Vol. 79 Friday, No. 197 October 10, 2014

Pages 61215–61562

OFFICE OF THE FEDERAL REGISTER

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Contents Federal Register Vol. 79, No. 197

Friday, October 10, 2014

Agriculture Department Coast Guard See Animal and Plant Health Inspection Service RULES See Forest Service Safety Zones: NOTICES Suisun Bay Electromagnetic Scan and Ordnance U.S. Tall Wood Building Prize Competition; Requirements Recovery, Suisun Bay, Concord, CA, 61238–61240 and Registration, 61275–61281 Shipping and Transportation; Technical, Organizational, and Conforming Amendments; Correction, 61261– Animal and Plant Health Inspection Service 61262 RULES Importation of Fresh Bananas from the Philippines into Commerce Department Hawaii and U.S. Territories, 61216–61221 See Foreign-Trade Zones Board Quarantined Areas and Regulated Articles: See International Trade Administration Pine Shoot Beetle, 61215 See National Oceanic and Atmospheric Administration NOTICES Architectural and Transportation Barriers Compliance Agency Information Collection Activities; Proposals, Board Submissions, and Approvals, 61285–61286

NOTICES Committee for Purchase From People Who Are Blind or Agency Information Collection Activities; Proposals, Severely Disabled Submissions, and Approvals: NOTICES Generic Clearance for the Collection of Qualitative Procurement List; Additions and Deletions, 61296 Feedback on Agency Service Delivery, 61285

Comptroller of the Currency Blind or Severely Disabled, Committee for Purchase From People Who Are RULES Liquidity Coverage Ratio: See Committee for Purchase From People Who Are Blind or Liquidity Risk Measurement Standards, 61440–61541 Severely Disabled

Bonneville Power Administration Consumer Product Safety Commission NOTICES NOTICES Proposed Revision of Billing Credits Policy, 61301–61302 Meetings; Sunshine Act, 61296

Centers for Medicare & Medicaid Services Defense Department NOTICES See Navy Department Agency Information Collection Activities; Proposals, Submissions, and Approvals, 61308–61309 Energy Department Medicare Programs: See Bonneville Power Administration Calendar Year 2015 Inpatient Hospital Deductible and NOTICES Hospital and Extended Care Services Coinsurance Authority to Import and Export Natural Gas, etc.: Amounts, 61309–61312 Gaz Metropolitain and Co. Limited Partnership, et al., Part A Premiums for the Uninsured Aged and for Certain 61300–61301 Disabled Individuals Who have Exhausted Other Entitlement; Calendar Year 2015, 61312–61314 Part B Monthly Actuarial Rates, Premium Rate, and Environmental Protection Agency Annual Deductible, Calendar Year 2015, 61314– PROPOSED RULES 61323 Disposal Regulations and Compliance Criteria: Waste Isolation Pilot Plant; Review Process for Compliance, 61268–61271 Children and Families Administration NOTICES RULES Agency Information Collection Activities; Proposals, Statewide Data Indicators and National Standards for Child Submissions, and Approvals, 61302–61303 and Family Services Reviews, 61241–61261 Environmental Impact Statements; Availability, etc., 61303– NOTICES 61304 Agency Information Collection Activities; Proposals, Pesticide Registrations: Submissions, and Approvals: Cancellation for Non-Payment of Year 2014 Registration Runaway and Homeless Youth Management Information Maintenance Fees; Orders Issued, 61304–61308 System, 61323 Single-Source Grant Awards: Lao Family Community Development, Inc., in Oakland, Executive Office of the President CA, 61323–61324 See National Drug Control Policy Office

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Federal Aviation Administration Trade Zones; Expansions: NOTICES Bollinger Shipyards, Inc., Subzone 124H, Golden Meetings: Meadow, LA, 61287–61288 RTCA Special Committee 214/EUROCAE WG–78: UniCarriers Americas Corp., Subzone 176E, Marengo, IL, Standards for Air Traffic Data Communication 61287 Services, 61368–61369 Noise Exposure Maps: Forest Service Westover Metropolitan Airport; Chicopee, MA, 61369– NOTICES 61370 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Communications Commission Locatable Minerals, 61281–61282 PROPOSED RULES Environmental Impact Statements; Availability, etc.: Radio Broadcasting Services: Beasley Pond Analysis Area, Apalachicola National Ehrenberg, AZ, 61271 Forest, FL, 61282–61283 Cretaceous Hills Ecological Restoration, Shawnee Federal Deposit Insurance Corporation National Forest, IL, 61283–61285 RULES Liquidity Coverage Ratio: Health and Human Services Department Liquidity Risk Measurement Standards, 61440–61541 See Centers for Medicare & Medicaid Services See Children and Families Administration Federal Highway Administration See National Institutes of Health NOTICES Homeland Security Department Proposed Memorandums of Understanding: See Coast Guard Application from the State of Texas under the Surface Transportation Project Delivery Program, 61370– Housing and Urban Development Department 61371 NOTICES Agency Information Collection Activities; Proposals, Federal Maritime Commission Submissions, and Approvals: PROPOSED RULES Housing Choice Voucher Program, 61330–61331 Ocean Transportation Intermediary Licensing and Financial Protection and Enhancement of Environmental Quality, Responsibility Requirements and General Duties, 61329–61330 61544–61561 Self-Help Homeownership Opportunity Program, 61328– 61329 Federal Motor Carrier Safety Administration Federal Property Suitable as Facilities to Assist the NOTICES Homeless, 61331–61332 Meetings: Motor Carrier Safety Advisory Committee and Medical Interior Department Review Board, 61371–61372 See Fish and Wildlife Service Parts and Accessories Necessary for Safe Operation; See Land Management Bureau Exemptions: See National Park Service Van Hool N.V. and Coach USA, 61372–61374 Internal Revenue Service Federal Reserve System NOTICES RULES Meetings: Liquidity Coverage Ratio: Information Reporting Program Advisory Committee, Liquidity Risk Measurement Standards, 61440–61541 61374–61375 NOTICES Formations of, Acquisitions by, and Mergers of Bank International Trade Administration Holding Companies, 61308 NOTICES Agency Information Collection Activities; Proposals, Federal Trade Commission Submissions, and Approvals: PROPOSED RULES Steel Import License, 61288 Telemarketing Sales, 61267–61268 Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Fish and Wildlife Service Certain Frozen Warmwater Shrimp from India, 61290– NOTICES 61291 Incidental Take Permit Application and Environmental Certain New Pneumatic Off-the-Road Tires from the Assessment: People’s Republic of China, 61291–61295 RE Cinco Solar Facility Project Habitat Conservation Narrow Woven Ribbon with Woven Selvedge from the Plan, Kern County, CA, 61333–61334 People’s Republic of China, 61288–61290 Foreign-Trade Zones Board International Trade Commission NOTICES NOTICES Production Activities; Authorizations: Investigations; Determinations, Modifications, and Rulings, Foreign-Trade Zone 20, Becker Hydraulics USA, Inc. etc.: (Hydraulic Hose Lines), Chesapeake, VA, 61287 Certain Consumer Electronics and Display Devices with Reorganizations under Alternative Site Frameworks: Graphics Processing and Graphics Processing Units Foreign-Trade Zone 259, Koochiching County, MN, 61287 therein, 61338

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Certain Stainless Steel Products, Certain Processes for Environmental Impact Statements; Availability, etc.: Manufacturing or Relating to Same and Certain Dyke Marsh Restoration and Long-Term Management Products Containing Same, 61339 Plan, George Washington Memorial Parkway, VA, Meetings; Sunshine Act, 61339–61340 61337

Justice Department National Science Foundation See Justice Programs Office NOTICES NOTICES Meetings: Meetings: Proposal Review Panel for Materials Research, 61341– National Commission on Forensic Science, 61340–61341 61342

Justice Programs Office National Transportation Safety Board NOTICES PROPOSED RULES Guidance: Investigation Procedures, 61272 Public Safety Bomb Suit Standard, 61341 NOTICES Agency Information Collection Activities; Proposals, Labor Department Submissions, and Approvals, 61342–61344 See Occupational Safety and Health Administration Navy Department Land Management Bureau NOTICES NOTICES Environmental Impact Statements; Availability, etc.: Environmental Impact Statements; Availability, etc.: EA–18G Growler Airfield Operations, Naval Air Station Las Vegas and Pahrump Field Offices, NV; Draft Resource Whidbey Island, WA, 61296–61298 Management Plan, 61334–61336 U.S. Navy F–35C West Coast Homebasing, 61298–61299 Meetings: National Aeronautics and Space Administration Disposal and Reuse of Former Naval Weapons Station NOTICES Seal Beach, Detachment Concord, Concord, CA; Exclusive Research Licenses, 61341 Environmental Impact Statement; Public Hearing, 61299–61300 National Drug Control Policy Office NOTICES Nuclear Regulatory Commission Designations of High Intensity Drug Trafficking Areas, NOTICES 61341 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 61344 National Institutes of Health NOTICES Occupational Safety and Health Administration Meetings: PROPOSED RULES Center for Scientific Review, 61325–61328 Chemical Management and Permissible Exposure Limits, National Cancer Institute, 61324–61327 61384–61438 National Institute of General Medical Sciences, 61326 National Institute on Aging, 61324, 61326 Personnel Management Office PROPOSED RULES National Oceanic and Atmospheric Administration Human Resources Management Reporting Requirements, RULES 61266–61267 Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic: Postal Regulatory Commission Blueline Tilefish in the South Atlantic Region; Annual NOTICES Catch Limits and Accountability Measures; Semi-Permanent Exception from Periodic Reporting of Extension, 61262–61263 Service Performance Measurement, 61345 Fisheries of the Exclusive Economic Zone Off Alaska: Atka Mackerel; Bering Sea and Aleutian Islands Securities and Exchange Commission Management Area, 61264–61265 NOTICES Other Rockfish; Aleutian Island Subarea of the Bering Sea Applications: and Aleutian Islands Management Area, 61263– DBX ETF Trust, et al., 61345–61355 61264 Self-Regulatory Organizations; Proposed Rule Changes: PROPOSED RULES C2 Options Exchange, Inc., 61357–61358 Fisheries off West Coast States: International Securities Exchange, LLC, 61364–61365 Pacific Coast Groundfish Fisheries Trawl Rationalization NASDAQ OMX BX, Inc., 61362–61364 Program for Start of 2015; Amendment, 61272–61274 NASDAQ Stock Market LLC, 61358–61360 NOTICES New York Stock Exchange LLC, 61360–61361 Meetings: NYSE MKT LLC, 61355–61357 New England Fishery Management Council, 61295–61296 Small Business Administration National Park Service NOTICES NOTICES Agency Information Collection Activities; Proposals, Environmental Assessments; Availability, etc.: Submissions, and Approvals, 61365–61366 General Management Plan for Sand Creek Massacre Disaster Declarations: National Historic Site, Colorado, 61336 Arizona, 61366

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Social Security Administration Monthly Certification of On-the-Job and Apprenticeship RULES Training, 61375 Medical Criteria for Evaluating Genitourinary Disorders, Funding Availability: 61221–61226 Supportive Services for Veteran Families Program, NOTICES 61376–61382 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 61366–61368 State Department Separate Parts In This Issue RULES International Traffic in Arms Regulations: Corrections, Clarifications, and Movement of Definitions, Part II 61226–61236 Labor Department, Occupational Safety and Health Administration, 61384–61438 Surface Transportation Board NOTICES Lease and Operation Exemptions: Part III Wisconsin Great Northern Railroad, Inc. from Rail Line of Federal Deposit Insurance Corporation, 61440–61541 Wisconsin Central, Ltd., 61374 Federal Reserve System, 61440–61541 Treasury Department, Comptroller of the Currency, 61440– Transportation Department 61541 See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration Part IV See Surface Transportation Board Federal Maritime Commission, 61544–61561 Treasury Department See Comptroller of the Currency See Internal Revenue Service Reader Aids RULES Consult the Reader Aids section at the end of this page for Gulf Coast Restoration Trust Fund, 61236–61238 phone numbers, online resources, finding aids, reminders, Veterans Affairs Department and notice of recently enacted public laws. NOTICES To subscribe to the Federal Register Table of Contents Agency Information Collection Activities; Proposals, LISTSERV electronic mailing list, go to http:// Submissions, and Approvals: listserv.access.gpo.gov and select Online mailing list Medical Foster Homes Record Keeping Requirements, archives, FEDREGTOC-L, Join or leave the list (or change 61375–61376 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.

5 CFR Proposed Rules: 337...... 61266 576...... 61266 792...... 61266 831...... 61266 842...... 61266 7 CFR 301...... 61215 319...... 61216 12 CFR 50...... 61440 249...... 61440 329...... 61440 16 CFR Proposed Rules: 306...... 61267 20 CFR 404...... 61221 22 CFR 120...... 61226 121...... 61226 123...... 61226 126...... 61226 130...... 61226 29 CFR Proposed Rules: 1910...... 61384 1915...... 61384 1917...... 61384 1918...... 61384 1926...... 61384 31 CFR 34...... 61236 33 CFR 165...... 61238 40 CFR Proposed Rules: 191...... 61268 194...... 61268 45 CFR 1355...... 61241 46 CFR 67...... 61261 Proposed Rules: 515...... 61544 47 CFR Proposed Rules: 73...... 61271 49 CFR Proposed Rules: 831...... 61272 50 CFR 622...... 61262 679 (2 documents) ...... 61263, 61264 Proposed Rules: 660...... 61272

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Rules and Regulations Federal Register Vol. 79, No. 197

Friday, October 10, 2014

This section of the FEDERAL REGISTER In an interim rule 1 effective and viewed on the Regulations.gov Web site contains regulatory documents having general published in the Federal Register on (see footnote 1 above for a link to applicability and legal effect, most of which April 17, 2014 (79 FR 21595–21597, Regulations.gov) or obtained from the are keyed to and codified in the Code of Docket No. APHIS–2010–0031), we person listed under FOR FURTHER Federal Regulations, which is published under amended the regulations by adding the 50 titles pursuant to 44 U.S.C. 1510. INFORMATION CONTACT. following counties to the area Tip feeding by PSB causes various quarantined for PSB: Cumberland, The Code of Federal Regulations is sold by malformations that reduce the value of the Superintendent of Documents. Prices of Effingham, Fayette, Knox, Mercer, Rock the tree. This kind of damage is new books are listed in the first FEDERAL Island, and Warren Counties, IL; REGISTER issue of each week. Baltimore, Carroll, Harford, and Howard especially severe in Christmas tree Counties, MD; Adair, Clark, Lewis, plantations, where tree form is the Macon, and Marion Counties, MO; primary consideration. PSB generally DEPARTMENT OF AGRICULTURE Dutchess, Putnam, and Westchester infests weakened, stressed, or dying Counties, NY; and Loudon County, VA. trees, but will also attack and kill Animal and Plant Health Inspection We also added the States of Indiana and apparently healthy trees. Service New Jersey in their entirety to the list In 2007, there were at least 137 of quarantined areas. In addition, to 7 CFR Part 301 Christmas tree farms and 288 nurseries clarify that firewood is a regulated and greenhouses in the affected counties [Docket No. APHIS–2010–0031] article, we updated the list of regulated that may be impacted by this rule. These articles to include firewood. figures understate the number of Pine Shoot Beetle; Addition of We solicited public comments for 60 Quarantined Areas and Regulated potentially affected entities because the days, ending June 16, 2014. We received number of these businesses was not Articles one comment by that date from a private disclosed for several of the counties. citizen, who supported the rule. AGENCY: Animal and Plant Health Moreover, data on the number of Therefore, for the reasons given in the Inspection Service, USDA. entities other than nurseries and interim rule and in this document, we ACTION: Affirmation of interim rule as Christmas tree farms that may be final rule. are adopting the interim rule as a final rule without change. affected, such as sawmills and logging SUMMARY: We are adopting as a final This action also affirms the operations, are not available. rule, without change, an interim rule information contained in the interim Based on our review of available that amended the pine shoot beetle rule concerning Executive Orders information, APHIS does not expect the regulations by adding areas in the States 12866, 12372, and 12988, and the interim rule to have a significant of Illinois, Maryland, Missouri, New Paperwork Reduction Act. economic impact on small entities. In York, and Virginia and the States of Further, for this action, the Office of the absence of significant economic Indiana and New Jersey in their entirety Management and Budget has waived its impacts, we have not identified to the list of quarantined areas. The review under Executive Order 12866. alternatives that would minimize such interim rule also updated the list of Regulatory Flexibility Act impacts. regulated articles. The interim rule was necessary to prevent the spread of pine This rule affirms an interim rule that List of Subjects in 7 CFR Part 301 shoot beetle, a pest of pine trees, into amended the regulations by adding noninfested areas of the United States. areas to the list of quarantined areas and Agricultural commodities, Plant diseases and pests, Quarantine, DATES: Effective on October 10, 2014, regulated articles for PSB. We took that we are adopting as a final rule the action based on the detection of PSB in Reporting and recordkeeping interim rule published at 79 FR 21595– areas not previously infested. As a result requirements, Transportation. 21597 on April 17, 2014. of the interim rule, there are additional PART 301—DOMESTIC QUARANTINE FOR FURTHER INFORMATION CONTACT: restrictions on the interstate movement Ms. NOTICES Karen Maguylo, National Policy of regulated articles to prevent the Manager, PPQ, APHIS, 4700 River Road spread of PSB to noninfested areas. ■ Unit 26, Riverdale, MD 20737–1231; The following analysis addresses the Accordingly, we are adopting as a (301) 851–3128. economic effects of the interim rule on final rule, without change, the interim small entities, as required by the rule that amended 7 CFR part 301 and SUPPLEMENTARY INFORMATION: Regulatory Flexibility Act. that was published at 79 FR 21595– Background In accordance with 5 U.S.C. 603, we 21597 on April 17, 2014. have performed a final regulatory The regulations in ‘‘Subpart—Pine Done in Washington, DC, this 6th day of Shoot Beetle,’’ (7 CFR 301.50 through flexibility analysis, which is summarized below, regarding the October 2014. 301.50–10, referred to below as the Kevin Shea, regulations) restrict the interstate economic effects of this rule on small movement of certain regulated articles entities. The full analysis may be Administrator, Animal and Plant Health Inspection Service. from quarantined areas in order to 1 To view the interim rule, its supporting [FR Doc. 2014–24245 Filed 10–9–14; 8:45 am] prevent the spread of pine shoot beetle economic analysis, and the comment we received, BILLING CODE 3410–34–P (PSB) into noninfested areas of the go to http://www.regulations.gov/#!docketDetail;D= United States. APHIS-2010-0031.

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DEPARTMENT OF AGRICULTURE Docket No. APHIS–2013–0045) a General Comments 1 proposal to amend the regulations to The majority of commenters stated Animal and Plant Health Inspection allow the importation of bananas from that the Animal and Plant Health Service the Philippines into Guam, Hawaii, and Inspection Service (APHIS) should the Northern Mariana Islands. We also prohibit the importation of bananas 7 CFR Part 319 prepared a pest risk assessment (PRA) from other countries into Hawaii and [Docket No. APHIS–2013–0045] entitled ‘‘Importation of Banana, Musa U.S. territories, as locally grown spp., as Fresh, Hard Green Fruit from bananas are plentiful or because RIN 0579–AD82 the Philippines to Guam, Hawaii, and importing commodities from other the Northern Mariana Islands’’ (January Importation of Fresh Bananas From countries would conflict with local food 2013). The PRA assesses the risks the Philippines Into Hawaii and U.S. initiatives. Many commenters expressed associated with the importation of fresh Territories concerns that the importation of lower- bananas from the Philippines into priced bananas from other countries AGENCY: Animal and Plant Health Guam, Hawaii, and the Northern would make it more difficult for local Inspection Service, USDA. Mariana Islands. Based on the producers to compete within the ACTION: Final rule. information contained in the PRA, we market. Several commenters objected to prepared a risk management document using tax dollars to implement and SUMMARY: We are amending the (RMD) that recommends appropriate enforce the proposed regulations rather regulations concerning the importation mitigation measures needed beyond the than using them to support local of fruits and vegetables to allow the port-of-entry inspection requirements. growers. importation of fresh bananas from the Based on the recommendations of the Such prohibitions would be beyond Philippines into Guam, Hawaii, and the RMD, we proposed to allow the the scope of APHIS’ statutory authority Northern Mariana Islands. As a importation of bananas from the under the Plant Protection Act (7 U.S.C. condition of entry, the bananas will Philippines into Hawaii and U.S. 7701 et seq., referred to below as the have to be produced in accordance with Territories only if they were produced PPA). Under the PPA, APHIS may a systems approach that includes in accordance with a systems approach. prohibit the importation of a fruit or requirements for importation of The systems approach we proposed vegetable into the United States only if commercial consignments, monitoring included requirements for: we determine that the prohibition is of fruit flies to establish low-prevalence • Registration, monitoring, and necessary in order to prevent the places of production, harvesting only of oversight of places of production; introduction or dissemination of a plant hard green bananas, and inspection for • Trapping for the fruit flies pest or noxious weed within the United quarantine pests by the national plant Bactrocera spp. to establish low- States. APHIS does not have the protection organization of the prevalence places of production; authority to restrict imports solely on Philippines. The bananas will also have • Covering bananas with pesticide the grounds of potential economic to be accompanied by a phytosanitary bags during the growing season; effects on domestic entities that could certificate with an additional • Harvesting only of hard green result from increased imports. Current declaration stating that they were bananas; Hawaiian banana production provides grown, packed, and inspected and • Requirements for culling, considerable banana supply to the found to be free of quarantine pests in safeguarding, and identifying the fruit; Hawaiian market, however it is accordance with the proposed and apparently not enough to satisfy the requirements. This action will allow the • demand for banana consumption in importation of bananas from the Inspection by the national plant protection organization (NPPO) of the Hawaii. Any impact of the rule on U.S. Philippines into Guam, Hawaii, and the banana producers in Hawaii and U.S. Northern Mariana Islands while Philippines for quarantine pests. We also proposed to require bananas territories is likely to be small. To the continuing to protect against the extent that new imports of bananas from introduction of plant pests. from the Philippines to be accompanied by a phytosanitary certificate with an the Philippines arrive in Hawaii and DATES: Effective November 10, 2014. additional declaration stating that the U.S. territories, consumers will benefit FOR FURTHER INFORMATION CONTACT: Mr. bananas were grown, packed, and from this additional source of fresh George Apgar Balady, Senior Regulatory inspected in accordance with the bananas. In addition, the importation of Policy Specialist, Regulatory proposed requirements. These are the Philippine bananas is expected to add Coordination and Compliance, PPQ, same conditions under which bananas jobs in the produce shipping and APHIS, 4700 River Road Unit 133, from the Philippines were already marketing industry within Hawaii and Riverdale, MD 20737–1236; (301) 851– authorized for importation into the the Territories, which would help offset 2240. continental United States. any potential losses. Tax dollars would not be used to support the proposed SUPPLEMENTARY INFORMATION: We solicited comments on the regulations. The importation of proposed rule for 60 days ending March Background Philippine bananas would require the 31, 2014. We received 46 comments NPPO of the Philippines to enter into a The regulations in ‘‘Subpart—Fruits from private citizens by the close of the trust fund agreement with APHIS. and Vegetables’’ (7 CFR 319.56–1 comment period. Three of the Under the trust fund agreement, the through 319.56–71, referred to below as commenters supported the proposed NPPO of the Philippines would be the regulations) prohibit or restrict the rule. The issues raised by the other required to pay in advance all estimated importation of fruits and vegetables into commenters are discussed below by costs that APHIS expects to incur in the United States from certain parts of topic. the world to prevent the introduction providing inspection services in the and dissemination of plant pests within exporting country. This includes 1 To view the proposed rule, supporting administrative expenses such as the United States. documents, and the comments we received, go to On January 28, 2014, we published in http://www.regulations.gov/#!docketDetail;D= inspector salaries and travel expenses. the Federal Register (79 FR 4410–4414, APHIS-2013-0045. The cost of inspecting shipments at U.S.

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ports of entry is recovered through user One commenter stated that certain as a pathway for the introduction of fees. growers may import bananas from insect pests and diseases into Hawaii Additionally, as a signatory to the smaller growers to meet consumer and the U.S. territories. World Trade Organization Agreement demand and suggested that production Two commenters expressed concern on Sanitary and Phytosanitary areas be canvassed and shipments about the ability to detect diseases in Measures, the United States has agreed inspected to ensure that bananas not of their incubation period and control that any prohibitions it places on the approved varieties or stage of maturity them following establishment. importation of fruits and vegetables will are prohibited importation. APHIS has seldom intercepted pests be based on scientific evidence, and will Just one interception of a target pest on commercial bananas when produced not be maintained without sufficient would be enough to cause APHIS to under a systems approach including scientific evidence. The blanket suspend a commercial import program bagging bananas after flower drop with prohibitions requested by the until APHIS and the Philippine NPPO plastic bags impregnated with pesticides commenters would not be in keeping agree that the pest eradication measures and harvest of green bananas. Therefore, with this agreement. taken have been effective and that the based on this track record, we are One commenter suggested that we pest risk has been eliminated. Because confident the NPPO of the Philippines should allow bananas from the bananas from non-registered places of can effectively oversee the application Philippines to be imported into Alaska, production present a greater pest risk of the proposed systems approach to where there is no local production, than does fruit grown in registered importing Philippine bananas to Guam, rather than importing bananas into places of production, we believe that it Hawaii, and the Northern Mariana Hawaii and the U.S. territories. is unlikely that the growers and packers Islands. We evaluated the potential for Under § 319.56–58, bananas from the in a registered place of production diseases to follow the pathway of Philippines are already allowed into the would allow their entire export bananas from the Philippines into continental United States, including operation to be jeopardized by allowing Hawaii and the U.S. territories in our Alaska. potentially infested fruit from non- PRA and determined that the only One commenter expressed frustration registered places of production to be disease of concern that could follow that that bananas grown in Hawaii could not commingled with their export-quality pathway is Ralstonia solanacearum. be exported, while bananas grown in fruit. In addition to that purely However, based on the requirements of other countries could be imported into economic disincentive, APHIS and the proposed systems approach, such as Hawaii. Philippine NPPO inspectors will also be bagging the inflorescence at the bending APHIS has an export staff to aid present in the places of production and stage, which prevents access to the fruit growers in exporting their agricultural packinghouses during the shipping by disease vectors, and standard commodities to other countries. Contact season to ensure that all requirements of industry procedures such as disinfecting information for this staff is available on the regulations are being observed. That tools, we determined that bananas from the APHIS Web site at http:// includes ensuring that only green the Philippines are not likely to present www.aphis.usda.gov/ under the Plant bananas are packed for export. There are a risk of introducing R. solanacearum to Health tab. no restrictions on the variety of bananas Hawaii and the U.S. territories. In addition, APHIS has no record of any Monitoring and Oversight that can be imported from the Philippines under the regulations. interceptions of R. solanacearum on Under paragraph (b)(3), the NPPO of The commenter also suggested that banana imports from any country. the Philippines would be required to shipments from noncompliant Therefore, because diseases are not retain all forms and documents related production areas be restricted until the likely to follow the pathway of bananas, to export program activities in groves production areas are determined to be in the potential latency of disease and packinghouses for at least 1 year compliance with the regulations per the symptoms is not an issue. and, as requested, provide them to NPPO and APHIS, and that records be Several commenters expressed APHIS for review. Such forms and kept regarding banana varieties and concern that Hawaii and the U.S. documents include, but are not limited stage of maturity. territories do not have the resources to, fruit fly trapping and inspection The NPPO of the Philippines would necessary to implement and enforce the records. One commenter pointed out be responsible for enforcing the proposed regulations, which would that the International Plant Protection requirements in the operational increase the risk of accidental or Convention (IPPC) requires that records workplan, including maintaining incidental introduction of quarantine be retained for at least the 2 previous records of growers and packers and pests and diseases. years or as long as necessary to support periodically conducting inspections or As stated previously, any required the export program from areas of low audits to ensure that growers are oversight by APHIS in the Philippines pest prevalence. producing bananas in accordance with will be paid for using monetary support Requiring the NPPO of the the systems approach. If the NPPO of from the industry through establishment Philippines to retain records for 1 year the Philippines finds that a place of of a trust fund. Inspection at the port of is consistent with our recordkeeping production or packinghouse is not arrival will be conducted by APHIS requirements for all offshore complying with the regulations, no fruit employees in conjunction with Customs phytosanitary mitigation programs. from the place of production or and Border Protection, and will be From past experience, retaining records packinghouse is eligible for export to funded by user fees. Hawaii and the for longer than 1 year has provided little the United States until APHIS and the U.S. territories will not have any value in traceback efforts as any issues NPPO of the Philippines conduct an implementation or enforcement that may occur are generally related to investigation and appropriate remedial responsibilities for the proposed the current growing season. While we actions have been implemented. regulations. do not require NPPO’s to retain records Several commenters called for for longer than 1 year, this does not Inspection increased inspections of bananas from pertain to APHIS pest interception The majority of commenters the Philippines to mitigate pest risk. records. Those records are maintained expressed concern regarding the One commenter stated that, because the for the life of the export program. potential for Philippine bananas to act PRA identified five times the number of

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significant quarantine pests for Guam, maturity at harvest and several other the Philippines, but that is not likely to Hawaii, and the Northern Mariana standard production and post-harvest follow the pathway of Philippine Islands than were identified in the PRA practices, as detailed in the PRA, were bananas due to production procedures prepared for the mainland United determined to be adequate mitigations. and post-harvest processing States, the proposed systems approach Because no pests were likely to follow requirements, such as bagging of should require a stricter inspection the pathway, no further analysis was bananas during the growing season and process. However, the commenter did conducted. the use of high-pressure water sprays. not elaborate on what aspect of the Several commenters referenced pests One commenter stated that these inspection process could be improved. that have become established in Hawaii measures are insufficient to prevent One commenter stated that large or the U.S. territories as a result of the introduction of the weed to Hawaii and inspection fees should be charged for importation of commodities. In the suggested that bananas grown in fields imports, including banana imports, in RMD, we stated that between 3.8 and 4 near I. cylindrica L. be inspected and order to prevent the importation of pests million metric tons of bananas were safeguarded from contamination with I. and diseases. imported into the United States from cylindrica L. seeds. As stated previously, APHIS seldom Central and South America each year Paragraph (b)(1) requires that the intercepts pests on commercially between 2003 and 2007, however, only Philippine NPPO conduct inspections of produced bananas produced under the 1,400 actionable quarantine pests were places of production beginning 3 proposed systems approach. Therefore, intercepted on imported bananas in that months before harvest and throughout APHIS considers the multiple layers of time period. One commenter stated that the shipping season to ensure safeguards sufficient to mitigate the risk citing the small number of pest compliance with the regulations. In posed by the quarantine pests listed in interceptions on bananas from Central addition, APHIS may also conduct the PRA. These mitigations are based on and South America versus the volume inspections of production areas as those currently used in Central and of shipments is misleading given that necessary to ensure compliance. This South America for export of bananas to the number of pests that remained inspection regimen coupled with the the United States. User fees are charged undetected would be correspondingly use of bagging and high-pressure water commensurate with the cost of larger for larger shipments. sprays makes it highly unlikely that inspecting imports. We are unable to Most pest interceptions, specifically seeds of I. cylindrical L. could charge more for inspecting specific fruit fly, occur in fruit seized in contaminate shipments of Philippine goods from certain countries. passenger baggage rather than in bananas. Therefore, the PRA concluded One commenter asked why we do not commercial imports. Fruit in passenger the weed was highly unlikely to follow have a set sampling rate established in baggage will continue to be prohibited the pathway. § 319.56–58(h)(2). The commenter under this rule. While the commenter One commenter raised concerns about expressed concern that, in the absence may be correct that larger shipments the chemicals used in the Philippines to of a current sampling rate, monitoring of could potentially contain larger treat bananas in the field. The the procedures required of the numbers of undetected quarantine pests, commenter stated that these chemicals Philippine NPPO by APHIS will be just one interception of a target pest in are illegal in the United States and insufficient. a commercial shipment would be questioned whether the field inspectors Rather than establishing a sampling enough to cause APHIS to suspend a in the Philippines would actually test rate within the regulations, APHIS has commercial import program. This was the bananas for disease and pesticide determined that setting a sampling rate the case for the suspension of the residues prior to exportation. A second within the operational workplan Spanish clementine import program commenter raised concerns about the provides greater flexibility in the event when a very small number of live quality of life of Filipino field workers that the sampling rate must be changed Mediterranean fruit fly (Ceratitis and suggested revisions to the proposed in the future. For most imported fruit, capitata) larvae were discovered in a systems approach to ensure their safety our sampling regime is designed to shipment. Importations of clementine and wellbeing, particularly when detect pest infestations if the pest is from Spain did not resume until a handling harmful pesticides. present in more than 1 or 2 percent of review was conducted and pest While the United States does not have sampled fruit. This corresponds to mitigations strengthened. Therefore, we direct control over pesticides that are sampling 150 to 300 fruit. consider the multiple layers of used on food commodities such as safeguards in the proposed rule bananas in other countries, there are PRA and RMD sufficient to mitigate the risk posed by regulations in the United States One commenter expressed concern the quarantine pests listed in the PRA. concerning the importation of food to that varieties of banana from the One commenter stated that all ensure that commodities do not enter Philippines would be imported for bananas grown in production areas the United States containing illegal which no risk analysis has been should be produced from tissue culture pesticide residues. Through section 408 conducted or risk mitigations in order to deter disease and asked of the Federal Food, Drug, and Cosmetic determined due to lack of published whether this is currently the case in the Act, the Environmental Protection data. Philippines. The commenter further Agency (EPA) has the authority to The PRA considered the risks stated that, since tissue culture for establish, change, or cancel tolerances associated with the importation of all specialty bananas may not be available, for food commodities. These EPA-set banana varieties. those banana varieties may need to be tolerances are the maximum levels of Several commenters noted that the restricted from importation until tissue pesticide residues that have been PRA does not assess the risk that culture is viable. determined, through comprehensive quarantine pests may pose to The Philippines has indicated that safety evaluations, to be safe for human endangered banana or other species producing bananas using tissue culture consumption. Tolerances apply to both found within Hawaii. is part of their standard industry food commodities that are grown in the The PRA found that no pests were practices. United States and food commodities likely to follow the pathway of mature The PRA lists Imperata cylindrica L. that are grown in other countries and green bananas because the stage of as a Federal noxious weed present in imported into the United States. The

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EPA tolerance levels are enforced once plant pests. Although we are not Under paragraph (b) of § 319.56–3, all the commodity enters the United States. requiring those practices, they are consignments of fruits and vegetables Chemicals such as DDT that are banned routinely conducted in the Philippines. are subject to inspection at the port of in the United States do not have One commenter pointed out that the entry. Inspectors will monitor for all tolerances on food commodities. Federal references used for the PRA did not pests listed in the PRA. Harvesting Government food inspectors are include more recent publications bananas at a hard green stage (i.e., responsible for monitoring food important for analyzing the potential for bananas with no yellow or green color commodities that enter the United establishment of Bactrocera musae break) is a standard industry practice for States to confirm that tolerance levels (banana fruit fly) in Hawaii. The banana production in Central and South are not exceeded and that residues of commenter cited one publication in America, the Philippines, Hawaii, and pesticide chemicals that are banned in particular which indicated that banana most of the world because ripe bananas the United States are not present on the fruit fly may oviposit in bananas earlier are more likely to be infested by fruit commodities. Tolerance levels for all than the mature green stage, flies. Bananas will be inspected at the chemicals that are acceptable for use on necessitating mitigations earlier than is port of entry to verify that they are at the bananas may be found in EPA’s common practice, and that they may proper stage of ripeness. APHIS regulations in 40 CFR 180.101 through demonstrate varietal host preferences. interception records going back to 1983 180.2020. Tolerance information can Although we recognize the indicate that there have been no also be obtained at http://www.epa.gov/ commenter’s concern, our pest interceptions of fruit flies in pesticides/food/viewtols.htm. Pesticide interception data does not indicate a commercially produced bananas from use in the Philippines is regulated higher risk of Bactrocera spp. fruit fly Central and South America. However, through the Fertilizer and Pesticide infestations in bananas than Anastrepha two additional mitigations (fruit fly Authority (FPA). Under this authority, spp. fruit fly infestations. In addition, trapping and population control) were all pesticides are required to be according to highly regarded scientific added specifically for the Philippine registered and all pesticide handlers sources referenced in the PRA, the bananas program to address fruit fly must be licensed. In addition, the FPA banana fruit fly is not present in the risk. If a typhoon were to occur during restricts or bans the use of any pesticide Philippines. However, as an additional the growing season, the likelihood is when evidence shows that the pesticide precaution, the fruit is required to be that the bags required to be placed over is an imminent hazard to crops, fish, bagged as soon as the blossom falls, the fruit would not stay in place. This livestock, the environment, or public while the fruit is still very small. The would disqualify such fruit from health. banana will remain in the pesticide- importation into the United States as it One commenter stated that repeated impregnated bag for months until would no longer have been produced in use of pesticides and bait sprays may harvest. Therefore, it is very unlikely accordance with the systems approach. increase pest resistance and that the that the banana will be subject to fruit In addition, even if fruit flies were to operational workplan must include a infest the fruit and the fruit were not fly infestation during the growing requirement to review the long-term immediately culled, the NPPO would season. APHIS will also require efficacy of pesticides. cull such fruit during inspection due to sampling and fruit cutting to ensure the APHIS uses information based on the visible damage done by fruit fly efficacy of the systems approach. studies conducted by the EPA to feeding. Finally, as mentioned determine the appropriate chemical and One commenter referred to table 6 in previously, APHIS requires sampling dosage requirements for use against the PRA and asked whether the column and cutting of fruit to detect pests in quarantine pests. It is outside the scope header ‘‘Quarantine pest’’ refers to shipments. These measures provide an of APHIS’ mission to review pesticide whether or not Hawaii and the U.S. added measure of protection against the resistance. territories consider the listed pest a introduction and establishment of fruit One commenter pointed out State quarantine pest. If so, the flies. inconsistencies between the PRA and commenter stated that APHIS should Two commenters expressed concern RMD and expressed concern regarding check the responses with respect to that APHIS would stop requiring fruit the omission of certain standard Hawaii to ensure accuracy. fly trapping after 2 years of inspections industry practices from the The PRA was drafted with respect to with no interception of fruit fly larvae. requirements in the RMD. The pest status in Hawaii and the U.S. One commenter asked how APHIS commenter stated that removing territories. Therefore, the quarantine would monitor changes in the fruit fly standard industry practices effectively pests referred to are those that are population in the Philippines if we no dismantles the systems approach, considered quarantine pests with longer required trapping. The second making the following steps in the respect to those States. commenter stated that 2 years of systems approach less effective. To Fruit Fly Mitigations trapping data are not representative of address this concern, the commenter future fruit fly populations when suggested we explain that the standard One commenter opposed the pesticide applications are not industry practices outlined in the PRA importation of hard green bananas from standardized between production areas remain in place for bananas from the the Philippines, testifying to the and when production areas and the Philippines and that we edit the RMD to occurrence of fruit fly attacks on hard varieties of bananas they grow may reflect this clarification. green bananas in the aftermath of a change as well. The commenter further APHIS does not require industry typhoon. Due to the frequency of suggested using the bait sprays as a way standard practices that are not typhoon activity in the Philippines, the for areas that do not have low technically and scientifically justified as commenter expressed concern that the prevalence for fruit flies to attain low a way to prevent or remove pests. risk of introducing fruit flies into prevalence or requiring importation APHIS omitted certain standard Hawaii and the U.S. territories increases only from pest free areas. industry practices from the with the importation of bananas from As stated in the proposed rule, we do requirements in the RMD because those the Philippines even when the bananas not want to impose trapping practices are designed to produce have been harvested at the hard green requirements if they are not justified by marketable fruit rather than to remove stage. the presence of fruit fly larvae in

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Philippine bananas. This is in pesticides. One commenter stated that Economic Analysis accordance with IPPC standards, which the time between flower removal and Two commenters objected to the require that phytosanitary measures bagging may vary with different banana number of unknowns in the economic represent the least restrictive measures varieties, which may allow for longer analysis of the proposed rule, including available and result in the minimum exposure times to the banana fruit fly the volume of bananas to be imported. impediment to the international for varieties that may be preferred hosts The commenters stated that, unlike the movement of people, commodities, and of the banana fruit fly. The commenter continental United States, Hawaii in conveyances. Bananas are poor hosts of also asked whether bagging is done for particular is a large producer of fruit flies, especially when harvested all banana varieties when the bananas. Therefore, the proposed rule green. In addition, we have never inflorescence is at the bending stage, could have unforeseen economic intercepted fruit flies in shipments of which is included in the planned impacts on Hawaiian growers. commercial bananas from Central or mitigations for Bugtok and Moko banana The information contained in the South America where the same systems varieties per the PRA. economic analysis was based on the best approach is in place. Although Because the growing period of information available. As stated Bactrocera spp. fruit flies have been commercial bananas is longer than the previously, APHIS does not have the intercepted in bananas found in life cycle of fruit flies within the authority to restrict imports solely on passenger baggage, these interceptions Philippines, in the unlikely event that the grounds of potential economic were very rare and they did not fruit are bagged after fruit fly infestation, effects on domestic entities that could originate from the Philippines. The only larvae would have emerged prior to result from increased imports. Current fruit fly known to infest green bananas harvest. The presence of fruit flies in the Hawaiian banana production provides is the banana fruit fly, which as stated bags along with larval emergence holes considerable banana supply to the previously, is not present in the would disqualify such bananas from Hawaiian market, however it is Philippines. APHIS does not require importation. apparently not enough to satisfy the fruit fly trapping for bananas from Post-harvest Processing demand for banana consumption in Central or South America and we are Hawaii. Any impact of the rule on U.S. requiring trapping for 2 years within the Citing pest interception data, one banana producers in Hawaii and U.S. Philippines only as an abundance of commenter stated that the cleaning territories is likely to be small. To the caution. The primary mitigation process to remove surface pests has not extent that new imports of bananas from methods are the poor host status of been effective in bananas from Central the Philippines arrive in Hawaii and green bananas and the pesticide- and South America. The commenter U.S. territories, consumers will benefit impregnated bagging. Therefore, we do indicated that this may be a particular from this additional source of fresh not believe it is necessary to continue to problem with pests that are known bananas. In addition, part of APHIS’ require fruit fly trapping in the absence disease vectors. The commenter examination of the economic impact of of fruit fly larvae after 2 years. If fruit suggested that utilizing standard a regulation is to determine the flies are discovered during sampling of industry practices within the regulation’s net benefits and costs to commercial fruit, the export program Philippines, such as using aluminum U.S. consumers as well as U.S. will be suspended and trapping or sulfate, may be more effective as a producers. other, equivalent measures, may be mitigation. Therefore, for the reasons given in the reinstated. We disagree with the commenter that proposed rule and in this document, we One commenter stated that, because the cleaning process to prevent surface are adopting the proposed rule as a final of the prevalence of fruit fly species in pests has been ineffective. The number rule, without change. Hawaii, the banana fruit fly could of pests intercepted in shipments of remain undetected there when it would bananas from Central and South Executive Order 12866 and Regulatory likely be easily detected and eradicated America has been very low given the Flexibility Act in the continental United States. volume of imported bananas from those This final rule has been determined to While it is the case that a number of areas. If, however, we find that a be not significant for the purposes of fruit fly species are present in Hawaii, significant number of surface pests are Executive Order 12866 and, therefore, this is not a sound scientific and arriving on bananas from the has not been reviewed by the Office of technical justification for requiring Philippines, we will either suspend the Management and Budget. permanent fruit fly trapping in the import program or amend the required In accordance with 5 U.S.C. 604, we Philippines. In the proposed rule, we mitigation measures to address the have performed a final regulatory proposed to require the NPPO of the issue. flexibility analysis, which is Philippines to monitor the bananas for summarized below, regarding the Phytosanitary Certificate pests, and if we have any problems in economic effects of this rule on small the first 2 years of the program, we may One commenter stated that entities. Copies of the full analysis are consider extending the trapping phytosanitary certificates from the available on the Regulations.gov Web requirement. Philippines are not effective in site (see footnote 1 in this document for preventing the introduction of foreign a link to Regulations.gov) or by Bagging Requirements pests and diseases because fake contacting the person listed under FOR In the proposed rule, we proposed phytosanitary certificates can be easily FURTHER INFORMATION CONTACT. that each place of production would purchased in Manila. Commercial production of bananas in have to follow a pest management The Philippines is a signatory to the the United States takes place in Hawaii, program specified by the NPPO of the IPPC, like the United States. As a where most if not all of the banana Philippines to reduce populations of signatory to the IPPC, one of the farms are small entities. Currently, quarantine pests. This management Philippines’ responsibilities is to issue about 4.1 million metric tons (MT) of program would include applying phytosanitary certificates with accurate bananas are imported into the United pesticides to reduce pest populations and complete information. We have no States (including the State of Hawaii) and bagging bananas after flower drop reason to doubt that the Philippines will every year. In 2011, Hawaii’s banana with plastic bags impregnated with do this. harvest totaled about 7,900 MT.

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We do not have information at this Animal and Plant Health Inspection recordkeeping requirements, Rice, point on the quantity of bananas that the Service has determined that an Vegetables. Philippines expects to ship to the State environmental impact statement need Accordingly, we are amending 7 CFR of Hawaii or to the U.S. territories, or not be prepared. part 319 as follows: the quantity and origin of bananas The 2012 EA and amended finding of already imported into these no significant impact were prepared in PART 319—FOREIGN QUARANTINE destinations. However, Hawaii as well accordance with: (1) The National NOTICES as the U.S. territories, already import Environmental Policy Act of 1969 bananas from other places since the (NEPA), as amended (42 U.S.C. 4321 et ■ 1. The authority citation for part 319 volume of banana consumption is seq.); (2) regulations of the Council on continues to read as follows: greater than their production. In general, Environmental Quality for Authority: 7 U.S.C. 450, 7701–7772, and the quantity of U.S. imports from the implementing the procedural provisions 7781–7786; 21 U.S.C. 136 and 136a; 7 CFR Philippines is expected to be relatively of NEPA (40 CFR parts 1500–1508); (3) 2.22, 2.80, and 371.3. insignificant, equivalent to about 0.05 USDA regulations implementing NEPA ■ 2. Section 319.56–58 is amended as percent of U.S. imports from other (7 CFR part 1b); and (4) APHIS’ NEPA follows: countries. What percent would go to Implementing Procedures (7 CFR part ■ a. The introductory text is revised; Hawaii depends on the demand from 372). ■ b. In paragraph (c), the date ‘‘February the consumers in the State of Hawaii The EA and amended finding of no 9, 2015’’ is removed and the date and in the other U.S. territories. significant impact may be viewed on the ‘‘November 10, 2016’’ is added in its Consumers in Hawaii and the U.S. Regulations.gov Web site (see footnote place; territories would benefit from the 1). Copies of the EA and amended ■ c. In paragraph (h)(2), in the second additional source of fresh bananas, finding of no significant impact are also sentence, the words ‘‘introductory text which are of similar quality as the available for public inspection at USDA, of this section’’ are removed and the domestic ones. room 1141, South Building, 14th Street words ‘‘operational workplan required and Independence Avenue SW., Executive Order 12988 by paragraph (a)(1) of this section’’ are Washington, DC, between 8 a.m. and added in their place; and This final rule allows bananas to be 4:30 p.m., Monday through Friday, ■ d. In the OMB citation at the end of imported into Guam, Hawaii, and the except holidays. Persons wishing to the section, the words ‘‘number 0579– Northern Mariana Islands from the inspect copies are requested to call 0394’’ are removed and the words Philippines. State and local laws and ahead on (202) 799–7039 to facilitate ‘‘numbers 0579–0394 and 0579–0415’’ regulations regarding bananas imported entry into the reading room. In addition, are added in their place. under this rule will be preempted while copies may be obtained by writing to the The revision reads as follows: the fruit is in foreign commerce. Fresh individual listed under FOR FURTHER fruits are generally imported for INFORMATION CONTACT. § 319.56–58 Bananas from the Philippines. immediate distribution and sale to the consuming public, and remain in Paperwork Reduction Act Bananas (Musa spp., which include M. acuminate cultivars and M. foreign commerce until sold to the In accordance with section 3507(d) of acuminate x M. balbisiana hybrids) may ultimate consumer. The question of the Paperwork Reduction Act of 1995 be imported into the continental United when foreign commerce ceases in other (44 U.S.C. 3501 et seq.), the information States, Guam, Hawaii, and the Northern cases must be addressed on a case-by- collection or recordkeeping Mariana Islands from the Philippines case basis. No retroactive effect will be requirements included in this final rule, only under the conditions described in given to this rule, and this rule will not which were filed under 0579–0415, this section. require administrative proceedings have been submitted for approval to the before parties may file suit in court Office of Management and Budget * * * * * challenging this rule. (OMB). When OMB notifies us of its Done in Washington, DC, this 6th day of National Environmental Policy Act decision, if approval is denied, we will October 2014. publish a document in the Federal Kevin Shea, An environmental assessment (EA) Register providing notice of what action Administrator, Animal and Plant Health and finding of no significant impact we plan to take. Inspection Service. were prepared in 2012 for a final rule for importation of bananas from the E-Government Act Compliance [FR Doc. 2014–24246 Filed 10–9–14; 8:45 am] BILLING CODE 3410–34–P Philippines into the continental United The Animal and Plant Health States. The EA provided a basis for the Inspection Service is committed to conclusion that the importation of compliance with the E-Government Act bananas from the Philippines into the to promote the use of the Internet and SOCIAL SECURITY ADMINISTRATION continental United States, under the other information technologies, to 20 CFR Part 404 conditions specified in that rule, would provide increased opportunities for not have a significant impact on the citizen access to Government [Docket No. SSA–2009–0038] quality of the human environment. information and services, and for other RIN 0960–AH03 APHIS reviewed the proposal to import purposes. For information pertinent to bananas from the Philippines into E-Government Act compliance related Revised Medical Criteria for Evaluating Guam, Hawaii, and the Northern to this rule, please contact Ms. Kimberly Genitourinary Disorders Mariana Islands under the conditions Hardy, APHIS’ Information Collection specified in this rule, and determined Coordinator, at (301) 851–2727. AGENCY: Social Security Administration. that this will not have a significant ACTION: Final rules. impact on the quality of the human List of Subjects in 7 CFR Part 319 environment. APHIS prepared an Coffee, Cotton, Fruits, Imports, Logs, SUMMARY: These final rules revise the amended finding of no significant Nursery stock, Plant diseases and pests, criteria in the Listing of Impairments impact, and the Administrator of the Quarantine, Reporting and (listings) that we use to evaluate cases

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involving genitourinary disorders in Comment: One commenter asked if co-morbid conditions, including CKD.’’ adults and children under titles II and we would require the estimated The same commenter also suggested XVI of the Social Security Act (Act). The glomerular filtration rate (eGFR) to be that we add guidance in the revisions reflect our program experience adjusted for race and sex. The introductory text to address acute and address adjudicator questions we commenter also suggested that we worsening of CKD during have received since we last establish an eGFR calculator to calculate hospitalizations for co-occurring comprehensively revised this body the eGFR for the criterion in proposed conditions. system in 2005. 6.05A. Response: We agree with the DATES: These rules are effective Response: We did not adopt this comment and provided clarification December 9, 2014. comment. The eGFR is a calculated regarding CKD complications in final value based on the measured serum FOR FURTHER INFORMATION CONTACT: listings 6.00C8 and 106.00C5. creatinine. The formulas used by Comment: A commenter suggested Cheryl A. Williams, Office of Medical laboratories to calculate eGFR all revisions to proposed listing 106.07 Policy, Social Security Administration, include adjustments for age, race, and requesting a 24-month period with 3 6401 Security Boulevard, Baltimore, sex. We will use the eGFR value as surgeries for childhood genitourinary Maryland 21235–6401, (410) 965–1020. calculated by the laboratory and will not disorders instead of 3 surgeries within For information on eligibility or filing independently calculate eGFR. Thus, we 12-month period. for benefits, call our national toll-free will not develop a calculator for eGFR. Response: We are not adopting this number, 1–800–772–1213, or TTY Comment: Another commenter noted comment because using a 12-month 1–800–325–0778, or visit our Internet that the weight loss criterion in period for evaluating an impairment is site, Social Security Online, at http:// proposed listing 6.05B4 (body mass an intrinsic part of our basic definition www.socialsecurity.gov. index (BMI) of 18.0 or less) is not of disability.2 We consider the SUPPLEMENTARY INFORMATION: consistent with the weight loss criterion combinations of impairments and Background in listing 5.08 (BMI of less than 17.5) limitations in functioning at step 3 of and suggested that we change the the sequential evaluation process, using We are making final the rules for criterion for consistency. our medical equivalence and functional evaluating genitourinary disorders that Response: We did not adopt this equivalence rules.3 We recognize that we proposed in a notice of proposed comment. We believe it is appropriate to some children who have multiple rulemaking (NPRM) we published in the use a different BMI criterion for listing surgeries for genitourinary impairments Federal Register on February 4, 2013 at 6.05B4 than we use in listing 5.08. The may have limitations in functioning that 78 FR 7695. The preamble to the NPRM criterion in listing 6.05B4 considers the last longer. In such cases, we evaluate provides the background for these severity of a person’s underlying those limitations under our medical revisions. You can view the preamble to chronic kidney disease (CKD) and its equivalence and functional equivalence the NPRM by visiting http:// effect on his or her nutrition and rules. www.regulations.gov and searching for metabolic status. People with CKD are Comment: One commenter stated that document ‘‘SSA–2009–0038–0005.’’ We unable to maintain adequate weight due there are undefined and poorly defined are making a number of changes in to decreased dietary protein intake and terms in the genitourinary listings. The response to public comments to the decreased dietary energy intake, which commenter said these terms included NPRM, which we explain below. are hallmarks of kidney failure. People ‘‘frequent,’’ ‘‘intractable,’’ ‘‘interferes,’’ with CKD may have an increased Why are we revising the listings for ‘‘anasarca,’’ ‘‘anorexia,’’ and ‘‘severe prevalence of protein energy evaluating genitourinary disorders? bone pain.’’ malnutrition. Furthermore, listing 5.08 Response: We partially adopted this We are revising the listings for requires a lower BMI because the listing comment. We provide brief definitions evaluating genitourinary disorders to considers only weight loss due to any for several medical terms when we first update the medical criteria, clarify how digestive disorder. Listing 5.08 does not use the terms in the introductory text of we evaluate genitourinary disorders, consider the severity of the individual’s these final listings. We define anasarca and address adjudicator questions. underlying digestive disorder. in 6.00C6 and 106.00C3; anorexia in In listing 5.08, we require BMI of less Public Comments 6.00C7; and ‘‘severe bone pain’’ and than 17.5 calculated on at least two ‘‘intractable’’ in 6.00C3. We have not In the NPRM, we provided the public evaluations, at least 60 days apart, provided definitions for the terms with a 60-day comment period, which within a consecutive 6-month period. In ‘‘frequent’’ and ‘‘interferes.’’ We use ended on April 5, 2013. We received six final listing 6.05B4, we require the same these two terms in our definition of comments. The comments came from number of BMI evaluations within a ‘‘severe bone pain’’ and use them in members of the public, disability consecutive 12-month period. We are adjudicators, and a national association their common English usage. using the consecutive 12-month period Comment: A commenter stated that representing disability examiners in the to be consistent with the 12-month there are no listings for combinations of State agencies that make disability 1 duration requirement. The 12-month impairments. The commenter stated that determinations for us. period is also consistent with the period the NPRM includes only single We carefully considered all of the we use when we evaluate comments. We have tried to summarize genitourinary disorders and leaves out hospitalizations due complications of a many important combinations of the commenters’ views accurately and genitourinary disorder in 6.09 and respond to all of the significant issues disorders. Examples that the commenter 106.09. provided included severe CKD not raised by the commenters that were Comment: One commenter expressed requiring dialysis and coronary artery within the scope of these rules. Some concern about proposed listing 6.09, disease; peripheral neuropathy and commenters noted provisions with regarding how to explain ‘‘CKD which they agreed and did not make complications requiring hospitalizations 2 See 42 U.S.C. 423(d)(1)(a) and (d)(2)(a), and suggestions for changes in those versus hospitalizations due to a group of 1382c(a)(3)(A) and 20 CFR 404.1505, 404.1509, provisions. We did not summarize or 416.905, 416.906, and 416.909. respond to those comments. 1 20 CFR 404.1509 and 416.909. 3 See 20 CFR 416.926 and 416.926a(a).

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generalized edema; and fluid overload the listing, is generally considered Other Changes and coronary artery disease. The unable to work because of the medical commenter also noted ‘‘a complete lack impairment alone at step three of the In addition to the changes we made in of listings that consider obesity.’’ sequential evaluation process. Thus, response to public comments, we Response: We did not adopt this when such a person’s impairment or revised 6.00C1 and 106.00C1 to clarify comment. We recognize that combination of impairments meets or the documentation requirement for genitourinary disorders may co-occur medically equals the level of severity hemodialysis or peritoneal dialysis. with impairments in other body described in the listing for the required systems. In some cases, the impairment What is our authority to make rules duration, disability will be found on the and set procedures for determining in another body system results from a basis of the medical facts alone in the genitourinary disorder; for example, whether a person is disabled under the absence of evidence to the contrary, for statutory definition? peripheral neuropathy resulting from example, the actual performance of CKD. In other cases, the impairment in SGA. The Act authorizes us to make rules another body system is not related to the genitourinary disorder; for example, Comment: A commenter stated that and regulations and to establish peripheral neuropathy resulting from the proposed criteria discriminate necessary and appropriate procedures to 6 diabetes mellitus. against the poor because they include implement them. We intend the listings to address medical tests that people cannot afford How long will these final rules be genitourinary disorders and the and that we will not purchase, such as effective? complications of those disorders. When kidney or bone biopsies, imaging the co-occurring condition or studies, and 24-hour urine protein tests. These final rules will remain in effect complication is due to a genitourinary The same commenter also stated that for 5 years after the date they become disorder, we evaluate it under final requirements, such as 90 consecutive effective, unless we extend them, or listing 6.09. However, when the co- days of prescribed therapy, urologic revise and issue them again. occurring impairments are unrelated, surgical procedures, and we believe it is more appropriate to hospitalization, discriminate against Regulatory Procedures evaluate the combination under our people who cannot afford treatment, Executive Order 12866, as medical equivalence rule at step 3 of the and suggested that we delete the Supplemented by Executive Order sequential evaluation process, or at requirements ‘‘[u]nless the 13563 steps 4 and 5 of the sequential Administration is willing to make a evaluation process.4 At these steps, commitment to purchase these.’’ We consulted with the Office of adjudicators can account for specific Management and Budget (OMB) and combinations of impairments, Response: We did not adopt the commenter’s suggestion. People with determined that these final rules meet complications of those impairments, the criteria for a significant regulatory and limitations of functioning on an the very serious genitourinary action under Executive Order 12866, as individual case basis. We address this in impairments described in these listings supplemented by Executive Order the introductory text of final listing generally receive the kinds of diagnostic 6.00C8. tests and treatments described in these 13563 and was reviewed by OMB. final rules because of urgent medical Comment: A commenter noted that Regulatory Flexibility Act we provide no quantitative data to show need. However, we do not penalize the validity of any of our genitourinary people who do not have the kinds of We certify that these final rules will proposed listings and noted that many medical evidence that we describe in not have a significant economic impact people engage in substantial gainful these listings. Under our rules, we may on a substantial number of small entities activity (SGA) even though they meet purchase medical examinations or tests because they affect individuals only. the requirements of a listing. The to obtain the evidence that we need, but Therefore, the Regulatory Flexibility commenter believes that this challenges we will not purchase diagnostic tests Act, as amended, does not require us to the validity of using the listings to that involve significant risk to the prepare a regulatory flexibility analysis. determine whether a person is disabled. person, such as kidney or bone Response: We disagree with this biopsies.5 Furthermore, we provide Paperwork Reduction Act comment. Our NPRM included an several alternatives for people with extensive list of medical and other genitourinary impairments to establish These final rules do not create any references that we relied on in that their impairment is of listing-level new or affect any existing collections proposing these rules. We also invited severity at step three of the sequential and, therefore, do not require OMB the public to comment on these evaluation process. If the impairment is approval under the Paperwork references and the data contained not of listing-level severity, we may find Reduction Act. within them. the person disabled at subsequent steps (Catalog of Federal Domestic Assistance The listings help to ensure that of the sequential evaluation process Program Nos. 96.001, Social Security— determinations or decisions of disability when considering the person’s residual Disability Insurance; 96.002, Social have a sound medical basis, that functional capacity, age, education, and Security—Retirement Insurance; 96.004, claimants receive equal treatment work experience. Social Security—Survivors Insurance; and throughout the country, and that we can Comment: Two commenters pointed 96.006, Supplemental Security Income) readily identify the majority of persons out stylistic and technical editorial who are disabled. The level of severity List of Subjects in 20 CFR Part 404 issues in the preamble and the proposed described in the listings is such that an rules. Administrative practice and individual, whom is not engaging in procedure, Blind, Disability benefits, SGA and has an impairment that meets Response: We have made appropriate Old-Age, survivors, and disability or medically equals all of the criteria of corrections in these final rules.

4 See 20 CFR 404.1526 and 416.926. 5 See 20 CFR 404.1519m and 416.919m. 6 42 U.S.C. 405(a), 902(a)(5), and 1383(d)(1).

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insurance, Reporting and recordkeeping to treatment. Laboratory findings, such as 4. Peripheral neuropathy. This disorder requirements, Social Security. serum creatinine or serum albumin levels, results when the kidneys do not adequately may document your kidney function. We filter toxic substances from the blood. These Carolyn W. Colvin, generally need evidence covering a period of toxins can adversely affect nerve tissue. The Acting Commissioner of Social Security. at least 90 days unless we can make a fully resulting neuropathy may affect peripheral For the reasons set out in the favorable determination or decision without motor or sensory nerves, or both, causing preamble, we are amending 20 CFR part it. pain, numbness, tingling, and muscle 2. Estimated glomerular filtration rate weakness in various parts of the body. Under 404, subpart P as set forth below: (eGFR). The eGFR is an estimate of the 6.05B2, the peripheral neuropathy must be a filtering capacity of the kidneys that takes severe impairment. (See §§ 404.1520(c), PART 404—FEDERAL OLD–AGE, into account serum creatinine concentration 404.1521, 416.920(c), and 416.921 of this SURVIVORS AND DISABILITY and other variables, such as your age, gender, chapter.) It must also have lasted or be INSURANCE (1950–) and body size. If your medical evidence expected to last for a continuous period of at includes eGFR findings, we will consider least 12 months. Subpart P—Determining Disability and them when we evaluate your CKD under 5. Fluid overload syndrome. This condition Blindness 6.05. occurs when excess sodium and water 3. Kidney or bone biopsy. If you have had retention in the body due to CKD results in ■ 1. The authority citation for subpart P a kidney or bone biopsy, we need a copy of vascular congestion. Under 6.05B3, we need of part 404 continues to read as follows: the pathology report. When we cannot get a a description of a physical examination that Authority: Secs. 202, 205(a)–(b) and (d)– copy of the pathology report, we will accept documents signs and symptoms of vascular (h), 216(i), 221(a), (i), and (j), 222(c), 223, a statement from an acceptable medical congestion, such as congestive heart failure, 225, and 702(a)(5) of the Social Security Act source verifying that a biopsy was performed pleural effusion (excess fluid in the chest), (42 U.S.C. 402, 405(a)–(b) and (d)–(h), 416(i), and describing the results. ascites (excess fluid in the abdomen), 421(a), (i), and (j), 422(c), 423, 425, and hypertension, fatigue, shortness of breath, or C. What other factors do we consider when peripheral edema. 902(a)(5)); sec. 211(b), Pub. L. 104–193, 110 we evaluate your genitourinary disorder? Stat. 2105, 2189; sec. 202, Pub. L. 108–203, 6. Anasarca (generalized massive edema or 1. Chronic hemodialysis or peritoneal 118 Stat. 509 (42 U.S.C. 902 note). swelling). Under 6.05B3 and 6.06B, we need dialysis. a description of the extent of edema, ■ 2. Amend appendix 1 to subpart P of a. Dialysis is a treatment for CKD that uses including pretibial (in front of the tibia), part 404 by: artificial means to remove toxic metabolic periorbital (around the eyes), or presacral (in ■ a. Revising item 7 of the introductory byproducts from the blood. Hemodialysis front of the sacrum) edema. We also need a text before part A; uses an artificial kidney machine to clean description of any ascites, pleural effusion, or ■ b. In part A: waste products from the blood; peritoneal pericardial effusion. ■ i. Revising the body system name for dialysis uses a dialyzing solution that is 7. Anorexia (diminished appetite) with introduced into and removed from the weight loss. Anorexia is a frequent sign of section 6.00 in the table of contents; and abdomen (peritoneal cavity) either ■ CKD and can result in weight loss. We will ii. Revising section 6.00; continuously or intermittently. Under 6.03, ■ use body mass index (BMI) to determine the c. In part B: your ongoing dialysis must have lasted or be ■ severity of your weight loss under 6.05B4. i. Revising the body system name for expected to last for a continuous period of at (BMI is the ratio of your measured weight to section 106.00 in the table of contents; least 12 months. To satisfy the requirements the square of your measured height.) The and in 6.03, we will accept a report from an formula for calculating BMI is in section ■ ii. Revising section 106.00. acceptable medical source that describes 5.00G. The revisions read as follows: your CKD and your current dialysis, and 8. Complications of CKD. The indicates that your dialysis will be ongoing. hospitalizations in 6.09 may be for different Appendix 1 to Subpart P of Part 404— b. If you are undergoing chronic complications of CKD. Examples of Listing of Impairments hemodialysis or peritoneal dialysis, your complications from CKD that may result in * * * * * CKD may meet our definition of disability hospitalization include stroke, congestive 7. Genitourinary Disorders (6.00 and before you started dialysis. We will heart failure, hypertensive crisis, or acute 106.00): December 9, 2019. determine the onset of your disability based kidney failure requiring a short course of on the facts in your case record. hemodialysis. If the CKD complication * * * * * 2. Kidney transplant. occurs during a hospitalization that was Part A a. If you receive a kidney transplant, we initially for a co-occurring condition, we will will consider you to be disabled under 6.04 * * * * * evaluate it under our rules for determining for 1 year from the date of transplant. After medical equivalence. (See §§ 404.1526 and 6.00 Genitourinary Disorders. that, we will evaluate your residual 416.926 of this chapter.) We will evaluate co- * * * * * impairment(s) by considering your post- occurring conditions, including those that 6.00 GENITOURINARY DISORDERS transplant function, any rejection episodes result in hospitalizations, under the listings you have had, complications in other body for the affected body system or under our A. Which disorders do we evaluate under systems, and any adverse effects related to rules for medical equivalence. these listings? ongoing treatment. D. How do we evaluate disorders that do not We evaluate genitourinary disorders b. If you received a kidney transplant, your meet one of the genitourinary listings? resulting in chronic kidney disease (CKD). CKD may meet our definition of disability Examples of such disorders include chronic before you received the transplant. We will 1. The listed disorders are only examples glomerulonephritis, hypertensive determine the onset of your disability based of common genitourinary disorders that we nephropathy, diabetic nephropathy, chronic on the facts in your case record. consider severe enough to prevent you from obstructive uropathy, and hereditary 3. Renal osteodystrophy. This condition is doing any gainful activity. If your nephropathies. We also evaluate nephrotic the bone degeneration resulting from chronic impairment(s) does not meet the criteria of syndrome due to glomerular dysfunction kidney disease-mineral and bone disorder any of these listings, we must also consider under these listings. (CKD–MBD). CKD–MBD occurs when the whether you have an impairment(s) that kidneys are unable to maintain the necessary satisfies the criteria of a listing in another B. What evidence do we need? levels of minerals, hormones, and vitamins body system. 1. We need evidence that documents the required for bone structure and function. 2. If you have a severe medically signs, symptoms, and laboratory findings of Under 6.05B1, ‘‘severe bone pain’’ means determinable impairment(s) that does not your CKD. This evidence should include frequent or intractable (resistant to treatment) meet a listing, we will determine whether reports of clinical examinations, treatment bone pain that interferes with physical your impairment(s) medically equals a records, and documentation of your response activity or mental functioning. listing. (See §§ 404.1526 and 416.926 of this

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chapter.) Genitourinary disorders may be a. Proteinuria of 3.5 g or greater per 24 uses an artificial kidney machine to clean associated with disorders in other body hours; or waste products from the blood; peritoneal systems, and we consider the combined b. Urine total-protein-to-creatinine ratio of dialysis uses a dialyzing solution that is effects of multiple impairments when we 3.5 or greater. introduced into and removed from the determine whether they medically equal a AND abdomen (peritoneal cavity) either listing. If your impairment(s) does not meet continuously or intermittently. Under 106.03, B. Anasarca (see 6.00C6) persisting for at or medically equal the criteria of a listing, your ongoing dialysis must have lasted or be least 90 days despite prescribed treatment. you may or may not have the residual expected to last for a continuous period of at 6.09 Complications of chronic kidney functional capacity to engage in substantial least 12 months. To satisfy the requirement disease (see 6.00C8) requiring at least three gainful activity. We proceed to the fourth in 106.03, we will accept a report from an and, if necessary, the fifth steps of the hospitalizations within a consecutive 12- acceptable medical source that describes sequential evaluation process in §§ 404.1520 month period and occurring at least 30 days your CKD and your current dialysis, and and 416.920 of this chapter. We use the rules apart. Each hospitalization must last at least indicates that your dialysis will be ongoing. in §§ 404.1594 and 416.994 of this chapter, 48 hours, including hours in a hospital b. If you are undergoing chronic as appropriate, when we decide whether you emergency department immediately before hemodialysis or peritoneal dialysis, your continue to be disabled. the hospitalization. CKD may meet our definition of disability before you started dialysis. We will 6.01 Category of Impairments, * * * * * determine the onset of your disability based Genitourinary Disorders Part B on the facts in your case record. 6.03 Chronic kidney disease, with * * * * * 2. Kidney transplant. chronic hemodialysis or peritoneal dialysis 106.00 Genitourinary Disorders. a. If you receive a kidney transplant, we (see 6.00C1). * * * * * will consider you to be disabled under 6.04 Chronic kidney disease, with kidney 106.04 for 1 year from the date of transplant. transplant. Consider under a disability for 1 106.00 GENITOURINARY DISORDERS After that, we will evaluate your residual year following the transplant; thereafter, A. Which disorders do we evaluate under impairment(s) by considering your post- evaluate the residual impairment (see these listings? transplant function, any rejection episodes 6.00C2). you have had, complications in other body 6.05 Chronic kidney disease, with We evaluate genitourinary disorders systems, and any adverse effects related to impairment of kidney function, with A and resulting in chronic kidney disease (CKD). ongoing treatment. B: Examples of such disorders include chronic b. If you received a kidney transplant, your A. Reduced glomerular filtration evidenced glomerulonephritis, hypertensive CKD may meet our definition of disability by one of the following laboratory findings nephropathy, diabetic nephropathy, chronic before you received the transplant. We will documented on at least two occasions at least obstructive uropathy, and hereditary determine the onset of your disability based 90 days apart during a consecutive 12-month nephropathies. We also evaluate nephrotic on the facts in your case record. period: syndrome due to glomerular dysfunction, 3. Anasarca (generalized massive edema or 1. Serum creatinine of 4 mg/dL or greater; and congenital genitourinary disorders, such swelling). Under 106.06B, we need a or as ectopic ureter, exotrophic urinary bladder, description of the extent of edema, including 2. Creatinine clearance of 20 ml/min. or urethral valves, and Eagle-Barrett syndrome pretibial (in front of the tibia), periorbital less; or (prune belly syndrome), under these listings. (around the eyes), or presacral (in front of the 3. Estimated glomerular filtration rate sacrum) edema. We also need a description B. What evidence do we need? (eGFR) of 20 ml/min/1.73m2 or less. of any ascites, pleural effusion, or pericardial AND 1. We need evidence that documents the effusion. signs, symptoms, and laboratory findings of 4. Congenital genitourinary disorder. B. One of the following: your CKD. This evidence should include Procedures such as diagnostic cystoscopy or 1. Renal osteodystrophy (see 6.00C3) with reports of clinical examinations, treatment circumcision do not satisfy the requirement severe bone pain and imaging studies records, and documentation of your response for urologic surgical procedures in 106.07. documenting bone abnormalities, such as to treatment. Laboratory findings, such as 5. Complications of CKD. The osteitis fibrosa, osteomalacia, or pathologic serum creatinine or serum albumin levels, hospitalizations in 106.09 may be for fractures; or may document your kidney function. We different complications of CKD. Examples of 2. Peripheral neuropathy (see 6.00C4); or generally need evidence covering a period of complications from CKD that may result in 3. Fluid overload syndrome (see 6.00C5) at least 90 days unless we can make a fully hospitalization include stroke, congestive documented by one of the following: favorable determination or decision without heart failure, hypertensive crisis, or acute a. Diastolic hypertension greater than or it. kidney failure requiring a short course of equal to diastolic blood pressure of 110 mm 2. Estimated glomerular filtration rate hemodialysis. If the CKD complication Hg despite at least 90 consecutive days of (eGFR). The eGFR is an estimate of the occurs during a hospitalization that was prescribed therapy, documented by at least filtering capacity of the kidneys that takes initially for a co-occurring condition, we will two measurements of diastolic blood into account serum creatinine concentration evaluate it under our rules for determining pressure at least 90 days apart during a and other variables, such as your age, gender, medical equivalence. (See § 416.926 of this consecutive 12-month period; or and body size. If your medical evidence chapter.) We will evaluate co-occurring b. Signs of vascular congestion or anasarca includes eGFR findings, we will consider conditions, including those that result in (see 6.00C6) despite at least 90 consecutive them when we evaluate your CKD under hospitalizations, under the listings for the days of prescribed therapy, documented on at 106.05. affected body system or under our rules for least two occasions at least 90 days apart 3. Kidney or bone biopsy. If you have had medical equivalence. during a consecutive 12-month period; or a kidney or bone biopsy, we need a copy of 4. Anorexia with weight loss (see 6.00C7) D. How do we evaluate disorders that do not the pathology report. When we cannot get a meet one of the genitourinary listings? determined by body mass index (BMI) of 18.0 copy of the pathology report, we will accept or less, calculated on at least two occasions a statement from an acceptable medical 1. The listed disorders are only examples at least 90 days apart during a consecutive source verifying that a biopsy was performed of common genitourinary disorders that we 12-month period. and describing the results. consider severe enough to result in marked 6.06 Nephrotic syndrome, with A and B: and severe functional limitations. If your A. Laboratory findings as described in 1 or C. What other factors do we consider when impairment(s) does not meet the criteria of 2, documented on at least two occasions at we evaluate your genitourinary disorder? any of these listings, we must also consider least 90 days apart during a consecutive 12- 1. Chronic hemodialysis or peritoneal whether you have an impairment(s) that month period: dialysis. satisfies the criteria of a listing in another 1. Proteinuria of 10.0 g or greater per 24 a. Dialysis is a treatment for CKD that uses body system. hours; or artificial means to remove toxic metabolic 2. If you have a severe medically 2. Serum albumin of 3.0 g/dL or less, and byproducts from the blood. Hemodialysis determinable impairment(s) that does not

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meet a listing, we will determine whether DEPARTMENT OF STATE designed part, component, accessory, or your impairment(s) medically equals a attachment. This revision is intended to listing. (See § 416.926 of this chapter.) 22 CFR Parts 120, 121, 123, 126, and help ensure that exporters properly Genitourinary disorders may be associated 130 apply ITAR § 120.41 when classifying with disorders in other body systems, and we [Public Notice 8898] their article and clarify that when a consider the combined effects of multiple specific article is described on the impairments when we determine whether RIN 1400–AD64 USML, it is enumerated and is not part they medically equal a listing. If your of a catch-all; (5) The definitions Amendment to the International Traffic impairment(s) does not medically equal a previously provided in ITAR § 121.8 are in Arms Regulations: Corrections, listing, we will also consider whether it removed to new ITAR § 120.45; (6) The Clarifications, and Movement of functionally equals the listings. (See policy with regard to when forgings, Definitions § 416.926a of this chapter.) We use the rules castings, and machined bodies are in § 416.994a of this chapter when we decide AGENCY: Department of State. controlled as defense articles is removed whether you continue to be disabled. ACTION: Final rule. from ITAR § 121.10 and placed in ITAR 106.01 Category of Impairments, § 120.6; (7) The threshold for lithium- Genitourinary Disorders SUMMARY: In an effort to streamline, ion batteries controlled in Category 106.03 Chronic kidney disease, with simplify and clarify the recent revisions VIII(h)(13) is increased from greater than chronic hemodialysis or peritoneal dialysis to the International Traffic in Arms 28 volts of direct current (VDC) nominal (see 106.00C1). Regulations (ITAR) made pursuant to to greater than 38 VDC nominal, so as 106.04 Chronic kidney disease, with the President’s Export Control Reform not to control on the USML such kidney transplant. Consider under a (ECR) initiative, the Department of State batteries in normal commercial aviation disability for 1 year following the transplant; is amending the ITAR as part of the use; (8) A control for specially designed thereafter, evaluate the residual impairment Department of State’s retrospective plan parts, components, accessories, and (see 106.00C2). under Executive Order 13563 completed attachments is added to the helmets 106.05 Chronic kidney disease, with on August 17, 2011. controlled in Category VIII(h)(15); (9) impairment of kidney function, with one of DATES: This rule is effective October 10, The phrase ‘‘electric-generating’’ is the following documented on at least two 2014. added to the control describing fuel occasions at least 90 days apart during a FOR FURTHER INFORMATION CONTACT: Mr. cells in Category VIII(h)(23) to clarify consecutive 12-month period: C. Edward Peartree, Director, Office of that fuel bladders and fuel tanks are not A. Serum creatinine of 3 mg/dL or greater; Defense Trade Controls Policy, within this control; (10) The word OR Department of State, telephone (202) ‘‘enumerated’’ is replaced with the word B. Creatinine clearance of 30 ml/min/ 663–2792; email DDTCResponseTeam@ ‘‘described’’ in the paragraphs of the 1.73m2 or less; state.gov. ATTN: Regulatory Change, USML for technical data and defense OR Omnibus Clarifications. The Department services directly related to the defense of State’s full retrospective plan can be articles in that Category to clarify that C. Estimated glomerular filtration rate the controls on technical data and (eGFR) of 30 ml/min/1.73m2 or less. accessed at http://www.state.gov/ documents/organization/181028.pdf. defense services apply even if the 106.06 Nephrotic syndrome, with A defense article is described in a catch- and B: SUPPLEMENTARY INFORMATION: all; (11) Conforming changes are made A. Laboratory findings as described in 1 or Changes in this Rule to citations throughout these sections; 2, documented on at least two occasions at and (12) Minor reference corrections are least 90 days apart during a consecutive 12- The following changes are made to made to Supplement No. 1 to Part 126, month period: the ITAR with this final rule: (1) 1. Serum albumin of 3.0 g/dL or less, or Definitions previously provided in including moving the footnote to the 2. Proteinuria of 40 mg/m2/hr or greater; §§ 121.3, 121.4, 121.14, and 121.15 are entire Supplement from the end to the opening to better clarify if an item is AND removed from these sections and incorporated into U.S. Munitions List excluded from eligibility in any row, it B. Anasarca (see 106.00C3) persisting for at Categories VIII, VII, XX, and VI, is excluded from that exemption, even least 90 days despite prescribed treatment. respectively; (2) USML Category II is if also described in another row that 106.07 Congenital genitourinary disorder amended to clarify that grenade contains a description that may also (see 106.00C4) requiring urologic surgical launchers are controlled in paragraph include that item. procedures at least three times in a (a) as a result of the revisions previously consecutive 12-month period, with at least 30 Regulatory Analysis and Notices made to USML Category IV pursuant to days between procedures. Consider under a Administrative Procedure Act disability for 1 year following the date of the Export Control Reform; (3) USML Category IX is amended to enumerate last surgery; thereafter, evaluate the residual The Department of State is of the impairment. military training not directly related to a defense article, which is a controlled opinion that controlling the import and 106.09 Complications of chronic kidney export of defense articles and services is disease (see 106.00C5) requiring at least three activity pursuant to ITAR § 120.9(a)(3). This change is required in order to a foreign affairs function of the United hospitalizations within a consecutive 12- States Government and that rules month period and occurring at least 30 days provide exporters a USML category to cite for military training when not implementing this function are exempt apart. Each hospitalization must last at least from 5 U.S.C. 553 and 554. 48 hours, including hours in a hospital related to a defense article; (4) The note emergency department immediately before to paragraph (b) in the specially Regulatory Flexibility Act the hospitalization. designed definition is revised to clarify that catch-all controls are only those Since the Department is of the * * * * * that generically control parts, opinion that this rule is exempt from the [FR Doc. 2014–24114 Filed 10–9–14; 8:45 am] components, accessories, and provisions of 5 U.S.C. 553, there is no BILLING CODE 4191–02–P attachments for a specified article and requirement for an analysis under the do not identify a specific specially Regulatory Flexibility Act.

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Unfunded Mandates Reform Act of 1995 distribution of power and 22 CFR Part 123 This rulemaking does not involve a responsibilities among the various Arms and munitions, Exports, mandate that will result in the levels of government. Therefore, in Reporting and recordkeeping expenditure by State, local, and tribal accordance with Executive Order 13132, requirements. governments, in the aggregate, or by the it is determined that this rulemaking 22 CFR Part 126 private sector, of $100 million or more does not have sufficient federalism in any year and it will not significantly implications to require consultations or Arms and munitions, Exports. warrant the preparation of a federalism or uniquely affect small governments. 22 CFR Part 130 Therefore, no actions were deemed summary impact statement. The necessary under the provisions of the regulations implementing Executive Arms and munitions, Campaign Unfunded Mandates Reform Act of Order 12372 regarding funds, Confidential business 1995. intergovernmental consultation on information, Exports, Reporting and Federal programs and activities do not recordkeeping requirements. Small Business Regulatory Enforcement apply to this rulemaking. Accordingly, the Department of State Fairness Act of 1996 Executive Orders 12866 and 13563 amends 22 CFR chapter I as follows: For purposes of the Small Business Regulatory Enforcement Fairness Act of Executive Orders 12866 and 13563 PART 120—PURPOSE AND 1996, a ‘‘major’’ rule is a rule that the direct agencies to assess costs and DEFINITIONS Administrator of the OMB Office of benefits of available regulatory Information and Regulatory Affairs finds alternatives and, if regulation is ■ 1. The authority citation for part 120 has resulted or is likely to result in (1) necessary, to select regulatory continues to read as follows: an annual effect on the economy of approaches that maximize net benefits Authority: Secs. 2, 38, and 71, Pub. L. 90– $100,000,000 or more; (2) a major (including potential economic, 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, increase in costs or prices for environmental, public health and safety 2797); 22 U.S.C. 2794; 22 U.S.C. 2651a; Pub. consumers, individual industries, effects, distributed impacts, and equity). L. 105–261, 112 Stat. 1920; Pub. L. 111–266; federal, state, or local government These executive orders stress the Section 1261, Pub. L. 112–239; E.O. 13637, 78 FR 16129. agencies, or geographic regions; or (3) importance of quantifying both costs significant adverse effects on and benefits, of reducing costs, of ■ 2. Section 120.6 is revised to read as competition, employment, investment, harmonizing rules, and of promoting follows: productivity, innovation, or on the flexibility. This rulemaking has been § 120.6 Defense article. ability of United States-based designated a ‘‘significant regulatory enterprises to compete with foreign- action,’’ although not economically Defense article means any item or based enterprises in domestic and significant, under section 3(f) of technical data designated in § 121.1 of foreign markets. Executive Order 12866. Accordingly, this subchapter. The policy described in The Department does not believe this this rule has been reviewed by the § 120.3 is applicable to designations of rulemaking will have an annual effect Office of Management and Budget additional items. This term includes on the economy of $100,000,000 or (OMB). technical data recorded or stored in any physical form, models, mockups or more. Articles that are being removed Executive Order 12988 from coverage in the U.S. Munitions List other items that reveal technical data categories contained in this rule will The Department of State has reviewed directly relating to items designated in still require licensing for export, but this rulemaking in light of sections 3(a) § 121.1 of this subchapter. It also from the Department of Commerce. and 3(b)(2) of Executive Order 12988 to includes forgings, castings, and other While the licensing regime of the eliminate ambiguity, minimize unfinished products, such as extrusions Department of Commerce is more litigation, establish clear legal and machined bodies, that have reached flexible than that of the Department of standards, and reduce burden. a stage in manufacturing where they are State, it is not expected that the change clearly identifiable by mechanical Executive Order 13175 in jurisdiction of these articles will properties, material composition, result in an export difference of The Department of State has geometry, or function as defense $100,000,000 or more. determined that this rulemaking will articles. It does not include basic The Department also does not believe not have tribal implications, will not marketing information on function or that this rulemaking will result in a impose substantial direct compliance purpose or general system descriptions. major increase in costs or prices for costs on Indian tribal governments, and ■ 3. Section 120.10 is amended by consumers, individual industries, will not preempt tribal law. revising paragraph (a)(4) to read as federal, state, or local government Accordingly, the requirements of follows: agencies, or geographic regions, or have Executive Order 13175 do not apply to § 120.10 Technical data. significant adverse effects on this rulemaking. competition, employment, investment, (a) * * * productivity, innovation, or on the Paperwork Reduction Act (4) Software (see § 120.45(f)) directly related to defense articles. ability of United States-based This rule does not impose or revise enterprises to compete with foreign- any reporting or recordkeeping * * * * * based enterprises in domestic and requirements subject to the Paperwork ■ 4. Section 120.41 is amended by foreign markets. Reduction Act, 44 U.S.C. Chapter 35. revising paragraph (a) introductory text, Executive Orders 12372 and 13132 paragraph (a)(2), and the note to List of Subjects paragraph (b), to read as follows: This rulemaking will not have 22 CFR Parts 120 and 121 substantial direct effects on the States, § 120.41 Specially designed. on the relationship between the national Arms and munitions, Classified (a) Except for commodities or government and the States, or on the information, Exports. software described in paragraph (b) of

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this section, a commodity or software (f) Software includes but is not (b)(2), in two places in paragraph (i) of (see § 120.45(f)) is specially designed if limited to the system functional design, Category I, in two places in paragraph it: logic flow, algorithms, application (k) of Category II, in two places in * * * * * programs, operating systems, and paragraph (e) of Category III, in one (2) Is a part (see § 120.45 (d)), support software for design, place in paragraph (i) of Category IV, in component (see § 120.45(b)), accessory implementation, test, operation, one place in Note 1 to paragraph (i) of (see § 120.45(c)), attachment (see diagnosis and repair. A person who Category VI, in one place in Note to § 120.45(c)), or software for use in or intends to export only software should, paragraph (h)(1) of Category VIII, in one with a defense article. unless it is specifically enumerated in place in paragraph (i) of Category VIII, * * * * * § 121.1 of this subchapter (e.g., USML in one place in paragraph (e) of Category Note to paragraph (b): The term Category XIII(b)), apply for a technical IX, in one place in paragraph (e) of ‘‘enumerated’’ refers to any article on data license pursuant to part 125 of this Category X, in two places in paragraph the U.S. Munitions List or the subchapter. (d) of Category XI, in two places in Commerce Control List and not in a (g) A system is a combination of parts, paragraph (f) of Category XII, in two ‘‘catch-all’’ control. A ‘‘catch-all’’ components, accessories, attachments, places in paragraph (l) of Category XIII, control is one that does not refer to firmware, software, equipment, or end- in two places in paragraph (m) of specific types of parts, components, items that operate together to perform a Category XIV, in two places in accessories, or attachments, but rather function. paragraph (f) of Category XV, in one controls unspecified parts, components, Note to paragraph (g): The industrial place in paragraph (e) of Category XVI, accessories, or attachments only if they standards established by INCOSE and in two places in paragraph (f) of were specially designed for an NASA provide examples for when Category XVIII, in one place in enumerated item. commodities and software operate paragraph (g) of Category XIX, in one together to perform a function as a place in paragraph (d) of Category XX; * * * * * system. References to these standards ■ d. Revising paragraph (a) of Category ■ 5. Section 120.45 is added to read as are included in this note to provide II; follows: examples for when commodities or ■ e. Removing the word ‘‘numerated’’ in § 120.45 End-items, components, software operate together to perform a adding in its place the word accessories, attachments, parts, firmware, function as a system. See the INCOSE ‘‘described’’ in paragraph (j) of Category software, systems, and equipment. standards for what constitutes a system V; ■ f. Revising paragraphs (a) and (b), and (a) An end-item is a system, at: http://g2sebok.incose.org/app/mss/ adding the note to paragraph (b)(4), and equipment, or an assembled article asset.cfm?ID=INCOSE%20G2SEBOK the note to paragraphs (a) and (b) in ready for its intended use. Only %202.00&ST=F, and in INCOSE SE Category VI; ammunition or fuel or other energy Handbook v3.1 2007; ISO/IEC ■ g. Revising paragraphs (a) source is required to place it in an 15288:2008. See the NASA standards for introductory text, (b), (c), and (e), and operating state. examples of what constitutes a system adding the note to paragraph (c), and (b) A component is an item that is in NASA SE Handbook SP–2007–6105 note 1, note 2, and note 3 to Category useful only when used in conjunction Rev 1. (h) Equipment is a combination of VII in Category VII; with an end-item. A major component ■ h. Revising paragraphs (a) includes any assembled element that parts, components, accessories, attachments, firmware, or software that introductory text, (a)(9), (a)(11), (a)(12), forms a portion of an end-item without (a)(13), adding paragraphs (a)(14), which the end-item is inoperable. A operate together to perform a function of, as, or for an end-item or system. (a)(15), and (a)(16), revising paragraphs minor component includes any (h)(3), (h)(6), (h)(13), (h)(15), and (h)(23), assembled element of a major Equipment may be a subset of an end- item based on the characteristics of the adding note 1 and note 2 to paragraph component. (a)(11), and note 1 to paragraph (a), and (c) Accessories and attachments are equipment. Equipment that meets the redesignating the note to paragraph (a) associated articles for any component, definition of an end-item is an end-item. as note 2 to paragraph (a) in Category equipment, system, or end-item, and Equipment that does not meet the definition of an end-item is a VIII; which are not necessary for its ■ i. Revising the title of Category IX, operation, but which enhance its component, accessory, attachment, firmware, or software. removing the note to paragraph (e) of usefulness or effectiveness. Category IX, and revising paragraph (e) (d) A part is any single unassembled PART 121—THE UNITED STATES of Category IX; element of a major or a minor MUNITIONS LIST ■ j. Adding note to paragraph (f)(1) in component, accessory, or attachment Category XIX; and which is not normally subject to ■ 6. The authority citation for part 121 ■ k. Revising paragraphs (a) disassembly without the destruction or continues to read as follows: introductory text, (a)(1), and (a)(4), the impairment of designed use. Authority: Secs. 2, 38, and 71, Pub. L. 90– redesignating paragraphs (a)(6), (a)(7), (e) Firmware and any related unique and notes 1 through 3 of paragraph support tools (such as computers, 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, 2797); 22 U.S.C. 2651a; Pub. L. 105–261, 112 (a)(7) as paragraphs (a)(7), (a)(8), and linkers, editors, test case generators, Stat. 1920; Section 1261, Pub. L. 112–239; notes 1 through 3 of paragraph (a)(8), diagnostic checkers, library of functions, E.O. 13637, 78 FR 16129. respectively, adding a new paragraph and system test diagnostics) directly ■ 7. Section 121.1 is amended by: (a)(6) and revising paragraph (a)(7) in related to equipment or systems covered Category XX. under any category of the U.S. ■ a. Revising the section heading; The revisions and additions read as Munitions List are considered as part of ■ b. Revising the final sentence of follows: the end-item or component. Firmware paragraph (b)(2); includes but is not limited to circuits ■ c. Removing the word ‘‘enumerated’’ § 121.1 The United States Munitions List. into which software has been and adding in its place the word * * * * * programmed. ‘‘described’’ in two places in paragraph (b) * * *

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(2) * * * Most U.S. Munitions List origin or designation, manufactured modifications made to incorporate categories contain an entry on technical prior to 1950 and unmodified since safety features required by law, are data (see § 120.10 of this subchapter) 1949. Vessels with modifications made cosmetic (e.g., different paint, and defense services (see § 120.9 of this to incorporate safety features required repositioning of bolt holes), or that add subchapter) related to the defense by law, are cosmetic (e.g., different parts or components otherwise available articles described in that U.S. Munitions paint), or that add parts or components prior to 1956 are considered List category. otherwise available prior to 1950 are ‘‘unmodified’’ for the purposes of this * * * * * considered ‘‘unmodified’’ for the paragraph. ECCN 0A606 also includes purposes of this paragraph. unarmed vehicles derived from Category II—Guns and Armament * * * * * otherwise EAR99 civilian vehicles that *(a) Guns over caliber .50 (i.e., 12.7 have been modified or otherwise fitted mm), whether towed, airborne, self- Category VII—Ground Vehicles with materials to provide ballistic propelled, or fixed, including but not *(a) Armored combat ground vehicles protection, including protection to level limited to, howitzers, mortars, cannons, as follows: III (National Institute of Justice Standard recoilless rifles, and grenade launchers. * * * * * 0108.01, September 1985) or better and that do not have reactive or * * * * * *(b) Ground vehicles (not enumerated in paragraph (a) of this category) and electromagnetic armor. Category VI—Surface Vessels of War trailers that are armed or are specially Note 2 to Category VII: Armored ground vehicles are (i) ground vehicles and Special Naval Equipment designed to be used as a firing or launch that have integrated, fully armored hulls *(a) Warships and other combatant platform to deliver munitions or or cabs, or (ii) ground vehicles on which vessels (i.e., battleships, aircraft carriers, otherwise destroy or incapacitate targets add-on armor has been installed to destroyers, frigates, cruisers, corvettes, (e.g., firing lasers, launching rockets, provide ballistic protection to level III littoral combat ships, mine sweepers, firing missiles, firing mortars, firing (National Institute of Justice Standard mine hunters, mine countermeasure artillery rounds, or firing other 0108.01, September 1985) or better. ships, dock landing ships, amphibious ammunition greater than .50 caliber) Armored support vehicles do not assault ships), Coast Guard Cutters (with (MT if specially designed for rockets, include those that are merely capable of or equivalent to those with U.S. space launch vehicles, missiles, drones, being equipped with add-on armor. designations WHEC, WMEC, WMSL, or or unmanned aerial vehicles capable of Note 3 to Category VII: Ground WPB for the purpose of this subchapter), delivering a payload of at least 500 kg vehicles include any vehicle meeting or foreign-origin vessels specially to a range of at least 300 km). the definitions or control parameters designed to provide functions (c) Ground vehicles and trailers regardless of the surface (e.g., highway, equivalent to those of the vessels listed equipped with any mission systems off-road, rail) upon which the vehicle is above; controlled under this subchapter (MT if designed to operate. (b) Other vessels not controlled in specially designed for rockets, space * * * * * paragraph (a) of this category, as launch vehicles, missiles, drones, or follows: unmanned aerial vehicles capable of Category VIII—Aircraft and Related (1) High-speed air cushion vessels for delivering a payload of at least 500 kg Articles transporting cargo and personnel, ship- to a range of at least 300 km). (a) Aircraft, as follows: to-shore and across a beach, with a Note to paragraph (c): ‘‘Mission systems’’ are defined as ‘‘systems’’ (see * * * * * payload over 25 tons; (9) Air refueling aircraft; (2) Surface vessels integrated with § 120.45(g) of this subchapter) that are nuclear propulsion plants or specially defense articles that perform specific * * * * * (11) Aircraft incorporating any designed to support naval nuclear military functions, such as by providing mission system controlled under this propulsion plants; military communication, target designation, surveillance, target subchapter; (3) Vessels armed or specially Note 1 to paragraph (a)(11): ‘‘Mission detection, or sensor capabilities. designed to be used as a platform to systems’’ are defined as ‘‘systems’’ (see deliver munitions or otherwise destroy * * * * * § 120.45(g) of this subchapter) that are or incapacitate targets (e.g., firing lasers, *(e) Armored support vehicles defense articles that perform specific launching torpedoes, rockets, or capable of off-road or amphibious use military functions such as by providing missiles, or firing munitions greater specially designed to transport or military communication, electronic than .50 caliber); or deploy personnel or materiel, or to warfare, target designation, surveillance, (4) Vessels incorporating any mission move with other vehicles over land in target detection, or sensor capabilities. systems controlled under this close support of combat vehicles or Note 2 to paragraph (a)(11): This does subchapter. troops (e.g., personnel carriers, resupply not include tethered aerostats. Mission Note to paragraph (b)(4): ‘‘Mission vehicles, combat engineer vehicles, systems incorporated on otherwise EAR- systems’’ are defined as ‘‘systems’’ (see recovery vehicles, reconnaissance controlled aerostats are controlled as the § 120.45(g) of this subchapter) that are vehicles, bridge launching vehicles, mission systems themselves just as if defense articles that perform specific ambulances, and command and control they were mounted, for example, on a military functions such as by providing vehicles). tower or a pole. military communication, electronic Note 1 to Category VII: Ground (12) Aircraft capable of being refueled warfare, target designation, surveillance, vehicles specially designed for military in flight including hover-in-flight target detection, or sensor capabilities. applications that are not identified in refueling (HIFR); Note to paragraphs (a) and (b): this category are subject to the EAR *(13) Optionally Piloted Vehicles Vessels specially designed for military under ECCN 0A606, including any (OPV) (i.e. aircraft specially designed to use that are not identified in paragraph unarmed ground vehicles, regardless of operate with and without a pilot (a) or (b) of this category are subject to origin or designation, manufactured physically located in the aircraft) (MT if the EAR under ECCN 8A609, including prior to 1956 and unmodified since the OPV has a range equal to or greater any demilitarized vessels, regardless of 1955. Ground vehicles with than 300km);

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(14) Aircraft with a roll-on/roll-off Mounted Cueing Systems, Joint Helmet countermeasures) or deploy military ramp, capable of airlifting payloads over Mounted Cueing Systems (JHMCS), payloads; 35,000 lbs. to ranges over 2,000 nm Helmet Mounted Displays, Display and * * * * * without being refueled in-flight, and Sight Helmets (DASH)), and specially (6) Integrated with nuclear propulsion landing onto short or unimproved designed parts, components, systems; airfields; accessories, and attachments therefor; (7) Equipped with any mission *(15) Aircraft not enumerated in * * * * * systems controlled under this paragraphs (a)(1) through (a)(14) as (23) Electricity-generating fuel cells subchapter; or follows: specially designed for aircraft controlled Note to paragraph (a)(7): ‘‘Mission (i) U.S.-origin aircraft that bear an in this category or controlled in ECCN system’’ is defined as a ‘‘system’’ (see original military designation of A, B, E, 9A610; § 120.45(g) of this subchapter) that are F, K, M, P, R, or S; or * * * * * defense articles that perform specific (ii) Foreign-origin aircraft specially military functions such as by providing designed to provide functions Category IX—Military Training military communication, electronic equivalent to those of the aircraft listed Equipment and Training warfare, target designation, surveillance, in paragraph (a)(15)(i) of this category; * * * * * target detection, or sensor capabilities. or (e) Technical data (see § 120.10 of this * * * * * (16) are armed or are specially subchapter) and defense services (see ■ 8. Sections 121.2, 121.3, 121.4, 121.8, designed to be used as a platform to § 120.9 of this subchapter): deliver munitions or otherwise destroy 121.10, 121.14, and 121.15 are removed (1) Directly related to the defense and reserved. targets (e.g., firing lasers, launching articles enumerated in paragraphs (a) rockets, firing missiles, dropping bombs, and (b) of this category; PART 123—LICENSES FOR THE or strafing); (2) Directly related to the software and EXPORT AND TEMPORARY IMPORT Note 1 to paragraph (a): Aircraft associated databases enumerated in OF DEFENSE ARTICLES specially designed for military paragraph (b)(4) of this category even if applications that are not identified in no defense articles are used or ■ 9. The authority citation for part 123 paragraph (a) of this section are subject transferred; or continues to read as follows: to the EAR and classified as ECCN (3) Military training (see, § 120.9(a)(3) 9A610, including any unarmed military Authority: Secs. 2, 38, and 71, Pub. L. 90– of this subchapter) not directly related 629, 90 Stat. 744 (22 U.S.C. 2752, 2778, aircraft, regardless of origin or to defense articles or technical data 2797); 22 U.S.C. 2753; 22 U.S.C. 2651a; 22 designation, manufactured prior to 1956 enumerated in this subchapter. U.S.C. 2776; Pub. L. 105–261, 112 Stat. 1920; and unmodified since manufacture. * * * * * Sec. 1205(a), Pub. L. 107–228; Section 1261, Aircraft with modifications made to Pub. L. 112–239; E.O. 13637, 78 FR 16129. incorporate safety of flight features or Category XIX—Gas Turbine Engines ■ other FAA or NTSB modifications such and Associated Equipment 10. Section 123.1 is amended by as transponders and air data recorders removing the word ‘‘enumerated’’ and * * * * * adding in its place the word are considered ‘‘unmodified’’ for the (f) * * * purposes of this paragraph. ‘‘described’’ in one place in paragraph (1) * * * (b)(1). * * * * * Note to paragraph (f)(1): Specially ■ 11. Section 123.16 is amended by (h) * * * designed (see § 120.41(b)(3)(ii) of this revising paragraph (b)(4) to read as (3) Tail boom folding systems, subchapter) does not control parts, follows: stabilator folding systems or automatic components, accessories, and rotor blade folding systems, and attachments that are common to engines § 123.16 Exemptions of general specially designed parts and enumerated in paragraph (a) through (d) applicability. components therefor; of this category but not identified in * * * * * * * * * * paragraph (f)(1), and those identified in (b) * * * (6) Bomb racks, missile launchers, paragraph (f)(1). For example, a part (4) Port Directors of U.S. Customs and missile rails, weapon pylons, pylon-to- common to only the F110 and F136 is Border Protection shall permit the launcher adapters, unmanned aerial not specially designed for purposes of export without a license, of unclassified vehicle (UAV) airborne launching the ITAR. A part common to only the models or mock-ups of defense articles, systems, external stores support systems F119 and F135—two engine models provided that such models or mock-ups for ordnance or weapons, and specially identified in paragraph (f)(1)—is are inoperable and do not reveal any designed parts and components therefor specially designed. technical data in excess of that which is (MT if the bomb rack, missile launcher, * * * * * exempted from the licensing missile rail, weapon pylon, pylon-to- requirements of § 125.4(b) of this Category XX—Submersible Vessels and launcher adapter, UAV airborne subchapter and do not contain Related Articles launching system, or external stores components (see § 120.45(b) of this support system is for a UAV, drone, or (a) Submersible and semi-submersible subchapter) covered by the U.S. missile that has a ‘‘range’’ equal to or vessels that are: Munitions List (see § 121.1 of this greater than 300 km); *(1) Submarines specially designed subchapter). Some models or mockups * * * * * for military use; built to scale or constructed of original (13) Aircraft Lithium-ion batteries that * * * * * materials can reveal technical data. U.S. provide greater than 38VDC nominal; (4) Armed or are specially designed to persons who avail themselves of this * * * * * be used as a platform to deliver exemption must provide a written (15) Integrated helmets incorporating munitions or otherwise destroy or certification to the Port Director of U.S. optical sights or slewing devices, which incapacitate targets (e.g., firing Customs and Border Protection that include the ability to aim, launch, track, torpedoes, launching rockets, firing these conditions are met. This or manage munitions (e.g., Helmet missiles, deploying mines, deploying exemption does not imply that the

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Directorate of Defense Trade Controls Authority: Secs. 2, 38, 40, 42, and 71, Pub. adding in its place the word will approve the export of any defense L. 90–629, 90 Stat. 744 (22 U.S.C. 2752, 2778, ‘‘described’’ in one place in paragraph articles for which models or mocks-ups 2780, 2791, and 2797); 22 U.S.C. 2651a; 22 (c). have been exported pursuant to this U.S.C. 287c; E.O. 12918, 59 FR 28205; 3 CFR, ■ exemption. 1994 Comp., p. 899; Sec. 1225, Pub. L. 108– 14. Supplement No. 1 to part 126 is 375; Sec. 7089, Pub. L. 111–117; Pub. L. 111– revised to read as follows: * * * * * 266; Sections 7045 and 7046, Pub. L. 112–74; E.O. 13637, 78 FR 16129. Supplement No. 1 to Part 126 PART 126—GENERAL POLICIES AND PROVISIONS § 126.1 [Amended] ■ 12. The authority citation for part 126 ■ 13. Section 126.1 is amended by continues to read as follows: removing the word ‘‘enumerated’’ and

SUPPLEMENT NO. 1* [*An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in any one row is excluded regardless of whether other rows may contain a description that would include the item.]

USML (CA) (AS) (UK) Category Exclusion § 126.5 § 126.16 § 126.17

I–XXI ...... Classified defense articles and services. See Note 1 ...... X X X I–XXI ...... Defense articles listed in the Missile Technology Control Regime (MTCR) Annex ...... X X X I–XXI ...... U.S. origin defense articles and services used for marketing purposes and not previously licensed ...... X X for export in accordance with this subchapter. I–XXI ...... Defense services for or technical data related to defense articles identified in this supplement as X ...... excluded from the Canadian exemption. I–XXI ...... Any transaction involving the export of defense articles and services for which congressional noti- X ...... fication is required in accordance with § 123.15 and § 124.11 of this subchapter. I–XXI ...... U.S. origin defense articles and services specific to developmental systems that have not ob- ...... X X tained written Milestone B approval from the U.S. Department of Defense milestone approval authority, unless such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of Defense for an end-use identified in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 or § 126.17 of this subchapter and is consistent with other exclusions of this supplement. I–XXI ...... Nuclear weapons strategic delivery systems and all components, parts, accessories, and attach- X ...... ments specifically designed for such systems and associated equipment. I–XXI ...... Defense articles and services specific to the existence or method of compliance with anti-tamper ...... X X measures, where such measures are readily identifiable, made at originating Government direc- tion. I–XXI ...... Defense articles and services specific to reduced observables or counter low observables in any ...... X X part of the spectrum. See Note 2. I–XXI ...... Defense articles and services specific to sensor fusion beyond that required for display or identi- ...... X X fication correlation. See Note 3. I–XXI ...... Defense articles and services specific to the automatic target acquisition or recognition and cue- ...... X X ing of multiple autonomous unmanned systems. I–XXI ...... Nuclear power generating equipment or propulsion equipment (e.g., nuclear reactors), specifically ...... X designed for military use and components therefor, specifically designed for military use. See also § 123.20 of this subchapter. I–XXI ...... Libraries (parametric technical databases) specially designed for military use with equipment con- ...... X trolled on the USML. See Note 13. I–XXI ...... Defense services or technical data specific to applied research as defined in § 125.4(c)(3) of this X ...... subchapter, design methodology as defined in § 125.4(c)(4) of this subchapter, engineering analysis as defined in § 125.4(c)(5) of this subchapter, or manufacturing know-how as defined in § 125.4(c)(6) of this subchapter. See Note 12. I–XXI ...... Defense services other than those required to prepare a quote or bid proposal in response to a X ...... written request from a department or agency of the United States Federal Government or from a Canadian Federal, Provincial, or Territorial Government; or defense services other than those required to produce, design, assemble, maintain or service a defense article for use by a reg- istered U.S. company, or a U.S. Federal Government Program, or for end-use in a Canadian Federal, Provincial, or Territorial Government Program. See Note 14. I ...... Firearms, close assault weapons, and combat shotguns ...... X ...... II(k) ...... Software source code related to USML Category II(c), II(d), or II(i). See Note 4 ...... X X II(k) ...... Manufacturing know-how related to USML Category II(d). See Note 5 ...... X X X III ...... Ammunition for firearms, close assault weapons, and combat shotguns listed in USML Category I X ...... III ...... Defense articles and services specific to ammunition and fuse setting devices for guns and arma- ...... X ment controlled in USML Category II. III(e) ...... Manufacturing know-how related to USML Category III(d)(1) or III(d)(2) and their specially de- X X X signed components. See Note 5. III(e) ...... Software source code related to USML Category III(d)(1) or III(d)(2). See Note 4 ...... X X IV ...... Defense articles and services specific to man-portable air defense systems (MANPADS). See X X X Note 6. IV ...... Defense articles and services specific to rockets, designed or modified for non-military applica- ...... X tions that do not have a range of 300 km (i.e., not controlled on the MTCR Annex). IV ...... Defense articles and services specific to torpedoes ...... X X IV ...... Defense articles and services specific to anti-personnel landmines. See Note 15 ...... X X X

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SUPPLEMENT NO. 1*—Continued [*An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in any one row is excluded regardless of whether other rows may contain a description that would include the item.]

USML (CA) (AS) (UK) Category Exclusion § 126.5 § 126.16 § 126.17

IV ...... Defense articles and services specific to cluster munitions ...... X X X IV(i) ...... Software source code related to USML Category IV(a), IV(b), IV(c), or IV(g). See Note 4 ...... X X IV(i) ...... Manufacturing know-how related to USML Category IV(a), IV(b), IV(d), or IV(g) and their specially X X X designed components. See Note 5. V ...... The following energetic materials and related substances: ...... X a. TATB (triaminotrinitrobenzene) (CAS 3058–38–6); ...... b. Explosives controlled in USML Category V(a)(38); ...... c. Iron powder (CAS 7439–89–6) with particle size of 3 micrometers or less produced by re- duction of iron oxide with hydrogen;. d. BOBBA–8 (bis(2-methylaziridinyl)2-(2-hydroxypropanoxy) propylamino phosphine oxide), and other MAPO derivatives;. e. N-methyl-p-nitroaniline (CAS 100–15–2); or ...... f. Trinitrophenylmethylnitramine (tetryl) (CAS 479–45–8) ...... V(a)(13) .... ANF or ANAzF as described in USML Category V(a)(13)(iii) and (iv) ...... X V(a)(23) .... Difluoraminated derivative of RDX as described in USML Category V(a)(23)(iii) ...... X V(c)(7) ...... Pyrotechnics and pyrophorics specifically formulated for military purposes to enhance or control ...... X radiated energy in any part of the IR spectrum. V(d)(3) ...... Bis-2, 2-dinitropropylnitrate (BDNPN) ...... X V(i) ...... Developmental explosives, propellants, pyrotechnics, fuels, oxidizers, binders, additives, or pre- ...... X X cursors therefor, funded by the Department of Defense via contract or other funding authoriza- tion in accordance with notes 1 to 3 for USML Category V(i). This exclusion does not apply if such export is pursuant to a written solicitation or contract issued or awarded by the U.S. De- partment of Defense for an end-use identified in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 or § 126.17 of this subchapter and is consistent with other exclusions of this supplement. VI ...... Defense articles and services specific to cryogenic equipment, and specially designed compo- ...... X nents or accessories therefor, specially designed or configured to be installed in a vehicle for military ground, marine, airborne or space applications, capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170°C). VI ...... Defense articles and services specific to superconductive electrical equipment (rotating machinery ...... X and transformers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of operating while in motion. This, however, does not include direct current hybrid homopolar generators which have single-pole normal metal armatures that rotate in a magnetic field produced by superconducting windings, provided those windings are the only superconducting component in the generator. VI ...... Defense articles and services specific to naval technology and systems relating to acoustic spec- ...... X X trum control and awareness. See Note 10. VI(a) ...... Nuclear powered vessels ...... X X X VI(e) ...... Defense articles and services specific to naval nuclear propulsion equipment. See Note 7 ...... X X X VI(g) ...... Software source code related to USML Category VI(a) or VI(c). See Note 4 ...... X X VII ...... Defense articles and services specific to cryogenic equipment, and specially designed compo- ...... X nents or accessories therefor, specially designed or configured to be installed in a vehicle for military ground, marine, airborne or space applications, capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170°C). VII ...... Defense articles and services specific to superconductive electrical equipment (rotating machinery ...... X and transformers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of operating while in motion. This, however, does not include direct current hybrid homopolar generators that have single-pole nor- mal metal armatures which rotate in a magnetic field produced by superconducting windings, provided those windings are the only superconducting component in the generator. VIII ...... Defense articles and services specific to cryogenic equipment, and specially designed compo- ...... X nents and accessories therefor, specially designed or configured to be installed in a vehicle for military ground, marine, airborne or space applications, capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170°C). VIII ...... Defense articles and services specific to superconductive electrical equipment (rotating machinery ...... X and transformers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of operating while in motion. This, however, does not include direct current hybrid homopolar generators which have single-pole normal metal armatures that rotate in a magnetic field produced by superconducting windings, provided those windings are the only superconducting component in the generator. VIII(a) ...... All USML Category VIII(a) items ...... X ...... VIII(f) ...... Developmental aircraft parts, components, accessories, and attachments identified in USML Cat- X ...... egory VIII(f). VIII(i) ...... Manufacturing know-how related to USML Category VIII(a) or VIII(e), and specially designed parts X X X or components therefor. See Note 5. VIII(i) ...... Software source code related to USML Category VIII(a) or VIII(e). See Note 4 ...... X X IX ...... Training or simulation equipment for Man Portable Air Defense Systems (MANPADS). See Note 6 ...... X X IX(e) ...... Software source code related to USML Category IX(a) or IX(b). See Note 4 ...... X X IX(e) ...... Software that is both specifically designed or modified for military use and specifically designed or ...... X modified for modeling or simulating military operational scenarios.

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SUPPLEMENT NO. 1*—Continued [*An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in any one row is excluded regardless of whether other rows may contain a description that would include the item.]

USML (CA) (AS) (UK) Category Exclusion § 126.5 § 126.16 § 126.17

X(e) ...... Manufacturing know-how related to USML Category X(a)(1) or X(a)(2), and specially designed X X X components therefor. See Note 5. XI(a) ...... Defense articles and services specific to countermeasures and counter- countermeasures See ...... X X Note 9. XI(a) ...... High Frequency and Phased Array Microwave Radar systems, with capabilities such as search, ...... X ...... acquisition, tracking, moving target indication, and imaging radar systems. See Note 16. XI ...... Defense articles and services specific to naval technology and systems relating to acoustic spec- ...... X X trum control and awareness. See Note 10. XI(b), Defense articles and services specific to USML Category XI (b) (e.g., communications security ...... X X XI(c), (COMSEC) and TEMPEST). XI(d). XI(d) ...... Software source code related to USML Category XI(a). See Note 4 ...... X X XI(d) ...... Manufacturing know-how related to USML Category XI(a)(3) or XI(a)(4), and specially designed X X X components therefor. See Note 5. XII ...... Defense articles and services specific to countermeasures and counter- countermeasures. See ...... X X Note 9. XII ...... Defense articles and services specific to USML Category XII(c) articles, except any 1st- and 2nd- X ...... generation image intensification tubes and 1st- and 2nd-generation image intensification night sighting equipment. End-items in USML Category XII(c) and related technical data limited to basic operations, maintenance, and training information as authorized under the exemption in § 125.4(b)(5) of this subchapter may be exported directly to a Canadian Government entity (i.e., federal, provincial, territorial, or municipal) consistent with § 126.5, other exclusions, and the provisions of this subchapter. XII ...... Technical data or defense services for night vision equipment beyond basic operations, mainte- X X X nance, and training data. However, the AS and UK Treaty exemptions apply when such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of De- fense for an end-use identified in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 or § 126.17 of this subchapter and is consistent with other exclusions of this supplement. XII(f) ...... Manufacturing know-how related to USML Category XII(d) and specially designed components X X X therefor. See Note 5. XII(f) ...... Software source code related to USML Category XII(a), XII(b), XII(c), or XII(d). See Note 4 ...... X X XIII(b) ...... Defense articles and services specific to USML Category XIII(b) (Military Information Security As- ...... X X surance Systems, cryptographic devices, software, and components). XIII(d) ...... Carbon/carbon billets and preforms which are reinforced in three or more dimensional planes, ...... X specifically designed, developed, modified, configured or adapted for defense articles. XIII(e) ...... Defense articles and services specific to armored plate manufactured to comply with a military ...... X standard or specification or suitable for military use. See Note 11. XIII(g) ...... Defense articles and services related to concealment and deception equipment and materials ...... X XIII(h) ...... Energy conversion devices other than fuel cells ...... X XIII(j) ...... Defense articles and services related to hardware associated with the measurement or modifica- ...... X X tion of system signatures for detection of defense articles as described in Note 2. XIII(l) ...... Software source code related to USML Category XIII(a). See Note 4 ...... X X XIV ...... Defense articles and services related to toxicological agents, including chemical agents, biological ...... X X agents, and associated equipment. XIV(a), Chemical agents listed in USML Category XIV(a), (d) and (e), biological agents and biologically X ...... XIV(b), derived substances in USML Category XIV(b), and equipment listed in USML Category XIV(f) XIV(d), for dissemination of the chemical agents and biological agents listed in USML Category XIV(a), XIV(e), (b), (d), and (e). XIV(f). XV(a) ...... Defense articles and services specific to spacecraft/satellites. However, the Canadian exemption X X X may be used for commercial communications satellites that have no other type of payload. XV(b) ...... Defense articles and services specific to ground control stations for spacecraft telemetry, tracking, ...... X X and control. Defense articles and services are not excluded under this entry if they do not con- trol the spacecraft. Receivers for receiving satellite transmissions are also not excluded under this entry. XV(c) ...... Defense articles and services specific to GPS/PPS security modules ...... X X XV(c) ...... Defense articles controlled in USML Category XV(c) except end-items for end-use by the Federal X ...... Government of Canada exported directly or indirectly through a Canadian-registered person. XV(e) ...... Anti-jam systems with the ability to respond to incoming interference by adaptively reducing an- X ...... tenna gain (nulling) in the direction of the interference. XV(e) ...... Antennas having any of the following: ...... X ...... a. Aperture (overall dimension of the radiating portions of the antenna) greater than 30 feet; .. b. All sidelobes less than or equal to -35 dB relative to the peak of the main beam; or ...... c. Designed, modified, or configured to provide coverage area on the surface of the earth less than 200 nautical miles in diameter, where ‘‘coverage area’’ is defined as that area on the surface of the earth that is illuminated by the main beam width of the antenna (which is the angular distance between half power points of the beam). XV(e) ...... Optical intersatellite data links (cross links) and optical ground satellite terminals ...... X ......

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SUPPLEMENT NO. 1*—Continued [*An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in any one row is excluded regardless of whether other rows may contain a description that would include the item.]

USML (CA) (AS) (UK) Category Exclusion § 126.5 § 126.16 § 126.17

XV(e) ...... Spaceborne regenerative baseband processing (direct up and down conversion to and from X ...... baseband) equipment. XV(e) ...... Propulsion systems which permit acceleration of the satellite on-orbit (i.e., after mission orbit in- X ...... jection) at rates greater than 0.1 g. XV(e) ...... Attitude control and determination systems designed to provide spacecraft pointing determination X ...... and control or payload pointing system control better than 0.02 degrees per axis. XV(e) ...... All specifically designed or modified systems, components, parts, accessories, attachments, and X ...... associated equipment for all USML Category XV(a) items, except when specifically designed or modified for use in commercial communications satellites. XV(e) ...... Defense articles and services specific to spacecraft and ground control station systems (only for ...... X X telemetry, tracking and control as controlled in USML Category XV(b)), subsystems, compo- nents, parts, accessories, attachments, and associated equipment. XV(f) ...... Technical data and defense services directly related to the other defense articles excluded from X X X the exemptions for USML Category XV. XVI ...... Defense articles and services specific to design and testing of nuclear weapons ...... X X X XVII ...... Classified articles, and technical data and defense services relating thereto, not elsewhere enu- X X X merated. See Note 1. XVIII ...... Defense articles and services specific to directed energy weapon systems ...... X X XIX(e), Defense articles and services specific to gas turbine engine hot section components and to Full ...... X X XIX(f)(1), Authority Digital Engine Control Systems (FADEC) or Digital Electronic Engine Controls XIX(f)(2), (DEEC). See Note 8. XIX(g). XIX(g) ...... Technical data and defense services for gas turbine engine hot sections. (This does not include X X X hardware). See Note 8. XX ...... Defense articles and services related to submersible vessels, oceanographic, and associated X X X equipment. XX ...... Defense articles and services specific to naval technology and systems relating to acoustic spec- ...... X X trum control and awareness. See Note 10. XX ...... Defense articles specific to cryogenic equipment, and specially designed components or acces- ...... X sories therefor, specially designed or configured to be installed in a vehicle for military ground, marine, airborne or space applications, capable of operating while in motion and of producing or maintaining temperatures below 103 K (¥170°C). XX ...... Defense articles specific to superconductive electrical equipment (rotating machinery and trans- ...... X formers) specially designed or configured to be installed in a vehicle for military ground, marine, airborne, or space applications and capable of operating while in motion. This, however, does not include direct current hybrid homopolar generators that have single-pole normal metal ar- matures which rotate in a magnetic field produced by superconducting windings, provided those windings are the only superconducting component in the generator. XX(a) ...... Nuclear powered vessels ...... X X X XX(b) ...... Defense articles and services specific to naval nuclear propulsion equipment. See Note 7 ...... X X X XX(c) ...... Defense articles and services specific to submarine combat control systems ...... X X XX(d) ...... Software source code related to USML Category XX(a). See Note 4 ...... X X XXI ...... Articles, and technical data and defense services relating thereto, not otherwise enumerated on X X X the USML, but placed in this category by the Director, Office of Defense Trade Controls Policy.

Note 1: Classified defense articles and services are not eligible for export under the Canadian exemptions. U.S. origin articles, technical data, and services controlled in USML Category XVII are not eligible for export under the UK Treaty exemption. U.S. origin classified defense arti- cles and services are not eligible for export under either the UK or AS Treaty exemptions except when being released pursuant to a U.S. De- partment of Defense written request, directive, or contract that provides for the export of the defense article or service. Note 2: The phrase ‘‘any part of the spectrum’’ includes radio frequency (RF), infrared (IR), electro-optical, visual, ultraviolet (UV), acoustic, and magnetic. Defense articles related to reduced observables or counter reduced observables are defined as: (a) Signature reduction (radio frequency (RF), infrared (IR), Electro-Optical, visual, ultraviolet (UV), acoustic, magnetic, RF emissions) of de- fense platforms, including systems, subsystems, components, materials (including dual-purpose materials used for Electromagnetic Inter- ference (EM) reduction), technologies, and signature prediction, test and measurement equipment and software, and material transmissivity/ reflectivity prediction codes and optimization software. (b) Electronically scanned array radar, high power radars, radar processing algorithms, periscope-mounted radar systems (PATRIOT), LADAR, multistatic and IR focal plane array-based sensors, to include systems, subsystems, components, materials, and technologies. Note 3: Defense articles and services related to sensor fusion beyond that required for display or identification correlation is defined as tech- niques designed to automatically combine information from two or more sensors/sources for the purpose of target identification, tracking, des- ignation, or passing of data in support of surveillance or weapons engagement. Sensor fusion involves sensors such as acoustic, infrared, electro optical, frequency, etc. Display or identification correlation refers to the combination of target detections from multiple sources for as- signment of common target track designation. Note 4: Software source code beyond that source code required for basic operation, maintenance, and training for programs, systems, and/or subsystems is not eligible for use of the UK or AS Treaty exemptions, unless such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of Defense for an end-use identified in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 or § 126.17 of this subchapter and is consistent with other exclusions of this supplement. Note 5: Manufacturing know-how, as defined in § 125.4(c)(6) of this subchapter, is not eligible for use of the UK or AS Treaty exemptions, un- less such export is pursuant to a written solicitation or contract issued or awarded by the U.S. Department of Defense for an end-use identi- fied in paragraph (e)(1), (e)(2), or (e)(4) of § 126.16 or § 126.17 of this subchapter and is consistent with other exclusions of this supplement.

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SUPPLEMENT NO. 1*—Continued [*An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in any one row is excluded regardless of whether other rows may contain a description that would include the item.]

USML (CA) (AS) (UK) Category Exclusion § 126.5 § 126.16 § 126.17

Note 6: Defense articles and services specific to Man Portable Air Defense Systems (MANPADS) includes missiles that can be used without modification in other applications. It also includes production and test equipment and components specifically designed or modified for MANPAD systems, as well as training equipment specifically designed or modified for MANPAD systems. Note 7: Naval nuclear propulsion plants includes all of USML Category VI(e). Naval nuclear propulsion information consists of technical data that concern the design, arrangement, development, manufacture, testing, operation, administration, training, maintenance, and repair of the propulsion plants of naval nuclear-powered ships and prototypes, including the associated shipboard and shore-based nuclear support facili- ties. Examples of defense articles covered by this exclusion include nuclear propulsion plants and nuclear submarine technologies or sys- tems; nuclear powered vessels (see USML Categories VI and XX). Note 8: A complete gas turbine engine with embedded hot section components or digital engine controls is eligible for export or transfer under the Treaties. Technical data, other than those data required for routine external maintenance and operation, related to the hot section is not eligible for export under the Canadian exemption. Technical data, other than those data required for routine external maintenance and oper- ation, related to the hot section or digital engine controls, as well as individual hot section parts or components are not eligible for the Treaty exemption whether shipped separately or accompanying a complete engine. Gas turbine engine hot section exempted defense article compo- nents and technology are combustion chambers and liners; high pressure turbine blades, vanes, disks and related cooled structure; cooled low pressure turbine blades, vanes, disks and related cooled structure; cooled augmenters; and cooled nozzles. Examples of gas turbine en- gine hot section developmental technologies are Integrated High Performance Turbine Engine Technology (IHPTET), Versatile, Affordable Advanced Turbine Engine (VAATE), and Ultra-Efficient Engine Technology (UEET), which are also excluded from export under the exemp- tions. Note 9: Examples of countermeasures and counter-countermeasures related to defense articles not exportable under the AS or UK Treaty ex- emptions are: (a) IR countermeasures; (b) Classified techniques and capabilities; (c) Exports for precision radio frequency location that directly or indirectly supports fire control and is used for situation awareness, target identi- fication, target acquisition, and weapons targeting and Radio Direction Finding (RDF) capabilities. Precision RF location is defined as angle of arrival accuracy of less than five degrees (RMS) and RF emitter location of less than ten percent range error; (d) Providing the capability to reprogram; and (e) Acoustics (including underwater), active and passive countermeasures, and counter-countermeasures. Note 10: Examples of defense articles covered by this exclusion include underwater acoustic vector sensors; acoustic reduction; off-board, un- derwater, active and passive sensing, propeller/propulsor technologies; fixed mobile/floating/powered detection systems which include in-buoy signal processing for target detection and classification; autonomous underwater vehicles capable of long endurance in ocean environments (manned submarines excluded); automated control algorithms embedded in on-board autonomous platforms which enable (a) group behav- iors for target detection and classification, (b) adaptation to the environment or tactical situation for enhancing target detection and classifica- tion; ‘‘intelligent autonomy’’ algorithms that define the status, group (greater than 2) behaviors, and responses to detection stimuli by autono- mous, underwater vehicles; and low frequency, broad band ‘‘acoustic color,’’ active acoustic ‘‘fingerprint’’ sensing for the purpose of long range, single pass identification of ocean bottom objects, buried or otherwise (controlled under Category USML XI(a)(1), (a)(2), (b), (c), and (d)). Note 11: This exclusion does not apply to the platforms (e.g., vehicles) for which the armored plates are applied. For exclusions related to the platforms, refer to the other exclusions in this list, particularly for the category in which the platform is controlled. The excluded defense articles include constructions of metallic or non-metallic materials or combinations thereof specially designed to provide protection for military systems. The phrase ‘‘suitable for military use’’ applies to any articles or materials which have been tested to level IIIA or above IAW NIJ standard 0108.01 or comparable national standard. This exclusion does not include military helmets, body armor, or other protective garments which may be exported IAW the terms of the AS or UK Treaty. Note 12: Defense services or technical data specific to applied research (§ 125.4(c)(3) of this subchapter), design methodology (§ 125.4(c)(4) of this subchapter), engineering analysis (§ 125.4(c)(5) of this subchapter), or manufacturing know-how (§ 125.4(c)(6) of this subchapter) are not eligible for export under the Canadian exemptions. However, this exclusion does not include defense services or technical data specific to build-to-print as defined in § 125.4(c)(1) of this subchapter, build/design-to-specification as defined in § 125.4(c)(2) of this subchapter, or basic research as defined in § 125.4(c)(3) of this subchapter, or maintenance (i.e., inspection, testing, calibration or repair, including overhaul, re- conditioning and one-to-one replacement of any defective items parts or components, but excluding any modification, enhancement, upgrade or other form of alteration or improvement that changes the basic performance of the item) of non-excluded defense articles which may be exported subject to other exclusions or terms of the Canadian exemptions. Note 13: The term ‘‘libraries’’ (parametric technical databases) means a collection of technical information of a military nature, reference to which may enhance the performance of military equipment or systems. Note 14: In order to utilize the authorized defense services under the Canadian exemption, the following must be complied with: (a) The Canadian contractor and subcontractor must certify, in writing, to the U.S. exporter that the technical data and defense services being exported will be used only for an activity identified in Supplement No. 1 to part 126 of this subchapter and in accordance with § 126.5 of this subchapter; and (b) A written arrangement between the U.S. exporter and the Canadian recipient must: (1) Limit delivery of the defense articles being produced directly to an identified manufacturer in the United States registered in accord- ance with part 122 of this subchapter; a department or agency of the United States Federal Government; a Canadian-registered per- son authorized in writing to manufacture defense articles by and for the Government of Canada; a Canadian Federal, Provincial, or Territorial Government; (2) Prohibit the disclosure of the technical data to any other contractor or subcontractor who is not a Canadian-registered person; (3) Provide that any subcontract contain all the limitations of § 126.5 of this subchapter; (4) Require that the Canadian contractor, including subcontractors, destroy or return to the U.S. exporter in the United States all of the technical data exported pursuant to the contract or purchase order upon fulfillment of the contract, unless for use by a Canadian or United States Government entity that requires in writing the technical data be maintained. The U.S. exporter must be provided writ- ten certification that the technical data is being retained or destroyed; and

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SUPPLEMENT NO. 1*—Continued [*An ‘‘X’’ in the chart indicates that the item is excluded from use under the exemption referenced in the top of the column. An item excluded in any one row is excluded regardless of whether other rows may contain a description that would include the item.]

USML (CA) (AS) (UK) Category Exclusion § 126.5 § 126.16 § 126.17

(5) Include a clause requiring that all documentation created from U.S. origin technical data contain the statement that, ‘‘This document contains technical data, the use of which is restricted by the U.S. Arms Export Control Act. This data has been provided in accord- ance with, and is subject to, the limitations specified in § 126.5 of the International Traffic in Arms Regulations (ITAR). By accepting this data, the consignee agrees to honor the requirements of the ITAR.’’ (c) The U.S. exporter must provide the Directorate of Defense Trade Controls a semi-annual report regarding all of their on-going activities authorized under § 126.5 of this subchapter. The report shall include the article(s) being produced; the end-user(s); the end-item into which the product is to be incorporated; the intended end-use of the product; and the names and addresses of all the Canadian contrac- tors and subcontractors. Note 15: This exclusion does not apply to demining equipment in support of the clearance of landmines and unexploded ordnance for humani- tarian purposes. As used in this exclusion, ‘‘anti-personnel landmine’’ means any mine placed under, on, or near the ground or other surface area, or delivered by artillery, rocket, mortar, or similar means or dropped from an aircraft and which is designed to be detonated or exploded by the presence, proximity, or contact of a person; any device or material which is designed, constructed, or adapted to kill or injure and which functions unex- pectedly when a person disturbs or approaches an apparently harmless object or performs an apparently safe act; any manually-emplaced munition or device designed to kill, injure, or damage and which is actuated by remote control or automatically after a lapse of time. Note 16: The radar systems described are controlled in USML Category XI(a)(3)(i) through (v). As used in this entry, the term ‘‘systems’’ in- cludes equipment, devices, software, assemblies, modules, components, practices, processes, methods, approaches, schema, frameworks, and models.

PART 130—POLITICAL DEPARTMENT OF THE TREASURY oil spill. One component of the Act, the CONTRIBUTIONS, FEES AND Direct Component, sets aside 35 percent COMMISSIONS 31 CFR Part 34 of the penalties paid into the trust fund RIN 1505–AC49 for grants to the State of Alabama, the ■ 15. The authority citation for part 130 State of Mississippi, the State of Texas, continues to read as follows: Gulf Coast Restoration Trust Fund the State of Louisiana and 20 Louisiana parishes, and 23 Florida counties. The Authority: Sec. 39, Pub. L. 94–329, 90 AGENCY: Office of the Fiscal Assistant Direct Component provides an equal Stat. 767 (22 U.S.C. 2779); 22 U.S.C. 2651a; Secretary, Treasury. amount to each of the five Gulf Coast E.O. 13637, 78 FR 16129. ACTION: Interim final rule. States, and allocates 30 percent of Louisiana’s share to the 20 eligible ■ 16. Section 130.8 is amended by SUMMARY: The Department of the parishes. revising the introductory text of Treasury is issuing regulations On September 6, 2013, Treasury paragraph (a) to read as follows: concerning the amounts available to proposed a rule to implement the Direct eligible Louisiana parishes from the § 130.8 Vendor. Component and four other components Gulf Coast Restoration Trust Fund, a in the RESTORE Act. Among its (a) Vendor means any distributor or fund established by the Resources and provisions, the proposed rule identified manufacturer who, directly or Ecosystem Sustainability, Tourist the 20 Louisiana parishes eligible to indirectly, furnishes to an applicant or Opportunities, and Revived Economies receive funds under the Direct supplier defense articles valued in an of the Gulf Coast States Act of 2012 Component, but not the share of each amount of $500,000 or more which are (RESTORE Act). These regulations parish. Treasury requested public amend an interim final rule for the end-items or major components as comments on the data and methodology RESTORE Act published on August 15, defined in § 120.45 of this subchapter. It for calculating these shares, and 2014. also means any person who, directly or received comments from the State of indirectly, furnishes to an applicant or DATES: Effective October 14, 2014. Louisiana and one Louisiana parish. supplier defense articles or services FOR FURTHER INFORMATION CONTACT: On July 31, 2014, Treasury proposed valued in an amount of $500,000 or Please send questions by email to a rule identifying the share of each more when such articles or services are [email protected] or contact Louisiana parish under the Direct to be delivered (or incorporated in Janet Vail, 202–622–6873. Component, based on a formula in the defense articles or defense services to be SUPPLEMENTARY INFORMATION: RESTORE Act and data from the United States Census Bureau and the United delivered) to or for the use of the armed I. Background forces of a foreign country or States Coast Guard. 79 FR 44325. Treasury considered the comments international organization under: The RESTORE Act makes funds available for the restoration and submitted previously, and opened a * * * * * protection of the Gulf Coast region new public comment period for 30 days. Rose E. Gottemoeller, through a new trust fund in the Treasury received two substantive Treasury of the United States, known as comments. Under Secretary, Arms Control and After considering public comments, International Security, Department of State. the Gulf Coast Restoration Trust Fund. The trust fund will contain 80 percent Treasury now issues the regulations as [FR Doc. 2014–23792 Filed 10–9–14; 8:45 am] of the administrative and civil penalties an interim final rule. The rule for BILLING CODE 4710–05–P paid after July 6, 2012, under the Louisiana parishes amends the Federal Water Pollution Control Act in RESTORE Act rule published on August connection with the Deepwater Horizon 15, 2014 (79 FR 48039), which covers

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other aspects of the Direct Component The Act does not specify the year and at http://www.treasury.gov/services/ and the Act. Both rules take effect on Treasury should use for oiled shoreline restore-act/Pages/default.aspx. The October 14, 2014. Treasury will publish or population. The proposed rule used resulting shares, which are unchanged a final, comprehensive rule for the oiled shoreline data collected between from the proposed rule, are listed in the RESTORE Act in the near future. 2010 and 2012, and population data for interim final rule. 2012, thereby fixing the share of each II. Public Comment and Summary of parish in the year of enactment. III. Procedural Requirements the Interim Final Rule Treasury received two comments on this A. Regulatory Flexibility Act In the July 2014 proposed rule, data. One Louisiana parish Treasury proposed an allocation for recommended that Treasury use The Regulatory Flexibility Act (RFA) each eligible Louisiana parish using a population data from 2010, because this (5 U.S.C. 601 et seq.) generally requires statutory formula that has three data is closer in time to the Deepwater agencies to prepare a regulatory elements: (a) 40 percent based on the Horizon incident. Another parish flexibility analysis of any rule subject to weighted average of miles of parish preferred 2013 population estimates, notice and comment rulemaking shoreline oiled, (b) 40 percent based on because these estimates are closer in requirements under the Administrative the weighted average of the population time to publication of the regulation. Procedure Act or any other statute, of the parish, and (c) 20 percent based Neither commenter addressed unless the agency certifies that the rule on the weighted average of the land Treasury’s oiled shoreline data. will not have a significant economic mass of the parish. 33 U.S.C. Treasury’s proposed rule used 2012 impact on a substantial number of small 1321(t)(1)(D)(i). One commenter data for both population and oiled entities. Treasury previously certified recommended that Treasury give greater shoreline, believing this to be a that the interim final rule for the entire weight to miles of oiled shoreline (60 reasonable choice that furthers Act, published on August 15, 2014, will Congress’s purposes. While 2010 data percent) and less weight to population not have a significant economic impact would be closer in time to the oil spill, (30 percent) and land mass (10 percent). on a substantial number of small there is no indication that Congress gave The commenter asserted that its formula entities. While that rule describes this fact any importance. There is also would be more fair to those parishes procedures concerning the allocation no indication that Congress intended to that were most impacted by the spill. and expenditure of amounts from the The formula in the proposed rule base each parish’s share on population changes and oiling occurring after trust fund, most of these requirements comes directly from the RESTORE Act. come from the Act itself or other Federal Treasury does not have discretion to enactment. Treasury believes that it is reasonable to use 2012 data for law, including the total allocation due change the formula in order to favor to Louisiana parishes under the Direct parishes with more oiled shoreline. population and oiling, because that data best represents conditions in Louisiana Component. For the three elements in the formula, when Congress passed the Act. It is Treasury certifies that the interim Treasury’s proposed rule used notable that Congress expected final rule for Louisiana parishes will not government data to determine the share procedures for implementing the Act have a significant impact on a of each parish. For the first element, would be completed shortly after substantial number of small entities. Treasury used data from the United enactment, including procedures This rule affects only 20 Louisiana States Coast Guard showing the number concerning each parish’s share. parishes, of which six meet the of miles of parish shoreline oiled RESTORE Act, Public Law 112–141 sec. definition of a small entity under the between 2010, the initial year of 1602(e), 126 Stat. 588. The Act refers to RFA. Even if a substantial number of response to the Deepwater Horizon spill, ‘‘parish shoreline oiled’’ in the past and July 6, 2012, the date of enactment small entities was affected, any tense. 33 U.S.C. 1321(t)(1)(D)(i)(II)(aa). economic impact of this interim final for the RESTORE Act. According to the Using data from later years would Coast Guard, the data were gathered rule would be minimal. The interim produce results that Congress could not final rule is limited to allocating funds using the Shoreline Clean-up have foreseen in 2012. Because Assessment Technique (SCAT), a to eligible Louisiana parishes according population in 2013 went up for some to a statutory formula, and does not systematic method for surveying an parishes and down for others, using affected shoreline after an oil spill.1 The impose any new obligations on these 2013 data would increase some parish parishes. second element is the weighted average shares and decrease others with little of the parish population. Treasury used correlation to the miles of oiled B. Regulatory Planning and Review 2012 population estimates for each shoreline. Accordingly, Treasury (Executive Orders 12866 and 13563) parish published by the United States interprets the Act as referring to 2 Census Bureau. The third element is shoreline oiled before July 6, 2012, and The interim final rule for the the weighted average of the parish land to parish populations in 2012. RESTORE Act, published on August 15, mass. Treasury used data from 2010, the Using the data described above and 2014, is a significant regulatory action most recent available from the United the statutory factors, Treasury as defined in Executive Order 12866, as States Census Bureau.3 determined each parish’s share with the supplemented by Executive Order following formula: Parish allocation = 13563. The notification for that rule 1 SCAT data are appropriate for determining the (40% * (parish miles oiled/sum of all includes a Regulatory Impact share of each Louisiana parish under the relevant oiled shoreline for eligible parishes)) + Assessment, which covers any standards of the Direct Component in the Act. economic impact incident to the interim Treasury takes no position on the data that may be (40% * (parish population/sum of all appropriate for other uses in connection with population for eligible parishes)) + (20% final rule for Louisiana parishes. The ongoing litigation or natural resource damage * parish land mass/sum of all land mass interim final rule for Louisiana parishes assessments. for eligible parishes). A detailed has been designated a significant 2 These estimates are available at http://fact description of the data Treasury used to regulatory action, although not finder2.census.gov/bkmk/table/1.0/en/PEP/2013/ PEPANNCHG.ST05/0400000US22. determine each parish’s share is economically significant, and has been 3 The data are available at http://quickfacts. available in the docket for the interim reviewed by the Office of Management census.gov/qfd/states/22000.html. final rule at http://www.regulations.gov, and Budget.

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C. Administrative Procedure Act 1.35717%; St. James, 0.75600%; St. John Washington, DC 20590, between 9 a.m. The Administrative Procedure Act (5 the Baptist, 1.11915%; St. Martin, and 5 p.m., Monday through Friday, U.S.C. 551 et seq.) (APA) provides that 2.06890%; St. Mary, 1.80223%; St. except Federal holidays. agency rules should become effective 30 Tammany, 5.53058%; Terrebonne, FOR FURTHER INFORMATION CONTACT: If days after publication in the Federal 9.91281%; Tangipahoa, 3.40337%; and you have questions on this rule, call or Register. See 5 U.S.C. 553(d). The APA, Vermilion, 3.02766%. email Lieutenant Junior Grade Joshua however, allows agencies to dispense * * * * * Dykman, U.S. Coast Guard Sector San Francisco; telephone (415) 399–3585 or with a delayed effective date when the David A. Lebryk, email at D11-PF-MarineEvents@ agency finds that good cause exists. 5 Fiscal Assistant Secretary. U.S.C. 553(d)(3). In this case, Treasury uscg.mil. If you have questions on finds that good cause exists to effectuate [FR Doc. 2014–24283 Filed 10–9–14; 8:45 am] viewing or submitting material to the this rule on October 14, 2014. As BILLING CODE 4810–25–P docket, call Barbara Hairston, Program discussed earlier in the preamble, this Manager, Docket Operations, telephone rule for Louisiana parishes amends the (202) 366–9826. RESTORE Act interim rule that was DEPARTMENT OF HOMELAND SUPPLEMENTARY INFORMATION: published on August 15, 2014 (79 FR SECURITY Table of Acronyms 48039). The August 15, 2014 interim Coast Guard rule covers other aspects of the Direct DHS Department of Homeland Security Component and the Act and takes effect DoD Department of Defense 33 CFR Part 165 FR Federal Register on October 14, 2014. It would be MMRP Military Munitions Response contrary to the public interest to make [Docket No. USCG–2014–0862] Program the RESTORE Act funds available to RIN 1625–AA00 MOTCO Military Ocean Terminal Concord some recipients ahead of others. So that NPRM Notice of Proposed Rulemaking all entities eligible to receive Direct Safety Zone: Suisun Bay A. Regulatory History and Information Component funds are treated equally, Electromagnetic Scan and Ordnance Treasury believes good cause exists to Recovery, Suisun Bay, Concord, CA The Coast Guard is issuing this make this parishes rule effective on the temporary final rule without prior same date as the August 15, 2014 AGENCY: Coast Guard, DHS. notice and opportunity to comment interim rule. ACTION: Temporary final rule. pursuant to authority under section 4(a) of the Administrative Procedure Act SUMMARY: The Coast Guard is List of Subjects in 31 CFR Part 34 (APA) (5 U.S.C. 553(b)). This provision establishing temporary safety zones in Coastal zone, Fisheries, Grant authorizes an agency to issue a rule the navigable waters of Suisun Bay in programs, Grants administration, without prior notice and opportunity to support of the Military Ocean Terminal Intergovernmental relations, Marine comment when the agency for good Concord (MOTCO) electromagnetic scan resources, Natural resources, Oil cause finds that those procedures are and ordnance recovery operations. pollution, Research, Science and ‘‘impracticable, unnecessary, or contrary These safety zones are established to technology, Trusts, Wildlife. to the public interest.’’ ensure the safety of the ordnance Under 5 U.S.C. 553(d)(3), the Coast For the reasons set forth in the identification and recovery teams and Guard finds that good cause exists for preamble, the Department of the mariners transiting the area. making this rule effective less than 30 Treasury amends 31 CFR subtitle A, part Unauthorized persons or vessels are days after publication in the Federal 34, to read as follows: prohibited from entering into, transiting Register. MOTCO notified the Coast through, or remaining in the safety PART 34—RESOURCES AND Guard on September 4, 2014 that they zones without permission of the Captain ECOSYSTEMS SUSTAINABILITY, intend to conduct an intrusive of the Port or their designated TOURIST OPPORTUNITIES, AND electromagnetic scan and ordnance representative. REVIVED ECONOMIES OF THE GULF recovery operation in selected areas of COAST STATES DATES: This rule is effective without Suisun Bay with a high probability of actual notice from October 10, 2014 containing ordnance items, and the ■ 1. The authority citation for part 34 until October 31, 2014. For the purposes operation would occur before the continues to read as follows: of enforcement, actual notice will be rulemaking process would be Authority: 31 U.S.C. 301; 31 U.S.C. 321; 33 used from September 29, 2014, through completed. It would be impracticable to U.S.C. 1251 et seq. October 31, 2014. This rule will be collect and respond to comments before enforced from 7 a.m. to 6 p.m. on the ■ 2. In § 34.302, revise the section the recovery operations begin. The dates mentioned above. heading and add a second sentence in safety zone is necessary to ensure the paragraph (e) to read as follows: ADDRESSES: Documents mentioned in safety of the teams conducting ordnance this preamble are part of docket USCG– scanning and recovery operations as § 34.302 Allocation of funds—Direct 2014–0862. To view documents well as provide for the safety of vessels Component. mentioned in this preamble as being transiting the area. For the safety * * * * * available in the docket, go to http:// concerns noted, it is in the public (e) * * * The share of each coastal www.regulations.gov, type the docket interest to have these regulations in zone parish is as follows: Ascension, number in the ‘‘SEARCH’’ box and click effect during the event. 2.42612%; Assumption, 0.93028%; ‘‘SEARCH.’’ Click on Open Docket Calcasieu, 5.07063%; Cameron, Folder on the line associated with this B. Basis and Purpose 2.10096%; Iberia, 2.55018%; Jefferson, rulemaking. You may also visit the The legal basis for the proposed rule 11.95309%; Lafourche, 7.86746%; Docket Management Facility in Room is 33 U.S.C 1231; 46 U.S.C Chapter 701, Livingston, 3.32725%; Orleans, W12–140 on the ground floor of the 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 7.12875%; Plaquemines, 17.99998%; St. Department of Transportation West 1.05–1, 6.04–1, 6.04–6, 160.5; Public Bernard, 9.66743%; St. Charles, Building, 1200 New Jersey Avenue SE., Law 107–295, 116 Stat. 2064;

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Department of Homeland Security the conclusion of the electromagnetic have a significant economic impact on Delegation No. 0170.1, which scan and ordnance recovery the safety a substantial number of small entities collectively authorize the Coast Guard zones shall terminate. for the following reasons. The safety to establish safety zones. The effect of the temporary safety zones will be activated, and thus subject MOTCO is conducting zones will be to restrict navigation in to enforcement, for a limited duration. Electromagnetic Scan and Ordnance the vicinity of the electromagnetic scan When the safety zones are activated, Recovery operations from September 29, and ordnance recovery operations. vessel traffic could pass safely around 2014 through October 31, 2014 in the Except for persons or vessels authorized the safety zones. The maritime public navigable waters of the Suisun Bay, CA by the Coast Guard Patrol Commander, will be advised in advance of the safety as depicted in National Oceanic and no person or vessel may enter or remain zones via Broadcast Notice to Mariners. Atmospheric Administration (NOAA) in the restricted area. Chart 18656. The Military Munitions 3. Assistance for Small Entities Response Program (MMRP) addresses D. Regulatory Analyses Under section 213(a) of the Small the safety and environmental hazards We developed this rule after Business Regulatory Enforcement presented by munitions and explosives. considering numerous statutes and Fairness Act of 1996 (Pub. L. 104–121), MOTCO recently completed an executive orders related to rulemaking. we want to assist small entities in underwater geophysical survey of Below we summarize our analyses understanding this rule. If the rule Suisun Bay whereby they identified 55 based on these statutes and executive would affect your small business, locations throughout Suisun Bay with orders. organization, or governmental ferrous-based objects that may contain 1. Regulatory Planning and Review jurisdiction and you have questions ordnance deposited as a result of the concerning its provisions or options for Port Chicago explosion on July 17, 1944. This rule is not a significant compliance, please contact the person They completed 33 of the locations in regulatory action under section 3(f) of listed in the FOR FURTHER INFORMATION 2013 and are now finishing the last 22. Executive Order 12866, Regulatory CONTACT, above. These safety zones are necessary to Planning and Review, as supplemented Small businesses may send comments ensure the safety of teams conducting by Executive Order 13563, Improving on the actions of Federal employees electromagnetic scans and ordnance Regulation and Regulatory Review, and who enforce, or otherwise determine recovery operations and to ensure the does not require an assessment of compliance with, Federal regulations to safety of mariners transiting the area. potential costs and benefits under the Small Business and Agriculture These safety zones will be enforced section 6(a)(3) of Executive Order 12866 Regulatory Enforcement Ombudsman from September 29, 2014 to October 31, or under section 1 of Executive Order and the Regional Small Business 2014 between the hours of 7 a.m. and 13563. The Office of Management and Regulatory Fairness Boards. The 6 p.m. The safety zones shall terminate Budget has not reviewed it under those Ombudsman evaluates these actions at the conclusion of the electromagnetic Orders. annually and rates each agency’s scan and ordnance recovery operations. We expect the economic impact of responsiveness to small business. If you this rule will not rise to the level of C. Discussion of the Final Rule wish to comment on actions by necessitating a full Regulatory employees of the Coast Guard, call 1– The Coast Guard will enforce a 500 Evaluation. The safety zone is limited in 888–REG–FAIR (1–888–734–3247). The foot moving safety zone around a 2- duration, and is limited to a narrowly Coast Guard will not retaliate against barge configuration, flying a red flag, tailored geographic area. In addition, small entities that question or complain and traveling throughout Suisun Bay although this rule restricts access to the about this rule or any policy or action conducting electromagnetic scan and waters encompassed by the safety zone, of the Coast Guard. ordnance recovery operations from the effect of this rule will not be September 29, 2014 to October 31, 2014 significant because the local waterway 4. Collection of Information between the hours of 7 a.m. and 6 p.m. users will be notified via public This rule will not call for a new To minimize impacts to commerce, the Broadcast Notice to Mariners to ensure collection of information under the ordnance disposal team will cease the safety zone will result in minimum Paperwork Reduction Act of 1995 (44 operations to accommodate commercial impact. The entities most likely to be U.S.C. 3501–3520). vessels requiring transit through the affected are waterfront facilities, navigation channel in vicinity to the commercial vessels, and pleasure craft 5. Federalism project location. Commercial vessels engaged in recreational activities. A rule has implications for federalism will be informed via broadcast and local under Executive Order 13132, notice to mariners to coordinate passing 2. Impact on Small Entities Federalism, if it has a substantial direct arrangements with the ordnance The Regulatory Flexibility Act of 1980 effect on the States, on the relationship disposal team prior to transiting the (RFA), 5 U.S.C. 601–612, as amended, between the national government and project area. requires federal agencies to consider the the States, or on the distribution of A temporary safety zone will be potential impact of regulations on small power and responsibilities among the established for emergency ordnance entities during rulemaking. The term various levels of government. We have detonation between Roe Island and Ryer ‘‘small entities’’ comprises small analyzed this rule under that Order and Island at the following location: businesses, not-for-profit organizations determined that this rule does not have 38°04′24″ N, 122°01′14″ W (NAD 83) for that are independently owned and implications for federalism. use only in the event that unstable operated and are not dominant in their ordnance items are recovered that fields, and governmental jurisdictions 6. Protest Activities require immediate detonation on site. with populations of less than 50,000. The Coast Guard respects the First Until such a time is needed, vessel This rule may affect owners and Amendment rights of protesters. traffic is free to move through the area. operators of waterfront facilities, Protesters are asked to contact the A broadcast will be released when the commercial vessels, and pleasure craft person listed in the FOR FURTHER zone will be enforced, giving vessel engaged in recreational activities and INFORMATION CONTACT section to traffic enough time to leave the area. At sightseeing. The safety zones will not coordinate protest activities so that your

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message can be received without 14. Environment Island at the following location: ° ′ ″ ° ′ ″ jeopardizing the safety or security of We have analyzed this rule under 38 04 24 N, 122 01 14 W (NAD 83) for people, places or vessels. Department of Homeland Security use only in the event that unstable 7. Unfunded Mandates Reform Act Management Directive 023–01 and ordnance items are recovered that Commandant Instruction M16475.lD, require immediate detonation on site. The Unfunded Mandates Reform Act which guide the Coast Guard in Until such a time is needed, vessel of 1995 (2 U.S.C. 1531–1538) requires complying with the National traffic is free to move through the area. Federal agencies to assess the effects of Environmental Policy Act of 1969 A broadcast will be released when the their discretionary regulatory actions. In (NEPA) (42 U.S.C. 4321–4370f), and zone will be enforced, giving vessel particular, the Act addresses actions have concluded this action is one of a traffic enough time to leave the area. that may result in the expenditure by a category of actions that do not (b) Enforcement period. The zones State, local, or tribal government, in the individually or cumulatively have a described in paragraph (a) of this aggregate, or by the private sector of significant effect on the human $100,000,000 (adjusted for inflation) or environment. This rule involves a safety section will be in effect from September more in any one year. Though this rule zone of limited size and duration. This 29, 2014 through October 31, 2014 will not result in such an expenditure, rule is categorically excluded from between the hours of 7 a.m. until 6 p.m. we do discuss the effects of this rule further review under paragraph 34(g) of The Captain of the Port San Francisco elsewhere in this preamble. Figure 2–1 of the Commandant (COTP) will notify the maritime 8. Taking of Private Property Instruction. An environmental analysis community of periods during which this checklist supporting this determination zone will be enforced via Broadcast This rule will not cause a taking of and a Categorical Exclusion Notice to Mariners in accordance with private property or otherwise have Determination are available in the 33 CFR 165.7. taking implications under Executive docket where indicated under Order 12630, Governmental Actions and (c) Definitions. As used in this ADDRESSES. We seek any comments or section, ‘‘designated representative’’ Interference with Constitutionally information that may lead to the Protected Property Rights. means a Coast Guard Patrol discovery of a significant environmental Commander, including a Coast Guard 9. Civil Justice Reform impact from this rule. coxswain, petty officer, or other officer This rule meets applicable standards List of Subjects in 33 CFR Part 165 on a Coast Guard vessel or a Federal, in sections 3(a) and 3(b)(2) of Executive Harbors, Marine safety, Navigation State, or local officer designated by or Order 12988, Civil Justice Reform, to (water), Reporting and recordkeeping assisting the COTP pursuant to a minimize litigation, eliminate requirements, Security measures, and Memorandum of Understanding with ambiguity, and reduce burden. Waterways. that agency, to assist in the enforcement 10. Protection of Children For the reasons discussed in the of the safety zones. We have analyzed this rule under preamble, the Coast Guard amends 33 (d) Regulations. (1) Under the general Executive Order 13045, Protection of CFR part 165 as follows: regulations in 33 CFR Part 165, Subpart Children from Environmental Health C, entry into, transiting or anchoring PART 165—REGULATED NAVIGATION within this safety zone is prohibited Risks and Safety Risks. This rule is not AREAS AND LIMITED ACCESS AREAS an economically significant rule and unless authorized by the COTP or a does not create an environmental risk to ■ 1. The authority citation for part 165 designated representative. health or risk to safety that may continues to read as follows: (2) The safety zone is closed to all disproportionately affect children. Authority: 33 U.S.C. 1231; 46 U.S.C. vessel traffic, except as may be 11. Indian Tribal Governments Chapter 701; 50 U.S.C. 191, 195; 33 CFR permitted by the COTP or a designated 1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. representative. This rule does not have tribal 107–295, 116 Stat. 2064; Department of implications under Executive Order Homeland Security Delegation No. 0170.1. (3) Vessel operators desiring to enter or operate within the safety zone must 13175, Consultation and Coordination ■ 2. Add temporary § 165.T11–666 to contact the COTP or a designated with Indian Tribal Governments, read as follows: because it does not have a substantial representative to obtain permission to direct effect on one or more Indian § 165.T11–666 Safety zone; Suisun Bay do so. Vessel operators given permission tribes, on the relationship between the Electromagnetic Scan and Ordnance to enter or operate in the safety zone Federal Government and Indian tribes, Recovery, Suisun Bay, Concord, CA. must comply with all directions given to or on the distribution of power and (a) Location. A temporary 500 foot them by the COTP or a designated responsibilities between the Federal moving safety zone will be established representative. Persons and vessels may Government and Indian tribes. around a 2-barge configuration, flying a request permission to enter the safety red flag, and traveling throughout 12. Energy Effects zone on VHF–23A or through the 24- Suisun Bay conducting electromagnetic hour Command Center at telephone This action is not a ‘‘significant scan and ordnance recovery operations (415) 399–3547. energy action’’ under Executive Order as depicted in National Oceanic and 13211, Actions Concerning Regulations Atmospheric Administration (NOAA) Dated: September 25, 2014. That Significantly Affect Energy Supply, Chart 18656. Prior to vessels traveling Michael H. Day, Distribution, or Use. through the navigational channel, notice Captain, U.S. Coast Guard, Captain of the will be given to the barges so that they Port San Francisco, Acting. 13. Technical Standards have ample time to move out of the way [FR Doc. 2014–24292 Filed 10–9–14; 8:45 am] This rule does not use technical and not impede traffic. An additional BILLING CODE 9110–04–P standards. Therefore, we did not temporary safety zone will be consider the use of voluntary consensus established for emergency ordnance standards. detonation between Roe Island and Ryer

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DEPARTMENT OF HEALTH AND experts in the field of child welfare and source for safety-related data. If a state HUMAN SERVICES related areas. is proposing to use alternative source The CFSRs enable CB to: (1) Ensure data for NCANDS, such data must be Administration for Children and conformity with federal child welfare child-level data and contain all of the Families requirements; (2) determine what is data elements necessary for CB to actually happening to children and calculate performance for an indicator. 45 CFR Part 1355 families as they are engaged in child If we determine that a state is not in welfare services; and (3) assist states to substantial conformity with a related Statewide Data Indicators and National enhance their capacity to help children outcome due to its performance on an Standards for Child and Family and families achieve positive outcomes. indicator, the state will include that Services Reviews CB conducts the reviews in partnership indicator in its program improvement AGENCY: Children’s Bureau (CB), with state child welfare agency staff and plan. The improvement a state must Administration for Children and other partners and stakeholders achieve is relative to the state’s baseline Families (ACF), Administration on involved in the provision of child performance at the beginning of the Children, Youth and Families (ACYF), welfare services. We have structured the program improvement plan period. Department of Health and Human reviews to help states identify strengths In an April 23, 2014 Federal Register Services (HHS). as well as areas needing improvement document (79 FR 22604) we provided a within their agencies and programs. detailed review of the consultation with ACTION: Final notice of statewide data We use the CFSR to assess state the field and information considered in indicators and national standards for performance on seven outcomes and developing the third round of the Child and Family Services Reviews. seven systemic factors. The seven CFSRs. We also proposed a plan for using statewide data indicators and SUMMARY: On April 23, 2014, the outcomes focus on key items measuring Administration of Children and safety, permanency, and well-being. The national standards that is different than Families (ACF) published a document seven systemic factors focus on key state those used in prior rounds including the in the Federal Register (79 FR 22604). plan requirements of titles IV–B and IV– method to calculating such indicators The document provided the Children’s E that provide a foundation for child and standards and our rationale. During Bureau’s plan to replace the statewide outcomes. If we determine that a state the 30-day public comment period data indicators used to determine a has not achieved substantial conformity following the Federal Register state’s substantial conformity with titles in one or more of the areas assessed in document, we received 52 unique IV–B and IV–E of the Social Security the review, the state is required to responses from state and local child Act through the Child and Family develop and implement a program welfare agencies, national and local Services Reviews (CFSRs). After improvement plan within two years advocacy and human services consideration of the public comments addressing the areas of nonconformity. organizations, researchers and other and additional Children’s Bureau CB supports the states with technical interested persons. CB’s reviewed all analysis, the Children’s Bureau is now assistance and monitors implementation public comments and questions before publishing its final plan. Where of their program improvement plans. making final decisions regarding the relevant, this document addresses key We withhold a portion of the state’s statewide data indicators and the comments from the field in response to federal title IV–B and IV–E funds if the methodology. This public notice the April 23, 2014 Federal Register state is unable to complete its program includes a summary of our response. document. improvement plan successfully. The public comments and questions Most relevant to this document are that were submitted are available in DATES: Effective October 10, 2014. the national standards for state their original form on FOR FURTHER INFORMATION CONTACT: performance on statewide data www.regulations.gov. Miranda Lynch Thomas, Children’s indicators CB uses to determine whether Summary of Final Statewide Data Bureau, 1250 Maryland Ave. SW., 8th a state is in substantial conformity with Indicators and Methods Floor, Washington, DC 20024, (202) certain child outcomes. We are 205–8138. authorized by the regulations at 45 CFR We have changed two indicators in response to the public comments. CB SUPPLEMENTARY INFORMATION: 1355.34(b)(4) and (5) to add, amend, or suspend any of the statewide data will measure the recurrence of Background indicators and to adjust the national maltreatment instead of repeat reports of maltreatment as we proposed in the The Children’s Bureau (CB) standards when appropriate. Statewide April Federal Register document. We implemented the CFSRs in 2001 in data indicators are aggregate measures will also add a new indicator to measure response to a mandate in the Social and we calculate them using permanency in 12 months for children Security Amendments of 1994. The administrative data available from a in foster care for 12 months to 23 legislation required the Department of state’s submissions to the Adoption and months. Health and Human Services to issue Foster Care Analysis and Reporting System (AFCARS),1 the National Child Therefore our final plan is to use two regulations for the review of state child statewide data indicators to measure and family services programs under Abuse and Neglect Data System (NCANDS),2 or a CB-approved alternate maltreatment in foster care and titles IV–B and IV–E of the Social recurrence of maltreatment in Security Act (see section 1123A of the 1 evaluating Safety Outcome 1: Children Social Security Act). The reviews are AFCARS collects case-level information from state and Tribal title IV–E agencies on all children are, first and foremost, protected from required for CB to determine whether in foster care and those who have been adopted abuse and neglect. We will use such programs are in substantial with title IV–E agency involvement. Title IV–E statewide data indicators to measure agencies must submit AFCARS data to the conformity with title IV–B and IV–E achievement of permanency in 12 plan requirements. The review process, Children’s Bureau twice a year. 2 NCANDS collects child-level information on as regulated at 45 CFR 1355.31–37, grew every child who receives a response from a child Children’s Bureau voluntarily. In FFY 2013, all 50 out of extensive consultation with protective services agency due to an allegation of states, the District of Columbia, and Puerto Rico interested groups, individuals, and abuse or neglect. States report this data to the submitted NCANDS data.

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months for children entering foster care, these children were in foster care as of dates. Since the report of an actual permanency in 12 months for children the end of the 12-month period. The incident date can clarify whether an in foster care for 12 months to 23 denominator is drawn from AFCARS. occurrence of maltreatment is actually months, permanency in 12 months for The numerator is of children in the separate from another or whether there children in foster care for 24 months or denominator, the total number of were multiple reports that refer to the more, re-entry to foster care in 12 substantiated or indicated reports of same incident in the data, we are months, and placement stability. These maltreatment (by any perpetrator) compelled to use this information where five permanency indicators will be used during a foster care episode within the it exists. Additionally, to prevent in evaluating Permanency Outcome 1: 12-month period. Rates are calculated potential over-counting of reports that Children have permanency and stability per day of foster care. However, we will are made when a child first enters foster in their living situations. multiply the rate by 100,000 to produce care that reflect what may have occurred A description of each of the seven larger and more readily understood prior to the child’s foster care entry, we statewide data indicators, how we will numbers. This indicator is calculated will exclude all reports of maltreatment calculate them, a summary of relevant using data that match children across that occur within the first 7 days of a public comments, and our rationale for AFCARS and NCANDS using the child’s removal from home. We will the final indicators and response to the AFCARS record number. apply this exclusion consistently for all public comments follows. This Some states provide incident dates in states. document includes our approach to their NCANDS data submissions. If a Some commenters also expressed measuring a state’s program state provides incident dates that are concern about the variation in how improvement on the indicators should associated with the maltreatment report, states decide to accept a report for the state not meet a national standard. those records with an incident date investigation and define substantiated We also provide information on how we occurring outside of the removal or indicated maltreatment to classify will share data and information related episode will be excluded, even if the incidents of abuse or neglect. One to state performance as well as data report dates fall within the episode. We commenter suggested that CB should quality issues that may impact the will also exclude the following: have a consistent definition of indicators and methods. Complete foster care episodes lasting substantiation or indication. We Attachment A provides a summary of less than 8 days, any report of acknowledge that there is variation in each final statewide data indicator maltreatment that occurs within the first how states screen in reports of including the numerators, 7 days of removal, victims who are age maltreatment, define maltreatment, and denominators, adjustments and data 18 or more and youth in foster care at substantiate maltreatment. This periods used to calculate the national age 18 or more. For those youth who at variation reflects the discretion that standards. Attachment B provides a the beginning of an included report states have to define abuse and neglect comparison of the data measures used period are 17 years of age and turn age and build a responsive child protective during CFSR Round 2 with the 18, any time spent in foster care beyond services system. CB does not have statewide data indicators we will use the young person’s 18th birthday is not authority to mandate a singular during Round 3. Attachment C provides counted in the denominator. definition or process. Further, doing so information on the AFCARS and Justification for Inclusion: This would result in skewing our NCANDS data elements that are used to indicator provides a measure of whether understanding of how state child calculate the indicators and national the state child welfare agency is able to protective systems respond to alleged ensure that children do not experience standards. Attachment D provides maltreatment. It may be helpful to think abuse or neglect while in the state’s information on the data quality about this indicator as capturing how foster care system. The indicator holds thresholds applied in determining well the state is able to prevent child states accountable for keeping children whether to include state data for maltreatment, as it defines it, once the safe from harm while under the calculating the indicators. state has made a determination that a responsibility of the state, no matter Finally we are issuing concurrent to child needs the protection of the state’s who perpetrates the maltreatment while this document, CFSR Technical Bulletin foster care system. How well the state is the child is in foster care. able to prevent child maltreatment in #8 that expands on this document with Public Comments and CB Response: additional technical information and this circumstance is relative to a Many commenters supported the national standard based on how all discussion relevant to the statewide data statewide data indicator for indicators, national standards and states perform in preventing maltreatment in foster care that we maltreatment in foster care as each state states’ performance on them. The proposed originally. Such commenters has defined maltreatment. technical bulletin will be available on endorsed how the rate will be A couple of commenters were CB’s Web site www.acf.hhs.gov/ calculated, the inclusion of all concerned that this indicator did not programs/cb. maltreatment types by any perpetrator seem to capture how the agency protects Statewide Data Indicators for CFSR (including parents), the exclusion of children from maltreatment if such Safety Outcome 1: Children Are, First children in foster care less than eight children do not enter foster care. It is and Foremost, Protected From Abuse days, and the use of incident dates. accurate that this indicator is focused on and Neglect Regarding incident dates, some of the protection from subsequent comments noted concern that not all maltreatment for children who are Safety Performance Area 1: states were consistently reporting already in the state agency’s custody. Maltreatment in Foster Care incident dates and some states have We have another indicator that looks at Indicator Description: Of all children difficulty identifying those dates. CB victims of abuse and neglect more in foster care during a 12-month period, acknowledges that there is variation in broadly to address the recurrence of what is the rate of victimization per day states’ capacity to report and actual maltreatment. We believe it is important of foster care? reporting of incident dates. We are to emphasize, however, that the set of Calculation: The denominator is of committed to continuing technical indicators that are used for CFSR children in foster care during a 12- assistance to states so that they can purposes are limited. We encourage month period, the total number of days improve their ability to report incident states to have a more comprehensive set

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of indicators in their own CQI systems NCANDS child file. This was a means proposed indicator to replace the as measures of their performance for of improving state reporting and recurrence of maltreatment indicator improvement and/or public providing context to the data that was used in prior CFSRs as we thought it accountability purposes. CB, through provided to states on maltreatment by could better assess the scope of the joint planning with states and the parents in foster care. As such, we child welfare agency’s protection provision of technical assistance can proposed this indicator noting that response to incoming reports of assist states as they consider appropriate states had improved their reporting of maltreatment. We also believed the indicators and measures to be included AFCARS record numbers which made proposed indicator would address in their Child and Family Services Plan. viable using an indicator with this link potential measurement problems of a Two commenters questioned how in this round of reviews. We have substantiation-based indicator should a trial home visits would impact the identified the states for which using a state change to a differential response indicator. One commenter advocated for consistent identifier is an issue and will approach during the course of a CFSR the inclusion of trial home visits in the be engaging in discussions with them on program improvement period. denominator while the other suggested how they can improve their reporting of A couple of commenters supported that it should be excluded since the AFCARS record numbers. the re-report of maltreatment indicator public may consider children on trial as we proposed it originally. However, home visits to be at home. Since this Safety Performance Area 2: Recurrence of Maltreatment the majority of commenters, particularly indicator is intentionally capturing the state child welfare agencies, expressed maltreatment of a child while in the Indicator Description: Of all children their concerns with the proposed placement and care responsibility of the who were victims of a substantiated or indicator. Many commenters were state agency, including when the child indicated report of maltreatment during concerned about several unintended is visited by his parent or on a trial a 12-month reporting period, what consequences or challenges in percent were victims of another home visit, we have factored in the messaging what the results of this substantiated or indicated maltreatment entire length of the trial home visit indicator mean. allegation within 12 months of their (until discharge) in the indicator. As One concern expressed by such we will not apply a trial home visit initial report? commenters was the potential for any adjustment to this indicator. Calculation: The denominator is the state changes in the policy or program One commenter expressed concern number of children with at least one that this indicator will make it more substantiated or indicated report of criteria for screening in reports to difficult for children in foster care to maltreatment in a 12-month period. The impact a state’s performance on the achieve normalcy in their lives. The numerator is the number of children in indicator, either negatively or concern was that a national measure of the denominator that had another positively. Another concern was that the maltreatment in foster care may substantiated or indicated report of indicator was perceived as contrary to influence child welfare agencies to maltreatment within 12 months of their state and federal laws that encourage require all adults who a child comes initial report. This indicator is and support reporting of potential child into contact with to have criminal and calculated using data from NCANDS. maltreatment. Similarly, some child abuse background checks. CB is We will use report dates as the commenters believed that the indicator, supportive of ensuring that children in primary data element to determine if constructed as a measure of safety, foster care are afforded normalcy to the when the maltreatment occurred, and could be interpreted to mean that extent practicable. We would like to include only reports occurring in the 12- agencies that had high rates of screened- work with states that may have higher month period. Substantiated or in reports of maltreatment were not rates of maltreatment in foster care to indicated maltreatments reports with ensuring child safety and that there analyze which populations appear at report dates in the 12-month period were higher rates of actual recurrence of risk of such harm and the circumstances with disposition dates after the 12- substantiated maltreatment. These in which maltreatment is occurring. month period are included, as well. If commenters noted that some states That way we can help states strategize there is a subsequent report of screen in reports for children who are at how to address these issues maltreatment within 14 days of the little to no risk of maltreatment, such as programmatically while balancing the earlier report we will not count it as for community or public service well-being and other needs of the recurrent maltreatment. If the state referrals. They noted that such referrals children the state serves. provides the incident date and it should not be thought of in the same Finally, a few commenters were indicates that multiple reports refer to way as actual allegations of concerned that the difficulty some states the same incident, we will also not maltreatment. experience in using a common identifier count it as recurrent maltreatment. Secondary concerns raised by in the AFCARS and NCANDS files Youth who are age 18 or more are commenters were around the variation could impact the accuracy of this excluded from the calculation of the in state responses to screened-in reports measure. We have set data quality indicator. as a matter of practice that could make thresholds (see attachment D) to ensure Justification for Inclusion: This interpretation of the indicator that states’ data quality issues do not indicator provides an assessment of challenging. For example, commenters affect the integrity of the standard. We whether the agency was successful in identified challenges associated with have required states to have consistent preventing subsequent maltreatment for the variation in state screening identifiers of children used in the a child if the child is the subject of a decisions and unsubstantiated report reporting of AFCARS data since it began substantiated or indicated report of expunction requirements. Several (1993) and we have requested the maltreatment. commenters provided suggestions for AFCARS record number in the Summary of Public Comments: We retaining the re-report of maltreatment NCANDS child files since FY 2003. In proposed originally an indicator of the indicator including: Requiring a the last round of CFSRs, we provided percent of children with a screened-in substantiated report to follow the initial states with data profiles that indicated report of alleged maltreatment that screened-in report to qualify as a re- the percentage of records with AFCARS occurs within 12 months of an initial report of maltreatment; risk adjusting record numbers reported in the screened-in report. We justified the based on the state’s screen-in rate; and

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allowing for a defined period of time entering foster care and before turning Two commenters pointed out issues between a report and subsequent report. age 18. This indicator is calculated with our original description of the We believe that there is good reason using data from AFCARS. For the indicator as evaluating the first episode for a revision to our approach. We are purposes of this indicator, discharged to within the period for children who have mindful that an indicator must be permanency includes the AFCARS multiple episodes during the same 12- readily explainable to the field and the foster care discharge reasons of: month period. One commenter noted public in terms of what it tells us about Reunification with parents or primary that we indicated in an attachment that a child welfare system’s response to caretakers, living with other relative(s), we would rely on the ‘‘date of most vulnerable children and families. We adoption and guardianship. This recent removal’’ data element and also were concerned about the potential indicator excludes youth who enter questioned whether the description of for unintended consequences with the foster care at or after age 18 and capturing episodes was accurate. proposed measures. We considered children who have a complete foster Another commenter pointed out that some of the commenter’s suggestions for care episode lasting less than 8 days. multiple episodes within a six-month improving a re-report indicator but each For children with multiple foster care period may be masked since you cannot proposed solution raised some level of episodes in the 12-month period, this duplicate children within a report concern. Still, CB believes that this indicator will use the first episode period. Both commenters are accurate indicator does hold potential to shed reported. about the limits of the AFCARS data. light on how well states are providing We apply a trial home visit Each six-month report period from services to the larger population of adjustment to this indicator. This means AFCARS includes detail on the most children at risk. As such, we will that if a child discharges from foster recent foster care episode as of the end include the re-report indicator as care during the 12-month period to of the six-month period. We do not have originally proposed as a context reunification with parents or other information in AFCARS about any measure in the state’s data profile. caretakers after a placement setting of a intervening foster care episodes. These CB will return to an indicator of trial home visit, any time in that trial ‘masked’ episodes represent a very recurrence of maltreatment, similar to home visit that exceeds 30 days is small percentage of all episodes that used in the prior two rounds. One discounted from the length of stay in reported to AFCARS. When we refer to of the modifications to this indicator foster care. A similar trial home visit using the first episode within the over the one used in prior rounds will adjustment has been applied to period, we mean we will use the be to have an expanded timeframe— permanency indicators in prior rounds episode provided in the first six-month looking at substantiated or indicated of CFSRs. The adjustment is made to report period of the year. We are using reports in an initial 12-month period address variations in state policy the earliest one available to us, given the and whether there is a subsequent one regarding returning children to their structure of AFCARS. In the past, when within 12 months. We are also using families for a period of time before the we merged six-month submissions similar adjustments as used in the state makes a formal discharge from together we kept only the most recent recurrence of maltreatment indicator. foster care ending the agency’s reported episode for the 12-month We will use incident dates where placement and care responsibility. period, so this represents a change from available, exclude reports made within Justification for Inclusion: This that practice. indicator provides a focus on the child 14 days of an earlier report, and exclude Permanency Performance Area 2: youth age 18 and older. With this welfare agency’s responsibility to reunify or place children in safe and Permanency in 12 Months for Children indicator, however, we are not able to in Foster Care 12 to 23 Months address one of our concerns about the permanent homes as soon as possible after removal. Indicator Description: Of all children potential impact of a state implementing Public Comments and CB Response: in foster care on the first day of a 12- differential or alternative response on Many commenters expressed support month period who had been in foster the measure. Where states implement for one or more aspects of the care (in that episode) between 12 and 23 differential response during program permanency in 12 months for children months, what percent discharged from improvement, we will consider on a entering foster care indicator. In foster care to permanency within 12 case-by-case basis the situation and its particular, commenters supported the months of the first day of the 12-month implications for accurate depictions of inclusion of guardianship and adoption period? compliance and/or meeting within the concept of permanency and Calculation: The denominator is the improvement goals. the use of an entry cohort to assess the number of children in foster care on the CFSR Permanency Outcome 1: Children state’s achievement of permanency for first day of a 12-month period who had Have Permanency and Stability in children. A few commenters requested been in foster care (in that episode) Their Living Situations clarification on whether we would between 12 and 23 months. The apply the trial home visit adjustment to numerator is the number of children in Permanency Performance Area 1: this indicator, which we have confirmed the denominator who discharged from Permanency in 12 Months for Children above. foster care to permanency within 12 Entering Foster Care A significant number of commenters months of the first day of the 12-month Indicator Description: Of all children believed that this indicator, in period and before turning 18. This who enter foster care in a 12-month combination with the permanency in 12 indicator is calculated using data from period, what percent discharged to months indicator for children who have AFCARS. For the purposes of this permanency within 12 months of been in foster care for 24 months or indicator, discharged to permanency entering foster care? more, left a significant gap in includes AFCARS foster care discharge Calculation: The denominator is the understanding the experiences of reasons of: Reunification with parents or number of children who enter foster children who have been in foster care primary caretakers, living with other care in a 12-month period. The for 12 to 23 months. We are addressing relative(s), adoption and guardianship. numerator is the number of children in these comments by adding an indicator. Youth who are aged 18 years or more on the denominator who discharged to We provide details on the new indicator the first day of the 12-month period are permanency within 12 months of in the next section. excluded from the calculation. We

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apply the trial home visit adjustment, as attention to the children who have been including this group of children in the defined earlier, to this indicator. in care for long periods of time and are statewide data indicator would Justification for Inclusion: This must likely to grow up in foster care. disadvantage states that extend foster indicator provides a focus on the child Thus we chose to add a new cohort care beyond age 18. welfare agency’s responsibility to rather than expand one of the originally CB has specified that this indicator reunify or place children in safe and proposed indicators. will include the trial home visit permanent homes timely if not achieved adjustment as do the other two in the first 12 months of foster care. Permanency Performance Area 3: permanency achievement indicators. Public Comments and CB Response: Permanency in 12 Months for Children We have also addressed the concern As noted above a number of in Foster Care 24 Months or More regarding the gap in cohorts by adding commenters were concerned about the Indicator Description: Of all children another indicator as explained potential for a significant gap in the in foster care on the first day of a 12- previously. Although we have excluded understanding and measurement of month period, who had been in foster from the calculation of this indicator performance for children who may care (in that episode) for 24 months or young people age 18 or older on the first achieve permanency between 12 and 23 more, what percent discharged to day of the 12-month period, we will not months. Some of the concerns expressed permanency within 12 months of the exclude from the denominator young noted that a significant portion of first day of the 12-month period? people who turn age 18 during the 12- children who remain in care beyond a Calculation: The denominator is the month period. Regardless of federal and year achieve permanency within the number of children in foster care on the state provisions that provide young next year and that could not be captured first day of a 12-month period who had people avenues to remain in foster care with the two originally proposed been in foster care (in that episode) for beyond 18 for care and services while indicators. Some made a programmatic 24 months or more. The numerator is they transition to adulthood, when argument about the requirements in title the number of children in the young people do not achieve IV–B and IV–E of the Social Security denominator who are discharged from permanency by 18 they cannot be Act (primarily due to amendments made foster care to permanency within 12 considered to have achieved by the Adoption and Safe Families Act) months of the first day of the 12-month permanency. While we can agree that that focus on procedural safeguards for period and before turning 18. This providing such extended care can mean children who remain in care beyond 12 indicator is calculated using data from better well-being outcomes for youth months. These include requirements for AFCARS. For the purposes of this based on existing research, extending permanency hearings every 12 months indicator discharged to permanency care does not address the young that focus on moving a child to includes AFCARS foster care discharge person’s need for permanency, which is permanency and requirements to file reasons of: Reunification with parents or the focus of this indicator. petitions for termination of parental primary caretakers, living with other rights once a child has been in foster relative(s), adoption, and guardianship. Permanency Performance Area 4: Re- care for 15 out of the most recent 22 Young people who are aged 18 years or entry to Foster Care in 12 Months months, unless exceptions apply. more on the first day of the 12-month Indicator Description: Of all children Similarly, some commenters noted that period are excluded from the who enter foster care in a 12-month guardianships and adoptions often take calculation. The trial home visit period who discharged within 12 more than 12 months due to procedural adjustment, as defined earlier, is months to reunification, living with a and legal requirements, but could still applied to this indicator. relative(s), or guardianship, what be considered timely if occurred within Justification for Inclusion: This percent re-enter foster care within 12 18 to 24 months. These commenters indicator monitors the effectiveness of months of their discharge? advocated for adding an indicator that the state child welfare agency in Calculation: The denominator is the incorporates the performance of the continuing to ensure permanency for number of children who entered foster state in achieving permanency for children who have been in foster care care in a 12-month period and children between their 1st and 3rd year for longer periods of time. discharged within 12 months to of foster care. We found these arguments Public Comments and CB Response: reunification, living with a relative(s), or to be compelling and have added this Several commenters expressed support guardianship. The numerator is the 2nd indicator to be responsive to these for this indicator as a useful measure number of children in the denominator points. because we have a singular concept of who re-entered foster care within 12 Before adding this indicator, we permanency to include permanent months of their discharge from foster considered whether to extend either the placement with a relative, reunification, care. We exclude children in foster care permanency achievement indicator for adoption and guardianship. for less than 8 days from this indicator the entry cohort to include children Commenters agreed with using this and children who enter or exit foster who enter foster care in a 24-month measure in parallel with the care at age 18 or more. If a child re- period, or to expand the cohort of permanency in 12 months for children enters foster care multiple times within children in care 24 months or more to entering foster care indicator. 12 months of their discharge, only the include children in care 12 months or Commenters also appreciated the first reported re-entry into foster care is more. With the former option, we indicator’s potential to maintain a focus selected. This indicator is calculated believed that the longer cohort would on those children who experience long using data from AFCARS. weaken the focus on the large group of lengths of stay in foster care. The field Justification for Inclusion: This children who are likely to exit to expressed concerns similar to those for indicator enables CB to monitor the permanency quickly. We also noted that the permanency in 12 months for effectiveness of programs and practice by changing the cohort we could no children entering foster care indicator. that support reunification and other longer pair it with a companion measure Some commenters also expressed a need permanency goals so that children do of re-entry to foster care within 12 to adjust for trial home visits. A few not return to foster care. months (discussed later). With the latter commenters raised concerns about how Public Comments and CB Response: option we were similarly concerned that the experiences of children age 17 and Some commenters expressed support for we would no longer be able to focus older could impact the measure and if the re-entry to foster care statewide data

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indicator as its own measure and as a cumulative across episodes reported in length of stay in foster care, looked at companion measure to permanency the same year. Rates are calculated per the percent of children with two or performance area 1 as we proposed. day of foster care. However, we will fewer placement settings. The new Companion measures are discussed in multiply the rate by 1,000 to produce indicator controls for the length of time the program improvement plan section larger numbers that are easier to children spend in foster care so only of this document. Several commenters understand. Only those placement one indicator is needed. Further, it shared concerns about the possibility settings that are required to be counted looks at moves per day of foster care, that the indicator overlooks the re-entry in the AFCARS file are used for this rather than children as the unit of to foster care for children who did not indicator. If the child is moved to a analysis, as was employed during CFSR achieve permanency quickly. Comments living arrangement or setting that would Round 2. The measure used for CFSR in this area point out that, because the not result in the state increasing the Round 2 was unable to differentiate indicator focuses on children who number of placement settings reported between children who moved twice achieve permanency within one year, in AFCARS such moves are not from children who moved more. The children who leave foster care after a included in this indicator. Children in new indicator does not count initial year are not considered. They argued foster care for less than 8 days are placements, but counts each subsequent that this creates a truncated view of re- excluded from the calculation. Youth move to capture accurately the rate of entry to foster care. Some of these who turn 18 during the 12-month period placement moves given the amount of commenters noted that the indicator will not have time in care beyond their time they were at risk of moving, rather used in the prior round of reviews had 18th birthday or moves after their 18th than the number of children affected. this more expanded cohort of children birthday counted. CB believes that placement stability is included and provided the state with a Justification for Inclusion: This important to the permanency and well- better perspective of the children who indicator emphasizes states’ being of children in foster care returned to foster care. A number of responsibility to ensure that children regardless of how long they have been alternative approaches to measuring re- whom the state removes from their in foster care. Even so, our analysis of entry to foster care were suggested homes experience stability while they AFCARS data indicates that most including revising the cohort of focus or are in foster care. placement moves occur within a child’s Public Comment and CB Response: adding cohorts or indicators that looked first 12 months of foster care, which is Several commenters expressed support at re-entries into foster care more why we focused this indicator on that for the placement stability data comprehensively. time period. With this refined focus, CB indicator citing it as an improvement During CFSR Round 2, this and states can monitor the period over the previous measure and performance area was evaluated using a during which placement moves are most empirically-based. Some commenters similar measure as a part of a composite. likely to occur and the state’s most For that measure, we calculated the agreed with the use of entry cohorts and recent performance. Since the CFSR percent of all children discharged from the move to a rate of placements Round 2 measures will still be included foster care to reunification or living with controlling for the length of stay. A few as a context measures in the data a relative in a 12-month period, who re- commenters asked for clarity on which profile, states can use such information entered foster care in less than 12 moves in foster care are included in the to analyze their trends, practice and months from the date of discharge. The indicator. In response, we have added to target areas for improvement. CFSR round 3 indicator differs from the the description above. In general, there measure used previously, in part, by are placement settings that are reported Some commenters questioned how to limiting the children included in the in AFCARS but which are not ‘counted’ calculate the measure and whether the indicator to the 12-month entry cohort. in terms of a move. These include trial data were available to do so accurately. We intentionally limited the indicator to home visit episodes, runaway episodes, One concern was whether all placement focus on children that enter foster care respite care and changes in a single days could be counted across all within a 12-month period to better align foster family home’s status, for example episodes in a year. Although the it with the other cohorts. We also note to reflect a licensing change from a structure of AFCARS obscures some again that since most children return to foster care home to a home dually short-term episodes from view, we are their homes or achieve permanency licensed for adoption. Additional using all available information to sum within the first year of entry into foster information on AFCARS placement placement days and moves across care, this indicator will capture the setting changes can be found in the CB’s episodes, to the extent practicable. The majority of the population that may re- Child Welfare Policy Manual.3 number of placement settings is always enter foster care. A few commenters voiced concerns relevant to the reported episode, so this about using only entry cohorts for does not bias the results. Further, it is Proposed Permanency Performance placement stability, which overlooks the same for all states, so we treat states Area 4: Placement Stability children who have been in foster care equally methodologically. Indicator Description: Of all children for longer periods of time. Other Another commenter asked for who enter foster care in a 12-month commenters pointed out that states clarification on whether the indicator period, what is the rate of placement could track additional cohorts of would track children for 12 months moves per day of foster care? children without it being a federal from entry date, or simply count Calculation: The denominator is of indicator for CFSR purposes. During placement days during the 12-month children who enter foster care in a 12- CFSR Round 2, we evaluated placement period for children entering during that month period, the total number of days stability through three individual period. The calculation is the latter; we these children were in foster care as of measures that made up a composite. All will count only the care days used the end of the 12-month period. The three of the measures, differentiated by within the 12-month period. Even if the numerator is of children in the child entered late in the 12-month denominator, the total number of 3 In particular, see the Child Welfare Policy period, we will count only those days placement moves during the 12-month Manual Section 1.2B.7, AFCARS, Data Elements and moves within the 12-month period. and Definitions, Foster Care Specific Elements, period. The days in care and moves Placements found at http://www.acf.hhs.gov/cwpm/ This measure allows for this because it during the placement episodes are programs/cb/laws_policies/laws/cwpm/index.jsp. controls for time in care.

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Some commenters were apprehensive We will work with states to do so in the AFCARS. One agency asked for CB to about how the placement stability data profiles and in the ongoing evaluate how to define ‘‘foster care indicator might impact beneficial assistance we provide to states and their placement’’ to ensure that the states placement moves in foster care. Several stakeholders around practice report consistently who is in foster care commenters pointed out that there are implications. across the country. In particular, the circumstances when placement changes commenter noted that a child’s Additional Comments on Cross-Cutting might produce better outcomes for placement outside of his or her own Issues or Multiple Indicators children or best address their well-being home and with a relative is not always needs such as when children may be Some commenters opined on cross- included in the reporting population moved to be with siblings or to meet the cutting issues or requested that CB depending on the circumstances. placement Indian Child Welfare Act’s address other issues in connection with Another requested that we provide more placement preferences. These the indicators that are relevant as clarity regarding the discharge reason of commenters noted that the data general concerns or to multiple ‘living with relatives’ within AFCARS. generated by the placement stability indicators. There were several CB is not defining those terms further indicator might not adequately explain additional comments that were outside in this document. However, we will these situations or create disincentives the scope of this Federal Register consider how to provide additional to move a child when such moves are document and relate to comments or technical assistance and guidance to appropriate. perspectives on child welfare policy states on how to report AFCARS data As we have noted in response to that are inappropriate for us to address accurately consistent with existing similar comments on the indicators of in this document. policy and also consider whether placement stability used in prior rounds Use of individual indicators and fewer additional policy is necessary. We note of review, AFCARS does not have indicators. Many commenters expressed that in defining AFCARS data elements information about whether a placement strong support for our proposal to and guidance, CB has intentionally change reflects a positive move that is replace the composites used for considered the range of states’ child made for the best interests of the child permanency in round 2 with individual welfare practices, authorities and and/or towards the achievement of the indicators of permanency in this round. responsibilities. For example, the issue child’s permanency and well-being Many appreciated our responsiveness to of whether a child ‘placed’ with a needs. The current administrative data feedback from the field on their relative is reported as in foster care to collection does not capture all of the challenges with translating composite AFCARS depends in part on whether contextual information necessary for us measures and noted that individual the state child welfare agency has to understand the dynamic needs of the indicators had more promise for placement and care responsibility of the child or the conditions of the child’s engaging their workers and partners in child and not whether the child is placement. We have always used the understanding performance and residing in his own home. We want all onsite case review component of the working together towards improvement. states to understand and apply AFCARS CFSR to provide more evaluative Similarly there were several reporting populations, data element information about a child’s moves in commenters who supported using fewer definitions and other related guidance foster care and continue to do so in this indicators as part of the CFSR. Some consistently. However, the application round of reviews.4 In so doing, we noted that a limited number of of that guidance will reflect the unique indicators would also reduce challenges consider whether moves that aspects of a state’s foster care program in the interpretation of multiple legitimately support the child’s best and population. measures, which may sometimes appear interests rather than an agency’s Well Being indicators. One to offer conflicting perspectives on resource limitations or other concerns organization recommended that CB performance. justify the move. States past improve well-being metrics used in the Greater reliance on entry cohorts. CFSR. Particular suggestions included performance during the onsite case Commenters generally supported CB’s review in this area indicates that tracking states’ implementation of intention to rely more on entry cohorts provisions of the Fostering Connections children experience many moves that as a method for measuring performance are not for the purposes of meeting their to Success and Increasing Adoptions 5 and gauging state improvement. Act of 2008 (Public Law 112–34) related needs. However, a commenter suggested that Finally, a couple of commenters noted to health including that children in CB be more precise in its terminology, that state administrators might have foster care receive health screenings, noting that the term ‘‘entry cohort’’ was difficulty in explaining this indicator to have up-to-date health information and overbroad to describe the cohorts of stakeholders or thinking through how it records, and states have processes for interest the indicators include. While relates to practice since it is expressed health oversight plans including we agree that this term is broad, we as a rate as opposed to the prior monitoring children’s use of included the term to reflect our general placement stability measure. We psychotropic medications. Another change in approach to measurement in understand that the new indicators, suggestion was for CB to work with the some areas. As we have described each Centers for Medicare and Medicaid particularly those that are expressed as indicator’s cohort specifically in terms Services (CMS) and the National a rate, will require states to acquire new of which children and circumstances Collaborative for Innovation in Quality strategies to communicate with the field are included in the numerator and the to develop effective well-being about how we measuring performance. denominator we do not believe it is measures. necessary to go into greater detail in CB focuses on how states are 4 See the CFSR Onsite Review Instrument, Stability of Foster Care Placement (item 4) at naming the type of cohorts used. providing for children’s well-being https://training.cfsrportal.org/resources/3044. Federal data elements and needs in the CFSR even though we do 5 U.S. Department of Health and Human Service, consistency of state practice. A few not have data elements in AFCARS or Child and Family Services Reviews Aggregate commenters requested that CB define NCANDS that support the development Report, Findings for Round 2 Fiscal Years 2007– 2010. December 16, 2011. Located online at terms that are referenced in the of meaningful statewide data indicators http://www.acf.hhs.gov/sites/default/files/cb/fcfsr_ indicators or require states to have relevant to child well-being at this time. report.pdf. consistency in what is captured in Through the onsite review component

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of the CFSR, CB examines whether the indicator could be expressed in a information about a state’s performance. state has appropriately assessed a positive fashion. CB chose not to revise CB is committed to consulting with child’s health (including dental) and the indicators or their descriptions in states to understand what their mental health needs, and if applicable, this way. Communicating these statewide performance is or is not whether the state also identified and indicators can be challenging, and revealing about its programs, practice managed any health and mental health reversing the direction of the indicator and results for the particular issues by facilitating the provision of the makes it less intuitive and more populations of children served by the necessary services for all children in complicated to measure and state. Although the assessment of the foster care and applicable children communicate. Second, maintaining state’s performance on national receiving services in their own homes. these indicators as described allows us indicators is part of our monitoring In the evaluation, we consider whether to remain consistent with the concepts efforts, it must be paired with a state the state conducted initial and periodic as measured during prior CFSR rounds, analysis of cases reviewed during the health/mental health screenings for the promoting greater ease of use. In other onsite review and other data or child, the presence or lack thereof of up cases, the measures simply cannot be information that the state has its to date health information and oversight reversed. As such we are keeping the disposal to better understand what is of medications, if applicable. More indicators framed as described. the experience of children involved in information on the particular Applicability to particular the child welfare system. assessment questions in the onsite populations. We received comments of National Standards and State review can be found in the CFSR Onsite concern about how the data indicators Performance Review Instrument.6 CB has described were perceived to apply to specific some of our efforts to focus child well- groups of children. One organization We have set the national standard at being issues in an issuance in 2012.7 CB sought additional consultation with the national observed performance for will continue to work in collaboration Indian tribes on the data indicators and each of the seven indicators. with CMS and other appropriate revisions to round 3 overall to inform For indicators in which the outcome partners to strengthen our ability to our thinking on applicability to Indian for a child either occurred or did not support states in measuring and children. CB conducted in-person occur the standard is calculated as the ensuring positive outcomes in these consultation with Indian tribes in 2011 number of children in the nation areas. regarding improvements in the CFSR in experiencing the outcome divided by Framing indicators in a positive the areas use of data and performance the number of children in the nation monitoring overall. We used this direction. There were several comments eligible for and therefore at risk of the feedback, in conjunction with feedback along the theme of reframing some of outcome. This is the case for the from states and other stakeholders in the indicators so that they were stated indicators that measure permanency (for revising round 3 and the data indicators. positively. For example, one commenter all cohorts) in 12 months, re-entry to However, we understand the need to suggested that the indicator be renamed foster care in 12 months and recurrence further engage Indian tribes in meeting to ‘permanency maintained’ and change of maltreatment. The result of the the needs of Indian children, the calculation of the indicator to be calculation is a proportion. However, particularly those in state custody. In positively framed so that the we present the standard as a percentage addition to reinforcing with states the denominator includes children exiting by multiplying the proportion by 100. importance of engaging and care to permanency and the numerator collaborating Indian tribes throughout For indicators in which the outcome includes those that do not re-enter. the CFSR process, CB will work directly for a child is a count per day in care the Regarding placement stability, two with Indian tribes and organizations standard is calculated as the sum of commenters noted that although the that advocate on behalf of Indian counts for all children in the nation indicator nomenclature is positively children to ensure that Indian tribes are divided by the sum of days these stated as placement stability, the informed about the CFSRs and the children were in care. This is the case description clarifies that the indicator opportunities to participate in them. for the indicators for placement stability itself is calculated negatively as We also received comments of (moves per day in care) and placement instability. These concern about how data indicators can maltreatment in foster care (number of commenters suggested switching the miss how states are performing with victimizations per day in care). The numerator and denominator so that the regard to Native American children, result of the calculation is a rate. We are LGBTQ populations and older youth. multiplying the rates to yield more 6 See the CFSR Onsite Review Instrument, We also heard concerns that state results understandable numbers: for placement Physical Health of the Child and Mental/Behavioral Health of the Child (items 17 and 18). Available on such indicators could be used as stability by 1,000 to yield a rate of online at https://training.cfsrportal.org/resources/ justification for the state to focus their moves per 1,000 days; and, for 3044. attention on other groups of children or maltreatment in foster care by 100,000 7 See for example ACYF–CB–IM–12–04, avoid work in accordance with best to give a rate of victimizations per Promoting Social and Emotional Well-Being for 100,000 days in care. Children and Youth Receiving Child Welfare practices for such populations. We Services. April 17, 2012. Available at http://www. understand that the data indicators are The following table shows the acf.hhs.gov/sites/default/files/cb/im1204.pdf. limited and provide generalized national standards for each indicator.

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TABLE 1—NATIONAL STANDARDS FOR CFSR ROUND 3 STATEWIDE DATA INDICATORS

Statewide data indicators for safety outcome 1 National standard

Maltreatment in Foster Care ...... 8.04 victimizations per 100,000 days in care. Recurrence of Maltreatment ...... 9.0%.

Statewide data indicators for permanency outcome 1 National standard

Permanency in 12 Months for Children Entering Foster Care ...... 40.4%. Permanency in 12 Months for Children in Foster Care 12 to 23 43.7%. Months. Permanency in 12 Months for Children in Foster Care 24 Months 30.3%. or More. Re-Entry to Foster Care in 12 Months ...... 8.3%. Placement Stability ...... 4.12 moves per 1,000 days in foster care.

Public Comment and CB Response: regression model will be used for adjustment for age. Use of dummy Some commenters stated that using the indicators in which the outcome is a variables is a common strategy in national observed performance as the count per unit of time. We chose multi- regression models to measure the national standard for state performance level modeling because it is a widely impact of a characteristic on an was an improvement over CFSR round accepted statistical method that enables outcome. A dummy variable has a value 2. A few others argued that the state fair evaluation of relative performance of 1 or 0 to indicate the presence or should be held to higher standards among states with different case mixes. absence of the characteristic. For believing that was consistent with The multi-level model that we employ example, a child who entered care at age legislative intent in requiring when assessing each state’s performance 2 will have a ‘‘1’’ for the ‘‘age 2’’ ‘‘substantial conformity’’ with federally takes into account: (1) The variation variable and a ‘‘0’’ for all others. For all mandated state plan requirements. across states in the age distribution of but the first day permanency indicators, As we considered how to set national children served for all indicators, and 19 age dummy variables are used to standards, we attempted to balance the the state’s entry rate for select indicators represent the ages from birth to 3 need for standards that were ambitious (risk adjustment); (2) the variation months, four to 11 months, and each yet feasible. We also were mindful of across states in the number of children year from age 1 through 17. The first day the states’ collective historical they serve; and, (3) the variation in permanency measure for children in performance and our historical child outcomes between states. The care 12 to 24 months uses 17 age expectations of substantial conformity. result of this modeling is a performance dummy variables (ages 1 through 17), As we noted in the prior document, we value that is a more accurate and fair and the first day permanency indicator believe that the national observed representation of each state’s for children in foster care 24 months of performance is a reasonable benchmark performance than can be obtained with more uses 16 age dummy variables (ages and would appropriately challenge simply using the state’s observed 2 through 17). The method requires states to improve their performance. performance. specifying a base or reference age group Some commenters urged us to allow Public Comments and CB Response: and for that we use the median age. states to be measured against their own No specific comments were received on We calculate the entry rate as the performance rather than using a using a multi-level approach. number of children entering foster care national comparison due to the Risk Adjustment. We will risk adjust during the 12-month period divided by disparate ways states across the country on child’s age for each indicator the number of children in the state’s conduct child welfare activities. (depending on the indicator it is the child population, multiplied by 1,000. Although we acknowledge that there are child’s age at entry, exit, or on the first We obtain the child population data disparities in child welfare activities in day). See appendix A for details on risk from the population division of the U.S. the states, we believe it is appropriate adjusters. We will also risk adjust on the Census Bureau.8 This Census data for CB to set consistent expectations for state’s foster care entry rate for two reflect population estimates as of July states’ performance in its title IV–B and indicators: Permanency in 12 months 1st of each year, whereas the 12-month IV–E programs. We also note that the for children entering foster care and re- periods CB uses to define children regulation that governs CFSRs requires entry to foster care in 12 months. entering care are either October to that we determine substantial Adjusting on age allows us to control September, or April to March. conformity based in part on national statistically for the fact that children of Therefore, we chose to use the Census standards versus state-specific different ages have different likelihoods year closest to the 12-month period the benchmarks (45 CFR 1355.31(a) and (b)). of experiencing the outcome, regardless child entered foster care as the CB has, however, set improvement goals of the quality of care a state provides. denominator. For example, if the based on how each state has performed Adjusting on foster care entry rate indicator follows children who entered historically. allows us to control for the impact of the care between April 1, 2011 and March Multi-level modeling approach. State states’ case mixes as far as the overall 31, 2012 (an ‘‘11B/12A’’ file in AFCARS performance on each statewide data risk children in that state have of file conventions), we use child indicator will be assessed using a multi- experiencing the outcome. We use entry population estimates from the July 2011 level (i.e., hierarchical) model rate to account for the fact that states Census estimate. If the 12-month period appropriate for that indicator. A multi- with lower entry rates tend to have spanned October 1, 2012 through level logistic regression model will be children at greater risk for poor used for indicators in which the outcomes. 8 Population estimates can be downloaded from outcome for a child either occurred or We use a separate ‘‘dummy’’ variable the U.S. Census Bureau’s Web site at https://www. did not occur. A multi-level Poisson for each age when calculating the risk census.gov/popest/index.html.

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September 30, 2013, we would use permanency indicators for children in aspects of the state’s child welfare population estimates as of July 1, 2013. foster care on the first day. This is program, such as whether the state child After we perform all the calculations because children in foster care on the welfare agency serves youth who are in the model, the result will be the first day of the period will include involved in the juvenile justice system. state’s risk standardized performance. children who entered in various years, Some commenters offered alternative The risk standardized performance is and therefore an entry rate using data approaches to risk adjustment including the ratio of the number of predicted from a single year may not adequately focusing on systemic and environmental outcomes over the number of expected reflect the experience with every child variables at the state level. We note that outcomes, multiplied by the national followed in the indicator. For a similar state program features are not readily observed performance. For details on reason, entry rate was not considered for identifiable in the administrative data how the predicted and expected the maltreatment in foster care that states submit to CB at this time. outcomes are calculated, please consult indicator. This indicator is based on However, risk adjusting on additional CFSR Technical Bulletin #8 for children in foster care during a 12- state-level variables is an important area additional information. month period. Although this indicator of research, and CB encourages Public Comments and CB Response: includes children who entered during researchers to continue to explore the Public comments expressed general the 12-month period, it also includes challenges and advantages of support for risk adjustment, but many children who were in foster care on the implementing such risk adjustment in more requested more information, first day of the period whose entry child welfare. explanation, and transparency to could have occurred at any point in the Some commenters offered alternative understand and comment on the past. approaches to risk adjustment that concept. We have provided more detail For the recurrence of maltreatment involved dividing some of the data in this document to address the issues indicator, we considered as a risk indicators by sub-populations. CB of transparency with precise adjuster the state’s screen-in rate, considered dividing the data indicators methodology explanations in CFSR defined as the number of referrals the by sub-populations as stratifying Technical Bulletin #8. Additionally, we state screens in per 1,000 children in the performance by sub-populations is a understand that risk adjustment adds child population. However, we decided useful strategy to see how outcomes complexity to understanding state against using this adjustment because its vary for children from different performance and so we decided as a impact on the outcome is unclear and backgrounds and experiences. However, matter of policy to employ it judiciously may have unintended consequences. in the context of the CFSR, we chose not in this round of reviews and use only State’s child protective services policies to pursue this approach because of the those variables that had wide support are still under considerable fluctuation, unmanageable set of indicators it would from the field and were statistically especially with the varied produce. For example, if we grouped significant. implementation of differential response child age into five groups as is Commenters offered numerous and structured decision-making. These commonly done, and had separate suggestions for possible risk adjustment and other policies that states are indicators for each age group, the result variables, with the most frequently implementing may affect screen-in rates would be 35 indicators (7 indicators by mentioned being child’s age, foster care in unclear ways, so it would be 5 age groups) based on age, and entry rate, and whether states included challenging to explain what the presumably 35 separate national juvenile justice youth in their child adjustment is doing. We believe more standards, and so forth. Instead, we welfare systems. Other variables the research on the impact of adjusting on chose to implement a risk adjustment field proposed include: The length of screen-in rates is needed before strategy that is widely practiced and can time from the date of a report to the date implementing this into the CFSRs. incorporate multiple risk adjustment of disposition, the state’s screen-in rate, Despite the call by some commenters variables into a single outcome. how child maltreatment is defined to risk adjust for demographic variables, Some commenters questioned statutorily, the degree to which states a few commenters argued that doing so whether CB would provide risk adjusted serve mental health populations and could unintentionally relieve providers information to local jurisdictions that adolescents with behavior problems, of their responsibility to work diligently would likely need to be responsible for poverty, parent factors and children’s to reunify vulnerable populations. implementing changes based on the individual risk factors such as sibling Further, the commenters noted that states’ performance on the indicators. group or severe disabilities. child welfare agencies have a moderate We note that these same models could CB considered and tested age as a risk degree of influence over the nature and be implemented at the state level, using adjuster for all indicators and found it adequacy of the services being provided as the focus of analysis the county to be statistically significant so we are to these populations and that adjusting (instead of the state, as the CB is doing). including it as a variable for all for demographic variables could mask Details about technical assistance indicators. We considered and tested the disparate negative experiences of available for states interested in whether the state’s foster care entry rate higher-risk populations. CB believes the performing similar analyses is should be used for permanency in 12 limited use of risk adjustment at this forthcoming as are further details on the months for children entering foster care, time mitigate some of the concerns information that will be available to re-entry to foster care in 12 months and expressed in these comments. CB would states in data profiles as we finalize placement stability. We found that the also like to note that states are still them. foster care entry rate was statistically encouraged to examine observed A commenter requested clarity on the significant for permanency in 12 months performance for children by age, sex, consequences for program improvement for children entering foster care and re- race and other demographic variables. if a state’s observed score meets the entry to foster care in 12 months and are This level of analysis will help uncover national standard, but the state’s risk using those. We found that foster care disparities in outcomes for certain adjusted performance does not. In this entry rates were not statistically populations based on their situation CB will still require the state significant for placement stability. We demographics. to enter into program improvement. did not consider using foster care entry Many of the suggested risk adjustment This is because the state’s observed rate as an adjuster for the two variables related to the programmatic performance is not the most precise

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measure of the state’s performance after performance relative to the standard. establishing thresholds. CB will set considering its case mix and size in the Due to the staggered schedule of CFSRs, improvement goals and thresholds in context of the performance of other some states will begin their onsite part relative to each state’s past states with similar case mixes. review one to three years after the performance. Categorizing State Performance establishment of the national standards A state can complete its program relative to the National Standards: A and any initial assessment we provide improvement plan successfully with state’s risk standardized performance of where states fall relative to the regard to the indicators by meeting its can be compared directly to the national standards. Or a state may resubmit data improvement goal and staying above the observed performance to determine if for an earlier reporting period prior to threshold for its companion measure, if the state’s risk standardized its review. In preparation for these applicable. The determination that the performance is statistically higher or states’ statewide assessments, CB will state has been successful can be made lower than the national observed rerun the national model using the during the program improvement period performance. To make this assessment, state’s most current data applicable, but or the non-overlapping data period. The CB calculates approximate 95% interval using the fixed data from the original non-overlapping data period follows the estimates around each state’s risk reference population (i.e., the fixed data end of the program improvement plan standardized performance. For details for all other states). This allows us to and is the period in which CB is on how these interval estimates are assess if the state, given its most recent evaluating the state’s resulting calculated, see Technical Bulletin #8. performance, would now meet the performance as evidenced in the data. CB will compare each state’s interval national standard had it performed this Alternatively, CB can relieve a state of estimate to the national observed way when we provide each state’s any further obligation to improve for performance, and assign each state to performance initially. CFSR purposes if the state meets the one of three groups: Sources and Data Periods: The national standard for an indicator prior • ‘‘No different than national datasets used for the national standard to or during the course of program performance’’ if the 95% interval calculations depend on the indicator. improvement monitoring. estimate surrounding the state’s risk Some indicators require more data Companion Measures: If a state has a standardized performance includes the periods than others. For example, the re- program improvement plan that national observed performance. entry indicator requires six report includes improving on the indicator • ‘‘Higher than national performance’’ periods of AFCARS data. This is permanency in 12 months for children if the entire 95% interval estimate because the cohort of children used entering foster care, CB’s determination surrounding the state’s risk requires a look at all children who enter of whether the state has improved standardized performance is higher than foster care over a 12-month period; then successfully will take into consideration the national observed performance. they are followed for another 12-months its performance on the re-entry to foster • ‘‘Lower than national performance’’ to establish whether they have exited to care indicator as a companion measure. if the entire 95% interval estimate permanency; then they are followed for Specifically, the state must not allow surrounding the state’s risk a subsequent 12-months after their exit performance on the companion measure standardized performance is lower than to see if they reenter foster care. to get worse beyond a certain level from the national observed performance. Attachment A specifies the data periods its baseline performance. Thresholds are Whether it is desirable for a state to that will be used for calculating the established as the inverse of be higher or lower than the national national standard for each indicator. performance goals, to provide the performance depends on the indicator. bounds in which states should not For the indicators assessing permanency Monitoring Statewide Data Indicators worsen. For example, a state must stay in 12 months for the three cohorts, a in Program Improvement Plans below a threshold for the companion re- higher value is desirable. For these CB will require states that do not meet entry to foster care indicator as well as indicators if the state’s risk standardized the national standard for an indicator to achieve its goal on the permanency in performance is ‘‘lower than national include improvement on that indicator 12 months for children entering foster performance’’ we will consider the state in its program improvement plan. If we care indicator to successfully complete not to have met the national standard are unable to determine a state’s the program improvement plan. The and will require program improvement. performance on an indicator due to data reverse is also true. If a state must For the remaining indicators, a lower quality issues, we will also require the improve on the re-entry to foster care value is desirable. If a state’s risk state to include that indicator in its indicator in its program improvement standardized performance is ‘‘higher program improvement plan. Data plan, it must not get worse than the than the national performance’’ for these quality levels that prevent CB from threshold established for permanency in indicators, we will consider the state identifying a state’s performance are 12 months for children entering foster not to have met the national standard described in the next section and are care. For details about threshold and will require program improvement. specified in Attachment C. For two of calculations, please see the section For all indicators, we will consider the statewide data indicators, below and CFSR Technical Bulletin #8. states that are ‘‘no different than permanency in 12 months for children Public Comments and CB Response: national performance’’ to have met the entering foster care and re-entry to foster Several commenters expressed strong national standard and no program care, CB will determine performance for support for the use of companion improvement will be required. program improvement purposes on one measures, but requested technical Public Comments and CB Response: A indicator in concert with the other as a assistance to support states’ work in commenter requested clarification on companion measure. The key translating these concepts and the whether the national standards will components for setting improvement calculations for thresholds. CB will remain fixed over the course of the goals and monitoring a state’s progress work to provide states with clear round. The national standard will over the course of a program explanations and visuals within their remain the fixed standard over round 3 improvement plan involve calculating data profiles and technical materials of of the CFSRs. However, there are baselines, setting improvement goals, how the companion measures can be situations in which a state’s more recent and when companion measures are interpreted and are calculated. On the data will be used to evaluate their included in an improvement plan, also other hand, a commenter requested that

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we acknowledge that there could be no needed to evaluate the state’s baseline for a state based on minimum and evidence or justification that one performance at the time of the PIP and maximum levels for improvement that indicator contributed to the result of the then subsequently throughout the we have set for each indicator. We will other. CB was careful to select the program improvement period. Since the set the minimum and maximum companion measures because of the CFSR review schedule is staggered, the improvement levels so that no states are close connection between the practices applicable year or data periods used in required to improve by more than the of one and the other. CB has no plans establishing the baseline will vary. For amount of improvement at the 50th to demonstrate for program example, a state with an onsite review percentile, and all states engaged in a improvement purposes that when a state in April 2015 (FY 2015) and enters into program improvement plan are to increases its exits to permanency within a program improvement plan in improve by at least the amount of 12 months and there is a subsequent September 2015 that includes the improvement at the 20th percentile (or increase reentry that there is causal recurrence of maltreatment indicator 80th percentile, depending on whether would have its baseline calculated relationship between the two (or that higher or lower performance is based on its performance in FY 2014. decreased reentries was caused by preferable on the indicator). We will Since recurrence of maltreatment decreased exits to permanency). then use these values to replace the However, the goal is not to show requires two years of NCANDS data, the applicable data periods would be FY otherwise resulting improvement goal/ causality; the concept is that if a state threshold. The technical detail of the is unable to keep from getting markedly 2013 and FY 2014. Public Comments and CB Response: several steps we will take for these worse on the companion measure it calculations are presented in CFSR cannot be considered to have No comments were received on the Technical Bulletin #8 as well as a full successfully improved on the primary proposal in this area and no changes discussion about the methods chosen indicator as it indicates that something were made. State Improvement Goals and and our rationales for doing so. in the state’s practices was problematic Thresholds: We will establish for the related area of permanency. It Table 2 provides the range of improvement factors for program will always be incumbent on the state, improvement factors for each statewide improvement goals and thresholds (if working in concert with CB, to drill data indicator. If the state is required to applicable) for the data indicators based down into the data and assess its improve for an indicator, the state will on the variability in a state’s observed practice to understand whether, where use their most recent year of observed performance in the three most recent and how practices can be aligned to performance as their baseline in years of data. The improvement factor is ensure that children’s needs are met for multiplied to the state’s observed determining the applicable permanency to be achieved timely and performance for each statewide data improvement factor. For example, for appears to be long lasting. indicator needing improvement in the the permanency in 12 months for State Baselines: CB will set the most recent year available at the start of children entering foster care indicator, baseline for each statewide data the improvement plan. Thresholds are improvement factors will be no lower indicator included in a program calculated for companion measures and than 1.035 and no higher than 1.057. If improvement plan at the state’s reflect levels of performance decline the value generated by a state’s own observed performance on that indicator that the state cannot cross for us to prior performance generates a value for the most recent year of available data consider the state to have successfully within that range, they would use that at the beginning of the program completed the primary statewide value. For example, if the baseline was improvement plan. However, just as indicator. Thresholds are simply the 40% and the state has to show the most there are multiple data periods used for inverse of the improvement goals. improvement, they would simply the development of the national The resulting improvement goal or multiply 1.057 with the baseline and standards, multiple time periods are threshold may be limited or increased obtain a goal of 42.28%.

TABLE 2—MINIMUM AND MAXIMUM IMPROVEMENT ON THE STATEWIDE DATA INDICATORS

Statewide data indicators for safety outcome 1 Minimum Maximum

Maltreatment in Foster Care ...... 0.922 0.849 Recurrence of Maltreatment ...... 0.953 0.910

Statewide data indicators for permanency outcome 1 Minimum Maximum

Permanency in 12 Months for Children Entering Foster care ...... 1.035 1.057 Permanency in 12 Months for Children in Foster Care 12 to 23 months ...... 1.040 1.074 Permanency in 12 Months for Children in Foster Care 24 Months or More ...... 1.034 1.080 Re-Entry to Foster Care in 12 Months ...... 0.912 0.867 Placement Stability ...... 0.953 0.912

Public Comment and CB Response: improvement targets. However, others performance that drops below a Some commenters expressed support for commented that they were confused threshold during program improvement. the program improvement methodology about the methods we proposed and Further, a number of commenters related to statewide data indicators as that they would have difficulty stated that there was not enough an overall concept. Such comments explaining them to stakeholders. information in the original document to included support for the use of Commenters requested more explicit inform further comments and companion measures and thresholds as descriptions on how we will establish challenged a number of our methods well as the use of historical performance goals and threshold and on the chosen as technically inaccurate. These as the basis for performance consequences for states that have commenters noted concerns with

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establishing states performance modeling and risk adjustment will be of placement that is not tied to federal improvement goals based on only three utilized in assessing a state’s performance standards, and indicators data points; using four standard performance over time to account for of juvenile justice case type and a deviations as the distance required for fluctuations in the state’s population. child’s Indian Child Welfare Act (ICWA) improvement; employing the When assessing a state’s performance eligibility and status. Chebyshev’s theorem; and how the over time to determine whether or not In CFSR Technical Bulletin #8 we application of these techniques could states meet program improvement plan have outlined the content of the data lead to states failing to meet the goals, we will not be using the same profiles that we will send to states so minimal level of improvement. As multi-level modeling and risk that they can evaluate their performance alternatives, commenters suggested the adjustment approach. We will be using in completing the statewide assessment. use of two standard deviations; relying the state’s own observed performance We have also outlined our plans for data upon available data, such as historical on the indicators, regardless of changes profile content that will be sent to states AFCARS and NCANDS data; applying in the state’s population to make these during program improvement, if the Empirical Rule rather than using the determination. necessary. We welcome continued input Chebyshev theorem; and allowing Successful completion of program from states on the content of program performance goals to be mutually improvement relative to the indicators: improvement profiles that will support negotiated between states and ACF. Although not specifically outlined in their analysis in developing strategies We made several changes in response our original proposal, we wanted to for improvement. However, we also to these comments. First, we have clarify that a state can complete its encourage states to conduct analysis on provided a more thorough explanation program improvement plan successfully any data available to the state, including of our methods and rationales for those with regard to the indicators in a couple data that is not submitted to CB such as methods in CFSR Technical Bulletin #8 of ways. One is by meeting its juvenile justice case type and ICWA as we believe it is important for states improvement goal and not exceeding status, to inform their understanding of to see the full detail of our methods. We the threshold for its companion their performance and measure also took another look at the application measure, if applicable, at some point progress. of four standard deviations in before the end of the program Data Quality: Excluding States From developing the improvement factors improvement monitoring. Alternatively, National Standards or State given the concerns about setting goals CB can relieve a state of any further Performance that were too large. After we conducted obligation to improve for CFSR additional analysis of the resulting purposes if the state meets the national Setting national standards and improvement factors we agree with standard for an indicator prior to the measuring state performance on commenters that in some circumstances approval of a program improvement statewide data indicators for CFSR employing the 4 standard deviations plan or during the course of program purposes relies upon the states would result in more aggressive improvement monitoring. This latter submitting high-quality data to AFCARS improvement factors than round 2 even provision also means that a state need and NCANDS. Therefore we will when also setting minimum and not meet a program improvement goal exclude states that have data quality maximum improvement expectations at (by application of the improvement issues that exceed the data quality limits the 80th and 20th percentiles. In factor or the minimum or maximum established from the model we use to response, we have adjusted the improvement level) for an indicator if calculate the national standard (i.e., the approach to use 2 standard deviations the state first meets the national national observed performance) and and also to set the maximum standard for that indicator. estimate states’ risk adjusted improvement of all states’ expectations performance. Data to the 50th percentile of all states’ Because errors in the data can original improvement factors, when Data Profiles: We will provide data misrepresent state performance, we calculated for every state and ordered profiles of state performance to each made the decision to remove a state from highest to lowest. state before the state’s CFSR on all seven from the analysis entirely if they exceed Another commenter requested of the statewide data indicators and certain limits on the data quality checks. additional information on whether other contextual data available from We reviewed state-by-state performance improvement goals and thresholds for AFCARS and NCANDS. This data on each data quality item before the statewide data indicators can be profile will assist the state to develop its establishing these limits. Because we do negotiated. As was the case in the prior statewide assessment and begin not want to be too strict and exclude a round, we have standardized the planning for program improvement, if great number of states, we were approach to establish improvement appropriate. In addition, we will conservative and set the limits high for factors that are applied to the state’s provide data profiles semi-annually to common issues (e.g. 10% for dropped baseline and are not negotiating the assist states in measuring progress cases). However, some checks are amount of improvement on the toward the goals identified in the critical to calculations (such as a count indicators. However, we will negotiate program improvement plan. of placements for the placement with a state how to design its program Public Comment and CB Response: stability measure), and we set the limits improvement approaches to attain the Several commenters appreciated our a bit lower (5%) in order to not improvement goals. We will also still commitment to providing data semi- misrepresent state performance. allow a state the opportunity during a annually, recognizing their importance program improvement plan to provide in preparing for CFSRs and improving Data Quality: Case-Level Exclusions data that can be verified, reproduced practice on a more general basis. Several For those states that do not exceed the and otherwise approved by ACF, as commenters requested specific data quality thresholds but still have evidence that the state has met the categories of information that would be identified data quality problems, we requirement for attaining the required beneficial for continuous quality will include the state in national improvement. improvement activities. Requested standards calculations and measure A commenter requested clarification information included disaggregated data state performance but we will exclude on whether the same multi-level for the statewide data indicators, a rate child-level records with missing or

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invalid data on elements needed to commended us for recognizing that For the permanency by 12 months entry determine the child’s outcome and quality data is critical to assessing cohort indicator, three states were perform the risk adjustment. For performance. Another commenter was excluded. For the reentry to foster care, example, if the risk adjustment for an concerned that the thresholds meant recurrence of maltreatment and indicator includes age at entry, a child that the standards could not be maltreatment in foster care indicators, whose age at entry cannot be considered national; while another four states were excluded. Six states determined (due to a missing date of wanted the thresholds raised to allow were excluded from the calculation of birth) will not be included in the more states to either participate in the the national standard for the placement analysis. For each indicator, we will national standard calculations or have stability indicator. We will continue to provide each state with a list of records their state performance evaluated. work with states that have their data that were excluded from the analyses. We concur with those commenters Public Comments and CB Response: that believe that data quality standards excluded from the national standards or Two commenters expressed support for are necessary to ensure the integrity of evaluation of state performance and our approach to addressing data quality our performance assessment. We believe advise on how they can address the data issues in estimating national standards we have maintained an appropriate quality issues in their systems. and a state’s risk adjusted performance. balance in setting data quality (Authority: 42 U.S.C. 1320a–1a; 45 CFR One commenter urged us to hold states thresholds so as not to exclude states 1355.31–37.) responsible for producing ‘‘high-quality, unreasonably. In terms of the national consistent, and complete data’’ pointing standards, the number of states Mark Greenberg, out that we have not found any state in excluded was relatively few. For the Acting Commissioner, Administration on the past 13 years, to be in full indicators permanency by 12 months for Children, Youth and Families. compliance with the AFCARS standards the 12 to 23 month and 2 or more years Attachment A: Statewide Data through ACF’s AFCARS Assessment first day cohorts, one state was excluded Indicators Reviews. The other commenter from the national standard calculation.

Measure Category Measure title description Denominator Numerator Exclusions & notes Risk adjustment

Safety ...... Maltreatment in Of all children in Of children in fos- Of children in the —If a state pro- —Age at entry (for Foster Care. foster care dur- ter care during a denominator, the vides incident children enter- ing a 12-month 12-month period, total number of dates, records ing) or age on period, what is the total number substantiated or with an incident first day of the the rate of vic- of days these indicated reports date occurring 12-month period timization per children were in of maltreatment outside of the re- (for children al- day of foster foster care as of (by any perpe- moval episode ready in care). care? the end of the trator) during a will be excluded, For national stand- 12-month pe- foster care epi- even if report ard calculation, riod a. sode within the dates fall within uses AFCARS 12-month pe- the episode. periods 2013A riod b. —Complete foster and 2013B and care episodes NCANDS lasting <8 days FY2013 Child are excluded. File. —Any report that occurs within the first 7 days of re- moval is ex- cluded. —Victims age 18 or more are ex- cluded, as well as youth in fos- ter care at 18 or more. For youth who start out as 17 years of age and turn 18 dur- ing the period, any time in fos- ter care beyond his/her 18th birthday is not counted in the denominator. —Cases are matched across AFCARS and NCANDS using AFCARS ID.

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Measure Category Measure title description Denominator Numerator Exclusions & notes Risk adjustment

Safety ...... Recurrence of Mal- Of all children who Number of children Number of children Relies primarily on —Age at initial vic- treatment. were victims of a with at least one in the denomi- the report date timization. substantiated or substantiated or nator that had to determine indicated report indicated report another substan- whether the mal- of maltreatment of maltreatment tiated or indi- treatment oc- during a 12- in a 12-month cated report of curred in the first month period, period. maltreatment 12-month period; what percent within 12 months therefore, if a were victims of of their initial re- case does not another substan- port. reach disposition tiated or indi- until the fol- cated report of lowing 12-month maltreatment period but has a within 12 months report date in of their initial re- the first, we in- port? clude it. For national stand- —If subsequent re- ard calculation, port is within 14 uses NCANDS days, we do not FY 2012 and FY count it. 2013 Child Files. —If incident date indicates that two reports refer to the same inci- dent, we do not count it. —If report date is prior to the first 12 months, we exclude it. —Youth age 18 or more are ex- cluded from the measure.

Permanency ... Permanency in 12 Of all children who Number of children Number of children —Children in foster —Age at entry. Months for Chil- enter foster care who enter foster in the denomi- care <8 days are —State’s foster dren Entering in a 12-month care in a 12- nator who dis- excluded. care entry rate. Foster Care. period, what per- month period. charged to per- —Children who cent discharged manency within enter foster care to permanency 12 months of en- at age 18 or within 12 months tering foster care more are ex- of entering foster and before turn- cluded. care? c ing 18. —Trial home visit For national stand- adjustment is ard calculation, applied. uses AFCARS periods 2011B through 2013A.

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Measure Category Measure title description Denominator Numerator Exclusions & notes Risk adjustment

Permanency ... Permanency in 12 Of all children in Number of children Number of children —Children age 18 —Age on first day. Months for Chil- foster care on in foster care on in the denomi- or more on the dren in Foster the first day of a the first day of a nator who dis- first day of the Care 12–23 12-month period 12-month period, charged from 12-month period Months. who had been in who had been in foster care to are excluded. foster care (in foster care (in permanency —Trial home visit that episode) be- that episode) be- within 12 months adjustment is tween 12 and 23 tween 12 and 23 of the first day of applied. months, what months. the 12-month percent dis- period and be- charged from fore turning 18. foster care to permanency within 12 months of the first day of the 12-month period? For national stand- ard calculation, uses AFCARS periods 2013B and 2014A.

Permanency ... Permanency in 12 Of all children in Number of children Number of children —Children age 18 —Age on first day. Months for Chil- foster care on in foster care on in the denomi- or more on the dren in Foster the first day of a the first day of a nator who dis- first day of the Care 24 Months 12-month period, 12-month period, charged from 12-month period or More. who had been in who had been in foster care to are excluded. foster care (in foster care (in permanency —Trial home visit that episode) for that episode) for within 12 months adjustment is 24 months or 24 months or of the first day of applied. more, what per- more. the 12-month cent discharged period and be- to permanency fore turning 18. within 12 months of the first day of the 12-month period? For national stand- ard calculation, uses AFCARS periods 2013B and 2014A.

Permanency ... Re-Entry to Foster Of all children who Number of children Number of children —Children in foster —Age at exit. Care in 12 enter foster care who enter foster in the denomi- care <8 days are —State’s foster Months. in a 12-month care in a 12- nator who re- excluded. care entry rate. period, who dis- month period enter foster care —Children who charged within and discharged within 12 months enter or exit fos- 12 months to re- within 12 months of their dis- ter care at age unification, live to reunification, charge. 18 or more are with relative, or live with rel- excluded, guardianship, ative(s), or —If a child has what percent re- guardianship. multiple re-en- enter foster care tries within 12 within 12 months months of their of their dis- discharge, only charge? a his first re-entry For national stand- is selected. ard calculation, uses AFCARS periods 2011B through 2014A.

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Measure Category Measure title description Denominator Numerator Exclusions & notes Risk adjustment

Permanency ... Placement Stability Of all children who Of children who Of children in the —Children in foster —Age at entry. enter foster care enter foster care denominator, the care <8 days are in a 12-month in a 12-month total number of excluded. period, what is period, the total placement —Children who the rate of place- number of days moves during enter foster care ment moves per these children the 12-month at age 18 or day of foster were in foster period e. more are ex- care? care as of the cluded. For For national stand- end of the 12- youth who enter ard calculation, month period d. at 17 years of uses AFCARS age and turn 18 periods 2013B during the pe- and 2014A. riod, any time in foster care be- yond his/her 18th birthday or placement changes after that date are not counted. —The initial re- moval from home (and into care) is not counted as a placement move. Notes: The letters ‘A’ and ‘B’ are shorthand for the six-month AFCARS reporting periods. The ‘A’ period spans October 1st–March 31st, and the ‘B’ period spans April 1st–September 30th of any given year. The year always refers to the year in which the six-month period ends. For ex- ample, 2014A refers to the six month period of 10/1/2013 through 3/31/2014. a For example, if during the 12-month period there were two children in foster care, one child for 10 days (1st episode), the same child for 40 days (2nd episode), and the other child for 100 days (his only episode), the denominator would = 150 days (10+40+100). b For example, if during the 12-month period there were two children in foster care, and one child had 3 substantiated or indicated reports and the other had 1 such report, the numerator would = 4 reports (3+1). c If a child has multiple entries during the 12-month period, only the first entry in the 12-month period is selected. d For example, if during the 12-month period two children entered care, one child for 10 days and the other child for 100 days, the denominator would be 110 days (10+100). e For example, if during the 12-month period two children entered care, and one child had 3 moves and the other had 1 move, the numerator would = 4 moves (3+1).

Attachment B: Comparison of Data Measures—CFSR Round 2 and Round 3

Comparable CFSR round 2 Category Measure title CFSR round 3 indicator measure How and why it’s changed

Safety ...... Maltreatment in foster care ..... Of all children in foster care Of all children in foster care In the CFSR 2 measure, during a 12-month period, during the reporting period, counts of children not mal- what is the rate of victimiza- what percent were not vic- treated in foster care are de- tion per day a of foster care? tims of substantiated or indi- rived by subtracting the cated maltreatment by a fos- NCANDS count of children ter parent or facility staff maltreated by foster care member? providers from the total count of all children placed in foster care, as reported in AFCARS. Because of im- proved reporting by states, we now link AFCARS and NCANDS data using the child ID and determine if maltreatment occurred dur- ing a foster care episode, improving accuracy on the indicator.

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Comparable CFSR round 2 Category Measure title CFSR round 3 indicator measure How and why it’s changed

This also allows us to expand the measure to include all types of perpetrators (includ- ing, for example, parents) under the assumption that states should be held ac- countable for keeping chil- dren safe from harm while in the care of the state, no matter who the perpetrator is.

Safety ...... Recurrence of maltreatment ... Of all children who were vic- Of all children who were vic- We will use a full 12-month tims of substantiated or indi- tims of substantiated or indi- period rather than only 6 cated maltreatment allega- cated maltreatment allega- months to capture the de- tion during a 12 month pe- tion during the first 6 months nominator, to create more riod, what percent were vic- of the reporting period, what stable estimates. We will tims of another substan- percent were not victims of also track them for another tiated or indicated maltreat- another substantiated or in- full 12 month to see if there ment allegation within the dicated maltreatment allega- is a recurring maltreatment. next 12 months? tion within a 6-month pe- riod? The indicator also includes these changes: If the subse- quent report is within 14 days, we will not count it. While the measure relies on report date, we will also make use of the incident data, when available. If the incident date indicates that two reports refer to the same incident, we will not count it. Finally, youth age 18 or more are excluded from the measure.

Perma- Permanency in 12 months for Of all children who enter foster Composite 1.3: Of all children We now count all types of per- nency. children entering foster care. care in a 12-month period, entering foster care for the manency (reunification, live what percent discharged to first time in a 6-month pe- with relative, adoption or permanency within 12 riod, what percent dis- guardianship) as having months of entering foster charged to reunification (or ‘met’ the indicator. care? live with relative) within 12 We also expanded the meas- months of entering foster ure to include all children care or by the time they who entered foster care that reached 18? year; not just those on their first removal episode. We also expanded the window of time for the entry cohort to a full year instead of 6 months; this will yield more stable estimates.

Perma- Permanency in 12 months for Of all children in foster care on In CFSR Round 2, we looked We add this cohort to allow for nency. children in foster care be- the first day of a 12-month at reunifications within 12 children and youth in foster tween 12 and 23 months. period who had been in fos- months as part of a meas- care who have already been ter care (in that episode) be- ure within Composite 1, and in foster care between 1 and tween 12 and 23 months, we looked at adoptions in 2 years to be a focus for what percent discharged to 24 months as part of Com- permanency, as well. permanency within 12 posite 2. months of the first day? We expect this population to have a higher percentage of exits to adoption or guard- ianship than those entering care during the year.

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Comparable CFSR round 2 Category Measure title CFSR round 3 indicator measure How and why it’s changed

Perma- Permanency in 12 months for Of all children in foster care on Composite 3.1: Of all children Same measure; no change. nency. children in foster care for 24 the first day of a 12-month in foster care on the first day The difference is that it is months or longer. period who had been in fos- of a 12-month period who now evaluated on its own, ter care (in that episode) for had been in foster care (in rather than as just one part 24 months or longer, what that episode) for 2 or more of a composite measure. percent discharged to per- years, what percent dis- We believe it is important to manency within 12 months charged to permanency hold states accountable for of the first day? within 12 months of the first getting those children and day or by the time they youth who have been in fos- reached 18? ter care for long periods of time to permanent homes.

Perma- Re-entry in 12 months ...... Of all children who enter foster Composite 1.4: Of all children The new indicator is limited to nency. care in a 12-month period discharged from foster care those children who entered and discharged within 12 to reunification or live with a foster care during the year, months to reunification, live relative in a 12-month pe- whereas the CFSR Round 2 with relative, or guardian- riod, what percent re-en- measure counted all chil- ship, what percent re-en- tered foster care in less than dren who discharged to re- tered foster care within 12 12 months from the date of unification or live with rel- months of their date of dis- discharge? ative, regardless of when charge? they entered foster care. The purpose of this focus is in keeping with the rationale that new interventions may best be monitored in an entry cohort. This indicator will also be used as a com- panion measure with perma- nency in 12 months, to en- sure that states working to improve permanency rates in their entry cohort do not see worsening performance on rates of re-entry to foster care. We also expanded the denom- inator to allow discharges to guardianship, in an effort to capture more discharges to permanency. Exits to adop- tion are not included be- cause they cannot be tracked reliably, as some states issue new child iden- tifiers if a child who was pre- viously adopted enters fos- ter care.

Perma- Placement stability ...... Of all children who enter foster Composite 4.1: Of all children The proposed indicator con- nency. care in a 12-month period, served in foster care during trols for length of time in fos- what is the rate of place- the 12-month period, what ter care, so we are looking ment moves per day b of percent had two or fewer at moves per day of foster foster care? placement settings? care, rather than children as the unit of analysis. The rationale for using an entry cohort rather than all children served is that our analysis shows children en- tering foster care tend to move much more than those children/youth in foster care for longer periods of time, whose placements may have stabilized. In CFSR Round 2 measure, moves that took place prior to the monitoring period were counted. Now we only count those moves that occur during the monitoring period. The initial placement is not counted.

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Comparable CFSR round 2 Category Measure title CFSR round 3 indicator measure How and why it’s changed

The CFSR Round 2 measure treated children who moved 2 times in an episode the same as children who moved 15 times; both were a failure to meet the meas- ure. The new indicator counts each move, so it continues to hold states ac- countable for those children/ youth who have already moved several times. a The rate may be expressed per 100,000 days because it is such a rare event. Using this metric gives us larger numbers that are easier to communicate. b The rate is expressed per 1,000 days to convert the rate to a metric that gives us larger numbers.

Attachment C: Data Elements Used for hhs.gov/programs/cb/resource/afcars- www.ndacan.cornell.edu/datasets/pdfs_ Statewide Data Indicators tb1. user_guides/178-NCANDS-child2012v1- For information regarding AFCARS For information regarding NCANDS User-Guide-and-Codebook.pdf. data elements, refer to http://www.acf. data elements, refer to http://

Permanency in Primary data elements required 12 months Re-entry to foster Placement stability Recurrence of Maltreatment in for calculation (all 3 indicators) care in 12 months maltreatment foster care

AFCARS FC Element #1 1: Title IV–E Agency ...... X X X NA X AFCARS FC Element #4: Record Num- ber ...... X X X NA X AFCARS FC Element #21: Date of Lat- est Removal...... X X X NA X AFCARS FC Element #23: Date of Placement in Current Foster Care Setting ...... NA NA X NA NA AFCARS FC Element #24: Number of Placement Settings during this Re- moval Episode...... NA NA X NA NA AFCARS FC Element #56: Date of Dis- charge from FC ...... X X X NA X AFCARS FC Element #58: Reason for Discharge ...... X X NA NA NA NCANDS CF Element #4: Child ID ...... NA NA NA X NA NCANDS CF Element #6: Report Date NA NA NA X X NCANDS CF Element #27: Child Mal- treatment 1—Disposition Level 2 ...... NA NA NA X X NCANDS CF Element #29: Child Mal- treatment 2—Disposition Level ...... NA NA NA X X NCANDS CF Element #31: Child Mal- treatment 3—Disposition Level ...... NA NA NA X X NCANDS CF Element #33: Child Mal- treatment 4—Disposition Level ...... NA NA NA X X NCANDS CF Element #34: Maltreat- ment death ...... NA NA NA X X NCANDS CF Element #145: AFCARS ID ...... NA NA NA NA X Optional Data Elements: AFCARS FC Element #41: Current Placement Setting ...... X NA NA NA NA NCANDS CF #146 Incident Date ... NA NA NA X X Additional Data Elements Required for Risk-Adjusted Analysis: AFCARS FC Element #6: Child’s Date of Birth ...... X X X NA X NCANDS CF Element #14: Child Age ...... NA NA NA X NA

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Permanency in Primary data elements required 12 months Re-entry to foster Placement stability Recurrence of Maltreatment in for calculation (all 3 indicators) care in 12 months maltreatment foster care

U.S. Census Bureau: Child Popu- lation, by State (Used to derive state foster care entry rates) ...... X 3 X NA X X 1 The elements are numbered by their position in the flat ASCII files submitted by states to these reporting systems. These numbering schema are specific to the files utilized by ACYF. Files obtained through the National Data Archive on Child Abuse and Neglect (NDACAN) may have a slightly different order. 2 Definition of ‘victim’ includes all children with a disposition level (for any of up to four maltreatments per child) of: a) Substantiated, or b) Indi- cated. These do not propose including differential response victims. Victims also include children who died as a result of maltreatment. 3 Relevant to Permanency by 12 months for the entry cohort only.

Attachment D: Data Quality Items, Limits, and Applicable Measures

Permanency in 12 months (all 3 indi- Data quality item Data quality limit Maltreatment in Recurrence of cators) & re-entry Placement stability foster care maltreatment to foster care in 12 months

AFCARS—Cross File Checks: Dropped cases ...... >10% X n/a X X AFCARS IDs don’t match from one period to next ...... >40% X n/a X X AFCARS—Within-file checks: Missing date of birth ...... >5% X n/a X X Missing date of latest removal ...... >5% X n/a X X Missing # of placement settings ..... >5% n/a n/a n/a X Date of birth after date of entry ...... >5% X n/a X X Date of birth after date of exit ...... >5% X n/a X X Age at entry greater than 21 ...... >5% X n/a X X Age at discharge greater than 21 ... >5% X n/a X X In foster care more than 21 years .. >5% X n/a X X Enters and exits care the same day >5% X n/a X X Exit date is prior to removal date ... >5% X n/a X X Missing discharge reason (exit date exists) ...... >5% n/a n/a X n/a Percent of children on 1st removal <95% X n/a X X NCANDS Data—Cross File Checks: Child IDs don’t match across years <1% n/a X n/a n/a Child IDs match across years, but dates of birth and sex do not match ...... >5% X X n/a n/a Some victims with AFCARS IDs should match IDs in AFCARS files ...... Y/N X n/a n/a n/a Some victims have AFCARS IDs ... <1% X n/a n/a n/a NCANDS Within file checks: Missing age ...... >5% X X n/a n/a Note. If a state exceeds these specified limits, we will not calculate performance for the state on the indicator.

[FR Doc. 2014–24204 Filed 10–9–14; 8:45 am] DEPARTMENT OF HOMELAND SUMMARY: The Coast Guard published a BILLING CODE 4184–25–P SECURITY final rule in the Federal Register on September 29, 2014, that made non- Coast Guard substantive corrections throughout Title 46 of the Code of Federal Regulations. 46 CFR Part 67 In that final rule, the Coast Guard revised a paragraph by substituting an [Docket No. USCG–2014–0688] incorrect word with one that was presumed correct. The substitution is RIN 1625–ZA33 actually incorrect, and the original word was correct. This correction resolves Shipping and Transportation; that error by replacing the word that we Technical, Organizational, and incorrectly removed. Conforming Amendments DATES: This correction is effective on October 10, 2014. AGENCY: Coast Guard, DHS. FOR FURTHER INFORMATION CONTACT: If ACTION: Correcting Amendment. you have questions on this correction,

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call or email Paul Crissy, Office of DEPARTMENT OF COMMERCE FMP and NMFS implements the FMP Standards Evaluation and Development, through regulations at 50 CFR part 622 Coast Guard; telephone 202–372–1093, National Oceanic and Atmospheric under the authority of the Magnuson- email [email protected]. If you Administration Stevens Fishery Conservation and have questions on viewing material on Management Act (Magnuson-Stevens the docket, call Cheryl Collins, Program 50 CFR Part 622 Act). The Magnuson-Stevens Act Manager, Docket Operations, telephone [Docket No. 131231999–4319–01] provides the legal authority for the 202–366–9826. promulgation of emergency regulations RIN 0648–BD87 under section 305(c) (16 U.S.C. 1855(c)). SUPPLEMENTARY INFORMATION: To view the original final rule document, visit Extension of Temporary Rule That Background http://www.gpo.gov/fdsys/granule/FR- Established Separate Annual Catch At its December 2013 meeting, the 2014-09-29/2014-21994. Limits and Accountability Measures for Council requested that NMFS Blueline Tilefish in the South Atlantic promulgate emergency regulations to Background Region reduce overfishing of blueline tilefish and rebuild the blueline tilefish stock, On September 29, 2014, the Coast AGENCY: National Marine Fisheries based on the most recent stock Guard published its annual technical Service (NMFS), National Oceanic and assessment conducted for blueline amendment to make non-substantive Atmospheric Administration (NOAA), tilefish in 2013, while permanent changes to Title 46 of the Code of Commerce. management measures and regulations Federal Regulations. 79 FR 58270. ACTION: Temporary rule; emergency are being developed through action extended. Need for Correction Amendment 32 to the FMP. The need for this emergency action is to minimize SUMMARY: NMFS issues this temporary The Coast Guard published a final adverse biological effects to the blueline rule to extend the expiration date of rule in the Federal Register that created tilefish stock and adverse socio- emergency measures implemented to economic effects to fishermen and the need for this correction. The Coast reduce the amount of blueline tilefish Guard amended § 67.259(b) by removing fishing communities that utilize the that may be harvested in the exclusive blueline tilefish portion of the snapper- the word ‘‘effected,’’ and adding in its economic zone (EEZ) of the South place the word ‘‘affected.’’ This grouper fishery. The Council and NMFS Atlantic. NMFS published an determined that any short-term adverse replacement was incorrect, however, as emergency rule on April 17, 2014, to the word ‘‘effected’’ was used correctly. socio-economic effects of the temporary remove the blueline tilefish portion measures would be justified to This correction amends paragraph (b) by from the deep-water complex annual minimize long-term reductions in replacing the word ‘‘affected’’ with the catch limit (ACL) and establish separate harvest that may be required if levels of word ‘‘effected.’’ commercial and recreational ACLs and unsustainable harvest continued to accountability measures (AMs) for List of Subjects in 46 CFR Part 67 reduce the biomass of the blueline blueline tilefish. The intent of this tilefish stock. Accordingly, on April 17, Reporting and recordkeeping rulemaking is to extend the measures 2014, NMFS published a temporary rule requirements, Vessels. implemented in the emergency action to under the Magnuson-Stevens Act to reduce overfishing of blueline tilefish in implement emergency regulations for Accordingly, 46 CFR part 67 is the South Atlantic while the South the blueline tilefish stock in the South amended by making the following Atlantic Fishery Management Council Atlantic (74 FR 21636) and requested correcting amendment: (Council) develops permanent public comment. That temporary rule is management measures. effective through October 14, 2014. PART 67—DOCUMENTATION OF DATES: The expiration date for the The measures contained in the VESSELS temporary rule published at 79 FR temporary rule and this extension, 21636, April 17, 2014, is extended from remove blueline tilefish from the deep- ■ 1. The authority citation for part 67 October 14, 2014, through April 18, water complex and establish separate continues to read as follows: 2015, unless NMFS publishes a commercial and recreational ACLs and Authority: 14 U.S.C. 664; 31 U.S.C. 9701; superseding document in the Federal AMs for blueline tilefish in the EEZ of 42 U.S.C. 9118; 46 U.S.C. 2103, 2107, 2110, Register. the South Atlantic. The temporary rule and this extension implement a blueline 12106, 12120, 12122; 46 U.S.C. app. 841a, ADDRESSES: Electronic copies of the tilefish total (commercial and 876; Department of Homeland Security documents in support of this temporary Delegation No. 0170.1. recreational) ACL of 224,100 lb (101,650 rule may be obtained from the Southeast kg), round weight. The commercial ACL § 67.259 [Corrected] Regional Office Web site at http://sero. _ _ for blueline tilefish is set at 112,207 lb nmfs.noaa.gov/sustainable fisheries/s (50,896 kg), round weight, and the ■ _ 2. In § 67.259(b), remove the word atl/sg/2014/acl er/index.html. recreational ACL is set at 111,893 lb ‘‘affected’’ and add, in its place, the FOR FURTHER INFORMATION CONTACT: Rick (50,754 kg), round weight. The deep- word ‘‘effected’’. DeVictor, Southeast Regional Office, water complex (composed of Dated: October 6, 2014. NMFS, telephone: 727–824–5305, email: yellowedge grouper, silk snapper, misty [email protected]. Katia Cervoni, grouper, queen snapper, sand tilefish, SUPPLEMENTARY INFORMATION: Chief, Office of Regulations and NMFS and black snapper, and blackfin snapper) Administrative Law, U.S. Coast Guard. the Council manage South Atlantic ACL remains at current levels, except snapper-grouper species, including with the blueline tilefish portion of the [FR Doc. 2014–24219 Filed 10–9–14; 8:45 am] blueline tilefish, under the Fishery complex ACL of 631,341 lb (286,371 kg), BILLING CODE 9110–04–P Management Plan for the Snapper- round weight, removed from the Grouper Fishery of the South Atlantic complex. Thus, for the deep-water Region (FMP). The Council prepared the complex without blueline tilefish, the

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commercial ACL is 60,371 lb (27,384 186 days provided that the public has permanent measures to be completed kg), round weight, and the recreational had an opportunity to comment on the through Amendment 32 have not yet ACL is 19,313 lb (8,760 kg), round emergency measures and the Council is been approved or implemented. Failure weight. actively preparing a plan amendment to to extend these temporary measures, The temporary rule and this extension address the overfishing on a permanent would result in additional overfishing of also establish in-season AMs for basis. If approved, Amendment 32 is the South Atlantic blueline tilefish blueline tilefish to prevent these catch scheduled to be implemented early in stock, which is contrary to the public limits from being exceeded. If the 2015 fishing year. interest and in violation of National commercial landings for blueline Comments and Responses Standard 1 of the Magnuson-Stevens tilefish reach or are projected to reach Act. the commercial ACL, NMFS will file a Section 305(c)(3)(B) of the Magnuson- For the reasons listed above, the AA notification with the Office of the Stevens Act requires that the public has also finds good cause to waive the 30- Federal Register to close the commercial an opportunity to comment on day delay in effectiveness of the action sector for blueline tilefish for the emergency measures after the regulation under 5 U.S.C. 553(d)(3). remainder of the fishing year. On and is published and the Council is actively Authority: 16 U.S.C. 1801 et seq. after the effective date of such a preparing a plan amendment to address notification, all sale or purchase of overfishing on a permanent basis. NMFS Dated: October 6, 2014. blueline tilefish is prohibited and solicited public comments in the April Samuel D. Rauch III, harvest or possession of blueline tilefish 17, 2014, temporary rule but received no Deputy Assistant Administrator for in or from the South Atlantic EEZ is comments on the temporary rule or the Regulatory Programs, National Marine limited to the bag and possession limit. emergency measures. Fisheries Service. This bag and possession limit applies in Classification [FR Doc. 2014–24220 Filed 10–9–14; 8:45 am] the South Atlantic on board a vessel for BILLING CODE 3510–22–P which a valid Federal commercial or This action is issued pursuant to charter vessel/headboat permit for section 305(c) of the Magnuson-Stevens South Atlantic snapper-grouper has Act, 16 U.S.C. 1855(c). The Assistant DEPARTMENT OF COMMERCE been issued, without regard to where Administrator for Fisheries, NOAA such species were harvested, i.e., in (AA), has determined that the National Oceanic and Atmospheric state or Federal waters. During the 2014 emergency measures this temporary rule Administration commercial fishing season, through extends are based upon the best AMs implemented in the emergency scientific information available, are 50 CFR Part 679 rule, NMFS closed the commercial necessary for the conservation and [Docket No. 131021878–4158–02] sector for blueline tilefish on June 23, management of the blueline tilefish 2014, when NMFS determined the component of the snapper-grouper RIN 0648–XD537 commercial ACL for blueline tilefish fishery and are consistent with the Fisheries of the Exclusive Economic was projected to be met (79 FR 35292, Magnuson-Stevens Act and other Zone Off Alaska; ‘‘Other Rockfish’’ in June 20, 2014). The commercial sector applicable laws. The Council is the Aleutian Island Subarea of the will reopen on January 1, 2015. developing Amendment 32 to establish If recreational landings for blueline long-term measures to end overfishing Bering Sea and Aleutian Islands tilefish reach or are projected to reach of South Atlantic blueline tilefish. Management Area the recreational ACL, NMFS will file a Amendment 32, if approved, is not AGENCY: National Marine Fisheries notification with the Office of the expected to become effective until the Service (NMFS), National Oceanic and Federal Register to close the recreational 2015 fishing year. Atmospheric Administration (NOAA), sector for blueline tilefish for the This temporary rule has been Commerce. remainder of the fishing year. On and determined to be not significant for ACTION: Temporary rule; closure. after the effective date of such purposes of Executive Order 12866. notification, the bag and possession Because prior notice and opportunity SUMMARY: NMFS is prohibiting retention limit of blueline tilefish in or from the for public comment are not required for of ‘‘other rockfish’’ in the Aleutian South Atlantic EEZ would be zero. This this rule by 5 U.S.C. 553 or any other Islands subarea of the Bering Sea and bag and possession limit would also law, the analytical requirements of the Aleutian Islands management area apply in the South Atlantic on board a Regulatory Flexibility Act, 5 U.S.C. 601 (BSAI). This action is necessary because vessel for which a valid Federal et seq. are inapplicable. Accordingly, no the 2014 total allowable catch (TAC) of commercial or charter vessel/headboat Regulatory Flexibility Analysis is ‘‘other rockfish’’ in the BSAI has been permit for South Atlantic snapper- required and none has been prepared. reached. grouper has been issued, without regard The AA finds good cause to waive the DATES: Effective 1200 hrs, Alaska local to where such species were harvested, requirements to provide prior notice time (A.l.t.), October 6, 2014, through i.e., in state or Federal waters. and opportunity for public comment The Council requested an extension of pursuant to the authority set forth in 5 2400 hrs, A.l.t., December 31, 2014. the temporary rule at its September U.S.C. 553(b)(B). Providing prior notice FOR FURTHER INFORMATION CONTACT: Josh 2014 meeting, and via an October 2, and opportunity for public comment on Keaton, 907–586–7228. 2014, letter to NMFS, to ensure that this action would be contrary to the SUPPLEMENTARY INFORMATION: NMFS management measures remain in effect public interest. This rule would manages the groundfish fishery in the for blueline tilefish to reduce continue emergency measures BSAI exclusive economic zone overfishing while more permanent implemented by the April 17, 2014, according to the Fishery Management measures are developed through temporary rule, for not more than an Plan for Groundfish of the Bering Sea Amendment 32 to the FMP. Section additional 186 days beyond the current and Aleutian Islands (FMP) prepared by 305(c)(3)(B) of the Magnuson-Stevens expiration date of October 14, 2014. The the North Pacific Fishery Management Act allows for emergency regulations to conditions prompting the initial Council under authority of the be extended for one additional period of temporary rule still remain, and more Magnuson-Stevens Fishery

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Conservation and Management Act. the reasons provided above for waiver of DATES: Effective October 9, 2014, Regulations governing fishing by U.S. prior notice and opportunity for public through 2400 hrs, Alaska local time vessels in accordance with the FMP comment. (A.l.t.), December 31, 2014. appear at subpart H of 50 CFR part 600 This action is required by § 679.20 FOR FURTHER INFORMATION CONTACT: and 50 CFR part 679. and § 679.21 and is exempt from review Steve Whitney, 907–586–7269. The 2014 TAC of ‘‘other rockfish’’ in under Executive Order 12866. SUPPLEMENTARY INFORMATION: the Aleutian Islands subarea of the BSAI NMFS Authority: 16 U.S.C. 1801 et seq. is 473 metric tons (mt) as established by manages the groundfish fishery in the the final 2014 and 2015 harvest Dated: October 6, 2014. BSAI according to the Fishery specifications for groundfish of the Emily H. Menashes, Management Plan for Groundfish of the BSAI (79 FR 12108, March 4, 2014). Acting Director, Office of Sustainable Bering Sea and Aleutian Islands In accordance with § 679.20(d)(2), the Fisheries, National Marine Fisheries Service. Management Area (FMP) prepared by the North Pacific Fishery Management Administrator, Alaska Region, NMFS [FR Doc. 2014–24159 Filed 10–6–14; 4:15 pm] Council under authority of the (Regional Administrator), has BILLING CODE 3510–22–P determined that the 2014 TAC of ‘‘other Magnuson-Stevens Fishery rockfish’’ in the Aleutian Islands Conservation and Management Act. subarea of the BSAI has been reached. DEPARTMENT OF COMMERCE Regulations governing fishing by U.S. Therefore, NMFS is requiring that vessels in accordance with the FMP ‘‘other rockfish’’ caught in the Aleutian National Oceanic and Atmospheric appear at subpart H of 50 CFR part 600 Islands subarea of the BSAI be treated Administration and 50 CFR part 679. as prohibited species in accordance The 2014 Atka mackerel ICA for the with § 679.21(b). 50 CFR Part 679 BS/EAI is 1,000 metric tons (mt) and 2014 Atka mackerel total allowable Classification [Docket No. 131021878–4158–02] catch allocated to the Amendment 80 This action responds to the best cooperative is 16,419 mt as established available information recently obtained by the final 2014 and 2015 harvest RIN 0648–XD542 from the fishery. The Assistant specifications for groundfish in the Administrator for Fisheries, NOAA Fisheries of the Exclusive Economic BSAI (79 FR 12108, March 4, 2014). (AA), finds good cause to waive the Zone Off Alaska; Reallocation of Atka The Administrator, Alaska Region, requirement to provide prior notice and Mackerel in the Bering Sea and NMFS, has determined that 750 mt of opportunity for public comment Aleutian Islands Management Area the Atka mackerel ICA for the BS/EAI pursuant to the authority set forth at 5 will not be harvested. Therefore, in U.S.C. 553(b)(B) as such requirement is AGENCY: National Marine Fisheries accordance with § 679.91(f), NMFS impracticable and contrary to the public Service (NMFS), National Oceanic and reallocates 750 mt of Atka mackerel interest. This requirement is Atmospheric Administration (NOAA), from the BS/EAI ICA to the Amendment impracticable and contrary to the public Commerce. 80 cooperatives in the BSAI. In interest as it would prevent NMFS from ACTION: Temporary rule; reallocation. accordance with § 679.91(f), NMFS will responding to the most recent fisheries reissue cooperative quota permits for data in a timely fashion and would SUMMARY: NMFS is reallocating the the reallocated Atka mackerel following delay prohibiting the retention of ‘‘other projected unused amount of the 2014 the procedures set forth in § 679.91(f)(3). rockfish’’ in the Aleutian Islands Atka mackerel incidental catch The harvest specifications for Atka subarea of the BSAI. NMFS was unable allowance (ICA) for the Bering Sea mackerel included in the harvest to publish a notice providing time for subarea and Eastern Aleutian district specifications for groundfish in the public comment because the most (BS/EAI) to the Amendment 80 BSAI (79 FR 12108, March 4, 2014) are recent, relevant data only became cooperatives in the Bering Sea and revised as follows: 250 mt of Atka available as of October 3, 2014. Aleutian Islands management area mackerel for the BS/EAI ICA and 17,169 The AA also finds good cause to (BSAI). This action is necessary to allow mt of Atka mackerel for the Amendment waive the 30-day delay in the effective the 2014 total allowable catch of Atka 80 cooperatives in the BS/EAI. Table 4 date of this action under 5 U.S.C. mackerel in the BSAI to be fully is correctly revised and republished in 553(d)(3). This finding is based upon harvested. its entirety as follows:

TABLE 4—FINAL 2014 AND 2015 SEASONAL AND SPATIAL ALLOWANCES, GEAR SHARES, CDQ RESERVE, INCIDENTAL CATCH ALLOWANCE, AND AMENDMENT 80 ALLOCATIONS OF THE BSAI ATKA MACKEREL TAC [Amounts are in metric tons]

2014 Allocation by area 2015 Allocation by area

Sector 1 Season 234 Eastern Aleu- Central 5 Western Eastern Aleu- Central 5 Western tian District/ Aleutian Aleutian tian District/ Aleutian Aleutian Bering Sea District District Bering Sea District District

TAC ...... n/a ...... 21,652 9,670 1,000 21,769 9,722 1,000 CDQ reserve...... Total ...... 2,317 1,035 107 2,329 1,040 107 A ...... 1,158 517 54 1,165 520 54 Critical Habitat 5 n/a 52 n/a n/a 52 n/a B ...... 1,158 517 54 1,165 520 54 Critical Habitat 5 n/a 52 n/a n/a 52 n/a ICA ...... Total ...... 250 75 40 1,000 75 40 Jig 6 ...... Total ...... 92 0 0 92 0 0

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TABLE 4—FINAL 2014 AND 2015 SEASONAL AND SPATIAL ALLOWANCES, GEAR SHARES, CDQ RESERVE, INCIDENTAL CATCH ALLOWANCE, AND AMENDMENT 80 ALLOCATIONS OF THE BSAI ATKA MACKEREL TAC—Continued [Amounts are in metric tons]

2014 Allocation by area 2015 Allocation by area

Sector 1 Season 234 Eastern Aleu- Central 5 Western Eastern Aleu- Central 5 Western tian District/ Aleutian Aleutian tian District/ Aleutian Aleutian Bering Sea District District Bering Sea District District

BSAI trawl limited ac- Total ...... 1,824 856 0 1,835 861 0 cess. A ...... 912 428 0 917 430 0 B ...... 912 428 0 917 430 0 Amendment 80 sec- Total ...... 17,169 7,704 853 16,513 7,746 853 tors. A ...... 8,585 3,852 427 8,256 3,873 427 B ...... 8,585 3,852 427 8,256 3,873 427 Alaska Groundfish Total 7 ...... 9,931 4,592 499 n/a n/a n/a Cooperative 7. A ...... 4,966 2,296 250 n/a n/a n/a Critical Habitat 5 n/a 230 n/a n/a n/a n/a B ...... 4,966 2,296 250 n/a n/a n/a Critical Habitat 5 n/a 230 n/a n/a n/a n/a Alaska Seafood Co- Total 7 ...... 7,238 3,112 354 n/a n/a n/a operative 7. A ...... 3,619 1,556 177 n/a n/a n/a Critical Habitat 5 n/a 156 n/a n/a n/a n/a B ...... 3,619 1,556 177 n/a n/a n/a Critical Habitat 5 n/a 156 n/a n/a n/a n/a 1 Section 679.20(a)(8)(ii) allocates the Atka mackerel TACs, after subtracting the CDQ reserves, jig gear allocation, and ICAs to the Amend- ment 80 and BSAI trawl limited access sectors. The allocation of the ITAC for Atka mackerel to the Amendment 80 and BSAI trawl limited ac- cess sectors is established in Table 33 to part 679 and § 679.91. The CDQ reserve is 10.7 percent of the TAC for use by CDQ participants (see §§ 679.20(b)(1)(ii)(C) and 679.31). 2 Regulations at §§ 679.20(a)(8)(ii)(A) and 679.22(a) establish temporal and spatial limitations for the Atka mackerel fishery. 3 The seasonal allowances of Atka mackerel are 50 percent in the A season and 50 percent in the B season. 4 Section 679.23(e)(3) authorizes directed fishing for Atka mackerel with trawl gear during the A season from January 20 to June 10 and the B season from June 10 to November 1. 5 Section 679.20(a)(8)(ii)(C) requires the TAC in area 542 shall be no more than 47% of ABC, and Atka mackerel harvests for Amendment 80 cooperatives and CDQ groups within waters 10 nm to 20 nm of Gramp Rock and Tag Island, as described Table 12 to part 679, in Area 542 are limited to no more than 10 percent of the Amendment 80 cooperative Atka mackerel allocation or 10 percent of the CDQ Atka mackerel alloca- tion. 6 Section 679.20(a)(8)(i) requires that up to 2 percent of the Eastern Aleutian District and the Bering Sea subarea TAC be allocated to jig gear after subtracting the CDQ reserve and ICA. The amount of this allocation is 0.5 percent. The jig gear allocation is not apportioned by season. 7 The 2015 allocations for Atka mackerel between Amendment 80 cooperatives and the Amendment 80 limited access sector will not be known until eligible participants apply for participation in the program by November 1, 2014. NMFS will post 2015 Amendment 80 allocations when they become available in December 2014. Note: Seasonal or sector apportionments may not total precisely due to rounding.

This will enhance the socioeconomic U.S.C. 553(b)(B) as such requirement is recent, relevant data only became well-being of harvesters dependent impracticable and contrary to the public available as of October 1, 2014. upon Atka mackerel in this area. The interest. This requirement is The AA also finds good cause to Regional Administrator considered the impracticable and contrary to the public waive the 30-day delay in the effective following factors in reaching this interest as it would prevent NMFS from date of this action under 5 U.S.C. decision: (1) The current catch of Atka responding to the most recent fisheries 553(d)(3). This finding is based upon mackerel ICA in the BS/EAI, (2) the data in a timely fashion and would the reasons provided above for waiver of harvest capacity and stated intent on delay the reallocation of Atka mackerel prior notice and opportunity for public future harvesting patterns of the from the BS/EAI ICA to the Amendment comment. Amendment 80 cooperatives that 80 cooperatives in the BSAI. Since the participate in this BS/EAI fishery. fishery is currently open, it is important This action is required by § 679.91 to immediately inform the industry as to and is exempt from review under Classification the revised allocations. Immediate Executive Order 12866. This action responds to the best notification is necessary to allow for the Authority: 16 U.S.C. 1801 et seq. available information recently obtained orderly conduct and efficient operation Dated: October 6, 2014. from the fishery. The Assistant of this fishery, to allow the industry to Administrator for Fisheries, NOAA plan for the fishing season, and to avoid Emily H. Menashes, (AA), finds good cause to waive the potential disruption to the fishing fleet Acting Director, Office of Sustainable requirement to provide prior notice and as well as processors. NMFS was unable Fisheries, National Marine Fisheries Service. opportunity for public comment to publish a notice providing time for [FR Doc. 2014–24160 Filed 10–9–14; 8:45 am] pursuant to the authority set forth at 5 public comment because the most BILLING CODE 3510–22–P

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Proposed Rules Federal Register Vol. 79, No. 197

Friday, October 10, 2014

This section of the FEDERAL REGISTER hiring, promotion, retention, reporting to EHRI would be on the same contains notices to the public of the proposed professional development, and training or similar schedule to the reporting issuance of rules and regulations. The policies and practices, and to also required by this regulation. Deleting the purpose of these notices is to give interested develop strategies for consolidating regulatory reporting requirement should persons an opportunity to participate in the such plans and reports where not have an adverse effect on OPM’s rule making prior to the adoption of the final rules. appropriate. ability to monitory agencies’ compliance This direction is similar in nature to with their approved plans. a separate requirement set forth in the • Section 792.204 requires agencies OFFICE OF PERSONNEL GPRA Modernization Act of 2010, providing child care subsidies to report MANAGEMENT Public Law 111–352, to identify at least utilization data to OPM annually. As we 10 percent of agency reports to Congress have not discerned a sufficient level of 5 CFR Parts 337, 576, 792, 831, and 842 as duplicative or outdated in FY 2013, interest in this information to justify RIN 3206–AM69 which is consistent with the requiring it on an annual basis, we are requirement to eliminate unnecessary proposing to remove this requirement Human Resources Management reporting. and require agencies to track the Reporting Requirements This proposed rule would remove or utilization of their funds and report the amend the provisions of title 5, Code of results to OPM as needed. AGENCY: U.S. Office of Personnel Federal Regulations, listed below, Sections 831.114 and 842.213 concern Management. which require agency reports to OPM reports on agencies’ use of voluntary ACTION: Proposed rule. that we have determined are no longer early retirement authority (VERAs). necessary. Because OPM plans to obtain this data, SUMMARY: The U.S. Office of Personnel • Section 337.305 requires agencies to Management (OPM) is issuing proposed when needed, from its central send OPM a copy of the annual reports Enterprise Human Resources Integration regulations that would remove they are required by 5 U.S.C. 3319(d) to regulatory requirements for Federal (EHRI) database and also to ask agencies send to Congress in each of the first 3 to address the effectiveness of VERAs in agencies to submit reports to OPM years after establishing a category rating relating to their implementation of their annual performance reports, we system. By a memorandum to agencies are proposing to remove paragraph (p) certain human resources management dated May 11, 2010, the President programs and authorities. from each of these provisions. implemented certain items related to Currently, agencies are required to DATES: Comments must be received on Federal hiring reform. In his report on a quarterly basis, within 30 or before December 9, 2014. memorandum, the President required days of the end of each quarter, and a ADDRESSES: You may submit comments, agencies use a category rating system for final report due within 60 days of the identified by RIN number ‘‘3206– evaluating and referring applicants by authority’s expiration. This delay results AM69,’’ using any of the following November 1, 2010. Because agencies not in data that is 3 to 4 months after actual methods: having a category system in place had separation dates. It is clear that Federal eRulemaking Portal: http:// to implement a system by November 1, reporting to EHRI would be on the same www.regulations.gov. Follow the 2010, the reporting requirement set forth or similar schedule to the reporting instructions for submitting comments. at 5 U.S.C. 3319(d) was met by required by this regulation. Deleting the Mail: Sydney Smith-Heimbrock, November 1, 2013, for many if not all regulatory reporting requirement should Deputy Associate Director for Strategic of the agencies covered by the not have an adverse effect on OPM’s Workforce Planning, Employee Services, regulation. Therefore, because agencies ability to monitory agencies’ compliance U.S. Office of Personnel Management, have met their reporting requirement to with their approved plans. Room 7460, 1900 E Street NW., Congress, the regulatory requirement to Washington, DC 20415. provide a copy of the report to OPM is Executive Order 13563 and Executive FOR FURTHER INFORMATION CONTACT: Jan no longer applicable. Order 12866, Regulatory Review Chisolm-King, by telephone at (202) • Section 576.104 concerns reports on The Office of Management and Budget 606–1958 or by email at janet.chisolm- agencies’ use of voluntary separation has reviewed this rule in accordance [email protected]. incentive payments (VSIPs). Because with E.O. 13563 and 12866. SUPPLEMENTARY INFORMATION: The U.S. OPM plans to obtain this data, when Office of Personnel Management (OPM) needed, from its central Enterprise Paperwork Reduction Act is issuing proposed regulations to Human Resources Integration (EHRI) This document does not contain eliminate several reporting requirements database and also to ask agencies to proposed information collection for Federal agencies, in accordance with address the effectiveness of VSIPs in requirements subject to the Paperwork Executive Order 13583 of August 18, their annual performance reports, we Reduction Act of 1995, Public Law 104– 2011, entitled ‘‘Establishing a are proposing to remove paragraph (b). 13. Coordinated Government-Wide Currently, agencies are required to Regulatory Flexibility Act Initiative to Promote Diversity and report on a quarterly basis, within 30 Inclusion in the Federal Workforce.’’ days of the end of each quarter, and a I certify that these regulations will not This Executive order includes a final report due within 60 days of the have a significant economic impact on requirement that OPM review authority’s expiration. This delay results a substantial number of small entities applicable human capital directives and in data that is 3 to 4 months after actual because they will apply only to Federal reports that are related to recruitment, separation dates. It is clear that agencies and employees.

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List of Subjects in 5 CFR Parts 337, 576, and reporting the results to OPM at such Sec. 842.109 also issued under Sec. 1622(b) 792, 831, and 842 time and in such manner as OPM of Public Law 104–106, 110 Stat. 515; Sec. prescribes. 842.208 also issued under Sec. 535(d) of Title Administrative practice and V of Division E of Pub. L. 110–161, 121 Stat. procedure, Government employees, PART 831—RETIREMENT 2042; Sec. 842.213 also issued under 5 U.S.C. Government publications, Reporting 8414(b)(1)(B) and Sec. 1313(b)(5) of Pub. L. and recordkeeping requirements, ■ 7. The authority citation for part 831 107–296, 116 Stat. 2135; Secs. 842.304 and Retirement. continues to read as follows: 842.305 also issued under Sec. 321(f) of Pub. L. 107–228, 116 Stat. 1383; Secs. 842.604 and U.S. Office of Personnel Management. Authority: 5 U.S.C. 8347; Sec. 831.102 842.611 also issued under 5 U.S.C. 8417; Sec. Katherine Archuleta, also issued under 5 U.S.C. 8334; Sec. 831.106 842.607 also issued under 5 U.S.C. 8416 and also issued under 5 U.S.C. 552a; Sec. 831.108 Director. 8417; Sec. 842.614 also issued under 5 U.S.C. also issued under 5 U.S.C. 8336(d)(2); Sec. 8419; Sec. 842.615 also issued under 5 U.S.C. Accordingly, OPM is proposing to 831.114 also issued under 5 U.S.C. 8418; Sec. 842.703 also issued under Sec. amend title 5, parts 337,576, 792, 831 8336(d)(2), and Sec. 1313(b)(5) of Pub. L. 7001(a)(4) of Pub. L. 101–508, 104 Stat. 1388; and 842, Code of Federal Regulations, as 107–296, 116 Stat. 2135; Sec. 831.201(b)(1) Sec. 842.707 also issued under Sec. 6001 of also issued under 5 U.S.C. 8347(g); Sec. follows: Pub. L. 100–203, 101 Stat. 1300; Sec. 842.708 831.201(b)(6) also issued under 5 U.S.C. also issued under Sec. 4005 of Pub. L. 101– 7701(b)(2); Sec. 831.201(g) also issued under PART 337—EXAMINING SYSTEM 239, 103 Stat. 2106 and Sec. 7001 of Pub. L. Secs. 11202(f), 11232(e), and 11246(b) of Pub. 101–508, 104 Stat. 1388; Subpart H also L. 105–33, 111 Stat. 251; Sec. 831.201(g) also ■ issued under 5 U.S.C. 1104; Sec. 842.810 also 1. The authority citation for part 337 issued under Sec. 7(b) and (e) of Pub. L. 105– issued under Sec. 636 of Appendix C to Pub. continues to read as follows: 274, 112 Stat. 2419; Sec. 831.201(i) also L. 106–554 at 114 Stat. 2763A–164; Sec. Authority: 5 U.S.C. 1104(a)(2), 1302, 2302, issued under Secs. 3 and 7(c) of Pub. L. 105– 842.811 also issued under Sec. 226(c)(2) of 3301, 3302, 3304, 3319, 5364; E.O. 10577, 3 274, 112 Stat. 2419; Sec. 831.204 also issued Public Law 108–176, 117 Stat. 2529; Subpart CFR 1954–1958 Comp., p. 218; 33 FR 12423, under Sec. 102(e) of Pub. L. 104–8, 109 Stat. J also issued under Sec. 535(d) of Title V of Sept. 4, 1968; 45 FR 18365, Mar. 21, 1980; 102, as amended by Sec. 153 of Pub. L. 104– Division E of Pub. L. 110–161, 121 Stat. 2042. 116 Stat. 2290, sec. 1413 of Public Law 108– 134, 110 Stat. 1321; Sec. 831.205 also issued 136 (117 Stat. 1665), as amended by sec. 853 under Sec. 2207 of Pub. L. 106–265, 114 Stat. § 842.213 [Amended] of Public Law 110–181 (122 Stat. 250). 784; Sec. 831.206 also issued under Sec. ■ 10. In § 842.213, remove paragraph 1622(b) of Pub. L. 104–106, 110 Stat. 515; (p). Sec. 831.301 also issued under Sec. 2203 of Subpart C—Alternative Rating and [FR Doc. 2014–23295 Filed 10–9–14; 8:45 am] Selection Procedures Pub. L. 106–265, 114 Stat. 780; Sec. 831.303 also issued under 5 U.S.C. 8334(d)(2) and BILLING CODE 6325–39–P § 337.305 [Removed.] Sec. 2203 of Pub. L. 106–235, 114 Stat. 780; Sec. 831.502 also issued under 5 U.S.C. 8337, ■ 2. Remove § 337.305. and Sec. 1(3), E.O. 11228, 3 CFR 1965–1965 FEDERAL TRADE COMMISSION PART 576—VOLUNTARY Comp. p. 317; Sec. 831.663 also issued under 5 U.S.C. 8339(j) and (k)(2); Secs. 831.663 and 16 CFR Part 306 SEPARATION INCENTIVE PAYMENTS 831.664 also issued under Sec. 11004(c)(2) of ■ 3. The authority citation for part 576 Pub. L. 103–66, 107 Stat. 412; Sec. 831.682 Telemarketing Sales Rule also issued under Sec. 201(d) of Pub. L. 99– is amended to read as follows: 261, 100 Stat. 23; Sec. 831.912 also issued AGENCY: Federal Trade Commission Authority: Sections 3521 through 3525 of under Sec. 636 of Appendix C to Pub. L. 106– (‘‘FTC’’ or ‘‘Commission’’). title 5, United States Code. 554, 114 Stat. 2763A–164; Subpart P also ACTION: Extension of comment period. ■ 4. Revise § 576.104 to read as follows: issued under Sec. 535(d) of Title V of Division E of Pub. L. 110–161, 121 Stat. 2042; SUMMARY: In an August 11, 2014, § 576.104 Additional agency requirements. Subpart V also issued under 5 U.S.C. 8343a Federal Register Notice, as part of its After OPM approves an agency plan and Sec. 6001 of Pub. L. 100–203, 101 Stat. systematic review of all current 1330–275; Sec. 831.2203 also issued under Commission regulations and guides, the for Voluntary Separation Incentive Sec. 7001(a)(4) of Pub. L. 101–508, 104 Stat. Payments, the agency must immediately 1388–328. Federal Trade Commission notify OPM of any subsequent changes (‘‘Commission’’) sought public comment in the conditions that served as the basis § 831.114 [Amended] on the efficacy, costs, and benefits of the for the approval of the Voluntary ■ 8. In § 831.114, remove paragraph (p). Telemarketing Sales Rule (‘‘TSR’’), and Separation Incentive Payment authority. whether the Commission should retain, PART 842—FEDERAL EMPLOYEES’ modify, or rescind it. The Notice stated PART 792—FEDERAL EMPLOYEES’ RETIREMENT SYSTEM—BASIC that comments must be received on or HEALTH, COUNSELING, AND WORK/ ANNUITY before October 14, 2014. In response to LIFE PROGRAMS ■ 9. The authority citation for part 842 a request received on September 29, 2014, the Commission has decided to ■ 5. The authority citation for part 792 continues to read as follows: extend the comment period, which will continues to read as follows: Authority: 5 U.S.C. 8461(g); Secs. 842.104 now close on November 13, 2014. and 842.106 also issued under 5 U.S.C. Authority: 5 U.S.C. 7361–7363; Sec. 643, DATES: 8461(n); Sec. 842.104 also issued under Secs. Comments addressing the Pub. L. 106–58, 113 Stat. 477; 40 U.S.C. regulatory review of the TSR must be 590(g). 3 and 7(c) of Pub. L. 105–274, 112 Stat. 2419; received on or before November 13, ■ 6. In § 792.204, remove paragraph (d) Sec. 842.105 also issued under 5 U.S.C. 8402(c)(1) and 7701(b)(2); Sec. 842.106 also 2014. and revise paragraph (c) to read as issued under Sec. 102(e) of Pub. L. 104–8, follows: FOR FURTHER INFORMATION CONTACT: 109 Stat. 102, as amended by Sec. 153 of Pub. Craig Tregillus, (202) 326–2970, or L. 104–134, 110 Stat. 1321–102; Sec. 842.107 § 792.204 Agency responsibilities; Karen S. Hobbs (202) 326–3587, reporting requirement. also issued under Secs. 11202(f), 11232(e), and 11246(b) of Pub. L. 105–33, 111 Stat. Division of Marketing Practices, Federal * * * * * 251, and Sec. 7(b) of Pub. L. 105–274, 112 Trade Commission, 600 Pennsylvania (c) Agencies are responsible for Stat. 2419; Sec. 842.108 also issued under Avenue NW.—Rm. CC–8528, tracking the utilization of their funds Sec. 7(e) of Pub. L. 105–274, 112 Stat. 2419; Washington, DC 20580.

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ADDRESSES: Interested parties may file a You can file a comment online or on If you prefer to file your comment on comment online or on paper, by paper. For the Commission to consider paper, write ‘‘Telemarketing Sales Rule following the instructions in the your comment, we must receive it on or Regulatory Review, 16 CFR Part 310, Request for Comment part of the before November 13, 2014. Write Project No. R411001’’ on your comment SUPPLEMENTARY INFORMATION section ‘‘Telemarketing Sales Rule Regulatory and on the envelope and mail your below. Write ‘‘Telemarketing Sales Rule Review, 16 CFR Part 310, Project No. comment to the following address: Regulatory Review, 16 CFR Part 310, R411001’’ on your comment. Your Federal Trade Commission, Office of the Project No. R411001’’ on your comment. comment—including your name and Secretary, 600 Pennsylvania Avenue File your comment online at https:// your state—will be placed on the public NW., Suite CC–5610 (Annex B), ftcpublic.commentworks.com/ftc/ record of this proceeding, including, to Washington, DC 20580, or deliver your telemarketingsalesnprm by following the extent practicable, on the public comment to the following address: the instructions on the Web-based form. Commission Web site, at http://www.ftc. Federal Trade Commission, Office of the If you prefer to file your comment on gov/os/publiccomments.shtm. As a Secretary, Constitution Center, 400 7th paper, mail your comment to the matter of discretion, the Commission Street SW., 5th Floor, Suite 5610 following address: Federal Trade tries to remove individuals’ home (Annex B), Washington, DC 20024. If Commission, Office of the Secretary, contact information from comments possible, submit your paper comment to 600 Pennsylvania Avenue NW., Suite before placing them on the Commission the Commission by courier or overnight CC–5610 (Annex B), Washington, DC Web site. service. 20580, or deliver your comment to the Because your comment will be made Visit the Commission Web site at following address: Federal Trade public, you are solely responsible for http://www.ftc.gov to read the August Commission, Office of the Secretary, making sure that your comment doesn’t 11, 2014 Notice and the news release Constitution Center, 400 7th Street SW., include any sensitive personal describing it. The FTC Act and other 5th Floor, Suite 5610 (Annex B), information, such as anyone’s Social laws that the Commission administers Washington, DC 20024. Security number, date of birth, driver’s permit the collection of public SUPPLEMENTARY INFORMATION: The license number or other state comments to consider and use in this Commission is extending the comment identification number or foreign country proceeding as appropriate. period for its rule review of the TSR to equivalent, passport number, financial The Commission will consider all November 13, 2014. The Commission’s account number, or credit or debit card timely and responsive public comments Notice requesting public comment number. You are also solely responsible that it receives on or before November posed an extensive list of questions on for making sure that your comment does 13, 2014. You can find more the costs, benefits and efficacy of the not include any sensitive health information, including routine uses TSR in the marketplace, and whether information, such as medical records or permitted by the Privacy Act, in the the Commission should retain, modify, other individually identifiable health Commission’s privacy policy, at http:// 1 or rescind it. The Commission also information. In addition, do not include www.ftc.gov/ftc/privacy.htm. specifically requested comment on three any ‘‘[t]rade secret or any commercial or By direction of the Commission. issues: (1) Whether the preaquired financial information . . . which is account information provisions of the Janice Podoll Frankle, privileged or confidential,’’ as provided Acting Secretary. TSR should be modified in view of in Section 6(f) of the FTC Act, 15 U.S.C. [FR Doc. 2014–24247 Filed 10–9–14; 8:45 am] current credit card association rules and 46(f), and FTC Rule 4.10(a)(2), 16 CFR the Restore Online Shoppers Confidence 4.10(a)(2). In particular, do not include BILLING CODE 6750–01–P Act, 15 U.S.C. 8401 (2010); (2) what competitively sensitive information impact, if any, the increasing use of such as costs, sales statistics, general media to solicit inbound calls inventories, formulas, patterns, devices, ENVIRONMENTAL PROTECTION from consumers to purchase a variety of manufacturing processes, or customer AGENCY goods or services, including those names. If you want the Commission to 40 CFR Parts 191 and 194 involving a negative option or free trial, give your comment confidential is having; and (3) the costs and burdens treatment, you must file it in paper [EPA–HQ–OAR–2014–0609; FRL–9917–73– of modifying the recordkeeping form, with a request for confidential OAR] requirements of the TSR to require treatment, and you have to follow the telemarketers to retain their own call procedure explained in FTC Rule 4.9(c), Review Process To Determine Whether records. The regulatory review comment 16 CFR 4.9(c). Your comment will be the Waste Isolation Pilot Plant period was to end on October 14, 2014. Continues To Comply With the In a letter dated September 25, 2014, kept confidential only if the FTC General Counsel grants your request in Disposal Regulations and Compliance which the Commission received on Criteria September 29, 2014, the Professional accordance with the law and the public Association for Customer Engagement interest. AGENCY: Environmental Protection (‘‘PACE’’) requested that the Postal mail addressed to the Agency. Commission extend the comment period Commission is subject to delay due to ACTION: Notice of availability; official for an additional two months. The heightened security screening. As a opening of public comment period. Commission recognizes that the result, we encourage you to submit your extensive list of questions on which it comments online. To make sure that the SUMMARY: The Environmental Protection has requested public comment raise Commission considers your online Agency (EPA, or the Agency) intends to significant issues and believes that comment, you must file it at https:// evaluate whether or not the Waste extending the comment period for 30 ftcpublic.commentworks.com/ftc/ Isolation Pilot Plant (WIPP) continues to days will be sufficient to facilitate a telemarketingsalesnprm, by following comply with the Agency’s more complete record. the instructions on the Web-based form. environmental radiation protection If this Notice appears at http:// standards for the disposal of radioactive 1 Federal Trade Commission: Telemarketing Sales www.regulations.gov, you also may file waste. Pursuant to the 1992 WIPP Land Rule, Rule Review, 79 FR 46732 (Aug. 11, 2014). a comment through that Web site. Withdrawal Act (LWA), as amended, the

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U.S. Department of Energy (DOE, or the protected through www.regulations.gov FOR FURTHER INFORMATION CONTACT: Ray Department) must submit or email. The www.regulations.gov Web Lee, Office of Radiation and Indoor Air, documentation of continued compliance site is an ‘‘anonymous access’’ system, Radiation Protection Division, Center with the EPA’s standards for disposal which means the EPA will not know for Radiation Information and Outreach, and other statutory requirements every your identity or contact information Mail Code 6608T, U.S. Environmental five years after the initial receipt of unless you provide it in the body of Protection Agency, 1200 Pennsylvania transuranic waste at WIPP. your comment. If you send an email Avenue, Washington, DC 20460; The DOE’s 2014 Compliance comment directly to the EPA without telephone number: 202–343–9463; fax Recertification Application (CRA) was going through www.regulations.gov your number: 202–343–2305; email address: received by the EPA on March 26, 2014, email address will be automatically [email protected]. and a copy may be found on the EPA’s captured and included as part of the SUPPLEMENTARY INFORMATION: WIPP Web site (http://www.epa.gov/ comment that is placed in the public I. General Information radiation/wipp/2014application.html) docket and made available on the and in the public dockets (see Internet. If you submit an electronic A. What should I consider as I prepare ADDRESSES Section). The EPA will comment, the EPA recommends that my comments for the EPA? determine when the DOE has provided you include your name and other 1. Submitting CBI. Do not submit this a complete application; the Agency’s contact information in the body of your information to the EPA through completeness determination will be comment and with any disk or CD–ROM www.regulations.gov or email. Clearly conveyed to the DOE and published in you submit. If the EPA cannot read your mark the information that you claim to the Federal Register. The EPA will comment due to technical difficulties be CBI. For CBI information in a disk or evaluate the ‘‘complete’’ application in and cannot contact you for clarification, CD–ROM that you mail to the EPA, determining whether the WIPP facility the EPA may not be able to consider mark the outside of the disk or CD–ROM continues to comply with the radiation your comment. Electronic files should as CBI and then identify electronically protection standards for disposal. The avoid the use of special characters or within the disk or CD–ROM the specific Agency requests public comment on all any form of encryption and be free of information that is claimed as CBI. In aspects of the DOE’s application. any defects or viruses. For additional addition to one complete version of the DATES: Comments in response to DOE’s information about the EPA’s public comment that includes information 2014 recertification application must be docket visit the EPA Docket Center claimed as CBI, a copy of the comment received by the end of the comment homepage at http://www.epa.gov/ that does not contain the information period. The comment period will extend epahome/dockets.htm. claimed as CBI must be submitted for beyond the time when the EPA notifies Docket: All documents in the docket inclusion in the public docket. the DOE that the recertification are listed in the www.regulations.gov Information so marked will not be application is complete. The ending index. Although listed in the index, disclosed except in accordance with date of the public comment period will some information is not publicly procedures set forth in 40 CFR part 2. be specified in a subsequent Federal available, e.g., CBI or other information 2. Tips for Preparing Your Comments. Register document. Announcements whose disclosure is restricted by statute. When submitting comments, remember will be published in the Federal Certain other material, such as to: Register to provide information on the copyrighted material, will be publicly • Identify the rulemaking by docket Agency’s completeness determination available only in hard copy. Publicly number and other identifying and final recertification decision. available docket materials are available information (subject heading, Federal either electronically at Register date and page number). ADDRESSES: Submit your comments, • identified by Docket ID No. EPA–HQ– www.regulations.gov or in hard copy at Follow directions—the agency may OAR–2014–0609, by one of the the Air and Radiation Docket, the EPA/ ask you to respond to specific questions following methods: DC, EPA West, Room 3334, 1301 or organize comments by referencing a • www.regulations.gov: Follow the Constitution Ave. NW., Washington, Code of Federal Regulations (CFR) part on-line instructions for submitting DC. The Public Reading Room is open or section number. • Explain why you agree or disagree; comments. from 8:30 a.m. to 4:30 p.m., Monday suggest alternatives and substitute • Email: to [email protected]. through Friday, excluding legal • Fax: 202–566–1741. holidays. The telephone number for the language for your requested changes. • Describe any assumptions and • Mail: Air and Radiation Docket and Public Reading Room is (202) 566–1744, provide any technical information and/ Information Center, Environmental and the telephone number for the Air and Radiation Docket is (202) 566–1742. or data that you used. Protection Agency, Mailcode: 6102T, • If you estimate potential costs or As provided in the EPA’s regulations at 1200 Pennsylvania Ave. NW., burdens, explain how you arrived at 40 CFR part 2, and in accordance with Washington, DC 20460. your estimate in sufficient detail to normal the EPA docket procedures, if Instructions: Direct your comments to allow for it to be reproduced. copies of any docket materials are Attn: Docket ID No. EPA–HQ–OAR– • Provide specific examples to requested, a reasonable fee may be 2014–0609. The Agency’s policy is that illustrate your concerns, and suggest charged for photocopying. all comments received will be included alternatives. in the public docket without change and These documents are also available • Explain your views as clearly as may be made available online at for review in electronic (CD/DVD) possible, avoiding the use of profanity www.regulations.gov, including any format at the WIPP Information Center or personal threats. personal information provided, unless in DOE’s Carlsbad Field Office (Skeen- • Make sure to submit your the comment includes information Whitlock Building). The Carlsbad WIPP comments by the comment period claimed to be Confidential Business Information Center is open from 8:00 deadline identified. Information (CBI) or other information a.m. to 3:00 p.m., Monday through whose disclosure is restricted by statute. Friday, excluding legal holidays. The II. Background Do not submit information that you telephone number for the WIPP The WIPP was authorized in 1980, consider to be CBI or otherwise Information Center is 1–800–336–WIPP. under section 213 of the DOE National

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Security and Military Applications of implementation of measures to provide conditions or activities at the WIPP Nuclear Energy Authorization Act of confidence for compliance with the every five years to determine if the 1980 (Pub. L. 96–164, 93 Stat. 1259, radiation release limits. Additionally, facility continues to comply with the 1265), ‘‘for the express purpose of the regulations limit radiation doses to Agency’s disposal regulations. This providing a research and development members of the public, and protect determination is not subject to standard facility to demonstrate the safe disposal ground water resources by establishing rulemaking procedures or judicial of radioactive wastes resulting from the maximum concentrations for review, as stated in the aforementioned defense activities and programs of the radionuclides in ground water. To section of the WIPP LWA. United States.’’ The WIPP is a disposal determine whether the WIPP facility The first recertification process began system for transuranic (TRU) radioactive meets these disposal standards, the with the DOE’s submittal of the initial waste. Developed by the DOE, the Agency issued the 1997 WIPP CRA, which was received by the Agency facility is located near Carlsbad in Compliance Criteria (40 CFR part 194), on March 26, 2004. The EPA deemed southeastern New Mexico. TRU waste is which interprets and implement the the CRA–2004 to be complete on emplaced 2,150 feet underground in an disposal standards specifically for the September 29, 2005, and published its ancient layer of salt that will eventually WIPP site. The Compliance Criteria— first WIPP recertification decision on ‘‘creep’’ and encapsulate the waste along with its accompanying preamble March 29, 2006 (71 FR 18010). containers. The WIPP has a total and supporting documents—describe The EPA received the Department’s capacity of 6.2 million cubic feet of TRU what information the DOE must provide second CRA on March 24, 2009. The waste. and how the EPA evaluates WIPP’s Agency deemed the CRA–2009 to be The 1992 WIPP LWA (Pub. L. 102– performance and provides ongoing complete on June 29, 2010, and 579) 1 limits radioactive waste disposal independent oversight. Thus, the published the second WIPP in the WIPP to TRU radioactive wastes Agency implemented its environmental recertification decision on November generated by defense-related activities. radiation protection standards, 40 CFR 18, 2010 (75 FR 70584). TRU waste is defined as waste part 191, by applying the WIPP The EPA received the Department’s containing more than 100 nano-curies Compliance Criteria, 40 CFR part 194, to third CRA on March 26, 2014. After EPA per gram of alpha-emitting radioactive the disposal of TRU radioactive waste at has determined that the application is isotopes, with half-lives greater than the WIPP. For more information about complete, the Agency will review the twenty years and atomic numbers 40 CFR part 191, refer to Federal CRA–2014 to ensure that all of the greater than 92. The Act further Register notices published in 1985 (50 changes made at the WIPP since the stipulates that radioactive waste shall FR 38066–38089, September 19, 1985) second recertification process have been not be TRU waste if such waste also and 1993 (58 FR 66398–66416, accurately reflected and that the facility meets the definition of high-level December 20, 1993). For more will continue to safely contain TRU radioactive waste, has been specifically information about 40 CFR part 194, refer radioactive waste. If the EPA approves exempted from regulation with the to Federal Register notices published in the CRA–2014, it will set the parameters concurrence of the Administrator, or has 1996 (61 FR 5224–5245, February 9, for how the WIPP will be operated by been approved for an alternate method 1996) and 1995 (60 FR 5766–5791, the DOE over the next five years. This of disposal by the Nuclear Regulatory January 30, 1995). approved CRA–2014 (along with any Commission. The TRU radioactive Using the process outlined in the supplemental completeness information waste proposed for disposal in the WIPP WIPP Compliance Criteria, the EPA submitted by the DOE) will then serve consists of materials such as rags, determined on May 18, 1998 (63 FR as the baseline for the next equipment, tools, protective gear and 27354), that DOE had demonstrated that recertification that will occur starting in sludges that have become contaminated the WIPP complied with Agency’s 2019. during atomic energy defense activities. radioactive waste disposal regulations at An important consideration in the The radioactive component of TRU subparts B and C of 40 CFR part 191. EPA’s review of the DOE’s CRA–2014 is waste consists of man-made elements The EPA’s certification determination the radiation release that took place in created during the process of nuclear permitted the WIPP to begin accepting the WIPP’s underground disposal area fission, chiefly isotopes of plutonium. TRU waste for disposal, provided that in February 2014. Recovery activities Some TRU waste is contaminated with other applicable conditions and are currently ongoing. EPA conducted hazardous wastes regulated under the environmental regulations were met. oversight activities in response to the Resource Conservation and Recovery Since the 1998 certification decision, incident and these activities are Act (RCRA; 42 U.S.C. 6901–6992k). The the EPA has conducted ongoing discussed on EPA’s Web site (http:// waste proposed for disposal at the WIPP independent technical review and www.epa.gov/radiation/news/wipp- derives from Federal facilities across the inspections of all WIPP activities related news.html#wippradevent). EPA’s review United States, including locations in to compliance with the EPA’s disposal confirmed that DOE remains in Colorado, Idaho, New Mexico, Nevada, regulations. The initial certification compliance with EPA’s standards; Ohio, South Carolina, Tennessee, and decision identified the starting however, EPA identified several areas Washington. (baseline) conditions for the WIPP site where improvements would enhance The WIPP must meet the EPA’s and established the waste and facility DOE’s ability to provide the best generic disposal standards at 40 CFR characteristics necessary to ensure possible information to the public and Part 191, Subparts B and C, for high- proper disposal in accordance with the its partner agencies during a release. level and TRU radioactive waste. These regulations. At that time, the EPA and Although the incident took place after standards limit releases of radioactive the DOE understood that future the preparation of the CRA–2014, the materials from disposal systems for information and knowledge gained from Department has indicated that changes radioactive waste, and require the actual operations of the WIPP would will need to be made to the WIPP result in changes to best practices and disposal system in order to reopen the 1 The 1992 WIPP Land Withdrawal Act was procedures for the facility. facility and that the DOE will provide amended by the ‘‘Waste Isolation Pilot Plant Land In recognition of this, section 8(f) of supplemental information to the Agency Withdrawal Act Amendments,’’ which were part of the National Defense Authorization Act for Fiscal the amended WIPP LWA requires the on the incident and potential Year 1997. EPA to evaluate all changes in ramifications on compliance. This

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information will be made available in and the public a general understanding filed by S and H Broadcasting, LLC, the Agency’s public dockets and posted of the information that is expected to be proposing the substitution for Channel on EPA’s WIPP Web site. The EPA is included in a complete application of 228C2 for vacant Channel 286C2 at currently considering how anticipated compliance. However, the DOE does not Ehrenberg, Arizona because the channel changes in the facility design will have to resubmit information already substitution was made in another impact the recertification process. supplied to the EPA in prior proceeding, MB Docket No. 11–207. The With today’s notice, the Agency recertification applications. Thus, the Audio Division also grants the ‘‘hybrid’’ solicits public comment on the DOE’s focus of each recertification is on any application for Station KQCM, North documentation of whether the WIPP changes to the disposal system since the Shore, California, File No. BPH– facility continues to comply with the previous recertification decision (in this 20120316ABT. disposal regulations. A copy of the case, 2009–2010). The EPA may request application is available for inspection additional information as necessary DATES: October 10, 2014. on the EPA’s WIPP Web site (http:// from the Department to ensure the www.epa.gov/radiation/wipp/ completeness of the CRA. ADDRESSES: Secretary, Federal 2014application.html) and in the public Once the 2014 recertification Communications Commission, 445 dockets described in the ADDRESSES application is deemed complete, the 12fth Street SW., Washington, DC section. Other background information EPA will provide the DOE with written 20554. related to the Agency’s recertification notification of its completeness activities are also available in our public determination and publish a Federal FOR FURTHER INFORMATION CONTACT: dockets and on our WIPP Web site. The Register notice announcing this Rolanda F. Smith, Media Bureau, (202) EPA will evaluate the complete determination. All correspondence 418–2700. application in determining whether the between the EPA and the DOE regarding SUPPLEMENTARY INFORMATION: This is a WIPP continues to comply with the the completeness of the CRA–2014, as synopsis of the Report and Order, MB radiation protection standards for well as any additional supplemental Docket No. 13–51, adopted September disposal. In addition, the EPA will information submitted by the 18, 2014, and released September 19, consider public comment and other Department, will be posted on our Web 2014. The full text of this Commission information relevant to the WIPP’s site and placed in the public dockets. compliance. The Agency is most The EPA will make a final decision as decision is available for inspection and interested in public comment on issues to whether the WIPP continues to meet copying during normal business hours where changes have occurred that may the disposal regulations after each of the in the FCC’s Reference Information potentially impact the WIPP’s ability to aforementioned steps (technical analysis Center at Portals II, CY–A257, 445 12th remain in compliance with the of the application, issuance of a notice Street SW., Washington, DC 20554. This requirements in the EPA’s disposal on the CRA–2014’s completeness in the document may also be purchased from regulations, as well as any areas where Federal Register, and analyses of public the Commission’s duplicating the public believes that changes have comment) have been completed. As contractors, Best Copy and Printing, occurred and have not been identified required by the WIPP LWA, the Agency Inc., 445 12th Street SW., Room CY– by the DOE. Additionally the Agency will make a final recertification decision B402, Washington, DC 20554, telephone expects to provide public meetings in within six months of issuing its 1–800–378–3160 or via email New Mexico during the review process completeness determination. www.BCPIWEB.com. This document to encourage and facilitate participation List of Subjects in 40 CFR Part 191 and does not contain information collection by interested stakeholders. 194 requirements subject to the Paperwork The first step in the recertification Reduction Act of 1995, Public Law 104– Environmental protection, Radiation process is a ‘‘completeness’’ 13. This document is not subject to the determination. The EPA will make this protection, Transuranic radioactive Congressional Review Act. (The completeness determination as a first waste, Waste treatment and disposal, Commission is not required to submit a step in its more extensive technical Waste Isolation Pilot Plant. copy of this Report and Order to review of the application. This Dated: October 1, 2014. determination is based on a number of Government Accountability Office, Michael P. Flynn, pursuant to the Congressional Review the Agency’s WIPP-specific guidances, Director, Office of Radiation and Indoor Air. most notably, the ‘‘Compliance Act, see 5 U.S.C. Section 801(a)(1)(A) Application Guidance’’ (CAG; EPA Pub. [FR Doc. 2014–24260 Filed 10–9–14; 8:45 am] because no rule changes were made). BILLING CODE 6560–50–P 402–R–95–014) and ‘‘Guidance to the List of Subjects in 47 CFR Part 73 U.S. Department of Energy on Preparation for Recertification of the Radio, Radio broadcasting. Waste Isolation Pilot Plant with 40 CFR FEDERAL COMMUNICATIONS Federal Communications Commission. Parts 191 and 194’’ (Docket A–98–49, COMMISSION Item II–B3–14; December 12, 2000). Nazifa Sawez, 47 CFR Part 73 Both guidance documents include Assistant Chief, Audio Division, Media guidelines regarding: (1) Content of [MB Docket No. 13–51; RM–11692; DA 14– Bureau. certification/recertification applications; 1362] [FR Doc. 2014–24113 Filed 10–9–14; 8:45 am] (2) documentation and format BILLING CODE 6712–01–P requirements; (3) time frame and Radio Broadcasting Services; evaluation process; and (4) change Ehrenberg, Arizona reporting and modification. The Agency AGENCY: Federal Communications developed these guidance documents to Commission. assist the DOE with the preparation of ACTION: Proposal rule; dismissal. any compliance application for the WIPP. It is the Agency’s intent that SUMMARY: The Audio Division dismisses these guidance documents give the DOE as moot the Petition for Rule Making

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NATIONAL TRANSPORTATION more time to submit comments. After NMFS can issue interim groundfish SAFETY BOARD considering these requests, and in light allocations at the beginning of the year, of the comprehensive nature of the allowing the Pacific coast groundfish 49 CFR Part 831 NPRM, we believe it prudent to extend fishery to continue in years when the comment period to October 31, annual groundfish harvest specifications [Docket No. NTSB–GC–2012–0002] 2014. are expiring and new ones are not yet RIN 3147–AA01 In accordance with 49 CFR 800.24(c), finalized, as is likely for January 1, the Board has delegated to the General 2015. Second, this action would amend Investigation Procedures Counsel the authority to ‘‘[a]pprove or regulations to extend NMFS’ authority disapprove, for good cause shown, to issue the full shorebased trawl AGENCY: National Transportation Safety requests to extend the time for filing allocation of groundfish to current quota Board (NTSB). comments on proposed new or amended share holders in the Shorebased ACTION: Notice of proposed rulemaking regulations.’’ I find good cause exists to Individual Fishing Quota Program. (NPRM); extension of comment period. provide the public additional time to Specifically, the rule would allow NMFS to issue that portion of the SUMMARY: On August 12, 2014, the submit thorough comments. Based on NTSB published a Notice of Proposed this authority, I submit this notice to allowable catch currently allocated to an Rulemaking (NPRM) to amend its extend the comment period for the Adaptive Management Program (AMP), regulations concerning its investigation NPRM concerning 49 CFR part 831 to to quota share holders until final criteria procedures. The NTSB is publishing October 31, 2014. and a process for distribution of the this notice to inform the public that it AMP quota shares is developed and David K. Tochen, implemented. is extending the comment period for the General Counsel. DATES: Submit comments on or before NPRM to October 31, 2014. [FR Doc. 2014–24360 Filed 10–9–14; 8:45 am] November 10, 2014. DATES: Submit comments on or before BILLING CODE 7533–01–P October 31, 2014. ADDRESSES: You may submit comments, ADDRESSES: A copy of this NPRM, identified by NOAA–NMFS–2014–0098, published in the Federal Register (FR), by any of the following methods: DEPARTMENT OF COMMERCE • Electronic Submissions: Submit all is available for inspection and copying electronic public comments via the in the NTSB’s public reading room, National Oceanic and Atmospheric Federal e-Rulemaking Portal. Go to located at 490 L’Enfant Plaza SW., Administration www.regulations.gov/ Washington, DC 20594–2003. #!docketDetail;D=NOAA-NMFS-2014- Alternatively, a copy is available on the 50 CFR Part 660 0098, click the ‘‘Comment Now!’’ icon, government-wide Web site on [Docket No. 140904753–4801–01] complete the required fields, and enter regulations at http:// or attach your comments. www.regulations.gov (Docket ID Number RIN 0648–BE34 • Mail: William W. Stelle, Jr., NTSB–GC–2012–0002). Regional Administrator, West Coast You may send comments identified Magnuson-Stevens Act Provisions; Fisheries off West Coast States; Region, NMFS, 7600 Sand Point Way by Docket ID Number NTSB–GC–2012– NE., Seattle, WA 98115–0070, Attn: 0002 using any of the following Regulatory Amendment to Pacific Coast Groundfish Fisheries Trawl Miako Ushio. methods: Instructions: Comments sent by any Rationalization Program for the Start of Federal eRulemaking Portal: Go to other method, to any other address or 2015 http://www.regulations.gov and follow individual, or received after the end of the instructions for sending your AGENCY: National Marine Fisheries the comment period, may not be comments electronically. Service (NMFS), National Oceanic and considered by NMFS. All comments Mail: Send comments to NTSB Office Atmospheric Administration (NOAA), received are a part of the public record of General Counsel, 490 L’Enfant Plaza Commerce. and will generally be posted for public East SW., Washington, DC 20594–2003. viewing on www.regulations.gov Facsimile: Fax comments to 202–314– ACTION: Proposed rule; request for comments. without change. All personal identifying 6090. information (e.g., name, address, etc.), Hand Delivery: Bring comments to SUMMARY: This proposed rule would confidential business information, or 490 L’Enfant Plaza East SW., 6th Floor, revise regulations for the Pacific Coast otherwise sensitive information Washington, DC, between 9 a.m. and 5 Groundfish fishery with a target submitted voluntarily by the sender will p.m., Monday through Friday, except implementation date of January 1, 2015. be publicly accessible. NMFS will Federal holidays. Final implementation of the 2015–2016 accept anonymous comments (enter ‘‘N/ Privacy: We will post all comments biennial harvest specifications and A’’ in the required fields if you wish to we receive, without change, to http:// management measures will likely be remain anonymous). Attachments to www.regulations.gov, including any delayed beyond January 1, 2015. NMFS electronic comments will be accepted in personal information provided. has identified two issues that must be Microsoft Word, Excel, or Adobe PDF FOR FURTHER INFORMATION CONTACT: addressed prior to January 1, 2015, to file formats only. David Tochen, General Counsel, (202) prevent interruption of ongoing fisheries FOR FURTHER INFORMATION CONTACT: 314–6080. and to allow harvest of the total Miako Ushio, phone: 206–526–4644; or SUPPLEMENTARY INFORMATION: After allowable groundfish catch. This action email: [email protected]. issuing the August 12, 2014 Notice of would address those issues by revising SUPPLEMENTARY INFORMATION: Proposed Rulemaking concerning the groundfish regulations in two ways. NTSB’s event investigation procedures First, this action would replace language Electronic Access (79 FR 47064), representatives from that was inadvertently deleted after a This rule is accessible via the Internet other Federal agencies contacted the series of temporary rulemakings. This at the Office of the Federal Register NTSB to inform us they would need would reinstate a mechanism whereby Web site at https://

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www.federalregister.gov. Background multiple purposes: community stability, Groundfish Trawl Catch Share Web site information and documents are processor stability, conservation, at www.westcoast.fisheries.noaa.gov/ available at the NMFS West Coast unintended/unforeseen consequences of fisheries/groundfish_catch_shares. Region Web site at http:// the Trawl Rationalization Program, or to The Chief Counsel for Regulation of www.westcoast.fisheries.noaa.gov/ facilitate new entrants. The program the Department of Commerce certified fisheries/groundfish/index.html and at reserved 10 percent of non-whiting to the Chief Counsel for Advocacy of the the Council’s Web site at http:// quota share (QS) for these purposes. Small Business Administration that this www.pcouncil.org. However, because the method for proposed rule, if adopted, would not distributing the resulting QP from AMP Background have a significant economic impact on QS has not yet been established, a substantial number of small entities. The Pacific Coast Groundfish Fishery consistent with the program, NMFS has This rule concerns the allocation of Management Plan (FMP) requires the been issuing the QP to current QS Quota shares via the AMP pass through Pacific Fishery Management Council holders in proportion to their non- provisions. Quota share holders are (Council) to set harvest specifications whiting QS. For the first years of the comprised of fishermen, processors, and and management measures for program, this allocation policy was seen non-profit organizations. As part of the groundfish at least biennially. Council as a means to ease the transition of the 2014 QS application renewal process, development of the 2015–2016 harvest QS fisheries into the Trawl quota share holders were asked if they specifications and management Rationalization Program with the considered themselves a ‘‘small’’ measures began in summer 2013 and expectation that the trawl program business based on a review of the Small culminated with a June 2014 would be modified to address changes Business Association (SBA) affiliation recommendation for harvest in the fishery. Both the Council and size criteria, including the $19.0 million specifications and associated NMFS have monitored this fishery, and size standard for finfish fishing. The management measures, with a target have not identified any concerns related size standard for finfish fishing has effective date of January 1, 2015. The to communities, processors, recently changed. On June 12, 2014, the effective date of these regulations will conservation, or other matters that SBA issued an interim final rule likely be delayed beyond January 1, would need to be addressed now by the revising the small business size 2015. In the event of a delay, NMFS has AMP quota. standards for several industries effective identified two issues that must be The Pacific Fishery Management July 14, 2014. 79 FR 33467 (June 12, addressed to prevent interruption of Council intends to conduct a formal 5- 2014). The rule increased the size ongoing fisheries and to allow harvest of year review of the Trawl Rationalization standard from $19.0 to $20.5 million for the total allowable groundfish catch. program, as required under Magnuson finfish fishing, from $5 to $5.5 million Those two issues are addressed through Steven Act 303A(c)(1)(G). The pass- for shellfish fishing, and from $7.0 this Proposed Rule. through mechanism is currently set to million to $7.5 million for other marine expire at the end of 2014, and this rule fishing, for-hire businesses, and Issuance of Groundfish Quota proposes, in accordance with the In January 2011, NMFS implemented Council’s recommendations from its marinas. A small organization is any the Trawl Rationalization Program for March, 2014 meeting, to extend the pro nonprofit enterprise that is the Pacific coast groundfish fishery’s rata pass-through until the independently owned and operated and trawl fleet (75 FR 78344, December 15, implementation of appropriate is not dominant in its field. For those 2010). This program included a regulations resulting from the 5-year finfish companies that reported provision to use a conservative estimate review. NMFS is proposing to extend themselves as ‘‘large’’ under the $19.0 to issue Pacific whiting quota pounds the pro rata pass-through so that the fish million standard, NMFS has reviewed (QP) at the beginning of the year in authorized for harvest through the available data on ownership, affiliation, years when harvest specifications of biennial specifications process will industry Web sites, and recent analysis Pacific whiting are not known by continue to be available to benefit the (NMFS-Alaska Region). NMFS did not January 1. The remainder of the quota fishing industry, dependent find any information that would change pounds would be issued when the final communities, and consumers. Without their status under the new finfish harvest specifications are established. A this rulemaking, 10 percent of the non- standard. Based on this analysis, NMFS similar provision for non-whiting whiting QS would not be issued. Based estimates that the 138 quota share groundfish species was added a year on 2013 non-whiting groundfish accounts are held by 99 entities, of later (76 FR 74725, December 1, 2011). revenues of $28.2 million, this would which 87 are small entities. In response to litigation, these result in a loss of approximately $2.8 This rule would not result in any provisions were amended via a million to the shorebased trawl fleet. immediate impacts on revenues or costs temporary rule (77 FR 45508, August 1, for the small entities because it 2012, extended via 78 FR 3848 through Classification maintains the current AMP pass- July 22, 2013). With the expiration of Pursuant to section 304(b)(1)(A) of the through processes used in this fishery this temporary rule in 2013, the Magnuson-Stevens Act (MSA), the since 2011. This rule making does not language allowing NMFS to use a NMFS Assistant Administrator has contain any new management measures conservative estimate for issuance of the preliminarily determined that this that would have specific economic non-whiting harvest QPs was proposed rule is consistent with the impacts on the fishery. Therefore, this inadvertently deleted. That provision is PCGFMP, other provisions of the proposed rule, if promulgated, would proposed to be reinstated through this Magnuson-Stevens, Act, and other not have a significant economic impact proposed rule. applicable law, subject to further on a substantial number of small consideration after public comment. entities. As a result, an initial regulatory Extension of AMP Quota Pass-Through A draft Environmental Assessment flexibility analysis is not required and As part of the Trawl Rationalization (EA) was prepared for the pass-through none has been prepared. NMFS will Program, NMFS created an Adaptive of adaptive management quota pounds conduct the appropriate analyses for Management Program (AMP) portion of this proposed action, and can any subsequent rulemakings stemming (§ 660.140(d)(1)(ii)(A)) to address be found on the NOAA Fisheries from this proposed rule.

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This proposed rule has been species other than Pacific whiting and (1) In years where the Pacific whiting determined to be not significant for Pacific halibut annually by multiplying harvest specification is known by purposes of Executive Order 12866. the QS permit owner’s QS for each such January 1, deposits to QS accounts for IFQ species by that year’s shorebased List of Subjects in 50 CFR Part 660 Pacific whiting will be made on or about trawl allocation for that IFQ species. January 1. Fisheries, Fishing, and Indian Deposits to QS accounts for IFQ species (2) In years where the Pacific whiting fisheries. other than Pacific whiting and Pacific harvest specification is not known by Dated: October 2, 2014. halibut will be made on or about January 1, NMFS will issue Pacific Samuel D. Rauch III, January 1 each year. Until the implementation of any regulatory whiting QP in two parts. On or about Deputy Assistant Administrator for January 1, NMFS will deposit Pacific Regulatory Programs, National Marine changes developed pursuant to the first Fisheries Service. program review for the trawl whiting QP based on the shorebased trawl allocation multiplied by the lower For the reasons set out in the rationalization program, the resulting end of the range of potential harvest preamble, NMFS proposes to amend 50 AMP QP will be issued to all QS permit specifications for Pacific whiting for CFR part 660 as follows: owners in proportion to their non- whiting QS. that year. After the final Pacific whiting PART 660—FISHERIES OFF WEST (1) In years where the groundfish harvest specifications are established COAST STATES harvest specifications are known by later in the year, NMFS will deposit January 1, deposits to QS accounts for additional QP to QS accounts. ■ 1. The authority citation for part 660 IFQ species will be made on or about * * * * * continues to read as follows: January 1. (l) * * * Authority: 16 U.S.C. 1801 et seq. and 16 (2) In years where the groundfish U.S.C. 773 et seq. harvest specifications are not known by (2) AMP QP pass through. The 10 ■ 2. In § 660.140, revise paragraphs January 1, NMFS will issue QP in two percent of non-whiting QS will be (d)(1)(ii)(A) introductory text, parts. On or about January 1, NMFS will reserved for the AMP, but the resulting (d)(1)(ii)(A)(1) and (2), (d)(1)(ii)(B)(1) deposit QP based on the shorebased AMP QP will be issued to all QS permit and (2), and paragraph (l)(2) to read as trawl allocation multiplied by the lower owners in proportion to their non- follows: end of the range of potential harvest whiting QS until the implementation of specifications for that year. After the any regulatory changes developed § 660.140 Shorebased IFQ Program. final harvest specifications are pursuant to the first program review for * * * * * established later in the year, NMFS will the trawl rationalization program. (d) * * * deposit additional QP to the QS (1) * * * [FR Doc. 2014–24192 Filed 10–9–14; 8:45 am] account. (ii) * * * BILLING CODE 3510–22–P (A) Non-whiting QP annual sub- * * * * * allocations. NMFS will issue QP for IFQ (B) * * *

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Notices Federal Register Vol. 79, No. 197

Friday, October 10, 2014

This section of the FEDERAL REGISTER the Competition will support costs can be viewed at the Competition Web contains documents other than rules or associated with pioneering the use of site at: proposed rules that are applicable to the advanced wood products and systems in www.tallwoodbuildingcompetition.org. public. Notices of hearings and investigations, tall buildings and open the door for Questions about the Competition can committee meetings, agency decisions and more widespread adoption of the be directed by email to the Competition rulings, delegations of authority, filing of petitions and applications and agency innovative materials. Sponsor at: Oscar Faoro, Project statements of organization and functions are The objective of the Competition is to Manager, U.S. Tall Wood Building Prize examples of documents appearing in this identify one or more proponents with Competition, OscarFaoro@ section. existing viable projects and capable tallwoodbuildingcompetition.org. design and construction teams willing Results of the Competition will be to convert their existing project from a announced on or about February 2015 DEPARTMENT OF AGRICULTURE traditionally constructed tall building to on the Competition Web site: www.tallwoodbuildingcompetition.org. [OES–2014–0001] a design and construction approach using advanced wood building SUPPLEMENTARY INFORMATION: Announcement of Requirements and materials, new composite or hybrid Registration for the U.S. Tall Wood wood methods, and/or existing proven Competition Partners and Competition Building Prize Competition alternative solution techniques. Sponsor The Competition prize purse will be The U.S. Department of Agriculture AGENCY: USDA. awarded to selected proponent(s) to (‘‘USDA’’) is the department of the U.S. ACTION: Notice. cover the incremental costs of Federal government that provides converting from traditional construction leadership on food, agriculture, natural Authority: 15 U.S.C. 3719. to wood construction. The selected resources, forestry, rural development, SUMMARY: The U.S. Department of proponent(s) will be the team nutrition, and other issues related to Agriculture in a cooperative partnership demonstrating the best ability to utilize agriculture in America. Web site: with the Softwood Lumber Board and new scientific data, to develop technical www.usda.gov the Binational Softwood Lumber expertise, and to use incremental The Softwood Lumber Board (‘‘SLB’’) Council is conducting a prize funding to safely design, specify, and is an industry funded Check-off Program competition funding initiative to construct a building of a minimum of established in cooperation with the support the demonstration of tall wood eighty feet (80’) in height (not including USDA’s Agricultural Marketing Service buildings in the United States. The U.S. a reinforced concrete podium) in the to promote the benefits and uses of Tall Wood Building Prize Competition United States of America that can softwood lumber products in outdoor, (the ‘‘Competition’’) is being conducted showcase the application, practicality, residential, and non-residential to showcase the architectural and and sustainability of innovative wood construction. Programs supported by the commercial viability of advanced wood based structural building solutions in SLB focus on increasing the demand for products in tall building construction in tall building construction. softwood lumber products in the United order to support employment DATES: States. Web site: opportunities in rural communities, Competition Submission Period: www.softwoodlumberboard.org maintain the health and resiliency of the October 9, 2014–December 8, 2014. The Canadian and U.S. Federal Nation’s forests, and advance Evaluation and Judging: December 8, governments established the Binational sustainability in the built environment. 2014–January 2015. Softwood Lumber Council (‘‘BSLC’’) as Using wood obtained through Verification of Potential Winner(s:) part of the 2006 Softwood Lumber sustainable forestry practices in green January 2015. Agreement ‘‘to promote increased building applications promotes a Announcement of Winner(s) & cooperation between the U.S. and healthy environment and a strong Signing of Preliminary Funding Canadian softwood lumber industries economy. The timber industry is an Agreement(s): February 2015. and to strengthen and expand the important job creator and supports The Competition Submission Period market for softwood lumber products in hundreds of local communities, many of begins October 9 at 10:00 a.m. ET and both countries’’. The BSLC is a leading them rural. A recent life cycle analysis ends December 8, 2014 at 12:00 a.m. ET. funder of efforts to increase the use of found that harvesting, transporting, The Competition Sponsor’s computer, softwood lumber products as part of the manufacturing, and using wood in set to Eastern Time, is the official time- shift to green building. Sustainably lumber and panel products in building keeping device for this Competition. harvested softwood lumber products yields fewer air emissions—including Competition dates are subject to from North America create jobs in rural greenhouse gases—than the resource change at the discretion of the communities, sequester significant extraction, manufacture, and use of Competition Sponsor. Entries submitted amounts of carbon, and help reduce the other common building materials. before or after the Competition overall environmental footprint of a There are barriers to being the first to Submission Period will not be reviewed home or building. Web site: adopt new building materials and or considered for award. www.softwoodlumber.org systems, most notably the costs of Collectively the USDA, SLB, and analyzing novel design and engineering Competition Questions, Changes, and BLSC are the ‘‘Competition Partners.’’ alternatives and verifying that these Results The SLB is the ‘‘Competition Sponsor.’’ solutions comply with applicable Changes or updates to the The Competition Sponsor, in code(s). The funds made available for Competition rules will be posted and coordination with the Competition

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Partners, will make all decisions related the Competition is eligible. None of the incremental costs of transitioning their to the development, management, and Competition Partners’ employees may building from a traditional structure to implementation of the Competition. participate as members of a Project a wood structure, i.e., those costs The Competition Sponsor and the Proponent Team. incurred only because of the Project winning Project Proponent Team(s) will Non-USDA Federal employees acting Proponent Team’s innovative use of enter into funding agreement(s) after the in the capacity of their Federal wood products in the demonstration Competition that will govern the employment are not eligible members of structure. obligations of the Project Proponent a Project Proponent Team. Non-USDA Incremental costs that may be paid for Team, the process for submitting Federal employees acting in their using the award(s) from the Prize Purse Eligible Expenses, and disbursements personal capacity should consult with are the Eligible Expenses listed below. from and administration of the Prize their respective office of ethics to The winning Project Proponent Team(s) Purse. A sample Funding Agreement determine whether their permission as a will be required to enter into a post- can be found on the Competition Web member of a Project Proponent Team is Competition funding agreement site: permissible. (‘‘Funding Agreement’’) with the www.tallwoodbuildingcompetition.org. Competition Sponsor, and to submit Registration Process for Participants incremental costs for approval as Eligibility Rules for Participating in the Project Proponent Teams may begin Eligible Expenses prior to receiving Competition submitting Competition entries at 10:00 disbursements of funds from the Prize The competition is open to Project a.m. EST on October 9, 2014 to the Purse. Proponent Teams consisting of real Submit page of the Competition Web The winning Project Proponent estate developers, institutions (e.g., site at: Team(s) is encouraged to seek universities), and other corporations or www.tallwoodbuildingcompetition.org. additional sources of funding beyond legal organizations (e.g., partnerships or Competition entries must be the Prize Purse to promote the project’s nonprofit organizations), and their submitted no later than 12:00 a.m. on transition from a traditional structure to design and construction team partners. December 7, 2014 to the Submit page of a wood structure. Each team member must be either: the Competition Web site at: All costs incurred in the preparation (1) Individuals that are part of the www.tallwoodbuildingcompetition.org. of Competition entries are to be borne Project Proponent Team must be Formatting by Project Proponent Teams. Entry residents of the 50 United States, the preparation costs will not be a Prize • District of Columbia, Puerto Rico, the Entries must be in pdf format. Purse Eligible Expense. U.S. Virgin Islands, Guam, and • Entries must include a table of American Samoa; or contents and be consecutively Eligible Expenses (2) Corporations, institutions, or other paginated. The following types of incremental legal entities that are part of the Project • Entries must include a cover letter costs of transitioning the winning Proponent Team must be organized in containing the information set out in Project Proponent Team(s) building and maintain a primary place of below in the Mandatory Elements from a traditional structure to a wood business in any jurisdiction specified in section, subsection A. structure will be eligible for (1). • Entries must not exceed 30 pages or reimbursement from the awarded Prize Project Proponent Teams shall 20 megabytes including appendices. Purse funds. identify a single lead applicant • Entries must be in English. individual or entity in their Competition • All accounting figures contained in Schematic Design, Design Development, entries (the ‘‘Team Lead’’). The Team entries must be in U.S. dollars. and Construction Drawings Lead is responsible for providing and Entries submitted late will not be • Architecture. meeting all entry and evaluation evaluated or considered for award. Æ Concept and design development. requirements. Entries sent to the Competition • Engineering. All proposed projects must be located Sponsor or Competition Partners in any Æ Incremental preliminary evaluation in one of the 50 United States, the manner other than through the Submit of possible structural solutions and District of Columbia, Puerto Rico, the page of the Competition Web site will building serviceability related issues. U.S. Virgin Islands, Guam, or American not be evaluated or considered for Æ Incremental design expenses Samoa. award. related to the design of the wood To be eligible to win the Competition, Entries that do not comply with the structure. Project Proponent Team members must formatting requirements will not be Æ Integration of novel solutions when not be suspended, debarred, or evaluated or considered for award. detailing structural documents for otherwise excluded from doing business Competition Award(s) tendering and construction. with the U.S. Federal Government. • Fire safety and protection. A Project Proponent Team shall not The Prize Purse is a combined pool Æ Fire and building safety strategies, be deemed ineligible because the Project from the Competition Partners of $2 related issues, and possible solutions. Proponent Team used Federal facilities million. The Prize Purse may increase, • Building enclosure. or consulted with Federal employees in but will not decrease. Any increases in Æ Examination of issues and detailing preparing its submission to the the Prize Purse will be posted on the solutions related to the building’s Competition if the facilities and Competition Web site and published in exterior facade. employees are made available to all the Federal Register. The Prize Purse • Mechanical and electrical Project Proponent Teams on an will be used to fund one or more interfaces. equitable basis. awards; the number of awards made Æ Strategies and issue resolutions None of the Competition Partners or will depend on the estimated amount of related to system integration. any of their respective affiliates, Eligible Expenses proposed by the • Secondary impact and preliminary subsidiaries, or any other company or winning Project Proponent Team(s). cost analysis related to use of wood entity involved with the design, Award(s) will be made to the winning products, components and systems, and production, execution, or distribution of Project Proponent Team(s) to cover related construction methodologies.

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Research, Testing, and Other Required all of the mandatory elements will not Proponent Team’s business case, Support by Third Parties be considered for award. specifically: • • Research. A. Each Competition entry must Project Proponent Team’s Æ Related to acoustic, fire, seismic, include a cover letter that (1) experience with building development, affirmatively represents that the Project tall building design and construction; vibration, connections, building envelop • assembly materials, and construction Proponent Team has read and consents The proposed project financing techniques. to be governed by the Competition rules plan; • A preliminary project budget; • Modeling and testing. and meets the eligibility requirements, • The estimated amount of Eligible Æ Costs associated with product, and (2) clearly lists the following project Expenses attributable to transitioning component, and/or system modeling and Project Proponent Team the project from traditional construction and testing. information: • A brief description of the project, to wood construction; Building System Code Acceptance, including location details, proposed • A reasonably detailed schedule of Final Cost Analysis and Approvals occupancy, proposed building height, when and where Eligible Expenses • and proposed construction start date; would be incurred, outlining how the Architecture and engineering. • Æ Comprehensive resolution of design The name of the title holder for the Prize Purse will be utilized. The issues. property site being considered for the schedule shall include dates of expected • Final code review, final cost project; Prize Purse funding requests; • The members of the Project • analysis, and preparation of documents A planned timeline of project Proponent Team, the Team Lead, key and peer review process costs. development and construction; contacts and contact details for the • • Additional design modeling or A narrative describing how the Team Lead, and a brief description of testing requirements. proposed wood solution and project • Final documents and presentations the relationship amongst and compares with other more commonly agreements in place between the Team to the Local Authority(ies) for building used structural solutions and buildings Lead and members of the Project in the market; and permit approvals. • • Other project approval costs. Proponent Team; A summary discussing market • The estimated amount of Eligible research and estimating the regional Construction Expenses attributable to transitioning demand for the residential, commercial, • Project construction fees associated the project from traditional construction institutional, or industrial spaces to wood construction; and included in the proposed project. with wood construction that would not • otherwise be required. A clear statement that the Project Competition entries also must include • Quality control, site inspection, and Proponent Team commits to have some information about the local site safety costs. wood material sourced from and authority(ies) having jurisdiction over • Weather protection costs related to manufactured by domestic Rural the project and/or project site (‘‘Local protecting materials and constructed Sources. Authority(ies)’’): • assemblies during the building process. B. Each Competition entry must Name(s) of and contact information • Fire protection and site security include information addressing the for the Local Authority(ies) having costs. following elements: jurisdiction over the project and/or • Risk management related costs. 1. Project Specifics and Details project site; • A discussion of the previous Related Activities and Other Costs Not Competition entries must include the experience of the Local Authority(ies) Noted but Directly Attributable to the following details about the proposed approving projects using a code Development and Construction of a project: • alternate approach; Wood Solutions for the Project The legal description of the parcel Æ Note that Project Proponent Team of land proposed for use as the project • Incremental supervision and trade experience working with the Local site; training associated with the proposed • Authority(ies) on a prior successfully The name of the title holder for the completed code alternate project will be wood solution(s). parcel of land proposed for use as the • Instrumentation during evaluated more highly than a general project site; discussion of the code alternate construction and ongoing monitoring Æ If the title holder is not a member experience of the Local Authority(ies) costs associated with building of the Project Proponent Team, include with other developers; and performance of critical wood a description of the agreement(s) components or assemblies. • Project Proponent Teams must • entered into with the title holder for use request from the Local Authority(ies) a Extra-ordinary course of of the parcel of land proposed for use construction insurance premiums and letter (letters) indicating a willingness as the project site; on the part of the Local Authority(ies) other extra-ordinary insurance costs • Current and proposed zoning of the to engage with the Project Proponent which can be clearly defined. parcel of land proposed for use as the • Team in a cooperative effort to develop Construction site access requested project site; by the Competition Partners that may • Status of required development a code alternate solution for the cause the proponent to incur additional proposed project. permit(s) for both the project site and Æ costs; i.e., construction disruption and the project itself; If the Local Authority(ies) cannot additional site safety requirements that • A project site plan; provide the requested letter(s) before the may result from visitor tours or • A project rendering; and deadline for submission of Competition promotional events. • A description of the proposed entries, the Project Proponent Team instead may include a written Mandatory Entry Elements accessibility and visibility of the project on a national architectural scale. description detailing the engagement All Competition entries must include the Project Proponent Team has had to information addressing all of the 2. Business Case for Project date with the Local Authority(ies) and mandatory elements. Any entry that Competition entries must include the nature of the response(s) received fails to include information addressing information setting out the Project from the Local Authority(ies).

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D Note: Competition entries with the some of the wood material used in the • A fire protection strategy for the requested letter(s) will be evaluated proposed wood solution sourced from project, and detailed information about more highly than those without. and manufactured by domestic (U.S.) the proposed fire protection systems D Note: The Project Proponent Rural Sources. and/or fire resistance applications Team(s) that is evaluated highest will be Æ Note: ‘‘Rural Sources’’ are sources proposed, and whether the proposed required to provide the requested in any areas other than: (1) A city or systems/applications have been letter(s) prior to being officially selected town that has a population of greater successfully used in wood structures as the Competition winner(s) and than 50,000 inhabitants; and (2) the elsewhere or are experimental. awarded the Prize Purse. urbanized area contiguous and adjacent to such a city or town, as defined by the 4. Sustainability 3. Proposed Wood Solution U.S. Bureau of the Census using the In addition to the information Competition entries must include 2010 census of the United States. requested with the mandatory elements, information setting out the Project D The following Web site can be used competition entries should include Proponent Team’s proposed wood as a general non-guaranteed guide to information about the project’s solution, specifically: assist in determining whether or not a sustainability, specifically: • Proposed structural system; particular area is likely rural: http:// • Any sustainable timber harvest Æ Detailed information about the eligibility.sc.egov.usda.gov/eligibility/ practices, certifications, or other land feasibility of the proposed structural welcomeAction.do. management information pertinent to solution being proposed for the project; anticipated product use. e.g., has it been used commonly Optional Entry Elements elsewhere; has it previously been tested Competition entries are not required 5. Rural Economic Ties and applied, or is it experimental and to include information addressing the Competition entries should include still requiring research, analysis, optional elements, but including additional information setting out the modeling, and testing; information addressing all of the project’s ties to stimulating the rural • A preliminary concept of the optional elements will increase chances economy, specifically: proposed structural solution with of winning. • Details about where key structural information about available research to Entries that include information and architectural wood products and support the solution, or the possible addressing some or all of the optional related materials or complementary breadth of analysis or testing elements will be evaluated more highly products will be sourced, produced, or requirements needed to validate the than entries that do not address any of fabricated, and the extent to which these solution; and the optional elements. materials will come from domestic 4. Sustainability 1. Project Specific Details (U.S.) Rural Sources. Competition entries must include Competition entries should include Evaluation, Judging, and Selection of information about the project’s additional detailed project information, Winner(s) sustainability, specifically: specifically: The Competition Sponsor will screen • • A narrative detailing the project’s The proposed building enclosure, all entries for eligibility and inclusion of environmental impact or footprint, and and information about how enclosure all the mandatory elements. Entries the sustainability elements featured in issues might be resolved for the specific from Project Proponent Teams that do the project; location, design, and occupancy of the not meet the eligibility requirements set • The narrative must address the proposed project. out above in the Eligibility Rules for anticipated levels of impact of the Participating in the Competition section proposed project from a sustainability 2. Business Case for Project and/or that fail to include one or more and performance perspective including Competition entries should include of the mandatory elements set out above references to life cycle assessment, additional information setting out the in the Mandatory Entry Elements inventory, impact and costing, carbon Project Proponent Team’s business case, sequestration, embodied energy and specifically: section will not be evaluated or expected energy usage. • The curricula vitae of the Project considered for award. Proponent Team design team member(s) Eligible and complete entries will be 5. Rural Economic Ties and/or key consultants; and judged by a fair and impartial panel of Competition entries must include • Examples of past projects designed individuals (the ‘‘Judging Panel’’) from information setting out the project’s ties and completed that are similar to the the Competition Partners and from to stimulating the rural economy, proposed project in form and scale. outside organizations with expertise in specifically: tall building design and construction. • An economic narrative describing 3. Proposed Wood Solution Competition entries that include the potential of the project and/or wood Competition entries should include information about only the mandatory materials used in the project to additional information about the elements can earn an evaluated base positively impact the U.S. rural proposed wood solution, specifically: score of up to 100%. Competition economy; • The potential advantages and/or entries that include information about • A proposed plan for working with costs savings of the proposed structural some or all of the optional elements can Competition Sponsor to develop a post- system and the overall project from a earn an evaluated base plus bonus score project Tall Wood Building constructability and competitive of up to 125%. The Judging Panel will Demonstration Report, for use within perspective over traditional methods of evaluate and score each eligible the building industry, that details building tall structures including but Competition entry, and will recommend lessons learned and makes not limited to; land utilization, for award to the Competition Partners recommendations about building tall integrated and detailed design; the entry(ies) with the highest combined wood structures in the United States; prefabrication opportunities, and speed base plus bonus score(s). The and of erection impacting directly or Competition Partners will, in their sole • A statement detailing the Project indirectly other inter-related secondary discretion, make award based on Proponent Team’s commitment to have or tertiary aspects of construction. consideration of the Judging Panel’s

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evaluations and recommendations and 3. Proposed Wood Solution—Mandatory • A description of the fire protection the anticipated contribution of the Element Criteria—25% strategy being proposed and its viability. winning entry(ies) to fostering • Viability of the proposed wood 4. Sustainability—Optional Element transformative change in building structural solution—based on the Criteria—Bonus 5% practices through replicable or iconic system and materials proposed, the • demonstration and the anticipated level of detail provided about the Documentation that links the wood unique contributions of the winning proposed system, the demonstrated materials and products to be sourced for entry(ies) to rural economic feasibility of the system, and the the proposed project to sustainable opportunity. The Competition Partners practicality of the proposed system and timber harvest practices, certifications, reserve the right to select other than the its potential for repeat use in the or other sustainable land management highest scoring entry(ies) for award. The industry. initiatives. Competition Partners, in their sole 5. Rural Economic Ties—Optional discretion, may identify competition 4. Sustainability—Mandatory Element Element Criteria—Bonus 5% finalists prior to a final award Criteria—15% • determination. The Judging Panel will • Amount of reduction in Competition entries that go beyond evaluate entries based upon the environmental footprint over a similar a commitment statement to include following mandatory criteria: building constructed using traditional details of how and where in rural 1. Project Specifics and Details— materials. America wood materials will be sourced Mandatory Element Criteria—15% • Amount and types of sustainability will be evaluated more highly than less elements featured in the project. detailed entries. • Viability of the proposed project— • Feasibility of realizing the Additional Rules and Conditions based on site ownership, site estimated levels of impact of the project parameters, site zoning, the stage of from a sustainability and performance A. General Conditions design development as presented, and perspective. By entering the Competition, each the stage of the development permit(s) Project Proponent Team guarantees that as described. 5. Rural Economic Ties—Mandatory • Element Criteria—15% its entry complies with all applicable Ability of the project to foster Federal and state laws and regulations. transformative change in the built • Feasibility of realizing positive Each Project Proponent Team environment—based on the project’s impacts to the U.S. rural economy from warrants that its entry is free of viruses, iconic architecture or engineering, or the project and/or wood materials used spyware, malware, or any other high profile accessibility or visibility. in the project—based on demonstration malicious, harmful, or destructive of the project’s potential to be a catalyst 2. Business Case for Project—Mandatory device. Project Proponent Teams for supporting emerging demand for Element Criteria—30% submitting entries containing any such new domestic rural manufacturing and device will be held liable and may be • The Project Proponent Team’s employment opportunities. • prosecuted to the fullest extent of the summary of experience with building Quality of the plan for development law. development and tall building design of a Tall Wood Building Demonstration Entries containing any matter which, and construction Report (A Case Study). in the sole discretion of Competition • • Creation of direct rural economic Viability of the Project Proponent Sponsor, is indecent, defamatory, in opportunity related to the project— Team’s business case—presentation of obvious bad taste, which demonstrates a based on documentation of commitment financial metrics, base assumptions, lack of respect for public morals or to source wood materials from U.S. demand estimation for the project’s conduct, which promotes Rural Sources. space, market analysis, budgets, discrimination in any form, which The Judging Panel will evaluate partnership agreements, regional or shows unlawful acts being performed, entries based upon the following national socio-economic impact of the which is slanderous or libelous, or optional element criteria: project, etc.; and based on an estimated which adversely affects the reputations summary of ‘Eligible Expenses’. 1. Project Specifics and Details— of Competition Sponsor or any of the • Project Timeline—proposed Optional Element Criteria—Bonus 5% Competition Partners will not be schedules with realistic estimated • A description of the proposed accepted. If the Competition Sponsor, in project completion dates that are nearer its sole discretion, finds any entry to be in the future will be evaluated more building enclosure solution and its viability. unacceptable then such entry shall be highly than proposed schedules with deemed disqualified and will not be estimated project completion dates that 2. Business Case for Project—Optional evaluated or considered for award. are further in the future and/or are Element Criteria—Bonus 5% The winning Project Proponent unrealistic. • Project Proponent Team’s past Team(s) must comply with all • Willingness and ability of the Local experience with completed design and applicable laws and regulations Authority(ies) to cooperate with the construction of projects that are similar regarding Prize Purse receipt and Project Proponent Team—based on the to the proposed project in form and disbursement. The winning Project letter(s) from or descriptions of scale. Proponent Team(s) also must comply engagement with the Local with all terms and conditions of the Authority(ies). 3. Proposed Wood Solution—Optional Funding Agreement(s) to be entered into D Competition entries with letter(s) Element Criteria—Bonus 5% between the winning Project Proponent will be evaluated more highly than • A reasonably detailed estimate of Team(s) and the Competition Sponsor. entries with only descriptions of the construction costs and savings Competition Sponsor’s failure to engagement between the Project comparing the proposed wood solution enforce any term of any applicable rule Proponent Team and the Local to other traditional methods and or condition shall not constitute a Authority(ies) materials for the proposed project. waiver of that term.

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B. Entry Conditions & Release Competition or to be acting in violation E. Intellectual Property of any applicable rule or condition. By entering the Competition, each By entering the Competition, each Project Proponent Team agrees to: (1) Any attempt by any person to Project Proponent Team warrants that it Comply with and be bound by all undermine the legitimate operation of is the author and/or authorized owner of applicable rules and conditions, and the the Competition may be a violation of its entry, and that the entry is wholly decisions of the Competition Sponsor criminal and civil law, and, should such original with the Project Proponent and Competition Partners, which are an attempt be made, Competition Team (or is an improved version of an binding and final in all matters relating Sponsor reserves the authority to seek existing project plan that the Project to this Competition; (2) release and hold damages from any such person to the Proponent Team is legally authorized to harmless the Competition Sponsor and fullest extent permitted by law. enter into the Competition), and that the the Competition Partners and all their D. Verification of Potential Winner(s) submitted entry does not infringe any respective past and present officers, copyright, patent, or any other rights of directors, employees, agents, and All potential competition winners are any third party. Each Project Proponent representatives (collectively the subject to verification by competition Team agrees to hold the Released Parties ‘‘Released Parties’’) from and against sponsor whose decisions are final and harmless for any infringement of any and all claims, expenses, and binding in all matters related to the copyright, trademark, patent, and/or liability arising out of or relating to the competition. other real or intellectual property right Project Proponent Team’s entry or Potential winner(s) must continue to that may be caused, directly or participating in the Competition and/or comply with all terms and conditions of indirectly, in whole or in part, from the Project Proponent Team’s the Competition rules, and winning is Project Proponent Team’s participation acceptance, use, or misuse of the Prize contingent upon fulfilling all in the Competition. Purse or recognition. requirements. The potential winner(s) All legal rights in any materials produced or submitted in entering the The Released Parties are not will be notified by email and/or Competition are retained by the Project responsible for: (1) Any incorrect or telephone. If a potential winner cannot Proponent Team and/or the legal holder inaccurate information, whether caused be contacted, or if the notification is of those rights. Entry into the by Project Proponent Teams, printing returned as undeliverable, the potential Competition constitutes express errors, or by any of the equipment or winner forfeits. In the event that a authorization for Competition Sponsor, programming associated with or used in potential winner, or an announced Competition Sponsor’s staff, the Competition; (2) technical failures of winner, is found to be ineligible or is Competition Partners’, Competition any kind, including, but not limited to, disqualified for any reason, the Partners’ staff, and the Judging Panel to malfunctions, interruptions, or Competition Sponsor may make award, review and analyze any and all aspects disconnections in phone lines or instead, to the next runner up, as of submitted entries, including any network hardware or software; (3) previously determined by the Judging trade secret or proprietary information unauthorized human intervention in Panel. contained in or evident from review of any part of the entry process for the Prior to awarding the Prize Purse, the submitted entries. Competition; (4) technical or human USDA will verify that the potential Legal rights in materials produced error that may occur in the winner(s) is/are not suspended, during design and construction of the administration of the Competition or the debarred, or otherwise excluded from winning project(s) will be negotiated as processing of entries; or (5) any injury doing business with the U.S. Federal part of the Funding Agreement entered or damage to persons or property that Government. Suspended, debarred, or into between Competition Sponsor and may be caused, directly or indirectly, in otherwise excluded parties will not be the winning Project Proponent Team(s). whole or in part, from Project Proponent eligible to win the Competition. A sample Funding Agreement, Team’s participation in the Competition Prior to being awarded the Prize Purse containing draft intellectual property or receipt or use or misuse of the Prize the potential winner(s) must: language, can be found on the Purse. If for any reason a Project 1. Provide the letter(s) of cooperation Competition Web site: Proponent Team’s entry is confirmed to www.tallwoodbuildingcompetition.org. have been deleted erroneously, lost, or from the Local Authority(ies); otherwise destroyed or corrupted, 2. Complete a certification of F. Publicity & Availability of Project for Project Proponent Team’s sole remedy is eligibility attesting to the Project Demonstration Purposes to submit another entry in the Proponent Team’s fulfillment of all the By entering the Competition, each Competition. eligibility requirements (the certification Project Proponent Team consents, as C. Termination and Disqualification form will be provided to the potential applicable, to Competition Sponsor’s winner(s) by Competition Sponsor); and Competition Partners’ use of the Competition Sponsor reserves the 3. Enter into a Funding Agreement names, likenesses, photographs, voices, authority to cancel, suspend, and/or with Competition Sponsor. The Funding and/or opinions of each member of the modify the Competition, or any part of Agreement governs the obligations of Project Proponent Team both it, if any fraud, technical failures, or any the Project Proponent Team, including individually and collectively, and other factor beyond Competition the addition of the United States of disclosure of their hometowns and Sponsor’s reasonable control impairs America as a named insured on general States for promotional purposes in any the integrity or proper functioning of the liability and umbrella insurance media, worldwide, without further Competition, as determined by policies; the process for submitting payment or consideration. Competition Sponsor in its sole Eligible Expenses; and disbursements During construction of the winning discretion. from and administration of the Prize project(s) and for a period of three (3) Competition Sponsor reserves the Purse. A sample Funding Agreement years after completion, upon advance right to disqualify any Project Proponent can be found on the Competition Web notice, the Project Proponent Team shall Team it believes to be tampering with site: provide the Competition Sponsor or the entry process or the operation of the www.tallwoodbuildingcompetition.org. Competition Partners’ representatives,

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and any representatives’ guests, Comments also may be submitted via Operation when mining operations are reasonable access to any premises where facsimile to 703–605–1575 or by email temporarily ceased, other than for the project takes place (i) to assess the to: [email protected]. seasonal closure. project’s progress or any element Comments submitted in response to There is not a required format for the thereof; and/or (ii) to showcase the this notice may be made available to the information collection, but all project as a demonstration of the public through relevant Web sites and information identified in 36 CFR part capabilities of wood structural products upon request. For this reason, please do 228 must be included. Form FS–2800– in tall building construction. not include in your comments 5, Plan of Operations for Mining information of a confidential nature, Activities on National Forest System G. Privacy & Disclosure Under FOIA such as sensitive personal information Lands, is available for use by mining Personal and contact information is or proprietary information. If you send operators to simplify this process. The not collected for commercial or an email comment, your email address information required in a Plan of marketing purposes. Information will be automatically captured and Operations, detailed in 36 CFR 228.4(c), submitted throughout the Competition included as part of the comment that is (d), and (e), includes: will be used only to communicate with placed in the public docket and made 1. The name and legal mailing address Project Proponent Teams regarding available on the Internet. Please note of operators (and claimants if they are entries and/or the Competition. that responses to this public comment not the same) and their lessees, assigns, Project Proponent Teams entries to request containing any routine notice or designees. the Competition may be subject to about the confidentiality of the 2. A map or sketch showing disclosure under the Freedom of communication will be treated as public information sufficient to locate: Information Act (‘‘FOIA’’). If a Project comments that may be made available to a. The proposed area of operations on Proponent Team believes that all or part the public notwithstanding the the ground. of its Competition entry is protected inclusion of the routine notice. b. Existing and/or proposed roads or from release under FOIA (e.g., if the The public may inspect the draft access routes to be used in connection information falls under FOIA exemption supporting statement and/or comments with the operation as set forth in 36 CFR #4 for ‘‘trade secrets and commercial or received at 201 14th Street SW., 228.12 on access. financial information obtained from a Washington, DC during normal business c. The approximate location and size person [that is] privileged or hours. Visitors are encouraged to call of areas where surface resources will be confidential’’) the Project Proponent ahead to 703–605–4545 to facilitate disturbed. Team will be responsible for clearly entry to the building. The public may 3. Information sufficient to describe marking the page(s)/section(s) of request an electronic copy of the draft the: a. Type of operations proposed and information it believes are protected. supporting statement and/or any comments received be sent via return how they would be conducted. Dated: October 3, 2014. b. Type and standard of existing and email. Requests should be emailed to Doug O’Brien, proposed roads or access routes. [email protected]. Acting Under Secretary, Rural Development. c. Means of transportation used or to FOR FURTHER INFORMATION CONTACT: Jim [FR Doc. 2014–24198 Filed 10–9–14; 8:45 am] be used as set forth in 36 CFR 228.12. DeMaagd, Assistant Director, Minerals BILLING CODE 3410–XY–P d. Period during which the proposed and Geology Management, at 303–275– activity will take place. 5473. Individuals who use e. Measures to be taken to meet the DEPARTMENT OF AGRICULTURE telecommunication devices for the deaf requirements for environmental (TDD) may call the Federal Relay protection in 36 CFR 228.8. Forest Service Service (FRS) at 1–800–877–8339 A Notice of Intent is required, as twenty-four hours a day, every day of detailed in 36 CFR 228.4(a)(2), to Information Collection; Locatable the year, including holidays. include information sufficient to Minerals SUPPLEMENTARY INFORMATION: Title: 36 identify the area involved, the nature of CFR Part 228, Subpart A—Locatable the proposed operation, the route of AGENCY: Forest Service, USDA. Minerals. access to the area of operations, and the ACTION: Notice, request for comment. OMB Number: 0596–0022 method of transport. A Cessation of Expiration Date of Approval: January Operations is required, as detailed in 36 SUMMARY: In accordance with the 31, 2015. CFR 228.10, to include verification of Paperwork Reduction Act of 1995, the Type of Request: Extension without intent to maintain structures, Forest Service is seeking comments change of a currently approved equipment, and other facilities; from all interested individuals and collection. expected reopening date; and an organizations on the extension of a Abstract: This collection of estimate of extended durations of currently approved information information is necessary to ensure that operations. collection, 36 CFR part 228, subpart A— the environmental impacts associated These collections of information are Locatable Minerals. with locatable mineral operations on crucial to protecting surface resources, DATES: Comments must be received in National Forest System (NFS) lands are including plants, animals, and their writing on or before December 9, 2014 minimized to the extent practicable. The habitat, as well as public safety on NFS to be assured of consideration. Forest Service regulations at 36 CFR lands. The authorized Forest Service Comments received after that date will 228.5 require mining operators, with officer will use the collected be considered to the extent practicable. some exceptions, to notify the information to ensure that the ADDRESSES: Comments concerning this authorized Forest Service officer of their exploration, development, and notice should be addressed to: Forest intent to conduct a locatable mineral production of mineral resources are Service, Director, Minerals and Geology operation on NFS lands by filing a conducted in an environmentally Management Staff, Mail Stop 1140, 1400 Notice of Intent or Plan of Operations. sensitive manner; that these mineral Independence Ave. SW., Washington, 36 CFR 228.10 requires mining operations are integrated with the DC 20250. operators to submit a Cessation of planning and management of other

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resources using the principles of DEPARTMENT OF AGRICULTURE ecosystem by: Thinning both longleaf ecosystem management; and that lands and slash pine stands to allow for disturbed by mineral operations are Forest Service further tree growth, restoring remnant reclaimed using the best scientific savannahs to improve habitat for a Apalachicola National Forest; knowledge and returned to other variety of plant species, and controlling Apalachicola Ranger District, Florida; productive uses. If this information was overabundant hardwood trees and brush Beasley Pond Analysis Area not collected, the Forest Service would species to restore herbaceous not be in compliance with the Federal AGENCY: Forest Service, USDA. groundcover. Secondary benefits include maintaining a stable RCW Regulations and locatable mineral ACTION: Notice of intent to prepare an habitat and improving the current operations could result in undue environmental impact statement. transportation system. There is a need to damage to surface resources. SUMMARY: The Forest Service will reduce current stocking levels of stands Estimate of Annual Burden: 12 Hours prepare an Environmental Impact within the project area to open the forest (10 hours—Plan of Operations; 1 hour— Statement (EIS) to analyze the impacts canopy and promote herbaceous Notice of Intent; 1 hour—Cessation of of timber harvest and associated groundcover growth and establishment. Operations). activities on approximately 3,800 acres There also exists a need for Type of Respondents: Mining of forestland and savannahs in the rehabilitation and maintenance in operators. Beasley Pond Analysis Area. Based on declining natural savannah sites in the public scoping, discussion with other project area. Estimated Annual Number of federal agencies and initial issues Respondents: 283 (111—Plans of Proposed Action analysis, the responsible official has ➢ Operations; 169—Notices of Intent; 3— determined that preparation of an EIS is First or intermediate thinning of Cessation of Operations). appropriate for this project. The approximately 1981 acres of slash and Estimated Annual Number of proposed project is an activity longleaf pine stands. Stands range in age Responses per Respondent: 1. implementing a land management plan from 25 to 141 years old. Younger slash and is subject to the pre-decisional and longleaf pine plantations have a Estimated Total Annual Burden on basal area (BA) ranging from 70 to 173 Respondents: 10,005 Hours (12 hours × objection process at 36 CFR part 218 subparts A and B. square-feet per acre. Thinning these 111 Plans of Operation = 1,332; 2 hour stands would reduce the BA to an DATES: × 169 Notices of Intent = 338; 1 hour × Comments concerning the scope average of 50 square feet per acre thus 3 Cessation of Operations = 3; 1,332 + of the analysis must be received by opening the stands for sunlight 338 + 3 = 1,673). November 10, 2014. The draft EIS is penetration needed for continued expected December 2014 and the final Comment is invited on: (1) Whether growth and groundcover establishment. EIS is expected March 2015. ➢ Conduct uneven-aged management this collection of information is ADDRESSES: Send written comments to cuts on 978 acres of mature longleaf necessary for the stated purposes and Marcus Beard, District Ranger, 57 Taff pine. Openings ranging from 1⁄4–2 acres the proper performance of the functions Drive, Crawfordville, FL 32327. (average size of 1⁄2 acre) in size will be of the Agency, including whether the Comments may also be sent via email to created around existing longleaf information will have practical or comments-southern-florida- seedlings or in areas of the stand that scientific utility; (2) the accuracy of the [email protected], or via facsimile would be suitable for longleaf natural Agency’s estimate of the burden of the to (850) 926–1904. regeneration. The number of openings collection of information, including the FOR FURTHER INFORMATION CONTACT: would be limited to 10% of the stand validity of the methodology and Branden Tolver—phone: (850) 926– size. Stand 7 of compartment 28 (91 assumptions used; (3) ways to enhance 3561; email: [email protected]. acres) will be treated with a foliar the quality, utility, and clarity of the Individuals who use telecommunication application of triclopyr (as needed) for information to be collected; and (4) devices for the deaf (TDD) may call the hardwood control. ways to minimize the burden of the Federal Information Relay Service ➢ Savannah restoration treatments collection of information on (FIRS) at 1–800–877–8339 between 8 on approximately 811 acres of savannah respondents, including the use of a.m. and 8 p.m., Eastern Time, Monday sites to remove pine trees and automated, electronic, mechanical, or through Friday. encroaching hardwoods. Girdling will be used in stands that cannot be other technological collection Purpose and Need for Action techniques or other forms of information accessed for traditional logging technology. The National Forests in Florida’s operations (stands 19 and 41 in Forest Plan outlines several goals for the compartment 26 and stand 37 in All comments received in response to National Forests of Florida, one of compartment 27). All of these sites have this notice, including names and which calls for the conservation and either been planted with slash pine or addresses when provided, will be a protection of declining natural have been encroached upon by woody matter of public record. Comments will communities, and uncommon brush species and hardwood tree be summarized and included in the biological, ecological, or geological site. species. To restore these savannah sites request for Office of Management and The Beasley Pond Analysis area a variable residual BA strategy will be Budget approval. contains large areas of historical implemented with groundcover Dated: October 2, 2014. savannah habitat, multiple red- condition serving as the trigger point for cockaded woodpecker (RCW) clusters, thinning intensity. More herbaceous Gregory C. Smith, critical habitat for the frosted flatwoods groundcover is needed when thinning to Acting Deputy Chief, National Forest System. salamander and recent records of three a lower BA in order to continue the use [FR Doc. 2014–24200 Filed 10–9–14; 8:45 am] federally listed plant species that occur prescribed fire as a means of BILLING CODE 3411–15–P in open savannah habitats. The primary maintaining the open park-like structure purpose of this project is to maintain, associated with savannahs. When improve, and restore a healthy forest groundcover conditions are deemed less

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than adequate to carry fire the Forest interested parties in June 2013. Pursuant watersheds between the communities of Service proposes to leave a higher to 36 CFR part 218 subparts A and B, Metropolis and Bay City, in southern residual BA of 40 square feet per acre a draft EIS will be made available for the Pope and eastern Massac Counties, in order to allow pine needle cast to 45-day notice and comment period. A Illinois. The 26,102 acres in the project serve as primary carrier of fire across the final EIS and draft Record of Decision areas include about 15,130 acres of stand. will be made available for a 45-day National Forest System land and 10,972 ➢ Spot foliar application of the objection period. acres of state and private land. All herbicide triclopyr (as needed) on 811 It is important that reviewers provide activities are proposed on National acres of savannah restoration sites for their comments at such times and in Forest System land. site hardwood control. This is not a such manner that they are useful to the DATES: Comments concerning the scope broadcast application of herbicide. Spot agency’s preparation of the of the analysis must be received by treatment would occur only where there environmental impact statement. November 10, 2014 in order to be most is a presence of woody vegetation that Therefore, comments should be useful in the development of the threatens the re-establishment of provided prior to the close of the environmental impact statement. The savannah plant species. If the savannah comment period and should clearly draft environmental impact statement is restoration areas do not show evidence articulate the reviewer’s concerns and expected February, 2015 and the final of woody encroachment after harvest it contentions. environmental impact statement is will not receive herbicide treatment. Comments received in response to expected September, 2015. ➢ this solicitation, including names and Clearcut 16 acres of slash pine ADDRESSES: Comments may be plantation for borrow pit excavation to addresses of those who comment, will submitted on the Hills Project Web provide surface material for future road be part of the public record for this page: http://tinyurl.com/Cretaceous- work. proposed action. Comments submitted ➢ Hills-Shawnee-NF. Written comments Remove six cattle guards from a anonymously will be accepted and may be sent to: Shawnee National closed range allotment (two on highway considered, however, they will not have Forest, Attn: Hills Project, 602 N. 1st 379, two on FSR 113, and one on FSRs standing to object. Street, Vienna, IL 62995. Comments 174 and 109). Dated: October 1, 2014. may also be sent via facsimile to (618) Possible Alternatives Marcus Beard, 658–1300, with ‘‘Hills Project’’ on the subject line. Three potential alternatives will be District Ranger. evaluated in the EIS. The first is the No [FR Doc. 2014–24191 Filed 10–9–14; 8:45 am] FOR FURTHER INFORMATION CONTACT: Action alternative which will consist of BILLING CODE 3410–11–P Amanda Kunzmann at 602 N. 1st Street, no treatments in the proposed project Vienna, (618) 658–2111, or area other than those already approved [email protected]. such as prescribed burning or non- DEPARTMENT OF AGRICULTURE Individuals who use telecommunication devices for the deaf native invasive species control. The Forest Service second alternative addresses the impact (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877–8339 to the environment if no herbicides Shawnee National Forest, Illinois; were used and treatments such as between 8 a.m. and 8 p.m., Eastern Cretaceous Hills Ecological Time, Monday through Friday. hardwood control were done by Restoration mechanical means. The third alternative SUPPLEMENTARY INFORMATION: AGENCY: Forest Service, USDA. would remove all proposed savannah Purpose of and Need for Action treatments in the project area. ACTION: Notice of intent to prepare an Additional alternatives may also be environmental impact statement. The purpose of the Hills Project is to added as we move through the planning implement land management activities SUMMARY: process. The USDA Forest Service consistent with the Forest Land and Shawnee National Forest (Forest) Resource Management Plan (Plan) and Responsible Official intends to prepare an environmental bring the Forest closer to the desired Marcus Beard, District Ranger for the impact statement to disclose the condition stated therein. The Forest Apalachicola National Forest environmental consequences of an Plan outlines goals, objectives and ecological restoration project. In the desired conditions for Forest resources. Nature of Decision To Be Made environmental impact statement, the The Hills Project Area encompasses Based upon the effects of the USDA Forest Service will address the three Forest Plan management- alternatives, the responsible official will potential environmental effects of the prescription areas: Even-Aged decide whether or not to implement the restoration of an oak-hickory hardwood Hardwood Forest (EH), Mature Proposed Action or one of the possible forest-type and the increase of wildlife Hardwood Forest (MH) and Natural alternatives. habitat diversity through the removal or Area (NA). thinning of non-native pine trees and The EH management prescription Preliminary Issues small shade-tolerant hardwood trees emphasizes maintenance of the oak- 1. Impact of timber removal on from about 3,200 acres, the application hickory forest-type; ecological species listed as threatened or of prescribed fire on about 15,100 acres, restoration to native hardwood of areas endangered under the Endangered treatment of invasive species, planted with non-native pine; wildlife Species Act of 1973. maintenance of barrens habitats, habitat associated with a mix of 2. Impact of borrow pit excavation on development of vernal ponds, and hardwoods, pine and openland; and the 16 acres of forested land. transportation system maintenance, production of high-quality hardwoods construction, or reconstruction. in a roaded-natural recreational setting. Scoping Process The Cretaceous Hills Ecological The desired condition relevant to this This notice of intent reinitiates the Restoration Project (Hills Project) is project is for a natural-appearing scoping process, which was started with located in the Bay Creek Ditch, Barren landscape with stands of hardwood a public scoping notice sent to Creek and Sister Islands-Ohio River trees in various age and size classes. The

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oak-hickory community and associated the NA management prescription, Responsible Official understories dominate. The land designated natural areas in the project The responsible official is the Hidden supports a variety of wildlife, ranging area include Robnett Barrens Ecological Springs-Mississippi Bluffs District from species that utilize early- Area, Dog Creek Barrens Ecological Area Ranger. successional stages to those requiring and Dean Cemetery East Barrens mature-stand characteristics. Some areas Ecological Area, as well as the Burke Nature of Decision To Be Made are actively managed for forest-interior Branch Research Natural Area Given the purpose and need for the species. Roads provide access for Ecological Area, with mesic barrens, proposal, the responsible official will recreation, administration and mesic floodplain forest and dry mesic review the analyses of the proposed management purposes, including upland forest. Among the Forest Plan action and the alternatives in order to transportation of forest products (Forest goals are the restoration and make the following decisions: Whether Plan, page 59). or not to release shade-intolerant oak, The MH management prescription maintenance of barrens through active hickory and other hardwoods through provides for recreation, wildlife and soil management and the management of removal of overstory pine; whether or and water protection, with motorized forest-interior habitats for large blocks of not to use site-preparation tools to and non-motorized recreation occurring oak-hickory forests, with burning in a roaded-natural or semi-primitive conducted frequently to promote oak- restore the native, hardwood-forest setting. The prescription provides hickory generation and to control community; whether or not to utilize a habitat for wildlife requiring mature- competition from shade-tolerant and commercial timber sale to remove the hardwood forest conditions. The desired invasive species, and the application of pine trees; whether or not to manage the condition relevant to this project is a herbicide to control invasive species forest-interior habitat and designated natural areas in the project areas; landscape of natural ecosystems. (Forest Plan, pages 21, 26 and 43). Usually dominant, mature, hardwood whether or not to apply prescribed fire trees and associated vegetation are Proposed Action or herbicides; whether or not to construct vernal ponds; and whether or interspersed with openland ecosystems; The following actions have been some areas are actively managed for not to manage the project area identified to address the needs forest-interior species (Forest Plan, page transportation system with described above. (1) To meet the need 68). maintenance, construction, or The NA management prescription to convert about 3,200 acres of non- reconstruction. native pine plantations to the oak- provides for the preservation, protection Scoping Process and/or enhancement of the unique hickory hardwood forest-type, conduct natural values found in many natural commercial harvest through overstory This notice of intent initiates the areas on the Forest. The desired future removal of remnant pine trees on about scoping process that will guide condition relevant to this project is that 490 acres and shelterwood with reserves development of the environmental the four designated natural areas and thinning on about 2,600 acres. impact statement for a project included in the project, each Treatments include two entries for site- implementing the Forest Plan; it is biologically and geologically unique, preparation for natural regeneration on subject to the requirements of 36 CFR contain a variety of wildlife species and about 3,200 acres and the application of part 218, Subparts A and B—Project- diverse vegetation in a natural- prescribed fire. Herbicides are proposed Level Pre-decisional Admnistrative Review Process. The initiation of the appearing condition. for site preparation and control of scoping period also opens the The forest in the EH management area shade-tolerant species. (2) To reduce the ‘‘designated opportunity for public is about 30 percent non-native pine that threat of wildfire from the hazardous comment’’ on this proposal, under 36 was planted in the 1930’s and 1940’s to fuel load in the project area, prescribed control erosion on depleted farmland. CFR part 218.5(a). This designated fire will be applied to about 15,100 Forest Plan management goals include opportunity will conclude at the end of acres throughout the project area. This the conversion of non-native pine the comment period for the draft plantations to native hardwoods, will not only reduce the fuel load in the environmental impact statement. emphasizing the removal of pine within area, but also will aid in the restoration It is important that reviewers provide or adjacent to natural areas; and the and maintenance of designated natural their comments at such times and in restoration and maintenance of the oak- areas and forest-interior habitat. (3) To such a manner that they are useful to hickory forest-type for biological restore and enhance the barrens natural the agency’s preparation of the diversity and wildlife habitat, utilizing areas, herbicide treatments and environmental impact statement. landscape-level prescribed burning, prescribed fire will be applied where Commenters who desire eligibility to timber harvesting and timber-stand necessary, small trees and shrubs will object during the pre-decisional improvement to help create and/or be removed, and non-native pines will administrative review process must maintain the necessary ecological be clearcut from about 90 acres within submit comments that meet the conditions for regeneration and and adjacent to natural areas. (4) To requirements of 36 CFR part 218.25. To maintenance (Forest Plan, pages 21–22). maintain forest-interior habitat to be most helpful to the development of The area has also been affected by two increase wildlife diversity, herbicide the environmental impact statement, major ice storms that damaged many treatments and prescribed fire will be comments should be provided prior to trees, increasing fuel-loading applied where necessary. (5) To create the close of the scoping period and throughout. additional habitat diversity, twenty should clearly articulate the reviewer’s The forest in the MH management small vernal pools will be constructed concerns. Scoping meetings will be area was also damaged by the ice in the project area. (6) To provide scheduled with interested parties and storms, with a heavy hazardous fuel management and possible future organizations following publication of load. This area includes the Burke this notice. recreational access to the project areas, Branch Inventoried Roadless Area, a Comments received in response to roads will be maintained, constructed or forest-interior habitat as described in the this solicitation, including names and reconstructed. Forest Plan (page 43). Managed under addresses of those who comment, will

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be part of the public record for this Regulations.gov. ID for this docket is program performance. Such data uses proposed action. Comments submitted ATBCB–2014–0002. require more rigorous designs that anonymously will be accepted and • Email: [email protected]. address: The target population to which considered; however, anonymous Include docket number ATBCB–2014– generalizations will be made, the comments will not provide the agency 0002 in the subject line of the message. sampling frame, the sample design with the ability to provide the • Fax: (202) 272–0081. (including stratification and clustering), respondent with subsequent • Mail or Hand Delivery/Courier: the precision requirements or power environmental documents. Office of the General Counsel, Access calculations that justify the proposed Dated: October 6, 2014. Board, 1331 F Street NW., Suite 1000, sample size, the expected response rate, Washington, DC 20004–1111. Hurston A. Nicholas, methods for assessing potential non- All comments, including any personal response bias, the protocols for data Forest Supervisor. information provided, will be posted collection, and any testing procedures [FR Doc. 2014–24229 Filed 10–9–14; 8:45 am] without change to http:// that were or will be undertaken prior to BILLING CODE 3411–15–P www.regulations.gov and are available fielding the study. Depending on the for public viewing. degree of influence the results are likely FOR FURTHER INFORMATION CONTACT: to have, such collections may still be ARCHITECTURAL AND Mario Damiani, Office of the General eligible for submission for other generic TRANSPORTATION BARRIERS Counsel, Access Board, 1331 F Street mechanisms that are designed to yield COMPLIANCE BOARD NW., Suite 1000, Washington, DC quantitative results. [Docket No. ATBCB–2014–0002] 20004–1111. Telephone numbers: (202) Respondents: Average annual 272–0050 (voice); (202) 272–0064 estimate of approximately 1,100 RIN 3014–0011 (TTY). These are not toll free numbers. Individuals and Households, Businesses Agency Information Collection Email address: damiani@access- and Organizations, State, Local or Tribal Activities: Requests for Comments; board.gov. Government. Below, we provide projected average Clearance of Renewed Approval of SUPPLEMENTARY INFORMATION: estimates for the next three years: Information Collection: Generic OMB Control Number: 3014–0011. Average Expected Annual Number of Clearance for the Collection of Title: Generic Clearance for the Activities: 7. Qualitative Feedback on Agency Collection of Qualitative Feedback on Average Number of Respondents per Service Delivery Agency Service Delivery. Type of Review: Renewal of a generic Activity: 157. AGENCY: Architectural and information collection. Annual Responses: 1,100. Transportation Barriers Compliance Background: The proposed Frequency of Response: Once per Board. information collection activity provides request. ACTION: Notice and request for a means to garner qualitative customer Estimated Average Burden per comments. and stakeholder feedback in an efficient, Response: 7.25 minutes. timely manner, in accordance with the Estimated Total Annual Burden: 120 SUMMARY: In accordance with the Administration’s commitment to hours. Paperwork Reduction Act of 1995 (44 improving service delivery. By Public Comments Invited: You are U.S.C. 3501–3521), the Architectural qualitative feedback we mean asked to comment on any aspect of this and Transportation Barriers Compliance information that provides useful information collection, including (a) Board (Access Board) invites public insights on perceptions and opinions, whether the proposed collection of comments about our intention to request but are not statistical surveys that yield information is necessary for the Access the Office of Management and Budget’s quantitative results that can be Board’s performance; (b) the accuracy of (OMB) approval to renew a generic generalized to the population of study. the estimated burden; (c) ways for the information collection. The Federal This feedback will provide insights into Access Board to enhance the quality, Register notice with a 60-day comment customer or stakeholder perceptions, utility, and clarity of the information period soliciting comments on the experiences and expectations, provide collection; and (d) ways that the burden following collection of information was an early warning of issues with service, could be minimized without reducing published on July 28, 2014 (79 FR or focus attention on areas where the quality of the collected information. 43709). As part of a federal government- communication, training or changes in We will summarize comments received wide effort to streamline the process for operations might improve delivery of in the request for OMB’s clearance of seeking feedback from the public on products or services. These collections this information collection. service delivery, the Access Board has will allow for ongoing, collaborative and David M. Capozzi, an approved Generic Information actionable communications between the Collection Request entitled ‘‘Generic Executive Director. Access Board and its customers and [FR Doc. 2014–24168 Filed 10–9–14; 8:45 am] Clearance for the Collection of stakeholders. It will also allow feedback BILLING CODE 8150–01–P Qualitative Feedback on Agency Service to contribute directly to the Delivery.’’ A copy of the draft improvement of program management. supporting statement is available at Feedback collected under this generic http://www.regulations.gov (see Docket clearance provides useful information, DEPARTMENT OF COMMERCE ID ATBCB–2014–0002). but it does not yield data that can be Submission for OMB Review; DATES: Submit comments by November generalized to the overall population. Comment Request 10, 2014. This type of generic clearance for ADDRESSES: Submit comments by any of qualitative information will not be used The Department of Commerce will the following methods: for quantitative information collections submit to the Office of Management and • Federal eRulemaking Portal: http:// that are designed to yield reliably Budget (OMB) for clearance the www.regulations.gov. Follow the actionable results, such as monitoring following proposal for collection of instructions for submitting comments. trends over time or documenting information under the provisions of the

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Paperwork Reduction Act (44 U.S.C. This information collection request guided angler fish (GAF), which are Chapter 35). may be viewed at reginfo.gov. Follow determined based on a conversion rate Agency: National Oceanic and the instructions to view Department of published by the National Marine Atmospheric Administration (NOAA). Commerce collections currently under Fisheries Service (NMFS). Leased GAF Title: Billfish Certificate of Eligibility. review by OMB. can be used by charter businesses to OMB Control Number: 0648–0216. Written comments and relax harvest restrictions for their angler Form Number(s): NA. recommendations for the proposed clients, since the fish caught under the Type of Request: Regular (extension of information collection should be sent leased GAF would not be subject to the a current information collection). within 30 days of publication of this _ charter sector-specific size and bag Number of Respondents: 200. notice to OIRA Submission@ limits that may be imposed—though the omb.eop.gov or fax to (202) 395–5806. Average Hours per Response: Initial non-charter sector size and bag limit dealer completion, 20 minutes; Dated: October 6, 2014. restrictions (currently two fish of any subsequent dealer completion, 2 Glenna Mickelson, size per day) would still apply to charter minutes. Management Analyst, Office of the Chief anglers who are not using GAF. Burden Hours: 43. Information Officer. Needs and Uses: This request is for an To help inform potential future policy [FR Doc. 2014–24178 Filed 10–9–14; 8:45 am] discussions about the CSP, NMFS extension of a currently approved BILLING CODE 3510–22–P information collection. Alaska Fisheries Science Center plans to A Certificate of Eligibility (COE) for conduct a survey that will collect Billfishes is required under 50 CFR part DEPARTMENT OF COMMERCE information on general attitudes toward 635 to accompany all billfish, except for the CSP and the GAF leasing program a billfish landed in a Pacific state and Submission for OMB Review; from Area 2C and Area 3A charter boat remaining in the state of landing. This Comment Request businesses (CHP holders), and ask them documentation certifies that the to indicate their preferences for The Department of Commerce will accompanying billfish was not hypothetically relaxing specific features submit to the Office of Management and harvested from the applicable Atlantic of the GAF leasing program that are Ocean management unit (described on Budget (OMB) for clearance the following proposal for collection of employed in similar types of programs the NOAA sample certificate), and in both fisheries and non-fisheries identifies the vessel landing the billfish, information under the provisions of the Paperwork Reduction Act (44 U.S.C. contexts. This information could the vessel’s homeport, the port of provide valuable information to the offloading, and the date of offloading. Chapter 35). Agency: National Oceanic and North Pacific Fishery Management The certificate must accompany the Atmospheric Administration (NOAA). Council in its evaluation of the current billfish to any dealer or processor who Title: Alaska Halibut Catch Sharing features of the CSP and provide subsequently receives or possesses the Plan Survey. information that may help it evaluate billfish. The extension of this collection OMB Control Number: 0648-xxxx. adjustments to the CSP. The survey will is necessary to implement the Form Number(s): NA. also provide a broad gauge of attitudes Consolidated Highly Migratory Species Type of Request: Regular (request for toward the program and its impacts on Fishery Management Plan, which a new information collection). the charter sector and anglers. contains an objective to reserve Atlantic Number of Respondents: 602. billfish for the recreational fishery. Average Hours Per Response: Full Affected Public: Business or other for- On October 5, 2012, the President survey, 30 minutes; follow-up telephone profit organizations. signed Public Law 112–183 entitled the survey, 10 minutes. Frequency: One time. ‘‘Billfish Conservation Act of 2012,’’ Burden Hours: 186. Respondent’s Obligation: Voluntary. which prohibits the sale of billfish (or Needs and Uses: This request is for a products containing billfish), or the new information collection. This information collection request custody, control, or possession of Numerous management measures may be viewed at reginfo.gov. Follow billfish (or products containing billfish) have recently been proposed or the instructions to view Department of for purposes of sale. The only implemented that affect recreational Commerce collections currently under exemptions to this prohibition include charter boat fishing for Pacific halibut review by OMB. billfish landed by U.S. fishing vessels in off Alaska, including the adoption of a Written comments and Hawaii and Pacific Insular Areas, and Halibut Catch Sharing Plan (78 FR recommendations for the proposed billfish landed by foreign fishing vessels 75843) in International Pacific Halibut information collection should be sent in the Pacific Insular Areas when the Commission Regulatory Areas 2C and within 30 days of publication of this foreign-caught billfish are exported to 3A that alters the way Pacific halibut is notice to OIRA_Submission@ non-U.S. markets or retained within allocated between the guided sport (i.e., omb.eop.gov or fax to (202) 395–5806. Hawaii and the Pacific Insular Areas for the charter sector) and the commercial local consumption. NOAA is currently halibut fishery. The Catch Sharing Plan Dated: October 7, 2014. developing implementing regulations (CSP) formalizes the annual process of Glenna Mickelson, for the Billfish Conservation Act. If allocating catch between the Management Analyst, Office of the Chief necessary, upon publication of the commercial sector and charter sector Information Officer. proposed rule, the information and for determining harvest restrictions [FR Doc. 2014–24254 Filed 10–9–14; 8:45 am] collection associated with the Billfish in the charter sector (78 FR 75843). In BILLING CODE 3510–22–P Certificate of Eligibility (0648–0216) addition, the CSP allows leasing of may be revised accordingly. commercial halibut individual fishing Affected Public: Business or other for- quota (IFQ) by eligible charter profit organizations. businesses holding a charter halibut Frequency: On occasion. permit (CHP). The IFQ pounds are Respondent’s Obligation: Mandatory. leased in terms of number of fish, called

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DEPARTMENT OF COMMERCE Register (79 FR 24669, 05–01–2014) and site in Marengo, Illinois, (FTZ Docket the application has been processed B–46–2014, docketed 6–26–2014); Foreign-Trade Zones Board pursuant to the FTZ Act and the Board’s Whereas, notice inviting public [B–44–2014] regulations; and, comment has been given in the Federal Whereas, the Board adopts the Register (79 FR 37281, 7–1–2014) and Foreign-Trade Zone 20, Authorization findings and recommendations of the the application has been processed of Production Activity, Becker examiner’s report, and finds that the pursuant to the FTZ Act and the Board’s Hydraulics USA, Inc., (Hydraulic Hose requirements of the FTZ Act and the regulations; and, Lines) Chesapeake, VA Board’s regulations are satisfied; Whereas, the Board adopts the Now, therefore, the Board hereby findings and recommendations of the On June 4, 2014, the Virginia Port orders: examiner’s memorandum, and finds that Authority, grantee of FTZ 20, submitted The application to reorganize FTZ 259 the requirements of the FTZ Act and the a notification of proposed production under the ASF is approved, subject to Board’s regulations are satisfied; activity to the Foreign-Trade Zones the FTZ Act and the Board’s regulations, Now, therefore, the Board hereby (FTZ) Board on behalf of Becker including Section 400.13, to the Board’s approves the expansion of Subzone Hydraulics USA, Inc., within FTZ 20, in standard 2,000-acre activation limit for 176E on behalf of UniCarriers Americas Chesapeake, Virginia. the zone, and to a five-year ASF sunset Corporation in Marengo, Illinois, as The notification was processed in provision for magnet sites that would described in the application and accordance with the regulations of the terminate authority for Sites 1 and 3 if Federal Register notice, subject to the FTZ Board (15 CFR part 400), including not activated by October 31, 2019. FTZ Act and the Board’s regulations, notice in the Federal Register inviting including Section 400.13. public comment (79 FR 36288, 6–26– Signed at Washington, DC, this 2nd day of October 2014. Signed at Washington, DC, this 2nd day of 2014). The FTZ Board has determined October 2014. Paul Piquado, that no further review of the activity is Paul Piquado, warranted at this time. The production Assistant Secretary of Commerce for Assistant Secretary of Commerce for activity described in the notification is Enforcement and Compliance, Alternate Chairman, Foreign-Trade Zones Board. Enforcement and Compliance, Alternate authorized, subject to the FTZ Act and Chairman, Foreign-Trade Zones Board. the FTZ Board’s regulations, including Attest: Andrew McGilvray, Section 400.14. Andrew McGilvray, Executive Secretary. Dated: October 6, 2014. Executive Secretary. [FR Doc. 2014–24269 Filed 10–9–14; 8:45 am] Andrew McGilvray, [FR Doc. 2014–24267 Filed 10–9–14; 8:45 am] BILLING CODE 3510–DS–P Executive Secretary. BILLING CODE 3510–DS–P [FR Doc. 2014–24268 Filed 10–9–14; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE DEPARTMENT OF COMMERCE Foreign-Trade Zones Board Foreign-Trade Zones Board DEPARTMENT OF COMMERCE [Order No. 1952] [Order No. 1953] Foreign-Trade Zones Board Expansion of Subzone 124H, Bollinger [Order No. 1951] Approval of Expansion of Subzone Shipyards, Inc., Golden Meadow, LA 176E, UniCarriers Americas Reorganization of Foreign-Trade Zone Corporation, Marengo, Illinois Pursuant to its authority under the Foreign- Trade Zones Act of June 18, 1934, as 259 Under Alternative Site Framework, amended (19 U.S.C. 81a–81u), the Foreign- Koochiching County, Minnesota Pursuant to its authority under the Foreign- Trade Zones Act of June 18, 1934, as Trade Zones Board (the Board) adopts the following Order: Pursuant to its authority under the Foreign- amended (19 U.S.C. 81a–81u), the Foreign- Trade Zones Act of June 18, 1934, as Trade Zones Board (the Board) adopts the Whereas, the Foreign-Trade Zones Act amended (19 U.S.C. 81a–81u), the Foreign- following Order: provides for ‘‘ . . . the establishment Trade Zones Board (the Board) adopts the Whereas, the Foreign-Trade Zones Act . . . of foreign-trade zones in ports of following Order: provides for ‘‘ . . . the establishment entry of the United States, to expedite Whereas, the Board adopted the . . . of foreign-trade zones in ports of and encourage foreign commerce, and alternative site framework (ASF) (15 entry of the United States, to expedite for other purposes,’’ and authorizes the CFR Sec. 400.2(c)) as an option for the and encourage foreign commerce, and Foreign-Trade Zones Board to grant to establishment or reorganization of for other purposes,’’ and authorizes the qualified corporations the privilege of zones; Foreign-Trade Zones Board to grant to establishing foreign-trade zones in or Whereas, the Koochiching Economic qualified corporations the privilege of adjacent to U.S. Customs and Border Development Authority, grantee of establishing foreign-trade zones in or Protection ports of entry; Foreign-Trade Zone 259, submitted an adjacent to U.S. Customs and Border Whereas, the Board’s regulations (15 application to the Board (FTZ Docket B– Protection ports of entry; CFR Part 400) provide for the 34–2014, docketed 04–24–2014) for Whereas, the Board’s regulations (15 establishment of subzones for specific authority to reorganize under the ASF CFR Part 400) provide for the uses; with a service area of Koochiching establishment of subzones for specific Whereas, the Port of South Louisiana, County, Minnesota, within and adjacent uses; grantee of Foreign-Trade Zone 124, has to the International Falls Customs and Whereas, the Greater Rockford Airport made application to the Board to Border Protection port of entry, and FTZ Authority, grantee of Foreign-Trade expand Subzone 124H–Site 10 on behalf 259’s existing Sites 1, 2 and 3 would be Zone 176, has made application to the of Bollinger Shipyards, Inc., to include categorized as magnet sites; Board to expand Subzone 176E on an additional 46.212 acres in Golden Whereas, notice inviting public behalf of UniCarriers Americas Meadow, Louisiana (FTZ Docket B–50– comment was given in the Federal Corporation to include an additional 2014, docket 07–17–2014);

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Whereas, notice inviting public Washington, DC 20230 (202) 482–2105, ways to enhance the quality, utility, and comment has been given in the Federal Fax: (202) 501–7952 or via email clarity of the information to be Register (79 FR 43391, 07–25–2014) and [email protected]. collected; and (d) ways to minimize the the application has been processed SUPPLEMENTARY INFORMATION: burden of the collection of information pursuant to the FTZ Act and the Board’s on respondents, including through the regulations; and, I. Abstract use of automated collection techniques Whereas, the Board adopts the The President’s Proclamation on Steel or other forms of information findings and recommendations of the Safeguards mandated that the technology. examiner’s memorandum, and finds that Departments of Commerce and Treasury Comments submitted in response to the requirements of the FTZ Act and the institute an import licensing system to this notice will be summarized and/or Board’s regulations are satisfied; facilitate the monitoring of certain steel included in the request for OMB Now, therefore, the Board hereby imports in 2002. approval of this information collection; approves the expansion of Subzone Regulations were established that they also will become a matter of public 124H on behalf of Bollinger Shipyards, implemented the Steel Import record. Inc., as described in the application and Monitoring and Analysis (SIMA) System Dated: October 6, 2014. Federal Register notice, subject to the and expanded on the licensing system Glenna Mickelson, FTZ Act and the Board’s regulations, in 2006 for steel that was part of those Management Analyst, Office of the Chief including Section 400.13. safeguards. The import license Information Officer. information is necessary to assess Signed at Washington, DC, this 2nd day of [FR Doc. 2014–24162 Filed 10–9–14; 8:45 am] October 2014. import trends of steel products. BILLING CODE 3510–DS–P Paul Piquado, In order to effectively monitor steel imports, Commerce must collect and Assistant Secretary of Commerce for Enforcement and Compliance, Alternate provide timely aggregated summaries DEPARTMENT OF COMMERCE Chairman, Foreign-Trade Zones Board. about the imports. The Steel Import Andrew McGilvray, License is the tool used to collect the International Trade Administration necessary information. The Census Executive Secretary. Bureau currently collects import data [A–570–952] [FR Doc. 2014–24270 Filed 10–9–14; 8:45 am] and disseminates aggregate information Narrow Woven Ribbon With Woven BILLING CODE 3510–DS–P about steel imports. However, the time Selvedge From the People’s Republic required to collect, process, and of China: Final Results of disseminate this information through DEPARTMENT OF COMMERCE Administrative Review; 2012–2013 Census can take up to 90 days after International Trade Administration importation of the product, giving AGENCY: Enforcement and Compliance, interested parties and the public far less International Trade Administration, Proposed Information Collection; time to respond to injurious sales. Department of Commerce. SUMMARY: On June 9, 2014, the Comment Request; Steel Import II. Method of Collection License Department of Commerce (the The license application can be ‘‘Department’’) published the AGENCY: International Trade submitted electronically via the preliminary results and partial Administration, Commerce. Commerce Web site (http://enforcement. rescission of the 2012–2013 ACTION: Notice. trade.gov/steel/license/) or completed administrative review of the electronically and emailed or faxed to antidumping duty order on narrow SUMMARY: The Department of the Department. woven ribbon with woven selvedge Commerce, as part of its continuing III. Data (‘‘NWR’’) from the People’s Republic of effort to reduce paperwork and China (‘‘PRC’’), in accordance with respondent burden, invites the general OMB Control Number: 0625–0245. section 751(a)(1)(B) of the Tariff Act of public and other Federal agencies to Form Number(s): ITA–4141P. 1930, as amended (‘‘the Act’’).1 The take this opportunity to comment on Type of Review: Regular submission. period of review (‘‘POR’’) is September proposed and/or continuing information Affected Public: Business or other for- 1, 2012, through August 31, 2013. collections, as required by the profit organizations. Because the PRC-wide entity failed to Paperwork Reduction Act of 1995. Estimated Number of Respondents: cooperate to the best of its ability in DATES: Written comments must be 3500. complying with our requests for Estimated Time per Response: 10 submitted on or before December 9, information, we preliminarily minutes. 2014. determined an estimated weighted- Estimated Total Annual Burden average dumping margin for the PRC- ADDRESSES: Direct all written comments Hours: 92,878. to Jennifer Jessup, Departmental Estimated Total Annual Cost to wide entity based on facts available Paperwork Clearance Officer, Public: 0. with an adverse inference (‘‘AFA’’). The Department of Commerce, Room 6616, Department invited interested parties to 14th and Constitution Avenue NW., IV. Request for Comments comment on the Preliminary Results. No Washington, DC 20230 (or via the Comments are invited on: (a) Whether parties commented. Accordingly, our Internet at [email protected]). the proposed collection of information final results remain unchanged from the FOR FURTHER INFORMATION CONTACT: is necessary for the proper performance Preliminary Results. Requests for additional information or of the functions of the agency, including DATES: Effective Date: October 10, 2014. copies of the information collection whether the information shall have instrument and instructions should be practical utility; (b) the accuracy of the 1 See Narrow Woven Ribbon With Woven Selvedge From the People’s Republic of China: directed to Julie Al-Saadawi, Office of agency’s estimate of the burden Preliminary Results and Partial Rescission of Policy, Enforcement and Compliance, (including hours and cost) of the Administrative Review; 2012–2013, 79 FR 32912 1401 Constitution Ave. NW., proposed collection of information; (c) (June 9, 2014) (‘‘Preliminary Results’’).

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FOR FURTHER INFORMATION CONTACT: description in the Order remains issue assessment instructions to CBP 15 Drew Jackson, AD/CVD Operations, dispositive.3 days after the date of publication of Office IV, Enforcement and Compliance, these final results of review. The Final Results of Review International Trade Administration, Department intends to instruct CBP to U.S. Department of Commerce, 14th As noted above, the Department liquidate entries of subject merchandise Street and Constitution Avenue NW., received no comments concerning the from Bestpak at the PRC-wide rate of Washington, DC 20230; telephone: (202) Preliminary Results on the record of this 247.65 percent. 482–4406. segment of the proceeding. As there are no changes from, or comments upon, Cash Deposit Requirements SUPPLEMENTARY INFORMATION: the Preliminary Results, the Department The following cash deposit Background finds that there is no reason to modify requirements will be effective upon its analysis. Thus, we continue to publication of the final results of this On June 9, 2014, the Department determine that Bestpak is part of the administrative review for all shipments published the Preliminary Results. The PRC-wide entity for these final results, of the subject merchandise from the PRC Department explained that it had and that the PRC-wide entity has failed entered, or withdrawn from warehouse, initiated an administrative review of the to act to the best of its ability to for consumption on or after the company, Yangzhou Bestpak Gifts & responding to the Department’s requests publication date, as provided by section Crafts Co., Ltd. (‘‘Bestpak’’) and issued for information, warranting the 751(a)(2)(C) of the Act: (1) For questionnaires to Bestpak, which did application of AFA, in accordance with previously investigated or reviewed PRC not respond to those questionnaires. sections 776(a) and (b) of the Act. and non-PRC exporters which are not Because Bestpak did not establish that Accordingly, no decision memorandum under review in this segment of the its export activities were separate from accompanies this Federal Register proceeding but which have separate that of the PRC-wide entity, in notice. For further details of the issues rates, the cash deposit rate will continue accordance with 19 CFR 351.107(d), the addressed in this proceeding, see the to be the exporter-specific rate Department preliminarily determined Preliminary Results and the published for the most recent period; (2) that Bestpak was part of the PRC-wide accompanying Preliminary Decision for all PRC exporters of subject entity. Further, because the PRC-wide Memorandum. The final weighted- merchandise that have not been found entity failed to provide responses to average dumping margin for the period to be entitled to a separate rate, the cash questionnaires and cooperate to the best September 1, 2012, through August 31, deposit rate will be the PRC-wide rate of its ability in complying with the 2013, is as follows: of 247.65 percent; and (3) for all non- information requests, the Department PRC exporters of subject merchandise preliminarily determined an estimated Weighted- which have not received their own rate, weighted-average dumping margin average Exporter dumping the cash deposit rate will be the rate based on AFA, in accordance with margin applicable to the PRC exporter(s) that sections 776(a) and (b) of the Act, for the (percent) supplied that non-PRC exporter. These PRC-wide entity. We invited interested deposit requirements, when imposed, parties to submit comments on the PRC-wide entity 4 ...... 247.65 shall remain in effect until further Preliminary Results. No party notice. commented, nor did any party request a hearing. Notification to Importers Regarding the Assessment Reimbursement of Duties Scope of the Order The Department will determine, and This notice serves as a final reminder Customs and Border Protection (‘‘CBP’’) The products covered by the order are to importers of their responsibility shall assess, antidumping duties on all narrow woven ribbons with woven under 19 CFR 351.402(f)(2) to file a appropriate entries covered by this selvedge.2 The merchandise subject to certificate regarding the reimbursement review.5 The Department intends to the order is classifiable under the of antidumping duties prior to Harmonized Tariff Schedule of the liquidation of the relevant entries 3 For a complete description of the scope of the United States (‘‘HTSUS’’) subheadings order, please see ‘‘Decision Memorandum for during this POR. Failure to comply with 5806.32.1020; 5806.32.1030; Preliminary Results of Antidumping Duty this requirement could result in the 5806.32.1050 and 5806.32.1060. Subject Administrative: Narrow Woven Ribbons With Department’s presumption that Woven Selvedge From the People’s Republic of reimbursement of antidumping duties merchandise also may enter under China,’’ from Christian Marsh, Deputy Assistant HTSUS subheadings 5806.31.00; Secretary for Antidumping and Countervailing Duty has occurred and the subsequent 5806.32.20; 5806.39.20; 5806.39.30; Operations, to Paul Piquado, Assistant Secretary for assessment of doubled antidumping 5808.90.00; 5810.91.00; 5810.99.90; Enforcement and Compliance, dated June 2, 2014 duties. (‘‘Preliminary Decision Memorandum’’), which can 5903.90.10; 5903.90.25; 5907.00.60; and be accessed directly at http://enforcement.trade. Notification to Interested Parties 5907.00.80 and under statistical gov/frn/. categories 5806.32.1080; 5810.92.9080; 4 The PRC-wide entity includes, among other This notice also serves as a reminder 5903.90.3090; and 6307.90.9889. companies, the following companies that indicated to parties subject to the administrative that they did not ship subject merchandise to the protective order (‘‘APO’’) of their Although the HTSUS subheadings are United States during the POR: (1) Apex Trimmings provided for convenience and customs Inc. d/b/a Papillon Ribbon & Bow (Canada); (2) responsibility concerning the purposes, the written product Cheng Hsing Ribbon Factory; (3) Hen Hao Trading disposition of proprietary information Co., Ltd. a.k.a. Taiwan Tulip Ribbons and Braid Co. disclosed under APO in accordance Ltd; (4) Hsien Chan Enterprise Co., Ltd; (5) King with 19 CFR 351.305(a)(3). Timely 2 See Notice of Antidumping Duty Orders: Narrow Young Enterprises Co., Ltd; (6) Multicolor; (7) Woven Ribbons With Woven Selvedge From Taiwan Novelty Handicrafts Co., Ltd; (8) Papillon Ribbon & notification of the destruction of APO and the People’s Republic of China: Antidumping Bow (H.K.) Ltd; (9) Papillon Ribbon & Bow materials or conversion to judicial Duty Orders, 75 FR 53632 (September 1, 2010), as (Shanghai) Ltd; (10) Roung Shu Industry protective order is hereby requested. amended in Narrow Woven Ribbons With Woven Corporation a.k.a Cheng Hsing Ribbon Factory; (11) Selvedge From Taiwan and the People’s Republic Shienq Huong Enterprise Co., Ltd; and (12) Yu Shin Failure to comply with the regulations of China: Amended Antidumping Duty Orders, 75 Development Co. Ltd. and the terms of an APO is a FR 56982 (September 17, 2010). 5 See 19 CFR 351.212(b)(1). sanctionable violation.

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We are issuing and publishing these partnership company to a private more than 20 percent by weight of results and this notice in accordance limited company, under the definition shrimp or prawn are also included in with sections 751(a)(1) and 777(i) of the in Indian law and, as part of this the scope of this order. 2 Act. conversion, it changed its name to PPL. Excluded from the scope are: (1) 3 Dated: October 3, 2014. On August 22, 2014, PPL requested Breaded shrimp and prawns (HTSUS Paul Piquado, that the Department conduct an subheading 1605.20.10.20); (2) shrimp expedited CCR to determine that it is Assistant Secretary for Enforcement and and prawns generally classified in the Compliance. the successor-in-interest to PMP, for the Pandalidae family and commonly purpose of being assigned PMP’s cash [FR Doc. 2014–24272 Filed 10–9–14; 8:45 am] referred to as coldwater shrimp, in any deposit rate, as a part of the Liberty BILLING CODE 3510–DS–P state of processing; (3) fresh shrimp and Group of companies.4 We received no prawns whether shell-on or peeled comments opposing PPL’s request. (HTSUS subheadings 0306.23.00.20 and DEPARTMENT OF COMMERCE Scope of the Order 0306.23.00.40); (4) shrimp and prawns in prepared meals (HTSUS subheading International Trade Administration The scope of this order includes certain frozen warmwater shrimp and 1605.20.05.10); (5) dried shrimp and [A–533–840] prawns, whether wild-caught (ocean prawns; (6) canned warmwater shrimp harvested) or farm-raised (produced by and prawns (HTSUS subheading Certain Frozen Warmwater Shrimp aquaculture), head-on or head-off, shell- 1605.20.10.40); (7) certain battered From India: Initiation and Preliminary on or peeled, tail-on or tail-off, deveined shrimp. Battered shrimp is a shrimp- Results of Antidumping Duty Changed or not deveined, cooked or raw, or based product: (1) That is produced Circumstances Review otherwise processed in frozen form. from fresh (or thawed-from-frozen) and AGENCY: Enforcement and Compliance, The frozen warmwater shrimp and peeled shrimp; (2) to which a ‘‘dusting’’ International Trade Administration, prawn products included in the scope of layer of rice or wheat flour of at least 95 Department of Commerce. this order, regardless of definitions in percent purity has been applied; (3) SUMMARY: In response to a request by the Harmonized Tariff Schedule of the with the entire surface of the shrimp Premier Marine Products Private United States (HTSUS), are products flesh thoroughly and evenly coated with Limited (PPL), a producer/exporter of which are processed from warmwater the flour; (4) with the non-shrimp certain frozen warmwater shrimp shrimp and prawns through freezing content of the end product constituting (shrimp) from India, and pursuant to and which are sold in any count size. between four and ten percent of the section 751(b) of the Tariff Act of 1930, The products described above may be product’s total weight after being as amended (the Act), 19 CFR 351.216 processed from any species of dusted, but prior to being frozen; and (5) and 351.221(c)(3)(ii), the Department of warmwater shrimp and prawns. that is subjected to IQF freezing Commerce (the Department) is initiating Warmwater shrimp and prawns are immediately after application of the a changed circumstances review (CCR) generally classified in, but are not dusting layer. When dusted in of the antidumping duty (AD) order on limited to, the Penaeidae family. Some accordance with the definition of shrimp from India with regards to PPL. examples of the farmed and wild-caught dusting above, the battered shrimp Based on the information received, we warmwater species include, but are not product is also coated with a wet preliminarily determine that PPL is the limited to, whiteleg shrimp (Penaeus viscous layer containing egg and/or successor-in-interest to Premier Marine vannemei), banana prawn (Penaeus milk, and par-fried. Products (PMP) for purposes of merguiensis), fleshy prawn (Penaeus The products covered by this order determining AD liability. Interested chinensis), giant river prawn are currently classified under the parties are invited to comment on these (Macrobrachium rosenbergii), giant tiger following HTSUS subheadings: preliminary results. prawn (Penaeus monodon), redspotted 0306.17.00.03, 0306.17.00.06, DATES: Effective Date: October 10, 2014. shrimp (Penaeus brasiliensis), southern 0306.17.00.09, 0306.17.00.12, FOR FURTHER INFORMATION CONTACT: brown shrimp (Penaeus subtilis), southern pink shrimp (Penaeus 0306.17.00.15, 0306.17.00.18, Blaine Wiltse or Stephen Banea, AD/ 0306.17.00.21, 0306.17.00.24, CVD Operations, Office II, Enforcement notialis), southern rough shrimp (Trachypenaeus curvirostris), southern 0306.17.00.27, 0306.17.00.40, and Compliance, International Trade 1605.21.10.30, and 1605.29.10.10. These Administration, U.S. Department of white shrimp (Penaeus schmitti), blue shrimp (Penaeus stylirostris), western HTSUS subheadings are provided for Commerce, 14th Street and Constitution convenience and for customs purposes Avenue NW., Washington, DC 20230; white shrimp (Penaeus occidentalis), only and are not dispositive, but rather telephone: (202) 482–6345 or (202) 482– and Indian white prawn (Penaeus the written description of the scope of 0656, respectively. indicus). this order is dispositive. SUPPLEMENTARY INFORMATION: Frozen shrimp and prawns that are packed with marinade, spices or sauce Initiation and Preliminary Results of Background are included in the scope of this order. Changed Circumstances Review On February 1, 2005, the Department In addition, food preparations, which published in the Federal Register the are not ‘‘prepared meals,’’ that contain Pursuant to section 751(b)(1)(A) of the AD order on shrimp from India.1 Act and 19 CFR 351.216(d), the Effective April 8, 2013, PMP, a 2 See Letter from Premier Marine Private Limited, Department will conduct a CCR upon dated August 22, 2014 (CCR Request). receipt of a request from an interested producer/exporter of Indian shrimp 3 Id. party for a review of an AD order which covered by this order, converted from a 4 PMP received a 2.49 percent dumping margin as part of the Liberty Group in the 2012–2013 shows changed circumstances sufficient 1 See Notice of Amended Final Determination of administrative review of the AD order on shrimp to warrant a review of the order. The Sales at Less Than Fair Value and Antidumping from India. See Certain Frozen Warmwater Shrimp information submitted by PPL Duty Order: Certain Frozen Warmwater Shrimp From India: Final Results of Antidumping Duty supporting its claim that it is the from India, 70 FR 5147 (Feb. 1, 2005) (Shrimp Administrative Review; 2012–2013, 79 FR 51309 Order). (Aug. 28, 2014) (Shrimp Review). successor-in-interest to PMP

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demonstrates changed circumstances Inspection Council of India showing the notice.15 Parties will be notified of the sufficient to warrant such a review.5 same address for the production facility; time and date of any hearing, if In accordance with the above- (7) a list of the suppliers of PMP before, requested. Interested parties may submit referenced regulation, the Department is and PPL after, the conversion to a case briefs and/or written comments not initiating a CCR to determine whether private limited company; (8) a list of the later than 14 days after the publication PPL is the successor-in-interest to PMP. customers of PMP before, and PPL after, of this notice. Rebuttal briefs, and In determining whether one company is the conversion; and, (9) a list of the rebuttals to written comments, which the successor-in-interest to another, the employees of PMP before, and PPL after, must be limited to issues raised in such Department examines a number of the conversion. briefs or comments, may be filed not factors including, but not limited to, Based on the evidence on the record, later than 21 days after the date of changes in management, production we preliminarily find that PPL is the publication of this notice. Parties who facilities, supplier relationships, and successor-in-interest to PMP. We find submit case briefs or rebuttal briefs in customer base.6 While no single factor that, while PPL expanded to seven this changed circumstance review are or combination of these factors will partners from two after its conversion to requested to submit with each necessarily provide a dispositive a private limited company, the original argument: (1) A statement of the issue; indication of a successor-in-interest two partners retained a majority stake in and (2) a brief summary of the relationship, the Department will PPL and no managers or other argument; and (3) a table of authorities. generally consider the new company to employees changed as a result of the Interested parties who wish to comment be the successor to the previous conversion.9 As a result, we find that on the preliminary results must file company if the new company’s resulting PPL operates as the same business entity briefs electronically using Enforcement operation is not materially dissimilar to as PMP. Moreover, PPL: (1) Retained the and Compliance’s Antidumping and that of its predecessor.7 Thus, if the same production facility as PMP; 10 (2) Countervailing Duty Centralized evidence demonstrates that, with continued to purchase raw shrimp from Electronic Service System (IA ACCESS). respect to the production and sale of the a majority of the same suppliers as IA ACCESS is available to registered 11 subject merchandise, the new company PMP; and (3) continued to supply the users at http://iaaccess.trade.gov. An 12 operates as the same business entity as same U.S. customers. Therefore, we electronically-filed document must be the prior company, the Department will also find that the production facility, received successfully in its entirety by assign the new company the cash supplier relationships, and customers the Department’s electronic records 8 deposit rate of its predecessor. have not changed as a result of PMP’s system, IA ACCESS, by 5 p.m. Eastern In its August 22, 2014, submission, conversion to PPL. Thus, we Time on the date the document is due. PPL provided information to preliminarily find that PPL should Consistent with 19 CFR 351.216(e), demonstrate that it is the successor-in- receive the same AD deposit rate (i.e., we intend to issue the final results of interest to PMP. PPL states that the 2.49 percent) with respect to the subject this changed circumstance review no company’s management, production merchandise as PMP, its predecessor later than 270 days after the date on facilities and customer/supplier company. which this review was initiated, or relationships have not changed as a When it concludes that expedited within 45 days of publication of these result of its conversion to a private action is warranted, the Department preliminary results if all parties agree to limited company. To support its claims, may publish the notice of initiation and our preliminary finding. PPL submitted the following preliminary results for a CCR We are issuing and publishing this documents: (1) PMP’s partnership deed concurrently.13 We have determined finding and notice in accordance with from 1986; (2) PPL’s new partnership that expedition of this CCR is warranted sections 751(b)(1) and 777(i)(1) of the deed from 2013; (3) the particulars of because we have the information PPL’s capital shares and percent of necessary to make a preliminary finding Act and 19 CFR 351.216 and shareholdings for each partner; (4) the already on the record.14 Should our 351.221(c)(3)(ii). certificate of incorporation; (5) the final results remain the same as these Dated: October 6, 2014. Memorandum of Association and preliminary results, effective the date of Paul Piquado, Articles of Association of PPL showing publication of the final results, we will Assistant Secretary for Enforcement and details of the partnership; (6) PMP’s and instruct U.S. Customs and Border Compliance. PPL’s certificates issued by the Export Protection to suspend entries of subject [FR Doc. 2014–24277 Filed 10–9–14; 8:45 am] merchandise produced or exported by BILLING CODE 3510–DS–P 5 See 19 CFR 351.216(d); see also Notice and PPL at PMP’s cash deposit rate (i.e., 2.49 Preliminary Results of Antidumping Duty Changed percent), effective on the publication Circumstances Review: Carbon and Certain Alloy Steel Wire Rod From Mexico, 75 FR 67685 (Nov. 3, date of our final results. DEPARTMENT OF COMMERCE 2010). Public Comment 6 See Notice of Initiation and Preliminary Results International Trade Administration of Antidumping Duty Changed Circumstances Pursuant to 19 CFR 351.310(c), any Review: Certain Frozen Warmwater Shrimp From interested party may request a hearing [A–570–912] Thailand, 75 FR 61702, 61703 (Oct. 6, 2010) within 14 days of publication of this (Shrimp from Thailand) (unchanged in Notice of Certain New Pneumatic Off-the-Road Final Results of Antidumping Duty Changed Tires From the People’s Republic of Circumstances Review: Certain Frozen Warmwater 9 See CCR Request, at 7 and 10. Shrimp From Thailand, 75 FR 74684 (Dec. 1, 2010); 10 Id. China: Preliminary Results of Industrial Phosphoric Acid From Israel; Final 11 Id. at 9. Antidumping Duty Administrative Results of Antidumping Duty Changed 12 Id. Review; 2012–2013 Circumstances Review, 59 FR 6944 (Feb. 14, 1994). 13 See 19 CFR 351.221(c)(3)(ii); see also Initiation 7 See Shrimp from Thailand, 75 FR at 61703. and Preliminary Results of Antidumping Duty AGENCY: Enforcement and Compliance, 8 Id.; see also Notice of Final Results of Changed Changed Circumstances Review: Canned Pineapple International Trade Administration, Circumstances Antidumping Duty Administrative Fruit from Thailand, 69 FR 30878 (June 1, 2004). Department of Commerce. Review: Polychloroprene Rubber From Japan, 67 FR 14 See Ball Bearings and Parts Thereof from 58 (Jan. 2, 2002); and Ball Bearings and Parts Japan: Initiation and Preliminary Results of Thereof from France: Final Results of Changed- Changed Circumstances Review, 71 FR 14679 (Mar. 15 See 19 CFR 351.303 for general filing Circumstances Review, 75 FR 34688 (June 10, 2010). 23, 2006). requirements.

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SUMMARY: The Department of Commerce demonstrate eligibility for separate rate did not have any reviewable (‘‘Department’’) is conducting an status and thus has been included in the transactions during the POR. Consistent administrative review of the PRC-wide entity, and Trelleborg had no with a recently announced refinement antidumping duty order on certain new shipments during the POR. to its assessment practice in non-market pneumatic off-the-road tires (‘‘OTR DATES: Effective Date: October 10, 2014. economy (‘‘NME’’) cases, the tires’’) from the People’s Republic of FOR FURTHER INFORMATION CONTACT: Department is not rescinding this China (‘‘PRC’’). The period of review review, in part, but intends to complete Brendan Quinn or Andrew Medley, AD/ 6 (‘‘POR’’) is September 1, 2012, through CVD Operations, Office III, Enforcement the review with respect to Trelleborg. August 31, 2013. The review covers the and Compliance, International Trade Preliminary Determination of following exporters of subject Administration, Department of Affiliation and Collapsing merchandise: Mandatory respondents Commerce, 1401 Constitution Avenue Based on the evidence presented in Double Coin Holdings Ltd. (‘‘Double NW., Washington, DC 20230; telephone: Coin’’) 1 and Guizhou Tyre Co., Ltd./ Double Coin’s questionnaire responses, (202) 482–5848 or (202) 482–4987, Guizhou Tyre Import and Export Co., we preliminarily find that DCH respectively. Ltd. (collectively, ‘‘GTC’’), and non- (including Shanghai Heavy Tire), DC examined respondents Zhongce Rubber SUPPLEMENTARY INFORMATION: Rugao/Jiangsu, and DC Donghai are 2 affiliated, pursuant to section 771(33)(E) Group Company Limited (‘‘Zhongce’’), Scope of the Order 3 Weihai Zhongwei Rubber Co., Ltd. of the Act. In addition, based on the (‘‘Zhongwei’’), and Trelleborg Wheel The merchandise covered by this evidence presented in the questionnaire System (Xingtai) China, Co. Ltd. order includes new pneumatic tires responses, we preliminarily find that (‘‘Trelleborg’’). We preliminarily find designed for off-the-road and off- DCH (including its Shanghai Heavy Tire that GTC made sales of subject highway use, subject to certain factory), DC Rugao/Jiangsu, and DC merchandise at less than normal value, exceptions. The subject merchandise is Donghai should be treated as a single Zhongce and Zhongwei are eligible for currently classifiable under Harmonized entity for the purposes of this review a separate rate, Double Coin failed to Tariff Schedule of the United States (collectively, the ‘‘DCH Single Entity’’). (‘‘HTSUS’’) subheadings: 4011.20.10.25, This finding is based on the 1 In Initiation of Antidumping and Countervailing 4011.20.10.35, 4011.20.50.30, determination that there is significant Duty Administrative Reviews and Request for 4011.20.50.50, 4011.61.00.00, potential for manipulation of price Revocation in Part, 78 FR 67104, 67108 (November 4011.62.00.00, 4011.63.00.00, between the parties pursuant to the 8, 2013) (‘‘Initiation Notice’’), the review was initiated on Double Coin Group Rugao Tyre Co., 4011.69.00.00, 4011.92.00.00, criteria laid out in 19 CFR 351.401(f), Ltd.—renamed Double Coin Group Jiangsu Tyre 4011.93.40.00, 4011.93.80.00, due to the high level of common Co., Ltd.—(‘‘DC Rugao/Jiangsu’’), Double Coin 4011.94.40.00, and 4011.94.80.00. The ownership, interlocking boards and Group Shanghai Donghai Tyre Co., Ltd. (‘‘DC HTSUS subheadings are provided for managers, and intertwined operations.7 Donghai’’), and Double Coin Holdings, Ltd. (‘‘DCH’’ or ‘‘Double Coin’’). The respondent in this review convenience and customs purposes Separate Rates is DCH, which exported all subject merchandise only; the written product description of produced by both its wholly-owned and affiliate the scope of the order is dispositive. In the Initiation Notice,8 we informed factories during the POR. DC Donghai is an parties of the opportunity to request a affiliated producer of subject merchandise that did Preliminary Determination of No separate rate. In proceedings involving not produce OTR tires for export in the POR. See, Shipments e.g., Letter from Double Coin entitled, ‘‘Section A NME countries, the Department begins Response of Double Coin Holdings and China Trelleborg submitted a timely-filed with a rebuttable presumption that all Manufacturers Alliance, LLC,’’ dated January 22, certification indicating that it had no companies within the NME country are 2014 (‘‘Double Coin SAQR’’). DC Rugao/Jiangsu is subject to government control and, thus, a majority DCH-owned subsidiary factory which, shipments of subject merchandise to the along with the 100 percent DCH-owned production United States during the POR.4 should be assigned a single weighted- factory (i.e., Double Coin Lorry Tyre Branch, a.k.a., Consistent with its practice, the average dumping margin. It is the Shanghai Heavy Tire), produced the subject Department asked U.S. Customs and Department’s policy to assign all merchandise in question during the POR. Id. The exporters of merchandise subject to an International Trade Department of DCH is Border Protection (‘‘CBP’’) to conduct a responsible for all export sales of merchandise query on potential shipments made by administrative review involving an under consideration produced by both DCH’s Trelleborg during the POR; CBP did not NME country this single rate unless an Shanghai Heavy Tire factory and the DC Rugao/ provide any evidence that contradicts exporter can demonstrate that it is Jiangsu factory. Id. Additionally, the China 5 sufficiently independent so as to be Manufacturers Alliance (‘‘CMA’’) is DCH’s U.S. Trelleborg’s claim of no shipments. sales affiliate for all POR sales, and has provided Based on Trelleborg’s certification and entitled to a separate rate. Companies and certified to relevant and requested sales-related our analysis of CBP information, we that wanted to be considered for a information on behalf of the respondent. Id. preliminarily determine that Trelleborg separate rate in this review were Accordingly, for ease of reference we use ‘‘Double required to timely file a separate-rate Coin’’ to collectively refer to each of the above production, export, and sales entities that comprise 3 For a complete description of the scope of the the respondent in this review, but note that DCH order, see the Memorandum from Christian Marsh, 6 See Non-Market Economy Antidumping is the actual exporter-respondent. Furthermore, as Deputy Assistant Secretary for Antidumping and Proceedings: Assessment of Antidumping Duties, 76 discussed below, we have collapsed DCH Countervailing Duty Operations, to Paul Piquado, FR 65694, 65694–95 (October 24, 2011) and the (including Shanghai Heavy Tire), DC Rugao/ Assistant Secretary for Enforcement and ‘‘Assessment Rates’’ section, below. Jiangsu, and DC Donghai into a single entity for the Compliance, entitled, ‘‘Decision Memorandum for 7 For further discussion of the Department’s purposes of this review. Preliminary Results of Antidumping Duty affiliation and collapsing decision, see 2 This review was initiated on Hangzhou Zhongce Administrative Review: Certain New Pneumatic Memorandum to the File, entitled, ‘‘2012–2013 Rubber Co., Ltd.; however, in the final results of a Off-the-Road Tires from the People’s Republic of Administrative Review of the Antidumping Duty changed circumstances review, which was China,’’ dated September 30, 2014 (‘‘Preliminary Order on Certain New Pneumatic Off-the-Road completed after the instant review initiated, the Decision Memorandum’’). Tires from the People’s Republic of China: Double Department determined that Zhongce was the 4 See Letter from Trelleborg, entitled, ‘‘Trelleborg Coin Affiliation and Collapsing Memorandum,’’ successor-in-interest to Hangzhou Zhongce Rubber Wheel Systems (Xingtai) China, Co. Ltd. Statement dated September 30, 2014 (‘‘Double Coin Affiliation Co., Ltd. See Certain New Pneumatic Off-the-Road of No Shipments during the POR: New Pneumatic and Collapsing Memo’’). Tires From the People’s Republic of China: Final Off-The-Road Tires from the People’s Republic of 8 See Initiation of Antidumping and Results of Antidumping Duty Changed China,’’ dated November 20, 2013. Countervailing Duty Administrative Reviews and Circumstances Review, 79 FR 8463 (February 12, 5 See CBP Message Number 3352302, dated Request for Revocation in Part, 78 FR 67104, 2014). December 18, 2013. 61704–05 (November 8, 2013) (‘‘Initiation Notice’’).

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application or a separate-rate excluding any rates that are zero, de of the PRC-wide entity, we thus certification to demonstrate their minimis, or based entirely on adverse preliminarily calculated a simple eligibility for a separate rate. Separate- facts available.11 In this case, one average of the previously assigned PRC- rate applications and separate-rate mandatory respondent, Double Coin, is wide rate (210.48 percent) 13 and Double certifications were due to the preliminarily found to be part of the Coin’s calculated margin (0.69 percent) Department within 60 calendar days of PRC-wide entity. The other mandatory as the rate applicable to the PRC-wide the publication of the Initiation Notice. respondent, GTC, is receiving a separate entity. Accordingly, the Department In this review, all exporters for which rate for these preliminary results revised the PRC-wide entity rate to a review was requested submitted calculated from its own sales and 105.59 percent for these preliminary separate-rate information to rebut the production data. To determine a rate for results. For a further discussion of the presumption that, like all companies the unselected separate rate companies, PRC-wide entity rate, see the within the PRC, they are subject to we find it appropriate to use the margin Preliminary Decision Memorandum. government control with respect to calculated for GTC, which was also Methodology export activities. As further discussed in found to be separate from the PRC-wide the Preliminarily Decision entity with respect to its export The Department conducted this Memorandum,9 we determine that the activities, and which rate is not zero or review in accordance with section mandatory respondent Double Coin has de minimis nor based entirely on facts 751(a)(1)(B) of the Act. Export and not demonstrated that it operates free available. Therefore, we are constructed export prices were from government control with respect to preliminarily assigning GTC’s calculated in accordance with sections export activities. Thus, we preliminary calculated margin as the rate assigned to 772(a) and (b) of the Act. Because the determine that Double Coin is part of non-examined entities which have PRC is a NME within the meaning of the PRC-wide entity. demonstrated their eligibility for a section 771(18) of the Act, the The remaining mandatory respondent separate rate. Department calculated normal value in (i.e., GTC) and non-examined accordance with section 773(c) of the PRC-Wide Entity respondents (i.e., Zhongce and Act. Zhongwei) submitted sufficient Double Coin, one of the companies For a full description of the information for the Department to that the Department selected as a methodology underlying our preliminarily determine that they are mandatory respondent in this preliminary results, please see the entitled to a separate rate.10 A full administrative review, failed to Preliminary Decision Memorandum, discussion of the basis for granting these demonstrate absence of de facto which is hereby adopted by this notice. companies a separate rate can be found government control over export A list of the topics included in the in the Preliminary Decision activities due to the fact that its Preliminary Decision Memorandum is Memorandum. controlling shareholder is wholly- attached as an Appendix to this notice. owned by the State-owned Assets The Preliminary Decision Memorandum Rate for Non-Examined Companies Supervision and Administration is a public document and is on file Which Are Eligible for a Separate Rate Commission of the State Council and electronically via Enforcement and Normally, the Department’s practice the significant level of control this Compliance’s Antidumping and is to look for guidance from section majority shareholder wields over the Countervailing Duty Centralized 735(c)(5)(A) of the Tariff Act of 1930, as respondent’s Board of Directors.12 As a Electronic Service System (‘‘IA amended (‘‘the Act’’), to assign to result, we preliminarily determine that ACCESS’’). IA ACCESS is available to separate rate companies that were not Double Coin is part of the PRC-wide registered users at http:// individually examined a rate equal to entity. iaaccess.trade.gov, and it is available to the average of the rates calculated for Because Double Coin provided the all parties in the Central Records Unit, the individually examined respondents, Department with its verified sales and room 7046 of the main Department of production data, we are able to calculate Commerce building. In addition, a 9 See Preliminary Decision Memorandum. For a margin for an unspecified portion of complete version of the Preliminary further analysis, including business proprietary a single PRC-wide entity, but cannot do Decision Memorandum can be accessed information details, with respect to the denial of Double Coin’s separate rate, see also the so for the remaining unspecified portion directly on the internet at http:// Department’s memorandum to the File, entitled, of the entity. As the Department must enforcement.trade.gov/frn/index.html. ‘‘2012–2013 Administrative Review of the calculate a single margin for the PRC- The signed Preliminary Decision Antidumping Duty Order on Certain New wide government controlled entity and Memorandum and the electronic Pneumatic Off-the-Road Tires from the People’s there is insufficient information on the versions of the Preliminary Decision Republic of China: Analysis of the Preliminary Results Margin Calculation for Double Coin record with respect to the composition Memorandum are identical in content. Holdings, Ltd.,’’ dated concurrently with this Preliminary Results of Review memorandum. 11 See, e.g., Preliminary Determination of Sales at 10 See Preliminary Decision Memorandum. For Less Than Fair Value and Partial Affirmative The Department preliminarily further analysis, including business proprietary Determination of Critical Circumstances: Certain determines that the following weighted- information details, with respect to the approval of Polyester Staple Fiber from the People’s Republic of GTC’s separate rate request, see also the China, 71 FR 77373, 77377 (December 26, 2006), average dumping margins exist: Department’s memorandum to the File, entitled, unchanged in Final Determination of Sales at Less ‘‘2012–2013 Administrative Review of the Than Fair Value and Partial Affirmative 13 See Certain New Pneumatic Off-The-Road Tires Antidumping Duty Order on Certain New Determination of Critical Circumstances: Certain from the People’s Republic of China: Final Pneumatic Off-the-Road Tires from the People’s Polyester Staple Fiber from the People’s Republic of Affirmative Determination of Sales at Less Than Republic of China: Analysis of the Preliminary China, 72 FR 19690 (April 19, 2007). Fair Value and Partial Affirmative Determination of Results Margin Calculation for Guizhou Tyre Co., 12 See ‘‘Separate Rates’’ section of the Preliminary Critical Circumstances, 73 FR 40485, 40489 (July Ltd.,’’ dated concurrently with this memorandum. Decision Memorandum. 15, 2008) (‘‘LTFV Investigation’’).

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Weighted average Exporter dumping margin

Guizhou Tyre Co., Ltd./Guizhou Tyre Import and Export Co., Ltd.14 ...... 16.18 Zhongce Rubber Group Company Limited ...... 16.18 Weihai Zhongwei Rubber Co., Ltd...... 16.18 PRC-Wide Entity (includes the DCH Single Entity 15) ...... 105.59

Disclosure and Public Comment determine, and CBP shall assess, entries of merchandise covered by the The Department intends to disclose to antidumping duties on all appropriate final results of this review and for future 20 the parties the calculations performed entries covered by this review. The deposits of estimated duties, where for these preliminary results within five Department intends to issue appropriate applicable. assessment instructions to CBP 15 days days of the date of publication of this Cash Deposit Requirements notice in accordance with 19 CFR after publication of the final results of The following cash deposit 351.224(b). Interested parties may this review. requirements for estimated antidumping submit case briefs no later than 30 days For GTC, whose weighted-average duties, when imposed, will apply to all after the date of publication of these dumping margin is not zero or de shipments of subject merchandise preliminary results of review.16 Rebuttal minimis (i.e., less than 0.5 percent), we entered, or withdrawn from warehouse, briefs, limited to issues raised in the will calculate importer-specific ad for consumption on or after the case briefs, may be filed no later than valorem duty assessment rates based on publication of the final results of this five days after the case briefs are filed.17 the ratio of the total amount of dumping Any interested party may request a calculated for the importer’s examined administrative review, as provided by hearing within 30 days of publication of sales to the total entered value of those section 751(a)(2)(C) of the Act: (1) If the this notice.18 Hearing requests should same sales in accordance with 19 CFR companies preliminarily determined to 21 contain the following information: (1) 351.212(b)(1). For duty assessment be eligible for a separate rate receive a The party’s name, address, and rates calculated on this basis, we will separate rate in the final results of this telephone number; (2) the number of direct CBP to assess the resulting ad administrative review, their cash participants; and (3) a list of the issues valorem rate against the entered deposit rate will be equal to the to be discussed. Oral presentations will customs values for the subject weighted-average dumping margin be limited to issues raised in the case merchandise. If the weighted-average established in the final results of this and rebuttal briefs. If a request for a dumping margin for the exporter is zero review, as adjusted for domestic hearing is made, parties will be notified or de minimis, or if the importer- subsidies (except, if that rate is de of the time and date for the hearing to specific assessment rate is zero or de minimis, then the cash deposit rate will be held at the U.S. Department of minimis, then the Department will be zero); (2) for any previously Commerce, 1401 Constitution Avenue instruct CBP to liquidate the appropriate investigated or reviewed PRC and non- NW., Washington, DC 20230.19 entries without regard to antidumping PRC exporter that is not under review in Unless otherwise extended, the duties. this segment of the proceeding but that Department intends to issue the final On October 24, 2011, the Department received a separate rate in the most results of this administrative review, announced a refinement to its recently completed segment of this which will include the results of its assessment practice in NME cases. proceeding, the cash deposit rate will analysis of issues raised in the case and Pursuant to this refinement in practice, continue to be the exporter-specific rate rebuttal briefs, within 120 days of for entries that were not reported in the published for the most recently publication of these preliminary results, U.S. sales databases submitted by completed segment of this proceeding; pursuant to section 751(a)(3)(A) of the companies individually examined (3) for all PRC exporters of subject Act. during this review, the Department will merchandise that have not been found instruct CBP to liquidate such entries at to be entitled to a separate rate, the cash Assessment Rates the PRC-wide rate. In addition, if the deposit rate will be equal to the cash Upon issuance of the final results of Department determines that an exporter deposit rate for the PRC-wide entity, this review, the Department will under review had no shipments of the which will be equal to the rate assigned subject merchandise, any suspended to the PRC-wide entity in the final 14 The review was initiated on Guizhou Advance entries that entered under that results of this administrative review; Rubber Co., Ltd. (‘‘GAR’’), Guizhou Tyre Co., Ltd., exporter’s case number (i.e., at that and (4) for all non-PRC exporters of and Guizhou Tyre Import and Export Co., Ltd. See exporter’s rate) will be liquidated at the subject merchandise which have not Initiation Notice, 78 FR at 67108. These three 22 companies were collapsed into a collective entity, PRC-wide rate. received their own rate, the cash deposit GTC, in the investigation. See Certain New In accordance with section rate will be the rate applicable to the Pneumatic Off-The-Road Tires From the People’s 751(a)(2)(C) of the Act, the final results PRC exporter(s) that supplied that non- Republic of China; Preliminary Determination of of this review shall be the basis for the Sales at Less Than Fair Value and Postponement PRC exporter. These cash deposit of Final Determination, 73 FR 9278, 9283 (February assessment of antidumping duties on requirements, when imposed, shall 20, 2008), unchanged in LTFV Investigation. GAR remain in effect until further notice. does not export subject merchandise; as such, we 20 See 19 CFR 351.212(b)(1). have only listed GTC in this section of the notice. 21 In these preliminary results, the Department Notification to Importers 15 As noted above, the review was initiated on applied the assessment rate calculation method DCH, DC Rugao/Jiangsu), and DC Donghai, and each adopted in Antidumping Proceedings: Calculation This notice also serves as a company has been preliminarily collapsed and of the Weighted-Average Dumping Margin and preliminary reminder to importers of treated as the DCH Single Entity for the purposes Assessment Rate in Certain Antidumping their responsibility under 19 CFR of this review. Proceedings: Final Modification, 77 FR 8101 351.402(f)(2) to file a certificate 16 See 19 CFR 351.309(c). (February 14, 2012). 17 See 19 CFR 351.309(d). 22 See Non-Market Economy Antidumping regarding the reimbursement of 18 See 19 CFR 351.310(c). Proceedings: Assessment of Antidumping Duties, 76 antidumping duties prior to liquidation 19 See 19 CFR 351.310(d)(1). FR 65694, 65694–95 (October 24, 2011). of the relevant entries during this

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review period. Failure to comply with be brought to the full Council for formal DEPARTMENT OF COMMERCE this requirement could result in the consideration and action, if appropriate. Department’s presumption that National Oceanic and Atmospheric DATES: reimbursement of antidumping duties This meeting will be held on Administration Tuesday, October 28, 2014 at 9 a.m. occurred and the subsequent assessment RIN 0648–XD541 of double antidumping duties. ADDRESSES: Notification to Interested Parties Meeting address: The meeting will be New England Fishery Management Council; Public Meeting We are issuing and publishing notice held at the Courtyard by Marriott, 32 of these results in accordance with Exchange Terrace, Providence, RI AGENCY: National Marine Fisheries sections 751(a)(1) and 777(i)(1) of the 02903; telephone: (401) 272–1191; fax: Service (NMFS), National Oceanic and Act. (401) 272–1416. Atmospheric Administration (NOAA), Dated: September 30, 2014. Council address: New England Commerce. Paul Piquado, Fishery Management Council, 50 Water ACTION: Notice; public meeting. Street, Mill 2, Newburyport, MA 01950. Assistant Secretary for Enforcement and SUMMARY: The New England Fishery Compliance. FOR FURTHER INFORMATION CONTACT: Management Council (Council) is Appendix—List of Topics Discussed in Thomas A. Nies, Executive Director, scheduling a public meeting of its the Preliminary Decision Memorandum New England Fishery Management Scallop Committee on to consider Council; telephone: (978) 465–0492. actions affecting New England fisheries 1. Background in the exclusive economic zone (EEZ). SUPPLEMENTARY INFORMATION: 2. Scope of the Order The Recommendations from this group will 3. Affiliation and Collapsing Advisors will review recommendations be brought to the full Council for formal 4. Preliminary Determination of No from the Scallop Plan Development consideration and action, if appropriate. Shipments Team for FY 2015 and FY 2016 (default) DATES: This meeting will be held on 5. Non-Market Economy Country fishery specifications (Framework 26). 6. Separate Rates Wednesday, October 29, 2014 at 9 a.m. The Advisors will also provide input on 7. Margin for the Separate Rate Companies ADDRESSES: other measures under consideration in 8. PRC-Wide Entity Meeting Address: The meeting will be 9. Surrogate Country and Surrogate Value Framework 26: (1) measures to allow held at the Courtyard by Marriott, 32 Data fishing in state waters after federal 10. Surrogate Country Exchange Terrace, Providence, RI Northern Gulf of Maine (NGOM) TAC is 02903; telephone: (401) 272–1191; fax: 11. Economic Comparability reached; (2) measures to make turtle 12. Significant Producers of Identical or (401) 272–1416. Comparable Merchandise regulations consistent in the scallop Council Address: New England 13. Data Availability fishery; (3) measures to modify the Fishery Management Council, 50 Water 14. Date of Sale existing area closure accountability Street, Mill 2, Newburyport, MA 01950. 15. Comparisons to Normal Value measures in place for Georges Bank and 16. Export Price and Constructed Export FOR FURTHER INFORMATION CONTACT: Southern New England/Mid-Atlantic Thomas A. Nies, Executive Director, Price yellowtail flounder, and develop new 17. Value-Added Tax New England Fishery Management 18. Normal Value accountability measures for northern Council; telephone: (978) 465–0492. windowpane flounder; and (4) consider 19. Factor Valuations SUPPLEMENTARY INFORMATION: The 20. Adjustment Under Section 777A(f) of the an inshore transit corridor for limited Committee will review Act access scallop vessels to declare out of 21. Currency Conversion recommendations from the Scallop Plan the fishery. Other business may be Development Team for FY 2015 and FY [FR Doc. 2014–24275 Filed 10–9–14; 8:45 am] discussed if time permits. 2016 (default) fishery specifications BILLING CODE 3510–DS–P Special Accommodations (Framework 26). The Committee will also provide input on other measures This meeting is physically accessible under consideration in Framework 26: DEPARTMENT OF COMMERCE to people with disabilities. Requests for (1) Measures to allow fishing in state National Oceanic and Atmospheric sign language interpretation or other waters after federal Northern Gulf of Administration auxiliary aids should be directed to Maine (NGOM) TAC is reached; (2) Thomas A. Nies, Executive Director, at measures to make turtle regulations RIN 0648–XD540 (978) 465–0492, at least 5 days prior to consistent in the scallop fishery; (3) the meeting date. measures to modify the existing area New England Fishery Management closure accountability measures in place Council; Public Meeting Authority: 16 U.S.C. 1801 et seq. for Georges Bank and Southern New AGENCY: National Marine Fisheries Dated: October 7, 2014. England/Mid-Atlantic yellowtail Service (NMFS), National Oceanic and Tracey L. Thompson, flounder, and develop new Atmospheric Administration (NOAA), Acting Deputy Director, Office of Sustainable accountability measures for northern Commerce. Fisheries, National Marine Fisheries Service. windowpane flounder; and (4) consider an inshore transit corridor for limited ACTION: Notice; public meeting. [FR Doc. 2014–24237 Filed 10–9–14; 8:45 am] access scallop vessels to declare out of SUMMARY: The New England Fishery BILLING CODE 3510–22–P the fishery. Other business may be Management Council (Council) is discussed if time permits. scheduling a public meeting of its Scallop Advisory Panel on to consider Special Accommodations actions affecting New England fisheries This meeting is physically accessible in the exclusive economic zone (EEZ). to people with disabilities. Requests for Recommendations from this group will sign language interpretation or other

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auxiliary aids should be directed to Contracting Activity: Defense Logistics MATTER TO BE CONSIDERED: Decisional Thomas A. Nies, Executive Director, at Agency Troop Support, Philadelphia, PA Matter: Safety Standard Recreational (978) 465–0492, at least 5 days prior to Coverage: C-List for 100% of the requirement Off-Highway Vehicles—NPR. the meeting date. of the Department of Defense, as A live webcast of the Meeting can be aggregated by the Defense Logistics viewed at www.cpsc.gov/live. Authority: 16 U.S.C. 1801 et seq. Agency Troop Support, Philadelphia, PA. For a recorded message containing the Dated: October 7, 2014. latest agenda information, call (301) Tracey L. Thompson, Laminating Pouch, Thermal, 3 Mil 504–7948. Thickness, Letter size Acting Deputy Director, Office of Sustainable CONTACT PERSON FOR MORE INFORMATION: Fisheries, National Marine Fisheries Service. NSN: 9330–00–NIB–0003—100/BX Todd A. Stevenson, Office of the [FR Doc. 2014–24238 Filed 10–9–14; 8:45 am] NSN: 9330–00–NIB–0004—25/BX Secretary, U.S. Consumer Product NSN: 9330–00–NIB–0005—50/BX BILLING CODE 3510–22–P Safety Commission, 4330 East West NSN: 9330–00–NIB–0007—100/BX NPA: LC Industries, Inc., Durham, NC Highway, Bethesda, MD 20814, (301) Contracting Activity: General Services 504–7923. COMMITTEE FOR PURCHASE FROM Administration, Fort Worth, TX Dated: October 7, 2014. PEOPLE WHO ARE BLIND OR Coverage: A-List for the Total Government Todd A. Stevenson, SEVERELY DISABLED Requirement as aggregated by the General Services Administration, Fort Secretariat. Procurement List; Proposed Additions Worth, TX. [FR Doc. 2014–24336 Filed 10–8–14; 4:15 pm] NSN: MR 1070—Brush, Power Scrub BILLING CODE 6355–01–P AGENCY: Committee for Purchase From NSN: MR 1071—Brush, Kitchen People Who Are Blind or Severely NSN: MR 1074—Broom, Corn Disabled. NSN: MR 1081—Brush, Toilet Bowl CONSUMER PRODUCT SAFETY ACTION: Proposed additions to the NSN: MR 1082—Broom, Large, Angle COMMISSION Procurement List. NPA: Alphapointe, Kansas City, MO Contracting Activity: NEXCOM-Navy Sunshine Act Meeting SUMMARY: The Committee is proposing Exchange Service Command, Virginia to add products and a service to the Beach, VA TIME AND DATE: Wednesday October 22, Procurement List that will be furnished Coverage: C-List for the requirements of Navy 2014, 10 a.m.–12 p.m. by nonprofit agencies employing Exchanges as aggregated by the Navy PLACE: Hearing Room 420, Bethesda persons who are blind or have other Exchange Service Command (NEXCOM), Towers, 4330 East West Highway, Virginia Beach, VA. severe disabilities. Bethesda, Maryland. NSN: MR 10669—Kit, Party, New Year’s Comments Must Be Received On Or STATUS: Commission Meeting—Open to Before: 11/10/2014. NPA: Winston-Salem Industries for the Blind, Inc., Winston-Salem, NC the Public. ADDRESSES: Committee for Purchase Contracting Activity: Defense Commissary MATTER TO BE CONSIDERED: Briefing From People Who Are Blind or Severely Agency, Fort Lee, VA Matter: Safety Standard Recreational Disabled, 1401 S. Clark Street, Suite Coverage: C-List for the requirements of Off-Highway Vehicles—NPR. 10800, Arlington, Virginia, 22202–4149. military commissaries and exchanges as A live webcast of the Meeting can be For Further Information Or To Submit aggregated by the Defense Commissary viewed at www.cpsc.gov/live. Comments Contact: Barry S. Lineback, Agency, Fort Lee, VA. For a recorded message containing the Telephone: (703) 603–7740, Fax: (703) Service latest agenda information, call (301) 603–0655, or email CMTEFedReg@ Service Type/Location: Internal Mail and 504–7948. AbilityOne.gov. Messenger Service, U.S. Department of CONTACT PERSON FOR MORE INFORMATION: SUPPLEMENTARY INFORMATION: This State, Harry S. Truman Building, 2201 C Todd A. Stevenson, Office of the notice is published pursuant to 41 USC Street NW., Washington, DC Secretary, U.S. Consumer Product 8503(a)(2) and 41 CFR 51–2.3. Its NPA: ServiceSource, Inc., Alexandria, VA Safety Commission, 4330 East West Contracting Activity: Department of State, purpose is to provide interested persons Office of Acquisition Mgmt—MA, Highway, Bethesda, MD 20814, (301) an opportunity to submit comments on Arlington, VA 504–7923. the proposed actions. Dated: October 7, 2014. Barry S. Lineback, Todd A. Stevenson, Additions Director, Business Operations. Secretariat. If the Committee approves the [FR Doc. 2014–24243 Filed 10–9–14; 8:45 am] [FR Doc. 2014–24337 Filed 10–8–14; 4:15 pm] proposed additions, the entities of the BILLING CODE 6353–01–P Federal Government identified in this BILLING CODE 6355–01–P notice will be required to procure the products and service listed below from nonprofit agencies employing persons CONSUMER PRODUCT SAFETY DEPARTMENT OF DEFENSE who are blind or have other severe COMMISSION disabilities. Department of the Navy The following products and service Sunshine Act Meeting Revised Notice of Intent To Prepare an are proposed for addition to the Environmental Impact Statement for Procurement List for production by the TIME AND DATE: Wednesday October 29, EA–18G Growler Airfield Operations at nonprofit agencies listed: 2014, 10 a.m.–12 p.m. Naval Air Station Whidbey Island, WA Products PLACE: Hearing Room 420, Bethesda and Notice of Request for Public Rice, Long Grain, Parboiled Towers, 4330 East West Highway, Scoping Comments Bethesda, Maryland. NSN: 8920–01–E62–4281—6/10 lb. Pkgs AGENCY: Department of the Navy, DoD. STATUS: Commission Meeting—Open to NSN: 8920–01–E62–4280—2/10 lb. Pkgs ACTION: Notice. NPA: Vision Corps, Lancaster, PA the Public.

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SUMMARY: This notice is to advise the attack) and has supported the Navy’s to ensure full transparency with the public that the Department of the Navy electronic attack (VAQ) community of public and to ensure the local (DoN) is revising the scope for the personnel, aircraft, equipment and community has adequate opportunity to Environmental Impact Statement (EIS) mission-related Navy functions since participate in the NEPA process. for EA–18G Growler airfield operations 1971. With the disestablishment of U.S. Accordingly, the DoN will assess the at Naval Air Station (NAS) Whidbey Marine Corps electronic attack potential environmental impacts of the Island, Washington. This revised Notice capabilities, the DoD expeditionary proposed force structure changes to the of Intent has been published because electronic attack mission is single-sited electronic attack community and home since the September 5, 2013 publication at NAS Whidbey Island which basing of additional EA–18G aircraft at of the original Notice of Intent in the maximizes operational capabilities and NAS Whidbey Island by re-scoping the Federal Register (78 FR 54635), the DoN efficiencies without duplicating EIS effort currently underway. has modified its proposed action to facilities and functions at another To meet current and future address a potential increase in the location. requirements, the DoN proposes to: (1) number of EA–18G aircraft to be NAS Whidbey Island provides Continue and expand the existing procured and the subsequent changes in facilities and support services for nine electronic attack operations at NAS the number of aircraft that would be Carrier Air Wing (CVW) VAQ Whidbey Island complex, which home based at NAS Whidbey Island. squadrons, three Expeditionary (EXP) includes Ault Field and OLF Coupeville The revised scope will evaluate the VAQ squadrons, one Reserve squadron, (including a range of Field Carrier potential environmental effects of and one Fleet Replacement Squadron Landing Practice (FCLP) operations); (2) homebasing an additional 13 to 36 EA– (FRS). These squadrons are comprised increase electronic attack capabilities 18G Growler aircraft at NAS Whidbey of EA–6B Prowler and EA–18G Growler and augment the VAQ FRS (provide for Island and the effects of this home aircraft. an increase of between 13 and 36 basing on EA–18G Growler airfield In 2005 and 2012, the DoN prepared aircraft) to support an expanded DoD operations at Ault Field and Outlying environmental analyses pursuant to the mission for identifying, tracking and Landing Field (OLF) Coupeville. National Environmental Policy Act targeting in a complex electronic Additional information concerning the (NEPA) of 1969 for the replacement of warfare environment; (3) construct and proposed scope changes is available on the EA–6B Prowler aircraft at NAS renovate facilities at Ault Field to the project Web site at Whidbey Island with the newer EA–18G accommodate additional aircraft; and (4) www.whidbeyeis.com. Growler aircraft. The 2005 station additional personnel and their The DoN invites comments on the Environmental Assessment (EA) family members at NAS Whidbey Island proposed scope and content of the EIS evaluated the environmental and in the surrounding community. from all interested parties. Comments consequences of transitioning CVW The revised scope of the EIS will on the scope of the EIS may be provided VAQ squadrons (fleet squadrons) and address the No Action Alternative and via the U.S. Postal Service or the EIS the FRS (training squadron) from the four action alternatives. Under the No Web site at: www.whidbeyeis.com. In EA–6B to the EA–18G aircraft and Action Alternative, the DoN would not addition, the DoN will conduct open disestablishing three EXP VAQ add VAQ squadrons or aircraft to NAS Whidbey Island to improve the Navy’s house information sessions to obtain squadrons. A subsequent EA in 2012 evaluated the environmental Electronic Attack capability. Legacy comments on the scope of the EIS and consequences of retaining and EA–6B Prowlers would continue to to identify specific environmental transitioning the three EXP VAQ gradually transition to next generation concerns or topics for consideration. Dates and Addresses: Three open squadrons, previously proposed for EA–18G Growler aircraft (82 aircraft) and annual EA–18G Growler airfield house information sessions will be held disestablishment, from EA–6B to EA– 18G aircraft and the relocation of a operations would be maintained at between 4:00 p.m. and 8:00 p.m. on: 1. Tuesday, October 28, 2014, reserve expeditionary VAQ squadron levels consistent with those identified Coupeville High School, 501 South from Joint Base Andrews, Maryland. in the 2005 and 2012 transition EAs. On September 5, 2013, the DoN Main Street, Coupeville, Washington While the No Action Alternative does announced the preparation of an EIS for 98239. not meet the purpose of and need for the EA–18G Growler airfield operations at 2. Wednesday, October 29, 2014, Oak proposed action, it serves as a baseline NAS Whidbey Island. In this EIS, the Harbor Elks Lodge, 155 NE Ernst Street, against which impacts of the proposed DoN proposed to evaluate the potential Oak Harbor, Washington 98277. action can be evaluated. environmental effects associated with 3. Thursday, October 30, 2014, The DoN will analyze the potential the introduction of two additional EA– Anacortes High School Cafeteria, 1600 environmental impacts of airfield 18G Growler expeditionary squadrons 20th Street, Anacortes, Washington operations (including FCLP for CVW acquired under the DoD Appropriations 98221. and FRS squadrons at Ault Field and Each of the three open house Act of 2014. During the public scoping OLF Coupeville), facilities and information sessions will be informal comment period, public meetings were functions associated with four force and consist of information stations held December 3–5, 2013 in Coupeville, structure alternatives: staffed by DoN representatives. Oak Harbor, and Anacortes, 1. Alternative 1: Expand EXP Washington, and over 1,600 comments electronic attack capabilities by FOR FURTHER INFORMATION CONTACT: EA– from the public were collected. establishing two new EXP VAQ 18G EIS Project Manager (Code EV21/ In Spring 2014, the Chief of Naval squadrons and augmenting the FRS by SS); Naval Facilities Engineering Operations submitted an Unfunded three additional aircraft (a net increase Command (NAVFAC) Atlantic, 6506 Requirements List to Congress that of 13 aircraft); Hampton Boulevard, Norfolk, Virginia identified a need for 22 additional EA– 2. Alternative 2: Expand CVW 23508. 18G aircraft to be included in the electronic attack capabilities by adding SUPPLEMENTARY INFORMATION: NAS President’s Budget for Fiscal Year 2015. two additional aircraft to each existing Whidbey Island is the center of While it is unclear whether more CVW VAQ squadron and augmenting excellence for electronic combat warfare Growlers will be procured, the DoN has the FRS by six additional aircraft (a net training (electronic surveillance and decided to analyze the potential growth increase of 24 aircraft);

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3. Alternative 3: Expand CVW demonstrated interest in cultural should be submitted to: EA–18G EIS capabilities by adding three additional resources for the project, and the Project Manager (Code EV21/SS); Naval aircraft to each existing CVW VAQ Advisory Council on Historic Facilities Engineering Command squadron and augmenting the FRS by Preservation. Pursuant to 36 CFR (NAVFAC) Atlantic, 6506 Hampton eight additional aircraft (a net increase 800.2(d), the DoN intends to use the Blvd., Norfolk, VA 23508. The same of 35 aircraft); and public scoping open house meetings to policy for release of personally 4. Alternative 4: Expand EXP and facilitate public involvement pursuant identifiable information as identified CVW capabilities by establishing two to Section 106 of the NHPA. The DoN above for scoping comments will be new EXP VAQ squadrons, adding two will present information about cultural maintained by DoN for individuals additional aircraft to each existing CVW resources and the Section 106 process requesting to be included on the EIS VAQ squadron, and augmenting the FRS for the project at the public scoping mailing list. by eight additional aircraft (a net open house meetings. Comments on Dated: October 6, 2014. increase of 36 aircraft). cultural resources or Section 106 issues N.A. Hagerty-Ford, In developing the proposed range of or concerns that are received from the alternatives, the DoN utilized long- public during the scoping process will Commander, Office of the Judge Advocate established operational considerations General, U.S. Navy, Federal Register Liaison be addressed as part of the Section 106 Officer. which are more fully described in the process. 2005 and 2012 EAs for the replacement No decision will be made to [FR Doc. 2014–24223 Filed 10–9–14; 8:45 am] of the EA–6B Prowler aircraft with the implement any alternative until the EIS BILLING CODE 3810–FF–P newer EA–18G Growler aircraft at NAS process is completed and a Record of Whidbey Island. These considerations Decision is signed by the Assistant DEPARTMENT OF DEFENSE include the fact that all of the Navy’s Secretary of the Navy (Energy, electronic attack mission and training Installations and Environment) or Department of the Navy facilities are located at NAS Whidbey designee. The scoping process will be Island, including the substantial used to identify community concerns Notice of Availability of Record of infrastructure and training ranges that and local issues to be addressed in the Decision for the Final Environmental have developed in more than 40 years EIS. Federal agencies, state agencies, Impact Statement for U.S. Navy F–35C of operation, the location of a suitable local agencies, Native American Indian West Coast Homebasing airfield that provides for the most Tribes and Nations, the public, and realistic training environment, the interested persons are encouraged to AGENCY: Department of the Navy, DoD. distance aircraft would have to travel to provide comments to the DoN to ACTION: Notice. accomplish training, and the expense of identify specific issues or topics of SUMMARY: The Department of the Navy, duplicating existing capabilities environmental concern that the after carefully weighing the strategic, elsewhere. As a result, the DoN is not commenter believes the DoN should operational, and environmental considering alternative locations for consider. All comments provided orally consequences of the proposed action, FCLP training, or squadron relocation. or in writing at the scoping meetings or announces its decision to provide Short-term detachments to meet training by mail during the scoping period will facilities and functions to support requirements would continue, as receive the same consideration during homebasing of F–35C aircraft at Naval needed. EIS preparation. All comments must be Air Station (NAS) Lemoore, California, The environmental analysis in the EIS postmarked no later than November 17, will focus on several aspects of the 2014. by accomplishing the proposed action proposed action: aircraft operations at The DoN will not release the names, as set out in Alternative 2 of the Ault Field and OLF Coupeville; facility street addresses, email addresses and Environmental Impact Statement (EIS) construction; and personnel changes. screen names, telephone numbers, or for U.S. Navy F–35C West Coast Resource areas to be addressed in the other personally identifiable Homebasing. Under Alternative 2, a EIS will include, but not be limited to: information of individuals who provide total of 100 F–35C aircraft in seven Air quality, noise, land use, comments during scoping unless Navy Pacific Fleet squadrons (10 aircraft socioeconomics, natural resources, required by law. However, the DoN may per squadron) and the Fleet biological resources, cultural resources, release the city, state, and 5-digit zip Replacement Squadron (30 aircraft) will and safety and environmental hazards. code of individuals who provide be homebased at NAS Lemoore The analysis will evaluate direct and comments. Each commenter making oral beginning in 2016. The proposed action indirect impacts, and will account for comments at the a public scoping will be completed in the 2028 cumulative impacts from other relevant meetings will be asked by the timeframe. The 100 F–35C aircraft will activities near the installation. Relevant stenographer if he/she otherwise elects replace 70 aging FA–18 Hornet aircraft. and reasonable measures that could to authorize the release of their As a result, aircraft loading at NAS avoid or mitigate environmental effects personally identifiable information prior Lemoore will gradually increase by a net will also be analyzed. Additionally, the to providing their comments. of 30 aircraft over the 13-year period. DoN will undertake consultations Commenters submitting written There will be no changes in aircraft applicable by law and regulation. comments, either using comment forms loading at Naval Air Facility (NAF) El As outlined in 36 CFR Part 800, or via the project Web site, may elect to Centro, California, under Alternative 2. ‘‘Protection of Historic Properties,’’ the authorize release of personally Homebasing the F–35C at NAS Lemoore DoN plans to comply with Section 106 identifiable information by checking a will result in an increase of of the National Historic Preservation Act ‘‘release’’ box on the comment form. approximately 68,400 operations per of 1966, as amended (NHPA), in To be included on the DoN’s mailing year at NAS Lemoore and an increase of conjunction with the NEPA process. list for the EIS (or to receive a copy of approximately 800 operations per year The Section 106 process will include the Draft EIS, when released), electronic at NAF El Centro. consultation with the State Historic requests can be made on the project SUPPLEMENTARY INFORMATION: The Preservation Officer, Native American Web site at www.whidbeyeis.com. complete text of the Record of Decision Tribes and Nations, other parties with a Requests via the U.S. Postal Service (ROD) is available on the project Web

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site at www.navyf35cwestcoasteis.com, clarify information presented in the Both redevelopment alternatives would along with the Final EIS U.S. Navy F– Draft EIS as necessary. There will not be be generally consistent with the policies 35C West Coast Homebasing, dated May a formal presentation. developed by the City of Concord 2014 and supporting documents. Single Thursday, November 13, 2014 (4:00 during the reuse planning process that copies of the ROD are available upon p.m. to 8:00 p.m.), Concord Senior took place between 2008 and 2012. Both request by contacting: U.S. Navy F–35C Citizens Center (Wisteria Room), 2727 alternatives focus on the preservation of EIS Project Manager, Naval Facilities Parkside Circle, Concord, California a significant amount of open space and Engineering Command Southwest, Attn: 94519. conservation areas, and sustainable development characterized by walkable Code EV21.AK, 1220 Pacific Highway, FOR FURTHER INFORMATION CONTACT: neighborhoods, transit-oriented Building 1, 5th Floor, San Diego, Director, NAVFAC BRAC PMO West, development, and ‘‘complete streets’’ California 92132. Attn: Ms. Erica Spinelli, NEPA Project that balance multiple types of Dated: October 6, 2014. Manager, 1455 Frazee Road, Suite 900, transportation. Under both alternatives, N.A. Hagerty-Ford, San Diego, California 92108–4310, most installation facilities would be telephone: 619–532–0980, fax: 619– Commander, Office of the Judge Advocate demolished, and the western side of the General, U.S. Navy, Federal Register Liaison 532–0995; email: erica.spinelli@ property would be developed as a series Officer. navy.mil. of mixed-use ‘‘development districts,’’ For more information on the NWS [FR Doc. 2014–24224 Filed 10–9–14; 8:45 am] with a higher concentration of Concord EIS, visit the Navy BRAC PMO BILLING CODE 3810–FF–P development at the north end, near Web site (http:// State Route 4 and the North Concord/ www.bracpmo.navy.mil/). Martinez Bay Area Rapid Transit DEPARTMENT OF DEFENSE SUPPLEMENTARY INFORMATION: The DoN Station. Redevelopment under either has prepared the Draft EIS for the Department of the Navy alternative would include parks and Disposal and Reuse of the Former NWS open spaces, best management practices Notice of Public Hearing for the Draft Concord in accordance with the for stormwater management, and green Environmental Impact Statement for requirements of NEPA (42 U.S.C. and sustainable design and planning the Disposal and Reuse of Former Sections 4321–4347) and its principles. Full build-out under either Naval Weapons Station Seal Beach, implementing regulations (40 CFR Parts alternative would be implemented over Detachment Concord, Concord, 1500–1508). A Notice of Intent (NOI) to a 25-year period. A No Action California prepare this Draft EIS was published in alternative was also considered, as the Federal Register on March 14, 2013 required by NEPA and to provide a AGENCY: Department of the Navy, DoD. (Federal Register, Vol. 78, No. 50/ point of comparison for assessing ACTION: Notice. Friday, March 14, 2013/Notices). The impacts of the redevelopment DoN is the lead agency for the proposed alternatives. SUMMARY: Pursuant to the National action, with the U.S. Army Corps of Alternative 1 includes the disposal of Environmental Policy Act (NEPA) of Engineers serving as a cooperating the former NWS Concord by the DoN 1969 (Pub. L. 91–190, 42 United States agency for the preparation of this EIS. and its reuse in a manner consistent Code [U.S.C.] 4321–4347), as The DoN closed the former NWS with the adopted Concord Reuse Project implemented by the Council on Concord on September 30, 2008, in (CRP) Area Plan. This alternative has Environmental Quality Regulations accordance with Public Law (Pub. L.) been identified as the Preferred implementing NEPA (40 Code of 101–510, the Defense Base Closure and Alternative by the DoN. Under this Federal Regulations [CFR] parts 1500– Realignment Act (DBCRA) of 1990, as alternative, redevelopment of 1508), the Department of the Navy amended in 2005. The DBCRA exempts approximately 2,500 acres of the former (DoN) has prepared and filed the Draft the decision-making process of the installation property would take place Environmental Impact Statement (EIS) Defense Base Closure and Realignment and would include a mix of land use to evaluate the potential environmental Commission from the requirements of types and densities. This alternative consequences associated with the NEPA. The DBCRA also relieves the would also result in the preservation of disposal of the former Naval Weapons DoN from the NEPA requirements to a significant area of open space and Station Seal Beach, Detachment consider the need for closing, conservation areas. The redevelopment Concord, Concord, California (NWS realigning, or transferring functions and would include approximately 6.1 Concord), and its subsequent reuse by from looking at alternative installations million square feet of commercial floor the local community. The DoN is to close or realign. However, in space and up to 12,272 residential initiating a 45-day public comment accordance with NEPA, before housing units. period to provide the community an disposing of any real property, the DoN Alternative 2 provides for the disposal opportunity to comment on the Draft must analyze the environmental effects of the former installation property by EIS. Federal, state, and local elected of the disposal. the DoN and its reuse in a manner officials and agencies and the public are The purpose of the proposed action is similar to the Area Plan but with a encouraged to provide written to dispose of surplus property at the higher density of residential comments. A public meeting will also former NWS Concord for subsequent development than under Alternative 1 be held to provide information and reuse in a manner consistent with the and within a smaller footprint. Under receive written comments on the Draft policies adopted by the City of Concord this alternative, redevelopment of EIS. during reuse planning that took place approximately 2,200 acres of the former Dates and Addresses: An open house between 2008 and 2012. The need for installation property with a mix of land public meeting will be held at the the proposed action is to provide the use types and densities would take location listed below and will allow local community the opportunity for place. This alternative would also individuals to review and comment on economic development and job creation. include the preservation of a significant the information presented in the Draft The Draft EIS has considered two amount of open space and conservation EIS. DoN representatives will be redevelopment alternatives for the areas. The alternative calls for available during the open house to disposal and reuse of NWS Concord. approximately 6.1 million square feet of

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commercial building space and up to cumulative impacts from other Attn: Ms. Erica Spinelli, NEPA Project 15,872 residential housing units. foreseeable federal, state, or local Manager, 1455 Frazee Road, Suite 900, Alternative 2 as presented in the Draft activities at and around the former NWS San Diego, California 92108–4310; (3) EIS is different from Alternative 2 as Concord property. The DoN conducted written comments can be emailed to presented in the NOI circulated during a scoping process to identify community [email protected]; or (4) the public scoping period in March and concerns and local issues that should be comments can be faxed to 619–532– April 2013. Alternative 2 was revised by addressed in the EIS. The DoN 0995, Attn: Ms. Erica Spinelli. the DoN in response to comments considered the comments provided, Comments may be submitted without received during the public scoping which identified specific issues or attending the public meeting. All period to be more consistent with the topics of environmental concern, in comments postmarked or emailed no land use planning policies adopted by determining the scope of the EIS. The later than midnight, November 25, 2014, the City of Concord as well as known Draft EIS identifies significant adverse will become part of the public record and foreseeable market conditions. impacts to air quality and traffic, and and will be responded to in the Final Comments on Alternative 2 received significant beneficial impacts to EIS. during the scoping period addressed the socioeconomics and public services. Requests for special assistance, sign smaller area designated for conservation The Draft EIS has been distributed to language interpretation for the hearing and open space in this alternative, as various federal, state, and local impaired, language interpreters, or other well as concerns regarding higher levels agencies, as well as other interested auxiliary aids for the scheduled public of traffic, noise, and air impacts. individuals and organizations. meeting must be sent by mail or email Accordingly, the revised Alternative 2 is Federal, state, and local agencies, as to Ms. Jone Guerin, Ecology and more similar to the adopted policies of well as interested members of the Environment, Inc., 368 Pleasant View the City of Concord as expressed in the public, are invited and encouraged to Drive, Lancaster, NY 14086, telephone: CRP Area Plan, reflecting a similar but review and comment on the Draft EIS. 716–684–8060, email: [email protected] slightly smaller development footprint The Draft EIS is available for viewing at no later than October 30, 2014. and representing a realistic reuse the following locations: scenario. Concord Library, 2900 Salvio Street, Dated: October 6, 2014. The No Action Alternative is also Concord, CA 94519 N.A. Hagerty-Ford, analyzed in the Draft EIS, as required by Pittsburg Library, 80 Power Avenue, Commander, Office of the Judge Advocate NEPA. Under this alternative, NWS Pittsburg, CA 94565 General, U.S. Navy, Federal Register Liaison Concord would be retained by the U.S. Pleasant Hill Library, 1750 Oak Park Officer. government in caretaker status. No reuse Boulevard, Pleasant Hill, CA 94523 [FR Doc. 2014–24286 Filed 10–9–14; 8:45 am] or redevelopment would occur. An electronic version of the Draft EIS BILLING CODE 3810–FF–P The Draft EIS addresses potential can be viewed or downloaded at the environmental impacts under each following Web site: http:// alternative associated with land use and www.bracpmo.navy.mil. A limited zoning; socioeconomics and number of hard copies are available by DEPARTMENT OF ENERGY environmental justice; air quality and contacting the DoN’s Base Realignment greenhouse gases; biological resources; and Closure Program Management [96–77–NG, 14–66–NG, 14–68–LNG, et al.] cultural resources; topography, geology, Office (BRAC PMO) at the address in and soils; hazards and hazardous this notice. Orders Granting Authority To Import substances; noise; public services; Comments can be made in the and Export Natural Gas, To Import and transportation, traffic, and circulation; following ways: (1) Written statements Export Liquefied Natural Gas, Vacating utilities and infrastructure; visual can be submitted to a DoN Prior Authority and Approving Change resources and aesthetics; and water representative at the public meeting; (2) in Control of Authorization Allowing resources. The analysis addresses direct written comments can be mailed to Exports of Liquefied Natural Gas and indirect impacts, and accounts for Director, NAVFAC BRAC PMO West, During July 2014

FE Docket Nos.

GAZ METROPOLITAIN AND COMPANY LIMITED PARTNERSHIP ...... 96–77–NG DEVON CANADA MARKETING CORPORATION ...... 13–143–NG NEXEN ENERGY MARKETING U.S.A. INC ...... 14–66–NG CHEVRON U.S.A. INC ...... 14–68–LNG MARATHON OIL COMPANY ...... 14–69–NG SEMPRA LNG MARKETING, LLC ...... 14–74–LNG SUMMITT ENERGY LP ...... 14–75–NG J. ARON & COMPANY ...... 14–76–NG UNION GAS LIMITED ...... 14–77–NG BP ENERGY COMPANY ...... 14–78–LNG ST. LAWRENCE GAS COMPANY, INC ...... 14–81–NG BP CANADA ENERGY MARKETING CORP ...... 14–82–NG STABILIS ENERGY SERVICES LLC ...... 14–84–LNG ANNOVA LNG COMMON INFRASTRUCTURE, LLC (for 13–140–LNG) ...... 14–004–CIC LNG DEVELOPMENT COMPANY, LLC (d/b/a OREGON LNG) ...... 12–77–LNG

AGENCY: Office of Fossil Energy, ACTION: Notice of orders. SUMMARY: The Office of Fossil Energy Department of Energy. (FE) of the Department of Energy gives

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notice that during July 2014, it issued gov/programs/gasregulation/ 4:30 p.m., Monday through Friday, orders granting authority to import and authorizations/Orders-2014.html. They except Federal holidays. export natural gas, to import and export are also available for inspection and Issued in Washington, DC, on September liquefied natural gas, vacating prior copying in the Office of Fossil Energy, 29, 2014. authority, and approving change in Office of Oil and Gas Global Security John A. Anderson, control of authorization allowing and Supply, Docket Room 3E–033, Director, Division of Natural Gas Regulatory exports of liquefied natural gas. These Forrestal Building, 1000 Independence Activities, Office of Oil and Gas Global orders are summarized in the attached Avenue SW., Washington, DC 20585, Security and Supply, Office of Oil and appendix and may be found on the FE (202) 586–9478. The Docket Room is Natural Gas. Web site at http://www.fossil.energy. open between the hours of 8:00 a.m. and Appendix

DOE/FE ORDERS GRANTING IMPORT/EXPORT AUTHORIZATIONS

1213–A ...... 07/03/14 96–77–NG ...... Gaz Metropolitain and Order vacating authority to import natural gas from Company Limited Part- Canada. nership. 3375–A ...... 07/03/14 13–143–NG ...... Devon Canada Marketing Order vacating authority to import natural gas from Corporation. Canada. 3453 ...... 07/03/14 14–66–NG ...... Nexen Energy Marketing Order granting blanket authority to import/export nat- U.S.A. Inc. ural gas from/to Canada/Mexico. 3454 ...... 07/03/14 14–68–LNG ...... Chevron U.S.A. Inc ...... Order granting blanket authority to import LNG from various international sources by vessel. 3455 ...... 07/03/14 14–69–NG ...... Marathon Oil Company .... Order granting blanket authority to import/export nat- ural gas from/to Canada/Mexico. 3456 ...... 07/03/14 14–74–LNG ...... Sempra LNG Marketing, Order granting blanket authority to import LNG from LLC. various international sources by vessel. 3457 ...... 07/03/14 14–75–NG ...... Summitt Energy LP ...... Order granting blanket authority to import/export nat- ural gas from/to Canada. 3458 ...... 07/03/14 14–76–NG ...... J. Aron & Company ...... Order granting blanket authority to import/export nat- ural gas from/to Canada. 3459 ...... 07/03/14 14–77–NG ...... Union Gas Limited ...... Order granting blanket authority to import/export nat- ural gas from/to Canada. 3460 ...... 07/10/14 14–78–LNG ...... BP Energy Company ...... Order granting blanket authority to import LNG from various international sources by vessel. 3461 ...... 07/10/14 14–81–NG ...... St. Lawrence Gas Com- Order granting blanket authority to import natural gas pany, Inc. from Canada. 3462 ...... 07/10/14 14–82–NG ...... BP Canada Energy Mar- Order granting blanket authority to import/export nat- keting Corp. ural gas from/to Canada. 3463 ...... 07/25/14 14–84–LNG ...... Stabilis Energy Services Order granting blanket authority to import/export LNG LLC. from/to Canada/Mexico by truck, rail, barge, and non-barge vessels. 3464 ...... 07/17/14 14–004–CIC for 13–140– Annova LNG Common In- Order approving Change in Control to Annova LNG LNG. frastructure, LLC. Common Infrastructure, LLC of authorization allow- ing exports of LNG to Free Trade Agreement na- tions. 3465 ...... 07/31/14 12–77–LNG ...... LNG Development Com- Order conditionally granting long-term Multi-Contract pany, LLC (d/b/a Or- authority to export LNG by vessel from the Oregon egon LNG). LNG Terminal in Warrenton, Clatsop County, Or- egon to Non-free Trade Agreement nations.

[FR Doc. 2014–24131 Filed 10–9–14; 8:45 am] DATES: Written comments are due to the 4519; fax number 503–230–3242; email BILLING CODE 6450–01–P address below no later than November [email protected]. 14, 2014. SUPPLEMENTARY INFORMATION: Proposed Action: Proposed Revision ADDRESSES: Comments and suggestions DEPARTMENT OF ENERGY of BPA’s Billing Credits Policy. on the proposed Billing Credits Policy Process to Date: Bonneville Power Bonneville Power Administration; revision for this project may be mailed Administration (BPA) worked with its Proposed Revision of BPA’s Billing by letter to Bonneville Power customers throughout 2014 to explore Credits Policy of 1993 Administration, Public Affairs—DKE–7, improvements to its Energy Efficiency P.O. Box 14428, Portland, OR 97292– (EE) program. Based on the collaborative AGENCY: Bonneville Power 4428. Or you may FAX them to 503– work with its customers, BPA proposes Administration (BPA), Department of 230–4019; submit them on-line at to revise its Billing Credits Policy to Energy. www.bpa.gov/comment; or email them offer a Billing Credit program for ACTION: Proposed Revision of BPA’s to [email protected] conservation pursuant to section 6(h) of Billing Credits Policy. the 1980 Pacific Northwest Electric FOR FURTHER INFORMATION CONTACT: Power Planning and Conservation Act Scott Wilson, Bonneville Power SUMMARY: This notice announces BPA’s that focuses on the independent Administration—PSW–6, P.O. Box proposal to revise its Billing Credit conservation activity of BPA’s Policy and to provide Billing Credits for 3621, Portland, Oregon, 97208–3621; customers and the potential of that conservation. toll-free telephone number 1–800–622– activity to reduce the BPA

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Administrator’s need to acquire an Administrator’s Record of Decision. ADDRESSES: Submit your comments, resources from conservation. BPA’s BPA will consider and respond to identified by docket identification (ID) existing Billing Credits Policy interprets comments received on the proposed number EPA–HQ–OPPT–2014–0597, by the Billing Credits provisions in the policy revision. BPA’s subsequent one of the following methods: Northwest Power Act, prescribes criteria decision will be documented in an • Federal eRulemaking Portal: http:// for customer and resource eligibility, Administrator’s Record of Decision. www.regulations.gov. Follow the online and establishes procedures for granting instructions for submitting comments. National Environmental Policy Act Billing Credits. With the proposed Do not submit electronically any revision of BPA’s Billing Credits Policy, BPA is in the process of assessing the information you consider to be BPA would consider customer requests potential environmental effects of the Confidential Business Information (CBI) for Billing Credits in exchange for a proposed billing credits policy revision or other information whose disclosure is customer’s independent acquisition of consistent with the National restricted by statute. conservation performed during the Environmental Policy Act. Comments • Mail: Document Control Office FY2016–2017 rate period and regarding the potential environmental (7407M), Office of Pollution Prevention throughout the duration of customers’ effects of the proposal may be submitted and Toxics (OPPT), Environmental existing Regional Dialogue contracts. to Katherine Pierce, NEPA Compliance Protection Agency, 1200 Pennsylvania Billing Credit Amount Officer, KEC–4, Bonneville Power Ave., NW., Washington, DC 20460– Administration, 905 NE 11th Avenue, 0001. BPA proposes to develop a formula Portland, OR 97232. Any such • Hand Delivery: To make special for determining the Billing Credit comments received by the comment arrangements for hand delivery or amount based on the costs that BPA deadline will be considered by BPA’s delivery of boxed information, please avoids by not providing the customer NEPA compliance staff in the NEPA follow the instructions at http://www. Energy Efficiency Incentive (EEI) process that will be conducted for this epa.gov/dockets/contacts.html. funding under Energy Conservation proposal. Additional instructions on Agreements (ECA). The formula would Issued in Portland, Oregon, on October 1, commenting or visiting the docket, be designed with the intent to along with more information about reasonably assure rate neutrality for all 2014. Elliot E. Mainzer, dockets generally, is available at http:// customers, whether or not they choose www.epa.gov/dockets. to participate in the Billing Credit Administrator and Chief Executive Officer. FOR FURTHER INFORMATION CONTACT: For program. [FR Doc. 2014–24266 Filed 10–9–14; 8:45 am] technical information contact: Toiya The formula would be constructed as BILLING CODE 6450–01–P follows. BPA would determine the Goodlow, National Program Chemicals average annual incremental cost that Division (7404–T), Office of Pollution BPA would incur by borrowing for, and Prevention and Toxics, Environmental ENVIRONMENTAL PROTECTION Protection Agency, 1200 Pennsylvania managing the distribution of, EEI funds AGENCY for the participating customers. In Ave., NW., Washington, DC 20460– 0001; telephone number: (202) 566– making that determination, BPA would [EPA–HQ–OPPT–2014–0597; FRL–9917–00] use a comparable amortization period 2305; email address: and interest rates matching those Agency Information Collection [email protected]. For general information contact: The forecast in the rate case for the initial Activities; Proposed Collection; TSCA-Hotline, ABVI-Goodwill, 422 years the Billing Credit would be Comment Request South Clinton Ave., Rochester, NY granted. The average annual AGENCY 14620; telephone number: (202) 554– incremental cost over the amortization : Environmental Protection 1404; email address: TSCA-Hotline@ period would represent the annual Agency (EPA). epa.gov. Billing Credit amount that a ACTION: Notice. participating customer is expected to SUPPLEMENTARY INFORMATION: SUMMARY: In compliance with the receive. I. What information is EPA particularly BPA’s final rates would be updated to Paperwork Reduction Act (PRA), this interested in? account for customer choices to forego document announces that EPA is the EEI and to include the costs of planning to submit an Information Pursuant to PRA section 3506(c)(2)(A) customer Billing Credits. A participating Collection Request (ICR) to the Office of (44 U.S.C. 3506(c)(2)(A)), EPA customer would agree to a Billing Management and Budget (OMB). The specifically solicits comments and Credits special provision in its Regional ICR, entitled: PCBs, Consolidated information to enable it to: Dialogue Contract that would define the Reporting and Record Keeping 1. Evaluate whether the proposed amount of forecasted conservation Requirements and identified by EPA collection of information is necessary savings the customer is obligated to ICR No. 1446.11 and OMB Control No. for the proper performance of the achieve, which is expected to be the 2070–0112, represents the renewal of an functions of the Agency, including same amount that would have been existing ICR that is scheduled to expire whether the information will have achieved under the ECA. on August 31, 2015. Before submitting practical utility. the ICR to OMB for review and 2. Evaluate the accuracy of the Public Involvement approval, EPA is soliciting comments on Agency’s estimates of the burden of the BPA has established a 30-day specific aspects of the proposed proposed collection of information, comment period during which information collection that is including the validity of the customers, stakeholders, and any other summarized in this document. The ICR methodology and assumptions used. interested parties are invited to and accompanying material are 3. Enhance the quality, utility, and comment on the proposed policy available in the docket for public review clarity of the information to be revision. This comment period will help and comment. collected. BPA ensure that a full range of issues DATES: Comments must be received on 4. Minimize the burden of the related to this proposal is addressed in or before December 9, 2014. collection of information on those who

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are to respond, including through the unreasonable risk of injury to health or the ICR currently approved by OMB. use of appropriate automated electronic, the environment. EPA uses the This increase reflects EPA’s revisions to mechanical, or other technological information collected under the 40 CFR the estimated total number of collection techniques or other forms of 761 requirements to ensure that PCBs respondents, resulting from new data information technology, e.g., permitting are managed in an environmentally safe gathered for this ICR effort as well as electronic submission of responses. In manner and that activities are being another recent PCB regulatory analysis, particular, EPA is requesting comments conducted in compliance with the PCB plus updated Agency data regarding from very small businesses (those that regulations. The information collected total numbers of regulated entities. The employ less than 25) on examples of by these requirements will update the ICR supporting statement provides a specific additional efforts that EPA Agency’s knowledge of ongoing PCB detailed analysis of the change in could make to reduce the paperwork activities, ensure that individuals using burden estimate. This change is an burden for very small businesses or disposing of PCBs are held adjustment. affected by this collection. accountable for their activities, and IV. What is the next step in the process demonstrate compliance with the PCB II. What information collection activity for this ICR? or ICR does this action apply to? regulations. Specific uses of the information collected include EPA will consider the comments Title: PCBs, Consolidated Reporting determining the efficacy of a disposal received and amend the ICR as and Record Keeping Requirements. technology; evaluating exemption appropriate. The final ICR package will ICR number: EPA ICR No. 1446.11. requests and exclusion notices; targeting then be submitted to OMB for review OMB control number: OMB Control compliance inspections; and ensuring and approval pursuant to 5 CFR No. 2070–0112. 1320.12. EPA will issue another Federal ICR status: This ICR is currently adequate storage capacity for PCB waste. This collection addresses the several Register document pursuant to 5 CFR scheduled to expire on August 31, 2015. 1320.5(a)(1)(iv) to announce the An Agency may not conduct or sponsor, information reporting requirements found in the PCB regulations. submission of the ICR to OMB and the and a person is not required to respond opportunity to submit additional to, a collection of information, unless it Responses to the collection of comments to OMB. If you have any displays a currently valid OMB control information are mandatory (see 40 CFR questions about this ICR or the approval number. The OMB control numbers for part 761). Respondents may claim all or process, please contact the technical EPA’s regulations in title 40 of the Code part of a response confidential. EPA will person listed under FOR FURTHER of Federal Regulations (CFR), after disclose information that is covered by INFORMATION CONTACT. appearing in the Federal Register when a claim of confidentiality only to the approved, are listed in 40 CFR part 9, extent permitted by, and in accordance Authority: 44 U.S.C. 3501 et. seq. with, the procedures in TSCA section 14 are displayed either by publication in Dated: October 1, 2014. the Federal Register or by other and 40 CFR part 2. Burden statement: The annual public James Jones, appropriate means, such as on the reporting and recordkeeping burden for Assistant Administrator, Office of Chemical related collection instrument or form, if this collection of information is Safety and Pollution Prevention. applicable. The display of OMB control estimated to average 1.36 hours per [FR Doc. 2014–24149 Filed 10–9–14; 8:45 am] numbers for certain EPA regulations is response. Burden is defined in 5 CFR BILLING CODE 6560–50–P consolidated in 40 CFR part 9. Abstract: Section 6(e)(1) of the Toxic 1320.3(b). The ICR, which is available in the Substances Control Act (TSCA), 15 USC docket along with other related ENVIRONMENTAL PROTECTION 2605(e), directs EPA to regulate the materials, provides a detailed AGENCY marking and disposal of polychlorinated explanation of the collection activities biphenyls (PCBs). Section 6(e)(2) bans [ER–FRL–9017–4] and the burden estimate that is only the manufacturing, processing, briefly summarized here: Environmental Impact Statements; distribution in commerce, and use of Respondents/Affected Entities: Notice of Availability PCBs in other than a totally enclosed Entities potentially affected by this ICR manner. Section 6(e)(3) establishes a are persons who currently possess PCB Responsible Agency: Office of Federal process for obtaining exemptions from items, PCB-contaminated equipment, or Activities, General Information (202) the prohibitions on the manufacture, other PCB waste. 564–7146 or http://www.epa.gov/ processing, and distribution in Estimated total number of potential compliance/nepa/. commerce of PCBs. Since 1978, EPA has respondents: 548,298. Weekly receipt of Environmental promulgated numerous rules addressing Frequency of response: On occasion. Impact Statements all aspects of the life cycle of PCBs as Estimated total average number of Filed 09/29/2014 Through 10/03/2014 required by the statute. The regulations responses for each respondent: 1.0. Pursuant to 40 CFR 1506.9. are intended to prevent the improper Estimated total annual burden hours: Notice handling and disposal of PCBs and to 745,926 hours. minimize the exposure of human beings Estimated total annual costs: Section 309(a) of the Clean Air Act or the environment to PCBs. These $29,778,544. This includes an estimated requires that EPA make public its regulations have been codified in the burden cost of $29,778,544 and an comments on EISs issued by other various subparts of 40 CFR 761. There estimated cost of $0 for capital Federal agencies. EPA’s comment letters are approximately 100 specific investment or maintenance and on EISs are available at: http://www.epa. reporting, third-party reporting, and operational costs. gov/compliance/nepa/eisdata.html. recordkeeping requirements covered by EIS No. 20140289, Draft EIS, USN, CA, 40 CFR 761. III. Are there changes in the estimates Disposal and Reuse of the Former To meet its statutory obligations to from the last approval? Naval Weapons Station Seal Beach, regulate PCBs, EPA must obtain There is an increase of 60,591 hours Detachment Concord, Comment sufficient information to conclude that in the total estimated respondent Period Ends: 11/25/2014, Contact: specified activities do not result in an burden compared with that identified in Erica Spinelli, 619–532–0980.

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EIS No. 20140290, Draft EIS, BR, CA, EIS No. 20140300, Draft EIS, BLM, NV, Public Docket (OPP Docket) in the Long-Term Water Transfers, Comment Las Vegas and Pahrump Field Offices Environmental Protection Agency Period Ends: 12/01/2014, Contact: Draft, Resource Management Plan, Docket Center (EPA/DC), West William Brad Hubbard, 916–978–5204 Comment Period Ends: 01/07/2015, Jefferson Clinton Bldg., Rm. 3334, 1301 EIS No. 20140291, Draft EIS, Contact: Lee Kirk, 702–515–5026. Constitution Ave. NW., Washington, DC CALTRANS, CA, High Desert Corridor Dated: October 7, 2014. 20460–0001. The Public Reading Room Project, Comment Period Ends: 12/02/ is open from 8:30 a.m. to 4:30 p.m., Cliff Rader, 2014, Contact: Ron Kosinski, 213– Monday through Friday, excluding legal 897–0703. Director, NEPA Compliance Division, Office holidays. The telephone number for the of Federal Activities. EIS No. 20140292, Final EIS, NOAA, 00, Public Reading Room is (202) 566–1744, ADOPTION—Programmatic- [FR Doc. 2014–24255 Filed 10–9–14; 8:45 am] and the telephone number for the OPP Deepwater Horizon Oil Spill: Phase III BILLING CODE 6560–50–P Docket is (703) 305–5805. Please review Early Restoration Plan, Review the visitor instructions and additional Contact: David G. Westerholm, 301– information about the docket available ENVIRONMENTAL PROTECTION 713–2989. The U.S. Department of at http://www.epa.gov/dockets. Commerce’s National Oceanic and AGENCY Complete lists of registrations Atmospheric Administration (NOAA) [EPA–HQ–OPP–2014–0673; FRL–9916–61] canceled for non-payment of the has adopted the U.S. Department of maintenance fee are also available for the Interior’s FEIS # 20140182, filed Cancellation of Pesticides for Non- reference in the OPP Docket. with the USEPA 06/20/2014. The Payment of Year 2014 Registration II. Background NOAA was a cooperating agency for Maintenance Fees; Summary of Orders this project. Recirculation of the Issued Section 4(i)(5) of FIFRA (7 U.S.C. document is not necessary under 136a–1(i)(5)) requires that all pesticide AGENCY: Environmental Protection registrants pay an annual registration Section 1306.3(c) of CEQ Regulations. Agency (EPA). EIS No. 20140293, Draft EIS, NMFS, 00, maintenance fee, due by January 15 of ACTION: Omnibus Essential Fish Habitat Notice. each year, to keep their registrations in Amendment 2, Comment Period Ends: SUMMARY: Under the Federal Insecticide, effect. This requirement applies to all 12/09/2014, Contact: John K. Bullard, Fungicide, and Rodenticide Act registrations granted under FIFRA 978–281–9315. (FIFRA), the payment of an annual section 3 as well as those granted under EIS No. 20140294, Draft EIS, USACE, maintenance fee is required to keep FIFRA section 24(c) to meet special SC, Charleston Harbor Post 45, pesticide registrations in effect. The fee local needs. Registrations for which the Comment Period Ends: 11/24/2014, due last January 15, 2014, has gone fee is not paid are subject to cancellation by order and without a Contact: Mark Messersmith, 843–329– unpaid for 199 registrations. If the fee is hearing. 8162. not paid, the EPA Administrator may Under FIFRA, the EPA Administrator EIS No. 20140295, Final EIS, NPS, VA, cancel these registrations by order and may reduce or waive maintenance fees Dyke Marsh Wetland Restoration and without a hearing; orders to cancel these for minor agricultural use pesticides Long-term Management Plan, Review registrations have been issued. Period Ends: 11/10/2014, Contact: when it is determined that the fee FOR FURTHER INFORMATION CONTACT: Brent Steury, 703–289–2500. would be likely to cause significant EIS No. 20140296, Final EIS, FHWA, IL, Mick Yanchulis, Information impact on the availability of the 75th Street Corridor Improvement Technology and Resources Management pesticide for the use. Project, Review Contact: Catherine A. Division (7502P), Office of Pesticide In fiscal year 2014, maintenance fees Batey, 217–492–4600. Under MAP–21 Programs, Environmental Protection were collected in one billing cycle. In section 1319, FTA has issued a single Agency, 1200 Pennsylvania Ave. NW., late November of 2013, all holders of FEIS and ROD. Therefore, the 30-day Washington, DC 20460–0001; telephone either FIFRA section 3 registrations or wait/review period under NEPA does number: (703) 347–0237; email address: FIFRA section 24(c) registrations were not apply to this action. [email protected]. sent lists of their active registrations, EIS No. 20140297, Draft EIS, USFS, OR, Product-specific status inquiries may along with forms and instructions for Kahler Dry, Forest Restoration Project, be made by calling toll-free, 1–800–444– responding. They were asked to identify Comment Period Ends: 11/24/2014, 7255. which of their registrations they wished Contact: John Evans, 541–278–3869. SUPPLEMENTARY INFORMATION: to maintain in effect, and to calculate EIS No. 20140298, Draft EIS, USACE, I. General Information and remit the appropriate maintenance WA, Puget Sound Nearshore fees. Most responses were received by Ecosystem Restoration, Comment A. Does this action apply to me? the statutory deadline of January 15. A Period Ends: 11/24/2014, Contact: This action is directed to the public notice of intent to cancel was sent in Nancy C. Gleason, 206–764–6577. in general. Although this action may be April of 2014 to companies who did not EIS No. 20140299, Final EIS, DOE, TX, of particular interest to persons who respond and to companies who ADOPTION—Freeport LNG produce or use pesticides, the Agency responded, but paid for less than all of Liquefaction Project and Phase II has not attempted to describe all the their registrations. Since mailing the Modification Project, Contact: John specific entities that may be affected by notices of intent to cancel, EPA has Anderson, 202–586–0521. The U.S. this action. maintained a toll-free inquiry number Department of Energy has adopted the through which the questions of affected Federal Energy Regulatory B. How can I get copies of this document registrants have been answered. Commission’s FEIS #20140178 filed and other related information? In fiscal year 2014, the Agency has with the USEPA 6/17/2014. DOE was The docket for this action, identified waived the fee for 266 minor a cooperating agency for this project. by docket identification (ID) number agricultural use registrations at the Recirculation of the document is not EPA–HQ–OPP–2014–0673, is available request of the registrants. Maintenance necessary under Section 1306.3(c) of at http://www.regulations.gov or at the fees have been paid for about 15,999 CEQ Regulations. Office of Pesticide Programs Regulatory FIFRA section 3 registrations, or about

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97% of the registrations on file in they are exhausted. Existing stocks are III. Listing of Registrations Canceled for December 2013. Fees have been paid for defined as those stocks of a registered Non-Payment about 1,746 FIFRA section 24(c) pesticide product which are currently in registrations, or about 88% of the total the United States and which have been Table 1 of this unit lists all of the on file in December 2013. Cancellations packaged, labeled, and released for FIFRA section 24(c) registrations, and for non-payment of the maintenance fee shipment prior to the effective date of Table 2 of this unit lists all of the FIFRA affect about 194 FIFRA section 3 the cancellation order. section 3 registrations which were registrations and about 5 FIFRA section The exceptions to these general rules canceled for non-payment of the 2014 24(c) registrations. are cases where more stringent maintenance fee. These registrations The cancellation orders generally restrictions on sale, distribution, or use have been canceled by order and permit registrants to continue to sell and of the products have already been without hearing. Cancellation orders distribute existing stocks of the canceled imposed, through special reviews or were sent to affected registrants via products until January 15, 2015, 1 year other Agency actions. These general certified mail in the past several days. after the date on which the fee was due. provisions for disposition of stocks The Agency is unlikely to rescind Existing stocks already in the hands of should serve in most cases to cushion cancellation of any particular dealers or users, however, can generally the impact of these cancellations while registration unless the cancellation be distributed, sold, or used legally until the market adjusts. resulted from Agency error.

TABLE 1—FIFRA SECTION 24(c) REGISTRATIONS CANCELLED FOR NON-PAYMENT OF 2014 MAINTENANCE FEE

SLN No. Product name

CA–08–0018 ...... Beleaf 50 SG Insecticide. HI–03–0003 ...... Dormex. NY–12–0003 ...... Tsunami DQ. OR–10–0007 ...... Bird Shield Bird Repellent Concentrate. SD–98–0005 ...... Compound Drc–1339 Concentrate-Staging Areas.

TABLE 2—FIFRA SECTION 3 REGISTRATIONS CANCELLED FOR NON-PAYMENT OF 2014 MAINTENANCE FEE

Registration No. Product name

000527–00108 ...... Ml-17G. 000527–00129 ...... D.C. San. 000641–00001 ...... Gopher-Go. 000641–00002 ...... Gopher-Go Ag Bait. 000777–00097 ...... Twister 2. 000777–00116 ...... Suzie Q. 001022–00518 ...... Cunapsol-1. 001022–00522 ...... Cunapsol-5. 001022–00536 ...... Pol-Nu Curap 20. 001270–00029 ...... Zep-O-San. 001270–00204 ...... Zep Veto Germicidal Bowl Cleaner. 001769–00266 ...... Al-Chek. 001769–00374 ...... Ancocide 4010. 003546–00041 ...... Shoofly Flying Insect Killer. 003573–00056 ...... Tide With Bleach II. 003573–00058 ...... Gain With Bleach II. 004713–00004 ...... Kenya Pyrethrum Extract Crude Concentrate A. 005073–00021 ...... Tox-O-Wik II. 007627–00021 ...... Stockade Fly Control Mineral Mix. 007627–00022 ...... Stockade Fly Control Block. 007627–00026 ...... Stockade Fly Control For Horses With Rabon Oral Larvicide. 007687–00003 ...... Root Force. 007698–00019 ...... Fly Patrol 19. 007698–00020 ...... Fly Patrol 4. 007698–00021 ...... Rolyx Fescue Mag. 008154–00009 ...... Sanamax Swimming Pool Water Disinfectant. 008668–00001 ...... Dog Shield. 008730–00073 ...... Hercon Disrupt Bio-Flake LBAM. 008730–00076 ...... Hercon Disrupt Bio-Tie LBAM. 009198–00118 ...... The Andersons Dithiopyr Herbicide I. 009198–00157 ...... The Andersons GC Fertilizer Plus 0.029% Bifenthrin. 009198–00159 ...... The Andersons Fertilizer Plus O.029% Bifenthrin. 009198–00196 ...... The Andersons Golf Products Fertilizer Plus Fungicide Vii. 009198–00224 ...... The Andersons GC 0.15% Granular Bifenthrin Insecticide. 009198–00226 ...... The Andersons Insect Killer Granules With 0.15% Bifenthrin. 009198–00229 ...... Andersons Golf Products Fluid Fungicide. 009198–00232 ...... The Andersons Fertilizer Bait Granules Plus 0.058% Bifenthrin. 009198–00243 ...... The Andersons Ferti-Bait FA With Distance. 009215–00008 ...... All Clear Granular Swimming Pool & Spa Sanitizer. 009404–00081 ...... Weed & Feed With 1.28% Atrazine For St. Augustine Lawns. 009404–00093 ...... Sunniland Atra-4 St. Augustine Lawn Weed Killer.

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TABLE 2—FIFRA SECTION 3 REGISTRATIONS CANCELLED FOR NON-PAYMENT OF 2014 MAINTENANCE FEE—Continued

Registration No. Product name

009436–00002 ...... Sodium Hypochlorite Solution. 009591–00170 ...... Prokill Choice Insecticide. 009608–00002 ...... Roach Prufe. 009608–00003 ...... Termite Prufe. 009768–00047 ...... Iodine Concentrate 20. 009902–00003 ...... Disposer Care Garbage Disposer Cleaner & Disinfectant (Sanitizer). 010190–00016 ...... Citridyne. 010613–00001 ...... Conclor. 010772–00003 ...... Armicarb Sodium Bicarbonate, F.C.C. 011411–00006 ...... Leslie’s Refillable Chlorinator Cartridge. 011411–00007 ...... Leslie’s Algi-Kill. 011411–00017 ...... Spa Chlor Brite III. 011623–00046 ...... Multipurpose Insect Spray. 011930–00001 ...... Omego Mist ULV. 011930–00006 ...... Pervade Mosquito Larvicide Petroleum Oil. 011930–00007 ...... Pyrifos Mist ULV 2 E.C. 011930–00010 ...... Pyrifos One Mist ULV E.C. 011930–00014 ...... Opti Mist 31–66 ULV. 011930–00016 ...... Actiperm 10% E.C. Multi-Purpose Insecticide. 021718–20001 ...... Hypochlorite Solution. 033270–00016 ...... Tomahawk. 033871–20001 ...... Sodium Hypochlorite Solution 15. 035896–00019 ...... Copper Sulfate Pentahydrate. 042850–00001 ...... Results Indoor Insect Killer. 042850–00004 ...... Diatect Multipurpose Insecticide II. 042850–00005 ...... Diatect Insecticide V. 044446–00069 ...... Ppp Flea & Tick Cycleblock Total Release Fogger. 045728–00031 ...... Vancide Mz-96. 045849–00001 ...... Chlorine Liquified Gas Under Pressure. 046043–00015 ...... Swimming Pool Chlorinating Shock. 046923–00012 ...... Coppercide 50. 049403–00014 ...... Nipacide X. 049403–00020 ...... Nipa Bit Press Paste. 049403–00026 ...... Nipacide Bit 10. 050675–00002 ...... Pink Boll Worm Pheromone Technical. 051549–20002 ...... SAF–T-Chlor. 051934–00007 ...... Liquid Ant Killer Bait. 052991–00013 ...... Mosquitol-L. 053053–00009 ...... Bioshield 50. 053053–00010 ...... Bioshield 150. 053053–00011 ...... Envirosystems Proshield 3651 I. 053053–00012 ...... Envirosystems Proshield 3651 D. 054382–00003 ...... Taktic E.C. 055195–00003 ...... Coldcide 0.25%. 056362–00004 ...... Sodium Hypochlorite—12.5. 058035–00016 ...... Ceannard Diuron 80DF. 058035–00018 ...... Ceannard Diuron/Bromacil 80DF. 058035–00019 ...... Ceannard Bromacil 80DF. 058185–00005 ...... Koban 30. 058185–00032 ...... Duosan Broad Spectrum Contact Ornamental Fungicide. 058880–00003 ...... 12.5% Sodium Hypochlorite Solution. 059074–00005 ...... Superchlor 7. 059807–00007 ...... Marathon 1% Granular. 059807–00008 ...... Marathon 60 WP. 060061–00011 ...... Pettit Marine Paint Premium Line Super Premium Performance Antifouling. 060061–00015 ...... Woolsey/Z*Spar Super Tox Anti-Fouling Finish B–71 Blue. 060061–00030 ...... Wood Treat MB Concentrate. 060061–00044 ...... Pettit Marine Paint Anti-Fouling 1636 Red Yacht Copper. 060061–00081 ...... Acp-60 Ablative Copper Polymer Antifouling Bottom Paint. 060061–00088 ...... Sscc-3359 Sap Stain Control Concentrate. 060061–00093 ...... Double Diamond Sapstain Control Chemical. 060061–00105 ...... Woodlife Ii Stain And Wood Preservative. 060061–00113 ...... LTC–3. 062498–00005 ...... Pool Pride 80z Chlorinating Sticks. 062575–00006 ...... Biestergard Captan 50–WP. 065458–00006 ...... Plato Industries Pest Strip. 065615–00003 ...... Scoot Tm Squirrel. 066338–00001 ...... Sodium Hypochlorite Solution. 067071–00053 ...... Acticide Mkw1. 067470–00006 ...... Ethylene Oxide. 067470–00007 ...... Ethylene Oxide 100 R. 067470–00008 ...... Oxyfume 2000.

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TABLE 2—FIFRA SECTION 3 REGISTRATIONS CANCELLED FOR NON-PAYMENT OF 2014 MAINTENANCE FEE—Continued

Registration No. Product name

067470–00009 ...... Oxyfume 2002. 067470–00010 ...... Steriflo. 067517–00054 ...... Permethrin Wettable Powder Packet. 067771–00001 ...... Moss-Kil Roof Strip. 068543–00038 ...... Bengal Insecticide Concentrate 5. 068849–20001 ...... Sodium Hypochlorite Solution. 068868–00003 ...... Surcide ICP–A. 068934–00001 ...... Aqua Select Water Filter. 069361–00028 ...... Topdog 41% Plus. 069361–00029 ...... Pendim Weed And Feed. 069361–00031 ...... Pendim 3.3 EC Herbicide. 069361–00032 ...... Pendim H20 Herbicide. 069361–00034 ...... Triclopyr Butoxyethyl Ester Technical. 069361–00042 ...... Repar Fipronil Technical. 069587–00003 ...... Timbercote 2000a. 070369–00001 ...... Microstat 2. 070567–00002 ...... Sodium Hypochlorite Solution (12.5%). 070585–00002 ...... Larvadex 2sl. 070778–00001 ...... Squirrel Away. 071065–00002 ...... Companion Dry Concentrate Biological Fungicide. 071218–00001 ...... Genesis Xtra. 071771–00001 ...... Messenger. 072159–00002 ...... Imidapro 2SC Systemic Insecticide. 072160–00001 ...... Peroxy-Solv. 072637–00002 ...... Green Screen Powder Animal Repellent. 072790–00001 ...... Pin Nip 2EC. 072852–00003 ...... Electrolite 25. 072852–00004 ...... Electrolite 31. 072897–00001 ...... Triosyn T50. 072897–00002 ...... Triosyn T50 Powder. 073748–00003 ...... Kontrol 2–2. 074843–00004 ...... Insect Shield Concentrate 15D. 074943–00001 ...... Mega-Lure 3000. 075341–00006 ...... Osmose Flurods. 075341–00011 ...... Cop-R-Nap. 075341–00015 ...... Ord-X029. 075512–00001 ...... Ebiox Trukleen Wipes. 075630–00001 ...... Zinc Borate. 079442–00010 ...... Exosex C. 079442–00012 ...... Exosex OF. 079533–00004 ...... Coleman Insect Repellent. 080967–00007 ...... Revolution. 081910–00002 ...... TCMTB. 081910–00003 ...... Casacide T200. 081974–00001 ...... Gasco Sanitizing Solution. 082539–00002 ...... Bug Candle. 083222–00011 ...... Lambda-Cy Ag Gold. 083529–00007 ...... Sharda Imidacloprid 75 WP Ag. 083529–00008 ...... Sharda Imidacloprid 75 WP T&O Insecticide. 083529–00009 ...... Sharda Imidacloprid 75 WP PCO Insecticide. 083529–00029 ...... Tebu 45DF. 083857–00003 ...... Mguard. 084059–00005 ...... Moi-401 EP. 084888–00001 ...... Nivalis Technical. 084888–00002 ...... Nivalis. 085125–00002 ...... Attractive Toxic Sugar Bait. 085724–00002 ...... Aako Chlorpyrifos Technical. 085948–00002 ...... Cb-104. 086461–00001 ...... Glyphosate 41%. 086461–00006 ...... Mepiquat Chloride 4.2%. 086461–00015 ...... Lambda-Cyhalothrin 13% EC Insecticide. 086516–00001 ...... Bug Blockade Insecticide. 086868–00001 ...... Phortress Fungicide. 086871–00001 ...... Kill Fleas Dead. 087134–00003 ...... Sh-12.5. 087273–00003 ...... Tri Pro Tabs. 087290–00006 ...... Willowood Glyphonator 41%. 087290–00014 ...... Willowood Imidacloprid 4SC. 087290–00015 ...... Willowood Glyphosate 4. 087290–00021 ...... Willowood Imidacloprid 2SC. 087290–00023 ...... Willowood Glyphosate 41%. 088211–00001 ...... BC 250.

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TABLE 2—FIFRA SECTION 3 REGISTRATIONS CANCELLED FOR NON-PAYMENT OF 2014 MAINTENANCE FEE—Continued

Registration No. Product name

088800–00002 ...... Appox-D 3000. 089016–00002 ...... Lag 2. 089016–00003 ...... Lag 3. 089016–00004 ...... Lag 4. 089016–00005 ...... Lag 5. 089103–00001 ...... Cloractive. 089385–00001 ...... Ryzofuel. 089466–00001 ...... Classic Pools Chlorine Solution. 089557–00001 ...... Green Label.

IV. Provisions for Disposition of assets or the ownership of, control of, or Community Bank, both in Poplar Bluff, Existing Stocks the power to vote shares of a bank or Missouri. The effective date of cancellation will bank holding company and all of the Board of Governors of the Federal Reserve be the date of the cancellation order. banks and nonbanking companies System, October 7, 2014. The orders effecting these requested owned by the bank holding company, Michael J. Lewandowski, cancellations will generally permit a including the companies listed below. Associate Secretary of the Board. registrant to sell or distribute existing The applications listed below, as well as other related filings required by the [FR Doc. 2014–24235 Filed 10–9–14; 8:45 am] stocks until January 15, 2015, 1 year BILLING CODE 6210–01–P after the date on which the fee was due. Board, are available for immediate Existing stocks are those stocks of inspection at the Federal Reserve Bank registered pesticide products which are indicated. The applications will also be currently in the United States and available for inspection at the offices of DEPARTMENT OF HEALTH AND which have been packaged, labeled, and the Board of Governors. Interested HUMAN SERVICES released for shipment prior to the persons may express their views in Centers for Medicare & Medicaid effective date of the cancellation order. writing on the standards enumerated in Services Unless the provisions of an earlier order the BHC Act (12 U.S.C. 1842(c)). If the apply, existing stocks already in the proposal also involves the acquisition of a nonbanking company, the review also [Document Identifiers: CMS–10292, CMS– hands of dealers or users can be R–185 and CMS–287–05] distributed, sold, or used legally until includes whether the acquisition of the they are exhausted, provided that such nonbanking company complies with the Agency Information Collection further sale and use comply with the standards in section 4 of the BHC Act Activities: Submission for OMB EPA-approved label and labeling of the (12 U.S.C. 1843). Unless otherwise Review; Comment Request affected product. Exception to these noted, nonbanking activities will be general rules will be made in specific conducted throughout the United States. ACTION: Notice. cases when more stringent restrictions Unless otherwise noted, comments SUMMARY: on sale, distribution, or use of the regarding each of these applications The Centers for Medicare & products or their ingredients have must be received at the Reserve Bank Medicaid Services (CMS) is announcing already been imposed, as in a special indicated or the offices of the Board of an opportunity for the public to review action, or where the Agency has Governors not later than November 6, comment on CMS’ intention to collect identified significant potential risk 2014. information from the public. Under the concerns associated with a particular A. Federal Reserve Bank of New York Paperwork Reduction Act of 1995 chemical. (Ivan Hurwitz, Vice President) 33 (PRA), federal agencies are required to Liberty Street, New York, New York publish notice in the Federal Register Authority: 7 U.S.C. 136 et seq. 10045–0001: concerning each proposed collection of Dated: September 22, 2014. 1. Sumitomo Mitsui Financial Group, information, including each proposed Jack Housenger, Inc. and Sumitomo Mitsui Banking extension or reinstatement of an existing Director, Office of Pesticide Programs. Corporation, both in Tokyo, Japan; to collection of information, and to allow [FR Doc. 2014–24253 Filed 10–9–14; 8:45 am] acquire at least an additional 10 percent, a second opportunity for public for a total of 19.9 percent of the voting comment on the notice. Interested BILLING CODE 6560–50–P shares of The Bank of East Asia, persons are invited to send comments Limited, Hong Kong S.A.R., Peoples regarding the burden estimate or any Republic of China, and thereby other aspect of this collection of FEDERAL RESERVE SYSTEM indirectly acquire additional voting information, including any of the Formations of, Acquisitions by, and shares of The Bank of East Asia (U.S.A.), following subjects: (1) the necessity and Mergers of Bank Holding Companies N.A., New York, New York. utility of the proposed information B. Federal Reserve Bank of St. Louis collection for the proper performance of The companies listed in this notice (Yvonne Sparks, Community the agency’s functions; (2) the accuracy have applied to the Board for approval, Development Officer) P.O. Box 442, St. of the estimated burden; (3) ways to pursuant to the Bank Holding Company Louis, Missouri 63166–2034: enhance the quality, utility, and clarity Act of 1956 (12 U.S.C. 1841 et seq.) 1. Sterling Bancshares, Inc., Poplar of the information to be collected; and (BHC Act), Regulation Y (12 CFR part Bluff, Missouri; to acquire 100 percent (4) the use of automated collection 225), and all other applicable statutes of the voting shares of Bootheel techniques or other forms of information and regulations to become a bank Bancorp, Inc., and thereby indirectly technology to minimize the information holding company and/or to acquire the acquire voting shares of First collection burden.

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DATES: Comments on the collection(s) of requests for the administrative Federal Office Cost Statement Form; Use: information must be received by the financial participation for expenditures Providers of services participating in the OMB desk officer by November 10, under their Medicaid Electronic Health Medicare program are required under 2014. Record Incentive Program related to sections 1815(a) and 1861(v)(1)(A) of the ADDRESSES: When commenting on the health information exchange, our staff Social Security Act (42 U.S.C. 1395g) to proposed information collections, will review the submitted information submit annual information to achieve please reference the document identifier and documentation to make an approval settlement of costs for health care or OMB control number. To be assured determination of the state advance services rendered to Medicare consideration, comments and planning document. Form Number: beneficiaries. In addition, regulations at recommendations must be received by CMS–10292 (OMB control number 42 CFR 413.17, 413.20 and 413.24 the OMB desk officer via one of the 0938–1088); Frequency: Once and require adequate cost data and cost following transmissions: OMB, Office of occasionally; Affected Public: State, reports from providers on an annual Information and Regulatory Affairs, Local, and Tribal Governments; Number basis. The home office cost statement Attention: CMS Desk Officer, Fax of Respondents: 56; Total Annual form is filed annually by chain Number: (202) 395–5806 OR Email: Responses: 56; Total Annual Hours: organizations to report costs directly [email protected]. 896. (For policy questions regarding this related to services furnished to To obtain copies of a supporting collection contact Thomas Romano at individual providers that are related to statement and any related forms for the 410–786–0465). patient care plus an appropriate share of proposed collection(s) summarized in 2. Type of Information Collection indirect costs. Form Number: CMS– this notice, you may make your request Request: Extension of currently 287–05 (OMB control number: 0938– using one of following: approved collection; Title of 0202); Frequency: Yearly; Affected 1. Access CMS’ Web site address at Information Collection: Granting and Public: Private sector—Business or other http://www.cms.hhs.gov/Paperwork Withdrawal of Deeming Authority to for-profit and Not-for-profit institutions; ReductionActof1995. Private Nonprofit Accreditation Number of Respondents: 1,686; Total 2. Email your request, including your Organizations and of State Exemption Annual Responses: 1,686; Total Annual address, phone number, OMB number, Under State Laboratory Programs and Hours: 785,676. (For policy questions and CMS document identifier, to Supporting Regulations; Use: The regarding this collection contact Yaakov [email protected]. information required is necessary to Feinstein at 410–786–5834.) 3. Call the Reports Clearance Office at determine whether a private Dated: October 7, 2014. (410) 786–1326. accreditation organization/State Martique Jones, FOR FURTHER INFORMATION CONTACT: licensure program standards and Reports Clearance Office at (410) 786– accreditation/licensure process is at Director, Regulations Development Group, Office of Strategic Operations and Regulatory 1326. least equal to or more stringent than those of the Clinical Laboratory Affairs. SUPPLEMENTARY INFORMATION: Under the Improvement Amendments of 1988 [FR Doc. 2014–24244 Filed 10–9–14; 8:45 am] Paperwork Reduction Act of 1995 (PRA) (CLIA). If an accreditation organization BILLING CODE 4120–01–P (44 U.S.C. 3501–3520), federal agencies is approved, the laboratories that it must obtain approval from the Office of accredits are ‘‘deemed’’ to meet the Management and Budget (OMB) for each CLIA requirements based on this DEPARTMENT OF HEALTH AND collection of information they conduct accreditation. Similarly, if a State HUMAN SERVICES or sponsor. The term ‘‘collection of licensure program is determined to have information’’ is defined in 44 U.S.C. requirements that are equal to or more Centers for Medicare & Medicaid 3502(3) and 5 CFR 1320.3(c) and stringent than those of CLIA, its Services includes agency requests or laboratories are considered to be exempt [CMS–8056–N] requirements that members of the public from CLIA certification and RIN 0938–AR94 submit reports, keep records, or provide requirements. The information collected information to a third party. Section will be used by HHS to: determine Medicare Program; CY 2015 Inpatient 3506(c)(2)(A) of the PRA (44 U.S.C. comparability/equivalency of the Hospital Deductible and Hospital and 3506(c)(2)(A)) requires federal agencies accreditation organization standards Extended Care Services Coinsurance to publish a 30-day notice in the and policies or State licensure program Amounts Federal Register concerning each standards and policies to those of the proposed collection of information, CLIA program; to ensure the continued AGENCY: Centers for Medicare & including each proposed extension or comparability/equivalency of the Medicaid Services (CMS), HHS. reinstatement of an existing collection standards; and to fulfill certain statutory ACTION: Notice. of information, before submitting the reporting requirements. Form No.: collection to OMB for approval. To CMS–R–185 (OMB control number: SUMMARY: This notice announces the comply with this requirement, CMS is 0938–0686); Frequency: Occasionally; inpatient hospital deductible and the publishing this notice that summarizes Affected Public: Private Sector— hospital and extended care services the following proposed collection(s) of Business or other for-profits and Not- coinsurance amounts for services information for public comment: for-profit institutions; Number of furnished in calendar year (CY) 2015 1. Type of Information Collection Respondents: 12; Total Annual under Medicare’s Hospital Insurance Request: Extension of a currently Responses: 96; Total Annual Hours: Program (Medicare Part A). The approved collection; Title of 384. (For policy questions regarding this Medicare statute specifies the formulae Information Collection: State Medicaid collection contact Arlene Lopez at 410– used to determine these amounts. For HIT Plan, Planning Advance Planning 786–6782.) CY 2015, the inpatient hospital Document, and Implementation 3. Type of Information Collection deductible will be $1,260. The daily Advance Planning Document for Request: Reinstatement without change coinsurance amounts for CY 2015 will Section 4201 of the Recovery Act; Use: of a previously approved collection; be: (1) $315 for the 61st through 90th To assess the appropriateness of state Title of Information Collection: Home day of hospitalization in a benefit

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period; (2) $630 for lifetime reserve productivity (the multifactor August 22, 2014 entitled, ‘‘Hospital days; and (3) $157.50 for the 21st productivity (MFP) adjustment) (see Inpatient Prospective Payment Systems through 100th day of extended care section 1886(b)(3)(B)(xi)(II) of the Act). for Acute Care Hospitals and the Long services in a skilled nursing facility in Under section 1886(b)(3)(B)(viii) of the Term Care Hospital Prospective a benefit period. Act, beginning with fiscal year 2015, the Payment System and Fiscal Year 2015 DATES: Effective Date: This notice is applicable percentage increase for Rates; Quality Reporting Requirements effective on January 1, 2015. hospitals that do not submit quality data for Specific Providers; Reasonable FOR FURTHER INFORMATION: Clare as specified by the Secretary of the Compensation Equivalents’’ (79 FR McFarland, (410) 786–6390 for general Department of Health and Human 49854). Therefore, the percentage information; Gregory J. Savord, (410) Services (the Secretary) is reduced by increase for hospitals paid under the 786–1521 for case-mix analysis. one quarter of the market basket update. inpatient prospective payment system We are estimating that after accounting that submit quality data and are SUPPLEMENTARY INFORMATION: for those hospitals receiving the lower meaningful EHR users is 2.2 percent I. Background market basket update in the payment- (that is, the FY 2015 market basket weighted average update, the calculated update of 2.9 percent less the MFP Section 1813 of the Social Security deductible will not be affected, since the adjustment of 0.5 percentage point and Act (the Act) provides for an inpatient majority of hospitals submit quality data less 0.2 percentage point). The average hospital deductible to be subtracted and receive the full market basket payment percentage increase for from the amount payable by Medicare update. Beginning with FY 2015, hospitals excluded from the inpatient for inpatient hospital services furnished section 1886(b)(3)(B)(ix) of the Act prospective payment system is 2.3 to a beneficiary. It also provides for requires that any hospital that is not a percent. Weighting these percentages in certain coinsurance amounts to be meaningful electronic health record accordance with payment volume, our subtracted from the amounts payable by (EHR) user (as defined in section best estimate of the payment-weighted Medicare for inpatient hospital and 1886(n)(3) of the Act) will have three- average of the increases in the payment extended care services. Section quarters of the market basket update rates for FY 2015 is 2.22 percent. 1813(b)(2) of the Act requires us to reduced by 331⁄3 percent for FY 2015, To develop the adjustment to reflect determine and publish each year the 662⁄3 percent for FY 2016, and 100 changes in real case-mix, we first amount of the inpatient hospital percent for FY 2017 and each calculated an average case-mix for each deductible and the hospital and subsequent fiscal year. We are hospital that reflects the relative extended care services coinsurance estimating that after accounting for costliness of that hospital’s mix of cases amounts applicable for services these hospitals receiving the lower compared to those of other hospitals. furnished in the following calendar year market basket update, the calculated We then computed the change in (CY). deductible will not be affected, since the average case-mix for hospitals paid II. Computing the Inpatient Hospital majority of hospitals are meaningful under the Medicare prospective Deductible for CY 2015 EHR users and are expected to receive payment system in FY 2014 compared the full market basket update. to FY 2013. (We excluded from this Section 1813(b) of the Act prescribes Under section 1886(b)(3)(B)(ii)(VIII) of calculation hospitals whose payments the method for computing the amount of the Act, the percentage increase used to are not based on the inpatient the inpatient hospital deductible. The update the payment rates for FY 2015 prospective payment system because inpatient hospital deductible is an for hospitals excluded from the their payments are based on alternate amount equal to the inpatient hospital inpatient prospective payment system is prospective payment systems or deductible for the preceding CY, as follows: reasonable costs.) We used Medicare adjusted by our best estimate of the • The percentage increase for long bills from prospective payment payment-weighted average of the term care hospitals is the market basket hospitals that we received as of July applicable percentage increases (as percentage increase reduced by 0.2 2014. These bills represent a total of defined in section 1886(b)(3)(B) of the percentage points and the MFP about 7.4 million Medicare discharges Act) used for updating the payment adjustment (see sections 1886(m)(3)(A) for FY 2014 and provide the most recent rates to hospitals for discharges in the and 1886(m)(4)(E) of the Act). case-mix data available at this time. fiscal year (FY) that begins on October • The percentage increase for Based on these bills, the change in 1 of the same preceding CY, and inpatient rehabilitation facilities is the average case-mix in FY 2014 is 1.48 adjusted to reflect changes in real case- market basket percentage increase percent. Based on these bills and past mix. The adjustment to reflect real case- reduced by 0.2 percentage points and experience, we expect the overall case mix is determined on the basis of the the MFP adjustment (see sections mix change to be 1.5 percent as the year most recent case-mix data available. The 1886(j)(3)(C) and 1886(j)(3)(D)(iv) of the progresses and more FY 2014 data amount determined under this formula Act). become available. is rounded to the nearest multiple of $4 • The percentage increase used to Section 1813 of the Act requires that (or, if midway between two multiples of update the payment rate for psychiatric the inpatient hospital deductible be $4, to the next higher multiple of $4). hospitals is the market basket adjusted only by that portion of the Under section 1886(b)(3)(B)(i)(XX) of percentage increase reduced by 0.3 case-mix change that is determined to the Act, the percentage increase used to percentage points and the MFP be real. Real case-mix is that portion of update the payment rates for FY 2015 adjustment (see sections case-mix that is due to changes in the for hospitals paid under the inpatient 1886(s)(2)(A)(i), 1886(s)(2)(A)(ii), and mix of cases in the hospital and not due prospective payment system is the 1886(s)(3)(C) of the Act). to coding optimization. We expect that market basket percentage increase, The Inpatient Prospective Payment all of the change in average case-mix otherwise known as the market basket System market basket percentage will be real and estimate that this update, reduced by 0.2 percentage increase for 2015 is 2.9 percent and the change will be 1.5 percent. points (see section 1886(b)(3)(B)(xii)(IV) MFP adjustment is 0.5 percent, as Thus as stated above, the estimate of of the Act), and an adjustment based on announced in the final rule that the payment-weighted average of the changes in the economy-wide appeared in the Federal Register on applicable percentage increases used for

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updating the payment rates is 2.22 III. Computing the Inpatient Hospital in section 1813(a)(1)(A) of the Act); the percent, and the real case-mix and Extended Care Services daily coinsurance for lifetime reserve adjustment factor for the deductible is Coinsurance Amounts for CY 2015 days will be $630 (one-half of the 1.5 percent. Therefore, using the inpatient hospital deductible as stated statutory formula as stated in section The coinsurance amounts provided in section 1813(a)(1)(B) of the Act); and 1813(b) of the Act, we calculate the for in section 1813 of the Act are the daily coinsurance for the 21st defined as fixed percentages of the inpatient hospital deductible for through 100th day of extended care inpatient hospital deductible for services furnished in CY 2015 to be services in a skilled nursing facility in services furnished in the same CY. The $1,260. This deductible amount is a benefit period will be $157.50 (one- increase in the deductible generates determined by multiplying $1,216 (the eighth of the inpatient hospital increases in the coinsurance amounts. inpatient hospital deductible for CY deductible as stated in section For inpatient hospital and extended care 1813(a)(3) of the Act). 2014 (78 FR 64953)) by the payment- services furnished in CY 2015, in weighted average increase in the accordance with the fixed percentages IV. Cost to Medicare Beneficiaries payment rates of 1.0222 multiplied by defined in the law, the daily Table 1 below summarizes the the increase in real case-mix of 1.015, coinsurance for the 61st through 90th deductible and coinsurance amounts for which equals $1,261.64 and is rounded day of hospitalization in a benefit CYs 2014 and 2015, as well as the to $1,260. period will be $315 (one-fourth of the number of each that is estimated to be inpatient hospital deductible as stated paid.

TABLE 1—PART A DEDUCTIBLE AND COINSURANCE AMOUNTS FOR CALENDAR YEARS 2014 AND 2015 TYPE OF COST SHARING

Value Number paid (in millions) 2014 2015 2014 2015

Inpatient hospital deductible ...... $1,216 $1,260 7.23 7.39 Daily coinsurance for 61st–90th Day ...... 304 315 1.87 1.91 Daily coinsurance for lifetime reserve days ...... 608 630 0.93 0.95 SNF coinsurance ...... 152 157.50 41.80 43.73

The estimated total increase in costs procedure, or practice are excepted from Budget under the authority of the to beneficiaries is about $1,120 million the requirements of notice and comment Paperwork Reduction Act of 1995. (rounded to the nearest $10 million) due rulemaking. VII. Regulatory Impact Analysis to: (1) The increase in the deductible We considered publishing a proposed and coinsurance amounts, and (2) the notice to provide a period for public A. Statement of Need increase in the number of deductibles comment. However, we may waive that Section 1813(b)(2) of the Act requires and daily coinsurance amounts paid. procedure if we find good cause that the Secretary to publish, between We determine the increase in cost to prior notice and comment are September 1 and September 15 of each beneficiaries by calculating the impracticable, unnecessary, or contrary year, the amounts of the inpatient difference between the 2014 and 2015 to the public interest. We find that the hospital deductible and hospital and deductible and coinsurance amounts procedure for notice and comment is extended care services coinsurance multiplied by the increase in the unnecessary here, because the formulae applicable for services furnished in the number of deductible and coinsurance following calendar year (CY). amounts paid. used to calculate the inpatient hospital deductible and hospital and extended B. Overall Impact V. Waiver of Proposed Notice and care services coinsurance amounts are Comment Period statutorily directed, and we can exercise We have examined the impacts of this no discretion in following the formulae. rule as required by Executive Order Section 1813(b)(2) of the Act requires Moreover, the statute establishes the 12866 on Regulatory Planning and Review (September 30, 1993), Executive publication of the inpatient hospital time period for which the deductible deductible and all coinsurance Order 13563 on Improving Regulation and coinsurance amounts will apply amounts—the hospital and extended and Regulatory Review (January 18, and delaying publication would be care services coinsurance amounts— 2011), the Regulatory Flexibility Act contrary to the public interest. between September 1 and September 15 (RFA) (September 19, 1980, Pub. L. 96– Therefore, we find good cause to waive of the year preceding the year to which 354), section 1102(b) of the Social they will apply. These amounts are publication of a proposed notice and Security Act, section 202 of the determined according to the statute as solicitation of public comments. Unfunded Mandates Reform Act of 1995 discussed above. As has been our VI. Collection of Information (March 22, 1995; Pub. L. 104–4), custom, we use general notices, rather Requirements Executive Order 13132 on Federalism than notice and comment rulemaking (August 4, 1999) and the Congressional procedures, to make the This document does not impose Review Act (5 U.S.C., Part I, Ch. 8). announcements. In doing so, we information collection requirements, Executive Orders 12866 and 13563 acknowledge that under the that is, reporting, recordkeeping or direct agencies to assess all costs and Administrative Procedure Act (APA), third-party disclosure requirements. benefits of available regulatory interpretive rules, general statements of Consequently, there is no need for alternatives and, if regulation is policy, and rules of agency organization, review by the Office of Management and necessary, to select regulatory

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approaches that maximize net benefits beds. As discussed above, we are not are not otherwise eligible for benefits (including potential economic, preparing an analysis for section 1102(b) under Medicare Part A (hereafter known environmental, public health and safety of the Act because the Secretary has as the ‘‘uninsured aged’’) and by certain effects, distributive impacts, and determined that this notice will not disabled individuals who have equity). A regulatory impact analysis have a significant impact on the exhausted other entitlement. The (RIA) must be prepared for major operations of a substantial number of monthly Part A premium for the 12 notices with economically significant small rural hospitals. months beginning January 1, 2015, for effects ($100 million or more in any 1 Section 202 of the Unfunded these individuals will be $407. The year). As stated in section IV of this Mandates Reform Act of 1995 also premium for certain other individuals as notice, we estimate that the total requires that agencies assess anticipated described in this notice will be $224. increase in costs to beneficiaries costs and benefits before issuing any DATES: Effective Date: This notice is associated with this notice is about rule whose mandates require spending effective on January 1, 2015. $1,120 million due to: (1) the increase in any 1 year of $100 million in 1995 FOR FURTHER INFORMATION CONTACT: in the deductible and coinsurance dollars, updated annually for inflation. Clare McFarland, (410) 786–6390. amounts, and (2) the increase in the For 2014, that threshold accounting for SUPPLEMENTARY INFORMATION: number of deductibles and daily inflation is approximately $141 million. coinsurance amounts paid. As a result, This notice does not impose mandates I. Background this notice is economically significant that will have a consequential effect of Section 1818 of the Social Security under section 3(f)(1) of Executive Order $141 million or more on state, local, or Act (the Act) provides for voluntary 12866 and thus, is a major action under tribal governments or on the private enrollment in the Medicare Hospital the Congressional Review Act. In sector. Insurance Program (Medicare Part A), accordance with the provisions of Executive Order 13132 establishes subject to payment of a monthly Executive Order 12866, this notice was certain requirements that an agency premium, of certain persons aged 65 reviewed by the Office of Management must meet when it promulgates a and older who are uninsured under the and Budget. proposed rule (and subsequent final Old-Age, Survivors, and Disability The RFA requires agencies to analyze rule) that imposes substantial direct Insurance (OASDI) program or the options for regulatory relief of small requirement costs on state and local Railroad Retirement Act and do not entities, if a rule has a significant impact governments, preempts state law, or otherwise meet the requirements for on a substantial number of small otherwise has Federalism implications. entitlement to Medicare Part A. These entities. For purposes of the RFA, small Since this notice does not impose any ‘‘uninsured aged’’ individuals are entities include small businesses, costs on state or local governments, uninsured under the OASDI program or nonprofit organizations, and small preempt state law, or have Federalism the Railroad Retirement Act, because governmental jurisdictions. Most implications, the requirements of they do not have 40 quarters of coverage hospitals and most other providers and Executive Order 13132 are not under Title II of the Act (or are/were not suppliers are small entities, either by applicable. nonprofit status or by having revenues married to someone who did). (Persons of less than $7.5 million to $38.5 Dated: September 12, 2014. insured under the OASDI program or million in any 1 year (for details, see the Marilyn Tavenner, the Railroad Retirement Act and certain Small Business Administration’s Web Administrator, Centers for Medicare & others do not have to pay premiums for site at http://www.sba.gov/sites/default/ Medicaid Services. Medicare Part A.) files/files/Size_Standards_Table.pdf). Dated: September 26, 2014. Section 1818A of the Act provides for Individuals and states are not included Sylvia M. Burwell, voluntary enrollment in Medicare Part in the definition of a small entity. As Secretary. A, subject to payment of a monthly discussed above, this annual notice [FR Doc. 2014–24257 Filed 10–9–14; 8:45 am] premium for certain disabled announces the inpatient hospital BILLING CODE 4120–01–P individuals who have exhausted other deductible and the hospital and entitlement. These are individuals who extended care services coinsurance were entitled to coverage due to a amounts for services furnished in CY DEPARTMENT OF HEALTH AND disabling impairment under section 2015 under Medicare’s Hospital HUMAN SERVICES 226(b) of the Act, but who are no longer Insurance Program (Medicare Part A). entitled to disability benefits and free As a result, we are not preparing an Centers for Medicare & Medicaid Medicare Part A coverage because they analysis for the RFA because the Services have gone back to work and their Secretary has determined that this [CMS–8057–N] earnings exceed the statutorily defined notice will not have a significant ‘‘substantial gainful activity’’ amount economic impact on a substantial RIN 0938–AR96 (section 223(d)(4) of the Act). number of small entities. Section 1818A(d)(2) of the Act In addition, section 1102(b) of the Medicare Program; CY 2015 Part A specifies that the provisions relating to Social Security Act requires us to Premiums for the Uninsured Aged and premiums under section 1818(d) prepare a regulatory impact analysis if for Certain Disabled Individuals Who through section 1818(f) of the Act for a rule may have a significant impact on Have Exhausted Other Entitlement the aged will also apply to certain the operations of a substantial number AGENCY: Centers for Medicare & disabled individuals as described above. of small rural hospitals. This analysis Medicaid Services (CMS), HHS. Section 1818(d) of the Act requires us must conform to the provisions of ACTION: Notice. to estimate, on an average per capita section 604 of the RFA. For purposes of basis, the amount to be paid from the section 1102(b) of the Act, we define a SUMMARY: This annual notice announces Federal Hospital Insurance Trust Fund small rural hospital as a hospital that is Medicare’s Hospital Insurance (Part A) for services incurred in the upcoming located outside of a Metropolitan premium for uninsured enrollees in calendar year (CY) (including the Statistical Area for Medicare payment calendar year (CY) 2015. This premium associated administrative costs) on regulations and has fewer than 100 is paid by enrollees age 65 and over who behalf of individuals aged 65 and over

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who will be entitled to benefits under The steps involved in projecting these comment are impracticable, Medicare Part A. We must then future costs to the Federal Hospital unnecessary, or contrary to the public determine the monthly actuarial rate for Insurance Trust Fund are: interest. the following year (the per capita • Establishing the present cost of We are not using notice and comment amount estimated above divided by 12) services furnished to beneficiaries, by rulemaking in this notification of and publish the dollar amount for the type of service, to serve as a projection Medicare Part A premiums for CY 2015 monthly premium in the succeeding CY. base; as that procedure is unnecessary If the premium is not a multiple of $1, • Projecting increases in payment because of the lack of discretion in the the premium is rounded to the nearest amounts for each of the service types; statutory formula that is used to multiple of $1 (or, if it is a multiple of and calculate the premium and the solely • 50 cents but not of $1, it is rounded to Projecting increases in ministerial function that this notice the next highest $1). administrative costs. serves. The APA permits agencies to Section 13508 of the Omnibus Budget We base our projections for CY 2015 waive notice and comment rulemaking Reconciliation Act of 1993 (Pub. L. 103– on—(1) current historical data; and (2) when notice and public comment 66) amended section 1818(d) of the Act projection assumptions derived from thereon are unnecessary. On this basis, to provide for a reduction in the current law and the Mid-Session Review we waive publication of a proposed premium amount for certain voluntary of the President’s Fiscal Year 2015 notice and a solicitation of public enrollees (section 1818 and section Budget. comments. 1818A of the Act). The reduction We estimate that in CY 2015, applies to an individual who is eligible 45,458,424 people aged 65 years and VI. Collection of Information to buy into the Medicare Part A program over will be entitled to benefits (without Requirements and who, as of the last day of the premium payment) and that they will This document does not impose previous month: incur about $221.762 billion in benefits information collection requirements, • Had at least 30 quarters of coverage and related administrative costs. Thus, that is, reporting, recordkeeping or under Title II of the Act; the estimated monthly average per third-party disclosure requirements. • Was married, and had been married capita amount is $406.53 and the Consequently, there is no need for for the previous 1-year period, to a monthly premium is $407. review by the Office of Management and person who had at least 30 quarters of Subsequently, the full monthly Budget under the authority of the coverage; premium reduced by 45 percent is $224. Paperwork Reduction Act of 1995. • Had been married to a person for at IV. Costs to Beneficiaries least 1 year at the time of the person’s VII. Regulatory Impact Analysis The CY 2015 premium of $407 is death if, at the time of death, the person A. Statement of Need had at least 30 quarters of coverage; or approximately 4.46 percent lower than • Is divorced from a person and had the CY 2014 premium of $426. We Section 1818(d) of the Act requires been married to the person for at least estimate that approximately 644,000 the Secretary of the Department of 10 years at the time of the divorce if, at enrollees will voluntarily enroll in Health and Human Services (the the time of the divorce, the person had Medicare Part A, by paying the full Secretary) during September of each at least 30 quarters of coverage. premium. Furthermore, the CY 2015 year to determine and publish the Section 1818(d)(4)(A) of the Act reduced premium of $224 is amount to be paid, on an average per specifies that the premium that these approximately 4.27 percent lower than capita basis, from the Federal Hospital individuals will pay for CY 2015 will be the CY 2014 premium of $234. We Insurance Trust Fund for services equal to the premium for uninsured estimate an additional 58,000 enrollees incurred in the impending calendar year aged enrollees reduced by 45 percent. will pay the reduced premium. (CY) (including the associated Therefore, we estimate that the total administrative costs) on behalf of II. Monthly Premium Amount for CY aggregate savings to enrollees paying individuals aged 65 and over who will 2015 these premiums in CY 2015, compared be entitled to benefits under Medicare The monthly premium for the to the amount that they paid in CY Part A. uninsured aged and certain disabled 2014, will be about $154 million. B. Overall Impact individuals who have exhausted other V. Waiver of Proposed Notice and entitlement for the 12 months beginning We have examined the impacts of this Comment Period January 1, 2015, is $407. rule as required by Executive Order The monthly premium for the We use general notices, rather than 12866 on Regulatory Planning and individuals eligible under Section notice and comment rulemaking Review (September 30, 1993), Executive 1818(d)(4)(B) of the Act, and therefore, procedures, to make announcements Order 13563 on Improving Regulation subject to the 45 percent reduction in such as this premium notice. In doing and Regulatory Review (January 18, the monthly premium, is $224. so, we acknowledge that, under the 2011), the Regulatory Flexibility Act Administrative Procedure Act (APA), (RFA) (September 19, 1980, Pub. L. 96– III. Monthly Premium Rate Calculation interpretive rules, general statements of 354), section 1102(b) of the Social As discussed in section I of this policy, and rules of agency organization, Security Act, section 202 of the notice, the monthly Medicare Part A procedure, or practice are excepted from Unfunded Mandates Reform Act of 1995 premium is equal to the estimated the requirements of notice and comment (March 22, 1995; Pub. L. 104–4), monthly actuarial rate for CY 2015 rulemaking. The agency may also waive Executive Order 13132 on Federalism rounded to the nearest multiple of $1 notice and comment if there is ‘‘good (August 4, 1999), and the Congressional and equals one-twelfth of the average cause,’’ as defined by the statute. We Review Act (5 U.S.C., Part I, Ch. 8). per capita amount, which is determined considered publishing a proposed Executive Orders 12866 and 13563 by projecting the number of Part A notice to provide a period for public direct agencies to assess all costs and enrollees aged 65 years and over as well comment. However, under the APA, we benefits of available regulatory as the benefits and administrative costs may waive that procedure if we find alternatives and, if regulation is that will be incurred on their behalf. good cause that prior notice and necessary, to select regulatory

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approaches that maximize net benefits operations of a substantial number of amounts. The monthly actuarial rates (including potential economic, small rural hospitals. for 2015 are $209.80 for aged enrollees environmental, public health and safety Section 202 of the Unfunded and $254.80 for disabled enrollees. The effects, distributive impacts, and Mandates Reform Act of 1995 also standard monthly Part B premium rate equity). A regulatory impact analysis requires that agencies assess anticipated for all enrollees for 2015 is $104.90, (RIA) must be prepared for major costs and benefits before issuing any which is equal to 50 percent of the notices with economically significant rule whose mandates require spending monthly actuarial rate for aged enrollees effects ($100 million or more in any 1 in any 1 year of $100 million in 1995 or approximately 25 percent of the year). As stated in section IV of this dollars, updated annually for inflation. expected average total cost of Part B notice, we estimate that the overall In 2014, that threshold is approximately coverage for aged enrollees. (The 2014 effect of the changes in the Part A $141 million. This notice does not standard premium rate was $104.90.) premium will be a savings to voluntary impose mandates that will have a The Part B deductible for 2015 is enrollees (section 1818 and section consequential effect of $141 million or $147.00 for all Part B beneficiaries. If a 1818A of the Act) of about $154 million. more on state, local, or tribal beneficiary has to pay an income-related As a result, this notice is economically governments or on the private sector. monthly adjustment, they may have to significant under section 3(f)(1) of Executive Order 13132 establishes pay a total monthly premium of about Executive Order 12866 and thus, a certain requirements that an agency 35, 50, 65, or 80 percent of the total cost major action under the Congressional must meet when it promulgates a of Part B coverage. Review Act. In accordance with the proposed rule (and subsequent final DATES: Effective Date: January 1, 2015. rule) that imposes substantial direct provisions of Executive Order 12866, FOR FURTHER INFORMATION: M. Kent requirement costs on state and local this notice was reviewed by the Office Clemens, (410) 786–6391. of Management and Budget. governments, preempts state law, or SUPPLEMENTARY INFORMATION: The RFA requires agencies to analyze otherwise has Federalism implications. options for regulatory relief of small Since this notice does not impose any I. Background costs on state or local governments, the entities, if a rule has a significant impact Part B is the voluntary portion of the requirements of Executive Order 13132 on a substantial number of small Medicare program that pays all or part are not applicable. entities. For purposes of the RFA, small of the costs for physicians’ services, entities include small businesses, Dated: September 12, 2014. outpatient hospital services, certain nonprofit organizations, and small Marilyn Tavenner, home health services, services furnished governmental jurisdictions. Most Administrator, Centers for Medicare & by rural health clinics, ambulatory hospitals and most other providers and Medicaid Services. surgical centers, comprehensive suppliers are small entities, either by Dated: September 26, 2014. outpatient rehabilitation facilities, and nonprofit status or by having revenues Sylvia M. Burwell, certain other medical and health of less than $7.5 million to $38.5 Secretary. services not covered by Medicare Part million in any 1 year (for details, see the [FR Doc. 2014–24250 Filed 10–9–14; 8:45 am] A, Hospital Insurance. Medicare Part B Small Business Administration’s Web BILLING CODE 4120–01–P is available to individuals who are site at http://www.sba.gov/sites/default/ entitled to Medicare Part A, as well as _ _ files/files/Size Standards Table.pdf). to U.S. residents who have attained age Individuals and states are not DEPARTMENT OF HEALTH AND 65 and are citizens, and aliens who were included in the definition of a small HUMAN SERVICES lawfully admitted for permanent entity. As discussed above, this annual residence and have resided in the notice announces Medicare’s Hospital Centers for Medicare & Medicaid United States for 5 consecutive years. Insurance (Part A) premium for Services Part B requires enrollment and payment uninsured enrollees in calendar year [CMS–8058–N] of monthly premiums, as described in (CY) 2015. As a result, we are not 42 CFR part 407, subpart B, and part preparing an analysis for the RFA RIN 0938–AS34 408, respectively. The difference because the Secretary has determined between the premiums paid by all that this notice will not have a Medicare Program; Medicare Part B enrollees and total incurred costs is met significant economic impact on a Monthly Actuarial Rates, Premium by transfers from the general fund of the substantial number of small entities. Rate, and Annual Deductible Treasury. In addition, section 1102(b) of the Beginning January 1, 2015 The Secretary of the Department of Social Security Act requires us to AGENCY: Centers for Medicare & Health and Human Services (the prepare a regulatory impact analysis if Medicaid Services (CMS), HHS. Secretary) is required by section 1839 of a rule may have a significant impact on ACTION: Notice. the Social Security Act (the Act) to the operations of a substantial number announce the Part B monthly actuarial of small rural hospitals. This analysis SUMMARY: This notice announces the rates for aged and disabled beneficiaries must conform to the provisions of monthly actuarial rates for aged (age 65 as well as the monthly Part B premium. section 604 of the RFA. For purposes of and over) and disabled (under age 65) The Part B annual deductible is section 1102(b) of the Act, we define a beneficiaries enrolled in Part B of the included because its determination is small rural hospital as a hospital that is Medicare Supplementary Medical directly linked to the aged actuarial rate. located outside of a Metropolitan Insurance (SMI) program beginning The monthly actuarial rates for aged Statistical Area for Medicare payment January 1, 2015. In addition, this notice and disabled enrollees are used to regulations and has fewer than 100 announces the monthly premium for determine the correct amount of general beds. As discussed above, we are not aged and disabled beneficiaries as well revenue financing per beneficiary each preparing an analysis for section 1102(b) as the income-related monthly month. These amounts, according to of the Act, because the Secretary has adjustment amounts to be paid by actuarial estimates, will equal, determined that this notice will not beneficiaries with modified adjusted respectively, one-half of the expected have a significant impact on the gross income above certain threshold average monthly cost of Part B for each

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aged enrollee (age 65 or over) and one- The premium rate for 1991 through Section 811 of the Medicare half of the expected average monthly 1995 was legislated by section Prescription Drug, Improvement, and cost of Part B for each disabled enrollee 1839(e)(1)(B) of the Act, as added by Modernization Act of 2003 (Pub. L. 108– (under age 65). section 4301 of the Omnibus Budget 173, also known as the Medicare The Part B deductible to be paid by Reconciliation Act of 1990 (OBRA 90) Modernization Act, or MMA), which enrollees is also announced. Prior to the (Pub. L. 101–508). In January 1996, the amended section 1839 of the Act, Medicare Prescription Drug, premium determination basis would requires that, starting on January 1, Improvement, and Modernization Act of have reverted to the method established 2007, the Part B premium a beneficiary 2003 (MMA) (Pub. L. 108–173), the Part by the 1972 Social Security Act pays each month be based on their B deductible was set in statute. After Amendments. However, section 13571 annual income. Specifically, if a setting the 2005 deductible amount at of the Omnibus Budget Reconciliation beneficiary’s ‘‘modified adjusted gross $110, section 629 of the MMA Act of 1993 (OBRA 93) (Pub. L. 103–66) income’’ is greater than the legislated (amending section 1833(b) of the Act) changed the premium basis to 50 threshold amounts (for 2015, $85,000 requires that the Part B deductible be percent of the monthly actuarial rate for for a beneficiary filing an individual indexed beginning in 2006. The aged enrollees (that is, 25 percent of income tax return, and $170,000 for a inflation factor to be used each year is program costs for aged enrollees) for beneficiary filing a joint tax return) the the annual percentage increase in the 1996 through 1998. beneficiary is responsible for a larger Part B actuarial rate for enrollees age 65 Section 4571 of the Balanced Budget portion of the estimated total cost of and over. Specifically, the 2015 Part B Act of 1997 (BBA) (Pub. L. 105–33) Part B benefit coverage. In addition to deductible is calculated by multiplying permanently extended the provision the standard 25 percent premium, these the 2014 deductible by the ratio of the that the premium be based on 50 beneficiaries now have to pay an 2015 aged actuarial rate to the 2014 aged percent of the monthly actuarial rate for income-related monthly adjustment actuarial rate. The amount determined aged enrollees (that is, 25 percent of amount. The MMA made no change to under this formula is then rounded to program costs for aged enrollees). the actuarial rate calculation, and the the nearest $1. The BBA included a further provision standard premium, which will continue The monthly Part B premium rate to affecting the calculation of the Part B to be paid by beneficiaries whose be paid by aged and disabled enrollees actuarial rates and premiums for 1998 modified adjusted gross income is is also announced. (Although the costs below the applicable thresholds, still to the program per disabled enrollee are through 2003. Section 4611 of the BBA modified the home health benefit represents 25 percent of the estimated different than for the aged, the statute total cost to the program of Part B provides that they pay the same payable under Part A for individuals enrolled in Part B. Under this section, coverage for an aged enrollee. However, premium amount.) Beginning with the depending on income and tax filing passage of section 203 of the Social beginning in 1998, expenditures for status, a beneficiary can now be Security Amendments of 1972 (Pub. L. home health services not considered responsible for 35, 50, 65, or 80 percent 92–603), the premium rate, which was ‘‘post-institutional’’ are payable under of the estimated total cost of Part B determined on a fiscal year basis, was Part B rather than Part A. However, coverage, rather than 25 percent. The limited to the lesser of the actuarial rate section 4611(e)(1) of the BBA required end result of the higher premium is that for aged enrollees, or the current that there be a transition from 1998 the Part B premium subsidy is reduced monthly premium rate increased by the through 2002 for the aggregate amount and less general revenue financing is same percentage as the most recent of the expenditures transferred from required for beneficiaries with higher general increase in monthly Title II Part A to Part B. Section 4611(e)(2) of income because they are paying a larger social security benefits. the BBA also provided a specific yearly However, the passage of section 124 proportion for the transferred funds. share of the total cost with their of the Tax Equity and Fiscal The proportions were 1⁄6 for 1998, 1⁄3 for premium. That is, the premium subsidy Responsibility Act of 1982 (TEFRA) 1999, 1⁄2 for 2000, 2⁄3 for 2001, and 5⁄6 continues to be approximately 75 (Pub. L. 97–248) suspended this for 2002. For the purpose of determining percent for beneficiaries with income premium determination process. the correct amount of financing from below the applicable income thresholds, Section 124 of TEFRA changed the general revenues of the Federal but will be reduced for beneficiaries premium basis to 50 percent of the Government, it was necessary to include with income above these thresholds. monthly actuarial rate for aged enrollees only these transitional amounts in the The MMA specified that there be a 5- (that is, 25 percent of program costs for monthly actuarial rates for both aged year transition to full implementation of aged enrollees). Section 606 of the and disabled enrollees, rather than the this provision. However, section 5111 of Social Security Amendments of 1983 total cost of the home health services the Deficit Reduction Act of 2005 (Pub. (Pub. L. 98–21), section 2302 of the being transferred. L. 109–171) (DRA) modified the Deficit Reduction Act of 1984 (DEFRA Section 4611(e)(3) of the BBA also transition to a 3-year period. 84) (Pub. L. 98–369), section 9313 of the specified, for the purpose of Section 4732(c) of the BBA added Consolidated Omnibus Budget determining the premium, that the section 1933(c) of the Act, which Reconciliation Act of 1985 (COBRA 85) monthly actuarial rate for enrollees age required the Secretary to allocate money (Pub. L. 99–272), section 4080 of the 65 and over be computed as though the from the Part B trust fund to the State Omnibus Budget Reconciliation Act of transition would occur for 1998 through Medicaid programs for the purpose of 1987 (OBRA 87) (Pub. L. 100–203), and 2003 and that 1⁄7 of the cost be providing Medicare Part B premium section 6301 of the Omnibus Budget transferred in 1998, 2⁄7 in 1999, 3⁄7 in assistance from 1998 through 2002 for Reconciliation Act of 1989 (OBRA 89) 2000, 4⁄7 in 2001, 5⁄7 in 2002, and 6⁄7 in the low-income Medicaid beneficiaries (Pub. L. 101–239) extended the 2003. Therefore, the transition period who qualify under section 1933 of the provision that the premium be based on for incorporating this home health Act. This allocation, while not a benefit 50 percent of the monthly actuarial rate transfer into the premium was 7 years expenditure, was an expenditure of the for aged enrollees (that is, 25 percent of while the transition period for including trust fund and was included in program costs for aged enrollees). This these services in the actuarial rate was calculating the Part B actuarial rates extension expired at the end of 1990. 6 years. through 2002. For 2003 through 2014,

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the expenditure was made from the trust premiums for December and the Act, it will not be changed during the fund because the allocation was following January are deducted from the year even if there are retroactive temporarily extended. However, respective month’s section 202 or 223 adjustments or payments and because the extension occurred after the benefits. The ‘‘hold-harmless’’ provision deductions on account of work that financing was determined, the does not apply to beneficiaries who are apply to the individual’s monthly allocation was not included in the required to pay an income-related benefits. calculation of the financing rates for monthly adjustment amount. Individuals who have enrolled in Part A check for benefits under section 202 these years. B late or who have re-enrolled after the or 223 of the Act is received in the Another provision affecting the termination of a coverage period are month following the month for which calculation of the Part B premium is subject to an increased premium under the benefits are due. The Part B section 1839(f) of the Act, as amended section 1839(b) of the Act. The increase by section 211 of the Medicare premium that is deducted from a particular check is the Part B payment is a percentage of the premium and is Catastrophic Coverage Act of 1988 for the month in which the check is based on the new premium rate before (MCCA 88) (Pub. L. 100–360). received. Therefore, a benefit check for any reductions under section 1839(f) of (However, the Medicare Catastrophic November is not received until the Act are made. Coverage Repeal Act of 1989 (Pub. L. December, but has December’s Part B 101–234) did not repeal the revisions to II. Provisions of the Notice premium deducted from it. section 1839(f) made by MCCA 88.) Generally, if a beneficiary qualifies for A. Notice of Medicare Part B Monthly Section 1839(f) of the Act, referred to as hold-harmless protection, the reduced Actuarial Rates, Monthly Premium the ‘‘hold-harmless’’ provision, provides premium for the individual for that Rates, and Annual Deductible that if an individual is entitled to January and for each of the succeeding benefits under section 202 or 223 of the 11 months is the greater of either— The Medicare Part B monthly Act (the Old-Age and Survivors • The monthly premium for January actuarial rates applicable for 2015 are Insurance Benefit and the Disability reduced as necessary to make the $209.80 for enrollees age 65 and over Insurance Benefit, respectively) and has December monthly benefits, after the and $254.80 for disabled enrollees the Part B premiums deducted from deduction of the Part B premium for under age 65. In section II.B. of this these benefit payments, the premium January, at least equal to the preceding notice, we present the actuarial increase will be reduced, if necessary, to November’s monthly benefits, after the assumptions and bases from which avoid causing a decrease in the deduction of the Part B premium for these rates are derived. The Part B individual’s net monthly payment. This December; or standard monthly premium rate for all decrease in payment occurs if the • The monthly premium for that enrollees for 2015 is $104.90. The Part increase in the individual’s social individual for that December. B annual deductible for 2015 is $147.00. security benefit due to the cost-of-living In determining the premium The following are the 2015 Part B adjustment under section 215(i) of the limitations under section 1839(f) of the monthly premium rates to be paid by Act is less than the increase in the Act, the monthly benefits to which an beneficiaries who file an individual tax premium. Specifically, the reduction in individual is entitled under section 202 return (including those who are single, the premium amount applies if the or 223 of the Act do not include head of household, qualifying individual is entitled to benefits under retroactive adjustments or payments and widow(er) with dependent child, or section 202 or 223 of the Act for deductions on account of work. Also, married filing separately who lived November and December of a particular once the monthly premium amount is apart from their spouse for the entire year and the individual’s Part B established under section 1839(f) of the taxable year), or a joint tax return.

Income-related Beneficiaries who file an individual tax return with in- monthly Total monthly come: Beneficiaries who file a joint tax return with income: adjustment premium amount amount

Less than or equal to $85,000 ...... Less than or equal to $170,000 ...... $0.00 $104.90 Greater than $85,000 and less than or equal to Greater than $170,000 and less than or equal to 42.00 146.90 $107,000. $214,000. Greater than $107,000 and less than or equal to Greater than $214,000 and less than or equal to 104.90 209.80 $160,000. $320,000. Greater than $160,000 and less than or equal to Greater than $320,000 and less than or equal to 167.80 272.70 $214,000. $428,000. Greater than $214,000 ...... Greater than $428,000 ...... 230.80 335.70

In addition, the monthly premium married and lived with their spouse at a separate tax return from their spouse, rates to be paid by beneficiaries who are any time during the taxable year, but file are as follows:

Income-related Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax monthly Total monthly return from their spouse: adjustment premium amount amount

Less than or equal to $85,000 ...... $0.00 $104.90 Greater than $85,000 and less than or equal to $129,000 ...... 167.80 272.70 Greater than $129,000 ...... 230.80 335.70

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The Part B annual deductible for 2015 premium is the amount that would be amount of incurred, but unpaid, is $147.00 for all beneficiaries. necessary to finance Part B on an expenses. Numerous factors determine B. Statement of Actuarial Assumptions incurred basis. This is the amount of what level of assets is appropriate to and Bases Employed in Determining the income that would be sufficient to pay cover variation between actual and Monthly Actuarial Rates and the for services furnished during that year projected costs. The three most Monthly Premium Rate for Part B (including associated administrative important of these factors are: (1) the Beginning January 2015 costs) even though payment for some of difference from prior years between the these services will not be made until actual performance of the program and Except where noted, the actuarial after the close of the year. The portion assumptions and bases used to estimates made at the time financing of income required to cover benefits not was established; (2) the likelihood and determine the monthly actuarial rates paid until after the close of the year is and the monthly premium rates for Part potential magnitude of expenditure added to the trust fund and used when changes resulting from enactment of B are established by the Office of the needed. Actuary in the Centers for Medicare & legislation affecting Part B costs in a Medicaid Services. The estimates The premium rates are established year subsequent to the establishment of underlying these determinations are prospectively and are, therefore, subject financing for that year; and (3) the prepared by actuaries meeting the to projection error. Additionally, expected relationship between incurred qualification standards and following legislation enacted after the financing and cash expenditures. These factors are the actuarial standards of practice was established, but effective for the analyzed on an ongoing basis, as the established by the Actuarial Standards period in which the financing is set, trends can vary over time. Board. may affect program costs. As a result, the income to the program may not Table 1 summarizes the estimated 1. Actuarial Status of the Part B Account equal incurred costs. Therefore, trust actuarial status of the trust fund as of in the Supplementary Medical fund assets must be maintained at a the end of the financing period for 2013 Insurance Trust Fund level that is adequate to cover an and 2014. Under the statute, the starting point appropriate degree of variation between for determining the standard monthly actual and projected costs, and the

TABLE 1—ESTIMATED ACTUARIAL STATUS OF THE PART B ACCOUNT IN THE SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND AS OF THE END OF THE FINANCING PERIOD

Assets less Financing period ending Assets Liabilities liabilities (millions) (millions) (millions)

December 31, 2013 ...... $74,204 $19,656 $54,548 December 31, 2014 ...... 70,931 20,376 50,555

2. Monthly Actuarial Rate for Enrollees and over for 2015 is $208.61. Based on necessary. The asset level projected for Age 65 and Older current estimates, the assets are not the end of 2014 is not adequate to The monthly actuarial rate for sufficient to cover the amount of accommodate this contingency. enrollees age 65 and older is one-half of incurred, but unpaid, expenses and to Two other factors affect the the sum of monthly amounts for: (1) The provide for a significant degree of contingency margin for 2015. Starting in projected cost of benefits, and (2) variation between actual and projected 2011, manufacturers and importers of administrative expenses for each costs. Thus, a positive contingency brand-name prescription drugs have enrollee age 65 and older, after margin is needed to increase assets to a paid a fee that is allocated to the Part adjustments to this sum to allow for more appropriate level. The monthly B account of the SMI trust. For 2015, the interest earnings on assets in the trust actuarial rate of $209.80 provides an total of these brand-name drug fees is adjustment of $3.41 for a contingency estimated to be $3.0 billion. The fund and an adequate contingency ¥ margin. The contingency margin is an margin and $2.22 for interest contingency margin has been reduced to amount appropriate to provide for earnings. account for this additional revenue. possible variation between actual and The size of the contingency margin for Another factor impacting the projected costs and to amortize any 2015 is affected by several factors. The contingency margin comes from the surplus assets or unfunded liabilities. largest factor involves the current law requirement that certain payment The monthly actuarial rate for formula for physician fees, which is incentives, to encourage the enrollees age 65 and older for 2015 is scheduled to result in a reduction in development and use of health determined by first establishing per- physician fees of an estimated 21.1 information technology (HIT) by enrollee cost by type of service from percent in April 2015. For 2003 through Medicare physicians, are to be excluded program data through 2013 and then March 2015, lawmakers have prevented from the premium determination. HIT projecting these costs for subsequent physician fee reductions from occurring. bonuses or penalties will be directly years. The projection factors used for In recognition of the strong possibility offset through transfers with the general financing periods from January 1, 2012 of substantial increase in Part B fund of the Treasury. The monthly through December 31, 2015 are shown expenditures that would result from actuarial rate includes an adjustment of in Table 2. similar legislation to override the ¥$0.24 for HIT bonus payments in As indicated in Table 3, the projected decreases in physician fees in 2015, it 2015. per-enrollee amount required to pay for is appropriate to maintain a The traditional goal for the Part B one-half of the total of benefits and significantly larger Part B contingency reserve has been that assets minus administrative costs for enrollees age 65 reserve than would otherwise be liabilities at the end of a year should

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represent between 15 and 20 percent of As shown in Table 4, the projected As indicated in Table 5, the monthly the following year’s total incurred per-enrollee amount required to pay for actuarial rates would result in an excess expenditures. To accomplish this goal, a one-half of the total of benefits and of assets over liabilities of $58,887 17 percent reserve ratio has been the administrative costs for disabled million by the end of December 2015 normal target used to calculate the Part enrollees for 2015 is $249.95. The under the cost growth rate assumptions B premium. In view of the strong monthly actuarial rate of $254.80 also used in preparing this report and likelihood of actual expenditures provides an adjustment of ¥$2.95 for assuming that the provisions of current exceeding estimated levels, due to the interest earnings and $7.80 for a law are fully implemented. This likelihood of the enactment of contingency margin, reflecting the same amounts to 21.6 percent of the estimated legislation after the financing has been factors described previously for the aged total incurred expenditures for the set for 2015 as a result of the scheduled actuarial rate. Based on current following year. 2015 physician update, a contingency estimates, the assets associated with the Assumptions that are somewhat more reserve ratio in excess of 20 percent of disabled Medicare beneficiaries at the pessimistic (and that therefore test the the following year’s expenditures would end of 2014 are not sufficient to cover adequacy of the assets to accommodate better ensure that the assets of the Part the amount of incurred, but unpaid, projection errors) produce a surplus of B account can adequately cover the cost expenses and to provide for a significant $17,781 million by the end of December of incurred-but-not-reported benefits degree of variation between actual and 2015 under current law, which amounts together with variations between actual projected costs. Thus, a positive to 5.8 percent of the estimated total and estimated cost levels. contingency margin is needed to incurred expenditures for the following increase assets to an appropriate level. year. Under fairly optimistic The actuarial rate of $209.80 per The actuarial rate of $254.80 per assumptions, the monthly actuarial rates month for aged beneficiaries, as month for disabled beneficiaries, as would result in a surplus of $96,482 announced in this notice for 2015, announced in this notice for 2015, million by the end of December 2015, or reflects the combined net effect of the reflects the combined net effect of the 40.3 percent of the estimated total factors previously described and the factors described previously for aged incurred expenditures for the following projection assumptions listed in Table beneficiaries and the projection year. 2. assumptions listed in Table 2. The sensitivity analysis indicates that the premium and general revenue 3. Monthly Actuarial Rate for Disabled 4. Sensitivity Testing Enrollees financing established for 2015, together Several factors contribute to with existing Part B account assets Disabled enrollees are those persons uncertainty about future trends in would be adequate to cover estimated under age 65 who are enrolled in Part medical care costs. It is appropriate to Part B costs for 2015 under current law, B because of entitlement to Social test the adequacy of the rates using even if actual costs prove to be Security disability benefits for more alternative cost growth rate somewhat greater than expected. than 24 months or because of assumptions. The results of those entitlement to Medicare under the end- assumptions are shown in Table 5. One 5. Premium Rates and Deductible stage renal disease (ESRD) program. set represents increases that are higher As determined in accordance with Projected monthly costs for disabled and, therefore, more pessimistic than section 1839 of the Act, listed are the enrollees (other than those with ESRD) the current estimate. The other set 2015 Part B monthly premium rates to are prepared in a fashion parallel to the represents increases that are lower and, be paid by beneficiaries who file an projection for the aged using therefore, more optimistic than the individual tax return (including those appropriate actuarial assumptions (see current estimate. The values for the who are single, head of household, Table 2). Costs for the ESRD program are alternative assumptions were qualifying widow(er) with dependent projected differently because of the determined from a statistical analysis of child, or married filing separately who different nature of services offered by the historical variation in the respective lived apart from their spouse for the the program. increase factors. entire taxable year), or a joint tax return.

Income-related Beneficiaries who file an individual tax return with in- monthly Total monthly come: Beneficiaries who file a joint tax return with income: adjustment premium amount amount

Less than or equal to $85,000 ...... Less than or equal to $170,000 ...... $0.00 $104.90 Greater than $85,000 and less than or equal to Greater than $170,000 and less than or equal to 42.00 146.90 $107,000. $214,000. Greater than $107,000 and less than or equal to Greater than $214,000 and less than or equal to 104.90 209.80 $160,000. $320,000. Greater than $160,000 and less than or equal to Greater than $320,000 and less than or equal to 167.80 272.70 $214,000. $428,000. Greater than $214,000 ...... Greater than $428,000 ...... 230.80 335.70

In addition, the monthly premium married and lived with their spouse at a separate tax return from their spouse, rates to be paid by beneficiaries who are any time during the taxable year, but file are listed as follows:

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Income-related Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax monthly Total monthly return from their spouse: adjustment premium amount amount

Less than or equal to $85,000 ...... $0.00 $104.90 Greater than $85,000 and less than or equal to $129,000 ...... 167.80 272.70 Greater than $129,000 ...... 230.80 335.70

TABLE 2—PROJECTION FACTORS 1 12-MONTH PERIODS ENDING DECEMBER 31 OF 2012–2015 [In percent]

Home Other inter- Calendar Physicians’ services Durable Carrier Other Outpatient Hospital Managed medical carrier health mediary year lab 4 hospital lab 6 care Fees 2 Residual 3 equipment services 5 agency services 7

Aged: 2012 .. ¥1.1 0.9 0.7 6.5 3.2 7.5 ¥3.4 4.1 4.2 1.9 2013 .. ¥0.1 0.3 ¥10.3 0.2 2.7 7.1 ¥0.9 ¥0.6 ¥1.1 0.7 2014 .. 0.5 0.3 ¥17.5 2.1 3.3 10.3 ¥0.2 ¥26.7 3.6 6.4 2015 .. ¥16.6 0.4 1.6 3.7 2.2 6.0 0.3 3.9 ¥5.5 1.5 Disabled: 2012 .. ¥1.1 2.2 1.0 24.9 2.4 8.6 ¥0.7 4.6 2.0 1.3 2013 .. ¥0.1 2.5 ¥8.4 11.7 1.7 7.7 ¥0.2 ¥0.2 3.2 2.7 2014 .. 0.5 0.6 ¥15.6 3.0 2.5 11.5 1.1 ¥30.1 5.4 7.8 2015 .. ¥16.6 0.8 1.7 3.9 1.8 6.3 0.5 4.0 ¥1.5 1.4 1 All values for services other than managed care are per fee-for-service enrollee. Managed care values are per managed care enrollee. 2 As recognized for payment under the program. 3 Increase in the number of services received per enrollee and greater relative use of more expensive services. 4 Includes services paid under the lab fee schedule furnished in the physician’s office or an independent lab. 5 Includes physician-administered drugs, ambulatory surgical center facility costs, ambulance services, parenteral and enteral drug costs, sup- plies, etc. 6 Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital. 7 Includes services furnished in dialysis facilities, rural health clinics, Federally qualified health centers, rehabilitation and psychiatric hospitals, etc.

BILLING CODE 4120–01–P

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TABLE 3-DERIVATION OF MONTHLY ACTUARIAL RATE FOR ENROLLEES AGE 65 AND OVER FOR FINANCING PERIODS ENDING DECEMBER 31, 2012 THROUGH DECEMBER 31, 2015 (IN DOLLARS)

Covered services (at level recognized): Physician fee schedule $80.02 $78.30 $76.94 $65.05 Durable medical equipment 8.32 7.29 5.84 6.00 Carrier lab 1 4.31 4.22 4.19 4.39 Other carrier services2 22.o7 22.13 22.23 22.96 Outpatient hospital 37.14 38.85 41.65 44.64 Home health 10.48 10.14 9.84 9.97 Hospitallab1 3.89 3.77 2.69 2.82 Other intermediary services-! 14.76 14.25 14.35 13.70 Managed care Total services 242.46 244.17 251.17 242.46 Cost sharing: Deductible ~5.37 ~5.63 ~5.63 ~5.63 Coinsurance ~31.04 ~29.06 ~28.17 ~26.32 Sequestration of benefits 0.00 ~3.16 ~4.34 ~4.21 HIT payment incentives ~1.57 ~2.04 ~0.24 Total benefits 204.48 204.28 210.15 206.07 Administrative expenses Incurred expenditures 207.93 207.85 213.18 208.61 Value of interest -2.21 -1.80 -1.91 -2.22 Contingency lor projection error and to amortize the surplus or deficit ~t.48 3.41 Monthly actuarial rate 199.80 209.80 209.80 209.80 1 Includes services paid under the lah fee schedule furni;;hed in the phvsieian's nllice or an independemlab. ~ Includes physician-administered drugs, ambulatory surgical center f~cility costs, ambulance services, parenteral and enteral drug costs. supplies, etc. 3 Includes services paid under the lab fee schedule furnished in the outpatient department of a hospital. 4 Includes services tl.Jrnished in dialysis facilities, rural health clinics, Federally qualitied health centers. rehabilitation and psychiatric hospitals, etc.

TABLE 4-DERIVATION OF MO~THLY ACTUARJAL RATE ~~<'OR DISABLED ENROLLEES FOR FINANCING PERIODS ENDING DECEMBER 31, 2012 THROUGH DECEMBER 31, 2015 (IN DOLLARS)

Financin Periods CY 2012 CY 2013 CY 2014 CY 2015 Covered services (at level recognized): Physician fee schedule $85.25 $84.62 S83.64 $70.30 Durable medical equipment 15.78 13.96 11.48 11.70 Carrier lab 1 6.12 6.58 6.58 6.86 Other carrier scrviccs2 25.R1 25.46 25.36 25.92 Outpatient hospital 52.49 54.70 59.55 63.42 IIome health 9.29 8.99 8.85 8.92 Hospitallab3 5.45 5.29 3.59 3.74 Other intennediary services4 41.78 42.43 42.68 42.74 Managed care 48.76 54.92 63.14 63.68 Total services 290.75 296.95 304.88 297.28 Cost sharing: Deductible -5.05 -5.29 -5.30 -5.29 Coinsurance ~46.06 ~44.46 ~42.64 ~39.80 Sequestration of benefits 0.00 -3.73 . 5.13 ~5.04 HIT payment incentives ~J.60 -2.14 -3.09 -0.25 Total benefits 238.04 241.32 248.71 246.90 Administrative expenses 4.01 4.22 3.59 3.05 Incurred expenditures 242.05 245.54 252.30 249.95 Value of interest ~3.82 . 3.49 2.71 ~2.95 Contingency margin for projection eJTor and to amortize the surplus or deficit -45.72 ~6.55 ~30.69 7.80 ~··~--~~-~~-·~Monll:lly~~(;ltJ.ari~~~al~e~ ··- ~-~-~·~-~--~~~~---~~~ -~~----~ ~~---~-~·-~~-_1~2..:.:~0___ ~ --~~_35~-~--- _ 218.90 254.80 1 Includes services paid under the lab fee schedule furnished in the physician's office or an independent lab. 2 Includes physician-administered drugs. ambulatory surgical center faciliry costs, ambulance services, parenteral and enteral drug costs, supplies, etc. 3 Includes services paid under the lab lee schedLile furnished in the outpatient department of a hospital. 4 Includes services furnished in dialysis tacilities, rural health clinics, Federally qualitied health centers, rehabilitation and psychiatric hospitals, etc.

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BILLING CODE 4120–01–C Security Act, section 202 of the respective amounts for 2014. As a result, III. Regulatory Impact Analysis Unfunded Mandates Reform Act of 1995 this notice is not economically (March 22, 1995, Pub. L. 104–4), significant under section 3(f)(1) of A. Statement of Need Executive Order 13132 on Federalism Executive Order 12866 and thus, is not Section 1839 of the Act requires us to (August 4, 1999) and the Congressional a major action under the Congressional annually announce (that is by Review Act (5 U.S.C. 804(2)). Review Act. In accordance with the September 30th of each year) the Part B Executive Orders 12866 and 13563 provisions of Executive Order 12866, monthly actuarial rates for aged and direct agencies to assess all costs and this notice was reviewed by the Office disabled beneficiaries as well as the benefits of available regulatory of Management and Budget. monthly Part B premium. We also announce the Part B annual deductible alternatives and, if regulation is As discussed earlier, this notice because its determination is directly necessary, to select regulatory announces that the monthly actuarial linked to the aged actuarial rate. approaches that maximize net benefits rates applicable for 2015 are $209.80 for (including potential economic, enrollees age 65 and over and $254.80 B. Overall Impact environmental, public health and safety for disabled enrollees under age 65. It We have examined the impacts of this effects, distributive impacts, and also announces the 2015 monthly Part B rule as required by Executive Order equity). A regulatory impact analysis premium rates to be paid by 12866 on Regulatory Planning and (RIA) must be prepared for major beneficiaries who file an individual tax Review (September 30, 1993), Executive notices with economically significant return (including those who are single, Order 13563 on Improving Regulation effects ($100 million or more in any 1 head of household, qualifying and Regulatory Review (January 18, year). For 2015, the standard Part B widow(er) with a dependent child, or 2011), the Regulatory Flexibility Act premium rate, the Part B income-related married filing separately who lived (RFA) (September 19, 1980, Pub. L. 96– premium rates, and the Part B apart from their spouse for the entire 354), section 1102(b) of the Social deductible are the same as the taxable year), or a joint tax return.

Income-related Beneficiaries who file an individual tax return with in- monthly Total monthly come: Beneficiaries who file a joint tax return with income: adjustment premium amount amount

Less than or equal to $85,000 ...... Less than or equal to $170,000 ...... $0.00 $104.90 Greater than $85,000 and less than or equal to Greater than $170,000 and less than or equal to 42.00 146.90 $107,000. $214,000. Greater than $107,000 and less than or equal to Greater than $214,000 and less than or equal to 104.90 209.80 $160,000. $320,000.

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Income-related Beneficiaries who file an individual tax return with in- monthly Total monthly come: Beneficiaries who file a joint tax return with income: adjustment premium amount amount

Greater than $160,000 and less than or equal to Greater than $320,000 and less than or equal to 167.80 272.70 $214,000. $428,000. Greater than $214,000 ...... Greater than $428,000 ...... 230.80 335.70

In addition, the monthly premium any time during the taxable year, but file are also announced and listed in the rates to be paid by beneficiaries who are a separate tax return from their spouse, following chart: married and lived with their spouse at

Income-related Beneficiaries who are married and lived with their spouse at any time during the year, but file a separate tax monthly Total monthly return from their spouse: adjustment premium amount amount

Less than or equal to $85,000 ...... $0.00 $104.90 Greater than $85,000 and less than or equal to $129,000 ...... 167.80 272.70 Greater than $129,000 ...... 230.80 335.70

The RFA requires agencies to analyze previously, we are not preparing an IV. Waiver of Proposed Notice options for regulatory relief of small analysis for section 1102(b) of the Act businesses, if a rule has a significant because the Secretary has determined The Medicare statute requires the impact on a substantial number of small that this notice will not have a publication of the monthly actuarial entities. For purposes of the RFA, small significant effect on a substantial rates and the Part B premium amounts entities include small businesses, number of small rural hospitals. in September. We ordinarily use general nonprofit organizations, and small Section 202 of the Unfunded notices, rather than notice and comment governmental jurisdictions. Most Mandates Reform Act of 1995 (UMRA) rulemaking procedures, to make such hospitals and most other providers and also requires that agencies assess announcements. In doing so, we note suppliers are small entities, either by anticipated costs and benefits before that, under the Administrative nonprofit status or by having revenues issuing any rule whose mandates Procedure Act, interpretive rules, of less than $7.0 million to $38.5 require spending in any 1 year of $100 general statements of policy, and rules million in any 1 year. Individuals and million in 1995 dollars, updated of agency organization, procedure, or States are not included in the definition annually for inflation. In 2014, that practice are excepted from the of a small entity. This notice announces threshold is approximately $141 requirements of notice and comment the monthly actuarial rates for aged (age million. This notice does not impose rulemaking. 65 and over) and disabled (under 65) mandates that will have a consequential beneficiaries enrolled in Part B of the effect of $141 million or more on State, We considered publishing a proposed Medicare SMI program beginning local, or tribal governments or on the notice to provide a period for public January 1, 2015. Also, this notice private sector. comment. However, we may waive that announces the monthly premium for Executive Order 13132 establishes procedure if we find, for good cause, aged and disabled beneficiaries as well certain requirements that an agency that prior notice and comment are as the income-related monthly must meet when it publishes a proposed impracticable, unnecessary, or contrary adjustment amounts to be paid by rule (and subsequent final rule) that to the public interest. The statute beneficiaries with modified adjusted imposes substantial direct compliance establishes the time period for which gross income above certain threshold costs on State and local governments, the premium rates will apply, and amounts. As a result, we are not preempts State law, or otherwise has delaying publication of the Part B preparing an analysis for the RFA Federalism implications. We have premium rate such that it would not be because the Secretary has determined determined that this notice does not published before that time would be that this notice will not have a significantly affect the rights, roles, and contrary to the public interest. significant economic impact on a responsibilities of States. Moreover, we find that notice and substantial number of small entities. For 2015, the standard Part B comment are unnecessary because the In addition, section 1102(b) of the Act premium rate, the Part B income-related formulas used to calculate the Part B requires us to prepare a regulatory premium rates, and the Part B premiums are statutorily directed. impact analysis if a rule may have a deductible are the same as the Therefore, we find good cause to waive significant impact on the operations of respective amounts for 2014. Therefore, publication of a proposed notice and a substantial number of small rural this notice is not a major rule as defined solicitation of public comments. hospitals. This analysis must conform to in 5 U.S.C. 804(2) and is not an the provisions of section 604 of the economically significant rule under (Catalog of Federal Domestic Assistance RFA. For purposes of section 1102(b) of Executive Order 12866. Program No. 93.774, Medicare— the Act, we define a small rural hospital In accordance with the provisions of Supplementary Medical Insurance Program). as a hospital that is located outside of Executive Order 12866, this notice was a Metropolitan Statistical Area and has reviewed by the Office of Management fewer than 100 beds. As we discussed and Budget.

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Dated: September 12, 2014. DEPARTMENT OF HEALTH AND Act. Organizations funded under the Marilyn Tavenner, HUMAN SERVICES Runaway and Homeless Youth program Administrator, Centers for Medicare & are required by statute (42 U.S.C. 5712, Medicaid Services. Administration for Children and 42 U.S.C. 5714–2) to meet certain data Families Approved: September 26, 2014. collection and reporting requirements. Sylvia M. Burwell, Submission for OMB Review; These requirements include maintenance of client statistical records Secretary, Department of Health and Human Comment Request Services. on the number and the characteristics of Title: Runaway and Homeless Youth the runaway and homeless youth, and [FR Doc. 2014–24248 Filed 10–9–14; 8:45 am] Management Information System youth at risk of family separation, who BILLING CODE 4120–01–P (RHYMIS) Version 3.0. participate in the project, and the OMB No.: 0970–0123. services provided to such youth by the Description: The Runaway and project. Homeless Youth Act, as amended by Public Law 106–71 (42 U.S.C. 5701 et Respondents: States localities, private seq.), mandates that the Department of entities and coordinated networks of Health and Human Services (HHS) such entities. Typical respondents are report regularly to Congress on the non-profit community based status of HHS-funded programs serving organizations who are reporting on the runaway and homeless youth. Such youth that they serve through their reporting is similarly mandated by the Basic Center, Transitional Living and Government Performance and Results Street Outreach programs.

ANNUAL BURDEN ESTIMATES

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

Youth Profile: Basic Center Program (one for each youth) ...... 321 115 0.20 7,383 Youth Profile: Transitional Living Program (one for each youth) ...... 205 19 0.250 974 Youth Profile: Street Outreach Program (one for each youth) ...... 138 524 0.073 5,279 Brief Agency Contacts Report ** (3 data elements per youth) ...... 664 865 0.05 28,718 Data Transfer ...... 664 2 0.50 664 * Number of respondents and response estimates are based on FY 2013 grantee award and annual youth service volumes (the number of grantees awarded and their service volumes change from year to year but not greatly.) ** Brief Agency Contacts Report is a new report that combines the elements of the Street Outreach Contacts, Turn away/Waitlist and Brief Contacts reports that were previously in place.

Estimated Total Annual Burden Administration for Children and the health and well-being of the local Hours: 43,018. Families. community. Additional Information: Copies of the Robert Sargis, SUMMARY: The Administration for proposed collection may be obtained by Reports Clearance Officer. Children and Families (ACF), Office of writing to the Administration for [FR Doc. 2014–24222 Filed 10–9–14; 8:45 am] Community Services (OCS) announces Children and Families, Office of BILLING CODE 4184–01–P the award of a single-source grant for Planning, Research and Evaluation, 370 $686,000 to the Lao Family Community L’Enfant Promenade SW., Washington, Development, Inc., in Oakland, CA, to DC 20447, Attn: ACF Reports Clearance DEPARTMENT OF HEALTH AND support the renovation of a former Officer. All requests should be HUMAN SERVICES warehouse, located in the Fruitvale identified by the title of the information district, into a mixed-use building. collection. Email address: Administration for Children and DATES: The period of support is from [email protected]. Families September 30, 2014 to June 30, 2015. FOR FURTHER INFORMATION CONTACT: OMB Comment: OMB is required to [CFDA Number 93.570] make a decision concerning the Rafael J. Elizalde, Program Manager collection of information between 30 Announcement of a Single-Source Division of Community Discretionary Programs, 370 L’ Enfant Promenade and 60 days after publication of this Grant Award to Lao Family Community SW., Washington, DC 20047. Telephone: document in the Federal Register. Development, Inc., in Oakland, CA 202–401–5115; Email: rafael.elizalde@ Therefore, a comment is best assured of AGENCY: Office of Community Services, acf.hhs.gov. having its full effect if OMB receives it ACF, HHS. within 30 days of publication. Written SUPPLEMENTARY INFORMATION: The Office comments and recommendations for the ACTION: Announcing the award of a of Community Services (OCS) proposed information collection should single-source grant to Lao Family Community Economic Development Community Development, Inc. (LFCD), (CED) program announces the award of be sent directly to the following: Office in Oakland, CA, to support activities $686,000 to Lao Family Community of Management and Budget, Paperwork that will enhance the successful Development, Inc. (LFCD), in Oakland, Reduction Project, Email: _ renovation of the their Culture, Arts, CA. CED is a federal grant program OIRA [email protected]. Recreation and Education Center (CARE funding Community Development Attn: Desk Officer for the Center), creating jobs while increasing Corporations (CDCs) that address the

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economic needs of low-income Agenda: To review and evaluate contract 93.393, Cancer Cause and Prevention individuals and families through the proposals. Research; 93.394, Cancer Detection and creation of sustainable business Place: National Institute on Aging, Diagnosis Research; 93.395, Cancer development and employment Gateway Building, Suite 2C212, 7201 Treatment Research; 93.396, Cancer Biology Wisconsin Avenue, Bethesda, MD 20892, Research; 93.397, Cancer Centers Support; opportunities. (Telephone Conference Call). Award funds will support renovation 93.398, Cancer Research Manpower; 93.399, Contact Person: Elaine Lewis, Ph.D., Cancer Control, National Institutes of Health, of the Culture, Arts, Recreation and Scientific Review Branch, National Institute HHS). Education Center (CARE Center) on Aging, Gateway Building, Suite 2C212, building, including architectural and MSC–9205, 7201 Wisconsin Avenue, Dated: October 6, 2014. engineer fees, construction permits, Bethesda, MD 20892, 301–402–7707, Melanie J. Gray, construction bonds, legal and [email protected]. Program Analyst, Office of Federal Advisory accounting contracting services, seismic Catalogue of Federal Domestic Assistance Committee Policy. Program Nos. 93.866, Aging Research, redesign (related to earthquake [FR Doc. 2014–24187 Filed 10–9–14; 8:45 am] National Institutes of Health, HHS). protection), heating, ventilating, air BILLING CODE 4140–01–P condition design and installation, fire Dated: October 6, 2014. sprinklers, and an elevator for handicap Melanie J. Gray, accessibility. The renovated facility will Program Analyst, Office of Federal Advisory DEPARTMENT OF HEALTH AND be used for culture, arts, and education Committee Policy. HUMAN SERVICES activities. It will house recreational [FR Doc. 2014–24183 Filed 10–9–14; 8:45 am] facilities, a conference training space, an BILLING CODE 4140–01–P National Institutes of Health outdoor community garden, and rental space for small businesses that will National Institute on Aging; Notice of facilitate economic growth in the DEPARTMENT OF HEALTH AND Closed Meeting district. HUMAN SERVICES Statutory Authority: Section 680(a)(2) Pursuant to section 10(d) of the of the Community Services Block Grant National Institutes of Health Federal Advisory Committee Act, as (CSBG) Act of 1981, as amended by the amended (5 U.S.C. App.), notice is National Cancer Institute; Notice of hereby given of the following meeting. Community Opportunities, Closed Meeting Accountability, and Training and The meeting will be closed to the Educational Services Act of 1998 (Pub. Pursuant to section 10(d) of the public in accordance with the L. 105–285), as amended. Federal Advisory Committee Act, as provisions set forth in sections amended (5 U.S.C. App.), notice is 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Melody Wayland, hereby given of the following meeting. as amended. The grant applications and Senior Grants Policy Specialist, Office of The meeting will be closed to the the discussions could disclose Administration, Office of Financial Services, public in accordance with the confidential trade secrets or commercial Division of Grants Policy. provisions set forth in sections 552b(c) property such as patentable material, [FR Doc. 2014–24205 Filed 10–9–14; 8:45 am] (4) and 552b(c) (6), Title 5 U.S.C., as and personal information concerning BILLING CODE 4184–26–P amended. The grant applications and individuals associated with the grant the discussions could disclose applications, the disclosure of which confidential trade secrets or commercial would constitute a clearly unwarranted DEPARTMENT OF HEALTH AND property such as patentable material, invasion of personal privacy. HUMAN SERVICES and personal information concerning Name of Committee: National Institute on National Institutes of Health individuals associated with the grant Aging Special Emphasis Panel, Pepper applications, the disclosure of which Centers. National Institute on Aging; Notice of would constitute a clearly unwarranted Date: October 29, 2014. Closed Meeting invasion of personal privacy. Time: 8:00 a.m. to 5:00 p.m. Name of Committee: National Cancer Agenda: To review and evaluate grant Pursuant to section 10(d) of the Institute Special Emphasis Panel; Cancer applications. Federal Advisory Committee Act, as Center Support Grant. Place: National Institute on Aging, amended (5 U.S.C. App.), notice is Date: December 11, 2014. Gateway Building, Suite 2C212, 7201 hereby given of the following meeting. Time: 3:50 p.m. to 5:05 p.m. Wisconsin Avenue, Bethesda, MD 20892. The meeting will be closed to the Agenda: To review and evaluate grant Contact Person: Alicja L. Markowska, public in accordance with the applications. Ph.D., DSC, Scientific Review Branch, provisions set forth in sections Place: Bethesda North Marriott Hotel & National Institute on Aging, 7201 Wisconsin 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Conference Center, 5701 Marinelli Road, Avenue, Suite 2C212, Bethesda, MD 20892, North Bethesda, MD 20852. 301–496–9666, [email protected]. as amended. The contract proposals and Contact Person: Adriana Stoica, Ph.D. the discussions could disclose This notice is being published less than 15 Scientific Review Officer, Resources and days prior to the meeting due to the timing confidential trade secrets or commercial Training Review Branch, Division of limitations imposed by the review and property such as patentable material, Extramural Activities, National Cancer funding cycle. and personal information concerning Institute, 9609 Medical Center Drive, Room 7W234, Bethesda, MD 20892–9750, 240–276– (Catalogue of Federal Domestic Assistance individuals associated with the contract Program Nos. 93.866, Aging Research, proposals, the disclosure of which 6368, [email protected]. Information is also available on the National Institutes of Health, HHS) would constitute a clearly unwarranted Institute’s/Center’s home page: http:// invasion of personal privacy. Dated: October 6, 2014. deainfo.nci.nih.gov/advisory/sep/sep.htm, Melanie J. Gray, Name of Committee: National Institute on where an agenda and any additional Program Analyst, Office of Federal Advisory Aging Special Emphasis Panel; NIA Aged information for the meeting will be posted Committee Policy. Cell Bank. when available. Date: November 10, 2014. (Catalogue of Federal Domestic Assistance [FR Doc. 2014–24185 Filed 10–9–14; 8:45 am] Time: 2:00 p.m. to 3:30 p.m. Program Nos. 93.392, Cancer Construction; BILLING CODE 4140–01–P

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DEPARTMENT OF HEALTH AND MSC 7806, Bethesda, MD 20892, 301–435– Place: Embassy Suites at the Chevy Chase HUMAN SERVICES 1180, [email protected]. Pavilion, 4300 Military Road NW., Name of Committee: Center for Scientific Washington, DC 20015. National Institutes of Health Review Special Emphasis Panel; PAR Panel: Contact Person: Allen Richon, Ph.D., Development of Appropriate Pediatric Scientific Review Officer, Center for Center for Scientific Review; Notice of Formulations and Pediatric Drug Delivery Scientific Review, National Institutes of Health, 6701 Rockledge Drive, Room 6184, Closed Meetings System. Date: November 6, 2014. MSC 7892, Bethesda, MD 20892, 301–379– Pursuant to section 10(d) of the Time: 11:00 a.m. to 3:00 p.m. 9351, [email protected]. Federal Advisory Committee Act, as Agenda: To review and evaluate grant Name of Committee: Center for Scientific amended (5 U.S.C. App.), notice is applications. Review Special Emphasis Panel; Small Place: National Institutes of Health, 6701 Business: Biomedical Sensing, Measurement hereby given of the following meetings. Rockledge Drive, Bethesda, MD 20892, and Instrumentation. The meetings will be closed to the (Telephone Conference Call). Date: November 7, 2014. public in accordance with the Contact Person: Robert C Elliott, Ph.D., Time: 8:00 a.m. to 5:00 p.m. provisions set forth in sections Scientific Review Officer, Center for Agenda: To review and evaluate grant 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Scientific Review, National Institutes of applications. as amended. The grant applications and Health, 6701 Rockledge Drive, Room 3130, Place: Hilton Washington/Rockville, 1750 the discussions could disclose MSC 7850, Bethesda, MD 20892, 301–435– Rockville Pike, Rockville, MD 20852. confidential trade secrets or commercial 3009, [email protected]. Contact Person: Guo Feng Xu, Ph.D., Name of Committee: Center for Scientific Scientific Review Officer, Center for property such as patentable material, Scientific Review, National Institutes of and personal information concerning Review Special Emphasis Panel; Member conflict: Oral Microbiology. Health, 6701 Rockledge Drive, Room 5122, individuals associated with the grant Date: November 6, 2014. MSC 7854, Bethesda, MD 20892, 301–237– applications, the disclosure of which Time: 1:00 p.m. to 3:00 p.m. 9870, [email protected]. would constitute a clearly unwarranted Agenda: To review and evaluate grant Name of Committee: Center for Scientific invasion of personal privacy. applications. Review Special Emphasis Panel; Member Place: National Institutes of Health, 6701 Conflict: Musculoskeletal Soft Tissue Name of Committee: Center for Scientific Rockledge Drive, Bethesda, MD 20892, Biology. Review Special Emphasis Panel; Urological (Telephone Conference Call). Date: November 7, 2014. and Urogynecological Sciences and Small Contact Person: Maria Nurminskaya, Ph.D., Time: 1:00 p.m. to 3:00 p.m. Business. Scientific Review Officer, Center for Agenda: To review and evaluate grant Date: October 29, 2014. Scientific Review, National Institutes of applications. Time: 8:00 a.m. to 6:00 p.m. Health, Bethesda, MD 20892, (301) 435–1222, Place: National Institutes of Health, 6701 Agenda: To review and evaluate grant [email protected]. Rockledge Drive, Bethesda, MD 20892, applications. (Telephone Conference Call). Place: Crowne Plaza Washington National Name of Committee: Center for Scientific Review Special Emphasis Panel; AREA Contact Person: Aftab A Ansari, Ph.D., Airport, 1489 Jefferson Davis Hwy, Arlington, Grants: Experimental and Computational Scientific Review Officer, Center for VA 22202. Genetics. Scientific Review, National Institutes of Contact Person: Ryan G Morris, Ph.D., Date: November 6, 2014. Health, 6701 Rockledge Drive, Room 4108, Scientific Review Officer, Center for Time: 3:00 p.m. to 5:30 p.m. MSC 7814, Bethesda, MD 20892, 301–237– Scientific Review, National Institutes of Agenda: To review and evaluate grant 9931, [email protected]. Health, 6701 Rockledge Drive, Room 4205, applications. Name of Committee: Center for Scientific MSC 7814, Bethesda, MD 20892, 301–435– Place: National Institutes of Health, 6701 1501, [email protected]. Review Special Emphasis Panel; Member Rockledge Drive, Bethesda, MD 20892, Conflict: Functional Correlates of Cognitive Name of Committee: Center for Scientific (Telephone Conference Call). Impairment and Seizures. Review Special Emphasis Panel; Member Contact Person: Ronald Adkins, Ph.D., Date: November 7, 2014. Conflict: Topics in Microbiology. Scientific Review Officer, Center for Time: 12:00 p.m. to 3:00 p.m. Date: October 30, 2014. Scientific Review, National Institutes of Agenda: To review and evaluate grant Time: 1:15 p.m. to 5:00 p.m. Health, 6701 Rockledge Drive, Room 2206, applications. Agenda: To review and evaluate grant MSC 7890, Bethesda, MD 20892, 301–435– Place: National Institutes of Health, 6701 applications. 4511, [email protected]. Rockledge Drive, Bethesda, MD 20892, Place: National Institutes of Health, 6701 Name of Committee: Center for Scientific (Telephone Conference Call). Rockledge Drive, Bethesda, MD 20892, Review Special Emphasis Panel; Small: Contact Person: Alessandra C Rovescalli, (Telephone Conference Call). Business: Biological Chemistry, Biophysics Scientific Review Officer, National Institutes Contact Person: Fouad A El-Zaatari, Ph.D., and Drug Discovery. of Health, Center of Scientific Review, 6701 Scientific Review Officer, Center for Date: November 7, 2014. Rockledge Drive, Room 5205, MSC, 7846, Scientific Review, National Institutes of Time: 8:00 a.m. to 5:00 p.m. Bethesda, MD 20892, (301) 435–1021, Health, 6701 Rockledge Drive, Room 3206, Agenda: To review and evaluate grant [email protected]. MSC 7808, Bethesda, MD 20892, (301) 435– applications. Name of Committee: Center for Scientific 1149, [email protected]. Place: Hotel Nikko San Francisco, 222 Review Special Emphasis Panel; Child Name of Committee: Center for Scientific Mason Street, San Francisco, CA 94102. Psychopathology and Departmental Review Special Emphasis Panel; Small Contact Person: Vonda K Smith, Ph.D., Disabilities AREA Review. Business: Biological Chemistry, Biophysics Scientific Review Officer, Center for Date: November 7, 2014. and Drug Discovery. Scientific Review, National Institutes of Time: 12:00 p.m. to 2:00 p.m. Date: November 3, 2014. Health, 6701 Rockledge Drive, Room 6188, Agenda: To review and evaluate grant Time: 8:30 a.m. to 6:00 p.m. MSC 7892, Bethesda, MD 20892, 301–435– applications. Agenda: To review and evaluate grant 1789, [email protected]. Place: National Institutes of Health, 6701 applications. Name of Committee: Center for Scientific Rockledge Drive, Bethesda, MD 20892, Place: Doubletree Hotel Bethesda, Review Special Emphasis Panel; Small (Telephone Conference Call). (Formerly Holiday Inn Select), 8120 Business: Cell, Computational and Molecular Contact Person: Serena Chu, Ph.D., Wisconsin Avenue, Bethesda, MD 20814. Biology. Scientific Review Officer, BBBP IRG, Center Contact Person: Sergei Ruvinov, Ph.D., Date: November 7, 2014. for Scientific Review, National Institutes of Scientific Review Officer, Center for Time: 8:00 a.m. to 6:00 p.m. Health, 6701 Rockledge Drive, Room 3178, Scientific Review, National Institutes of Agenda: To review and evaluate grant MSC 7848, Bethesda, MD 20892, 301–500– Health, 6701 Rockledge Drive, Room 4158, applications. 5829, [email protected].

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(Catalogue of Federal Domestic Assistance Center Drive, Room 3An.22, Bethesda, MD Wisconsin Avenue, Bethesda, MD 20892, Program Nos. 93.306, Comparative Medicine; 20892–6200, 301–594–3663, sidorova@ (Telephone Conference Call). 93.333, Clinical Research, 93.306, 93.333, nigms.nih.gov. Contact Person: Isis S. Mikhail, MPH, 93.337, 93.393–93.396, 93.837–93.844, (Catalogue of Federal Domestic Assistance DRPH, National Institute on Aging, Gateway 93.846–93.878, 93.892, 93.893, National Program Nos. 93.375, Minority Biomedical Building, 7201 Wisconsin Avenue, Suite Institutes of Health, HHS). Research Support; 93.821, Cell Biology and 2C212, Bethesda, MD 20892, 301–402–7702, [email protected]. Dated: October 3, 2014. Biophysics Research; 93.859, Pharmacology, Physiology, and Biological Chemistry (Catalogue of Federal Domestic Assistance Anna Snouffer, Research; 93.862, Genetics and Program Nos. 93.866, Aging Research, Deputy Director, Office of Federal Advisory Developmental Biology Research; 93.88, National Institutes of Health, HHS). Committee Policy. Minority Access to Research Careers; 93.96, Dated: October 6, 2014. [FR Doc. 2014–24188 Filed 10–9–14; 8:45 am] Special Minority Initiatives, National Melanie J. Gray, BILLING CODE 4140–01–P Institutes of Health, HHS). Program Analyst, Office of Federal Advisory Dated: October 6, 2014. Committee Policy. Melanie J. Gray, DEPARTMENT OF HEALTH AND [FR Doc. 2014–24186 Filed 10–9–14; 8:45 am] Program Analyst, Office of Federal Advisory BILLING CODE 4140–01–P HUMAN SERVICES Committee Policy. National Institutes of Health [FR Doc. 2014–24182 Filed 10–9–14; 8:45 am] BILLING CODE 4140–01–P DEPARTMENT OF HEALTH AND National Institute of General Medical HUMAN SERVICES Sciences; Notice of Closed Meetings DEPARTMENT OF HEALTH AND National Institutes of Health Pursuant to section 10(d) of the HUMAN SERVICES Federal Advisory Committee Act, as National Cancer Institute; Notice of amended (5 U.S.C. App.), notice is National Institutes of Health Closed Meeting hereby given of the following meetings. Pursuant to section 10(d) of the The meetings will be closed to the National Institute on Aging; Notice of Federal Advisory Committee Act, as public in accordance with the Closed Meetings amended (5 U.S.C. Appendix 2); notice provisions set forth in sections Pursuant to section 10(d) of the is hereby given of the following 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Federal Advisory Committee Act, as meeting. as amended. The grant applications and amended (5 U.S.C. App.), notice is The meeting will be closed to the the discussions could disclose hereby given of the following meetings. public in accordance with the confidential trade secrets or commercial The meetings will be closed to the provisions set forth in sections property such as patentable material, public in accordance with the 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., and personal information concerning provisions set forth in sections as amended. The purpose of this individuals associated with the grant 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., meeting is to evaluate requests for applications, the disclosure of which as amended. The grant applications and preclinical development resources for would constitute a clearly unwarranted the discussions could disclose potential new therapeutics for the invasion of personal privacy. confidential trade secrets or commercial treatment of cancer. The outcome of the Name of Committee: National Institute of property such as patentable material, evaluation will provide information to General Medical Sciences Special Emphasis and personal information concerning internal NCI committees that will Panel, Review of U01 Applications: Genomes individuals associated with the grant decide whether NCI should support to Natural Products. applications, the disclosure of which requests and make available contract Date: November 5, 2014. would constitute a clearly unwarranted Time: 8:00 a.m. to 5:00 p.m. resources for development of the Agenda: To review and evaluate grant invasion of personal privacy. potential therapeutic to improve the applications. Name of Committee: National Institute on treatment of various forms of cancer. Place: Courtyard by Marriott, 5520 Aging Special Emphasis Panel, Sex The research proposals and the Wisconsin Avenue, Chevy Chase, MD 20815. Difference in Health. discussions could disclose confidential Contact Person: Robert Horowits, Ph.D., Date: November 4, 2014. trade secrets or commercial property Scientific Review Officer, Office of Scientific Time: 10:00 a.m. to 1:30 p.m. such as patentable material, and Review, National Institute of General Medical Agenda: To review and evaluate grant personal information concerning Sciences, National Institutes of Health, 45 applications. individuals associated with the Center Drive, Room 3An.18, Bethesda, MD Place: National Institute on Aging, 20892–6200, 301–594–6904, horowitr@ Gateway Building, Suite 2C212, 7201 proposed research projects, the mail.nih.gov. Wisconsin Avenue, Bethesda, MD 20892, disclosure of which would constitute a Name of Committee: National Institute of (Telephone Conference Call). clearly unwarranted invasion of General Medical Sciences Special Emphasis Contact Person: Kimberly Firth, Ph.D., personal privacy. Panel, Support for Conferences and Scientific National Institutes of Health, National Name of Committee: National Cancer Meetings (R13). Institute on Aging, Gateway Building, 7201 Institute Special Emphasis Panel; NCI Date: November 5, 2014. Wisconsin Avenue, Suite 2C212, Bethesda, Experimental Therapeutics Program (Cycle Time: 11:30 p.m. to 3:00 p.m. MD 20892, 301–402–7702, firthkm@ 18 NExT). Agenda: To review and evaluate grant mail.nih.gov. Date: December 11, 2014. applications. Name of Committee: National Institute on Time: 8:30 a.m. to 4:30 p.m. Place: National Institutes of Health, Aging Special Emphasis Panel, Treatments of Agenda: To evaluate the NCI Experimental Natcher Building, 45 Center Drive, Room Aging Obese Patients. Therapeutics Program Portfolio. 3An.12, Bethesda, MD 20892–6200, Date: November 6, 2014. Place: National Institutes of Health, 9000 (Telephone Conference Call). Time: 1:00 p.m. to 5:00 p.m. Rockville Pike, Building 31 Conference Room Contact Person: Nina Sidorova, Ph.D., Agenda: To review and evaluate grant 6C10, Bethesda, MD 20892. Scientific Review Officer, Office of Scientific applications. Contact Person: Barbara Mroczkowski, Review, National Institute of General Medical Place: National Institute on Aging, Ph.D., Executive Secretary, Discovery Sciences, National Institutes of Health, 45 Gateway Building, Suite 2C212, 7201 Experimental Therapeutics Program,

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National Cancer Institute, NIH, 31 Center Name of Committee: Center for Scientific Scientific Review, National Institutes of Drive, Room 3A44, Bethesda, MD 20892, Review Special Emphasis Panel, Member Health, 6701 Rockledge Drive, Room 4211, (301) 496–4291, [email protected]. Conflict: Auditory Neuroscience. MSC 7814, Bethesda, MD 20892, 301–435– Joseph Tomaszewski, Ph.D., Executive Date: October 29–30, 2014. 6809, [email protected]. Secretary, Development Experimental Time: 8:00 a.m. to 6:00 p.m. Name of Committee: Center for Scientific Therapeutics Program, National Cancer Agenda: To review and evaluate grant Review Special Emphasis Panel, Institute, NIH, 31 Center Drive, Room 3A44, applications. Fellowships: Biochemistry and Biophysical Bethesda, MD 20892, (301) 496–6711, Place: National Institutes of Health, 6701 Chemistry. [email protected]. Rockledge Drive, Bethesda, MD 20892, Date: November 6–7, 2014. (Catalogue of Federal Domestic Assistance (Virtual Meeting). Time: 8:00 a.m. to 5:00 p.m. Program Nos. 93.392, Cancer Construction; Contact Person: John Bishop, Ph.D., Agenda: To review and evaluate grant 93.393, Cancer Cause and Prevention Scientific Review Officer, Center for applications. Research; 93.394, Cancer Detection and Scientific Review, National Institutes of Place: National Institutes of Health, 6701 Diagnosis Research; 93.395, Cancer Health, 6701 Rockledge Drive, Room 5182, Rockledge Drive, Bethesda, MD 20892, Treatment Research; 93.396, Cancer Biology MSC 7844, Bethesda, MD 20892, (301) 408– (Virtual Meeting). Research; 93.397, Cancer Centers Support; 9664, [email protected]. Contact Person: David R Jollie, Ph.D., 93.398, Cancer Research Manpower; 93.399, Name of Committee: Center for Scientific Scientific Review Officer, Center for Cancer Control, National Institutes of Health, Review Special Emphasis Panel, Member Scientific Review, National Institutes of HHS). Conflict: Integrative Neuroscience. Health, 6701 Rockledge Drive, Room 4166, MSC 7806, Bethesda, MD 20892, (301)–437– Dated: October 6, 2014. Date: October 30, 2014. Time: 1:00 p.m. to 6:00 p.m. 7927, [email protected]. Melanie J. Gray, Agenda: To review and evaluate grant Name of Committee: Center for Scientific Program Analyst, Office of Federal Advisory applications. Review Special Emphasis Panel, Member Committee Policy. Place: National Institutes of Health, 6701 Conflict: Neurobiology of Sensory and [FR Doc. 2014–24181 Filed 10–9–14; 8:45 am] Rockledge Drive, Bethesda, MD 20892, Cognitive Processing. BILLING CODE 4140–01–P (Virtual Meeting). Date: November 6, 2014. Contact Person: Nicholas Gaiano, Ph.D., Time: 9:00 a.m. to 6:00 p.m. Scientific Review Officer, Center for Agenda: To review and evaluate grant DEPARTMENT OF HEALTH AND Scientific Review, National Institutes of applications. HUMAN SERVICES Health, 6701 Rockledge Drive, Room 5178, Place: National Institutes of Health, 6701 MSC 7844, Bethesda, MD 20892–7844, 301– Rockledge Drive, Bethesda, MD 20892, National Institutes of Health 435–1033, [email protected]. (Virtual Meeting). Name of Committee: Center for Scientific Contact Person: Wei-Qin Zhao, Ph.D., Center for Scientific Review; Notice of Review Special Emphasis Panel, Member Scientific Review Officer, Center for Scientific Review, National Institutes of Closed Meetings Conflict: Research Project Grant. Date: November 3, 2014. Health, 6701 Rockledge Drive, Room 5181 Pursuant to section 10(d) of the Time: 11:00 a.m. to 1:00 p.m. MSC 7846, Bethesda, MD 20892–7846, 301– Federal Advisory Committee Act, as Agenda: To review and evaluate grant 435–1236, [email protected]. amended (5 U.S.C. App.), notice is applications. Name of Committee: Center for Scientific hereby given of the following meetings. Place: National Institutes of Health, 6701 Review Special Emphasis Panel, Small The meetings will be closed to the Rockledge Drive, Bethesda, MD 20892, Business: Endocrinology, Metabolism, (Telephone Conference Call). Nutrition, and Reproductive Sciences. public in accordance with the Contact Person: Wenchi Liang, Ph.D., Date: November 6, 2014. provisions set forth in sections Scientific Review Officer, Center for Time: 10:00 a.m. to 6:00 p.m. 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Scientific Review, National Institutes of Agenda: To review and evaluate grant as amended. The grant applications and Health, 6701 Rockledge Drive, Room 3150, applications. the discussions could disclose MSC 7770, Bethesda, MD 20892, 301–435– Place: National Institutes of Health, 6701 confidential trade secrets or commercial 0681, [email protected]. Rockledge Drive, Bethesda, MD 20892. property such as patentable material, Name of Committee: Center for Scientific Contact Person: Dianne Hardy, Ph.D., and personal information concerning Review Special Emphasis Panel, Muscle and Scientific Review Officer, Center for individuals associated with the grant Exercise Physiology. Scientific Review, National Institutes of Date: November 5–6, 2014. Health, 6701 Rockledge Drive, Room 6175, applications, the disclosure of which MSC 7892, Bethesda, MD 20892, 301–435– would constitute a clearly unwarranted Time: 8:00 a.m. to 2:00 p.m. Agenda: To review and evaluate grant 1154, [email protected]. invasion of personal privacy. applications. Name of Committee: Center for Scientific Name of Committee: Center for Scientific Place: National Institutes of Health, 6701 Review Special Emphasis Panel, AREA: Review Special Emphasis Panel, PAR13– Rockledge Drive, Bethesda, MD 20892, Oncological Sciences Grant Applications. 259:P01 Review Drug Addiction. (Virtual Meeting). Date: November 6, 2014. Date: October 16–17, 2014. Contact Person: Rajiv Kumar, Ph.D., Chief, Time: 11:00 a.m. to 4:00 p.m. Time: 8:00 a.m. to 6:00 p.m. MOSS IRG, Center for Scientific Review, Agenda: To review and evaluate grant Agenda: To review and evaluate grant National Institutes of Health, 6701 Rockledge applications. applications. Drive, Room 4216, MSC 7802, Bethesda, MD Place: National Institutes of Health, 6701 Place: National Institutes of Health, 6701 20892, 301–435–1212, [email protected], Rockledge Drive, Bethesda, MD 20892, Rockledge Drive, Bethesda, MD 20892, Name of Committee: Center for Scientific (Telephone Conference Call). (Virtual Meeting). Review Special Emphasis Panel, Small Contact Person: Sally A Mulhern, Ph.D., Contact Person: John Bishop, Ph.D., Business: Dermatology, Rheumatology, and Scientific Review Officer, Center for Scientific Review Officer, Center for Inflammation. Scientific Review, National Institutes of Scientific Review, National Institutes of Date: November 5, 2014. Health, 6701 Rockledge Drive, Room 6214, Health, 6701 Rockledge Drive, Room 5182, Time: 9:00 a.m. to 6:00 p.m. MSC 7804, Bethesda, MD 20892, (301) 435– MSC 7844, Bethesda, MD 20892, (301) 408– Agenda: To review and evaluate grant 5877, [email protected]. 9664, [email protected]. applications. Name of Committee: AIDS and Related This notice is being published less than 15 Place: National Institutes of Health, 6701 Research Integrated Review Group, HIV/ days prior to the meeting due to the timing Rockledge Drive, Bethesda, MD 20892. AIDS Vaccines Study Section. limitations imposed by the review and Contact Person: Aruna K Behera, Ph.D., Date: November 10, 2014. funding cycle. Scientific Review Officer, Center for Time: 8:00 a.m. to 6:00 p.m.

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Agenda: To review and evaluate grant DEPARTMENT OF HOUSING AND information collection described in applications. URBAN DEVELOPMENT Section A. Place: Mayflower Park Hotel, 405 Olive Way, Seattle, WA 98101. [Docket No. FR–5753–N–10] A. Overview of Information Collection Contact Person: Mary Clare Walker, Ph.D., 60-Day Notice of Proposed Information Title of Information Collection: Self- Scientific Review Officer, Center for Collection: Self-Help Homeownership Help Homeownership Opportunity Scientific Review, National Institutes of Opportunity Program (SHOP) Program (SHOP). Health, 6701 Rockledge Drive, Room 5208, OMB Approval Number: 2506–0157. MSC 7852, Bethesda, MD 20892, (301) 435– AGENCY: Office of Community Planning Type of Request: Extension of 1165, [email protected]. and Development, HUD. currently approved collection. Name of Committee: Center for Scientific ACTION: Notice. Form Number: HUD–424CB, HUD– Review Special Emphasis Panel, Small 2880, HUD–2993, HUD–2995, HUD– SUMMARY: HUD is seeking approval from Business: Cancer Diagnostics and Treatments 96011. the Office of Management and Budget (CDT). Description of the need for the (OMB) for the information collection Date: November 10–11, 2014. information and proposed use: This is a described below. In accordance with the Time: 8:00 a.m. to 5:00 p.m. proposed information collection for Paperwork Reduction Act, HUD is Agenda: To review and evaluate grant submission requirements under the requesting comment from all interested applications. SHOP Notice of Funding Availability Place: Courtyard Riverwalk Marriott, 207 parties on the proposed collection of information. The purpose of this notice (NOFA). HUD requires information in N. St Mary’s Street, San Antonio, TX 78205. order to ensure the eligibility of SHOP Contact Person: Zhang-Zhi Hu, MD, is to allow for 60 days of public comment. applicants and the compliance of SHOP Scientific Review Officer, Center for proposals, to rate and rank SHOP Scientific Review, National Institutes of DATES: Comment Due Date: December 9, applications, and to select applicants for Health, 6701 Rockledge Drive, Room 6186, 2014. grant awards. Information is collected MSC 7804, Bethesda, MD 20892, (301) 594– ADDRESSES: Interested persons are on an annual basis from each applicant 2414, [email protected]. invited to submit comments regarding that responds to the SHOP NOFA. The Name of Committee: AIDS and Related this proposal. Comments should refer to SHOP NOFA requires applicants to Research Integrated Review Group, AIDS the proposal by name and/or OMB submit specific forms and narrative Molecular and Cellular Biology Study Control Number and should be sent to: responses. Section. Colette Pollard, Reports Management Respondents: National and regional Date: November 10, 2014. Officer, QDAM, Department of Housing non-profit self-help housing Time: 8:00 a.m. to 6:00 p.m. and Urban Development, 451 Seventh organizations (including consortia) that Agenda: To review and evaluate grant Street SW., Room 4176, Washington, DC applications. apply for funds in response to the SHOP 20410–4500; telephone 202–402–3400 NOFA. Place: The St. Regis Washington DC, 923 (this is not a toll-free number) or email 16th Street NW., Washington, DC 20006. Frequency of Submission: Annually in at [email protected] for a copy of Contact Person: Kenneth A Roebuck, Ph.D., response to the issuance of a SHOP the proposed forms or other available Scientific Review Officer, Center for NOFA. Scientific Review, National Institutes of information. Person with hearing or Estimation of the total number of Health, 6701 Rockledge Drive, Room 5214, speech impairments may access this hours needed to prepare the information MSC 7852, Bethesda, MD 20892, (301) 435– number through TTY by calling the toll- collection including number of 1166, [email protected]. free Federal Relay Service at (800) 877– respondents, hours per response, 8339. (Catalogue of Federal Domestic Assistance frequency of response, and total hours Program Nos. 93.306, Comparative Medicine; FOR FURTHER INFORMATION CONTACT: of response for all respondents. The 93.333, Clinical Research, 93.306, 93.333, Martha Murray, SHOP Program estimates of the average hours needed to 93.337, 93.393–93.396, 93.837–93.844, Manager, Office of Affordable Housing prepare the information collection are 93.846–93.878, 93.892, 93.893, National Programs, U.S. Department of Housing based on information provided by Institutes of Health, HHS). and Urban Development, 451 Seventh previous applicants. Actual hours will Street SW., Room 7162, Washington, DC vary depending on the proposed scope Dated: October 6, 2014. 20410–4500; telephone 202–402–4410 of the applicant’s program, the Melanie J. Gray, (this is not a toll-free number) or by applicant’s geographic service area and Program Analyst, Office of Federal Advisory email at [email protected]. the number of affiliate organizations. Committee Policy. SUPPLEMENTARY INFORMATION: This The information burden is generally [FR Doc. 2014–24184 Filed 10–9–14; 8:45 am] notice informs the public that HUD is greater for national organizations with BILLING CODE 4140–01–P seeking approval from OMB for the numerous affiliates.

Total Paperwork Number of Frequency Hours per annual requirement respondents response hours

SF–424 ...... 10 1 1 10 HUD–424CB ...... 10 1 10 10 HUD–424 CBW ...... 10 1 30 300 SF–LLL ...... 10 1 .5 5 HUD–2880 ...... 10 1 .5 5 HUD–2993 ...... 10 1 .5 5 HUD–2995 ...... 10 1 .5 5 HUD–96011 ...... 10 1 .5 5 Applicant Eligibility ...... 10 1 10 100 SHOP Program Design and Scope of Work ...... 10 1 30 300 Rating Factor 1 ...... 10 1 25 250

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Total Paperwork Number of Frequency Hours per annual requirement respondents response hours

Rating Factor 2 ...... 10 1 25 250 Rating Factor 3 ...... 10 1 55 550 Rating Factor 4 ...... 10 1 30 300 Rating Factor 5 ...... 10 1 25 250

Total Annual Hour Burden ...... 243.5 2435

B. Solicitation of Public Comments SUMMARY: HUD is seeking approval from information collection described in This notice is soliciting comments the Office of Management and Budget Section A. (OMB) for the information collection from members of the public and affected A. Overview of Information Collection parties concerning the collection of described below. In accordance with the information described in Section A on Paperwork Reduction Act, HUD is Title of Information Collection: 24 the following: requesting comment from all interested CFR Part 50—Protection and (1) Whether the proposed collection parties on the proposed collection of Enhancement of Environmental Quality. information. The purpose of this notice of information is necessary for the OMB Approval Number: 2506–0177. proper performance of the functions of is to allow for 60 days of public the agency, including whether the comment. Type of Request: Extension of information will have practical utility; DATES: Comments Due Date: December currently approved collection. (2) The accuracy of the agency’s 9, 2014. Description of the need for the estimate of the burden of the proposed ADDRESSES: Interested persons are information and proposed use: HUD collection of information; invited to submit comments regarding requests its applicants to supply (3) Ways to enhance the quality, this proposal. Comments should refer to environmental information that is not utility, and clarity of the information to the proposal by name and/or OMB otherwise available to HUD staff for the be collected; and Control Number and should be sent to: environmental review on an applicant’s (4) Ways to minimize the burden of Colette Pollard, Reports Management proposal for HUD financial assistance to the collection of information on those Officer, QDAM, Department of Housing develop or improve housing or who are to respond; including through and Urban Development, 451 7th Street community facilities. HUD itself must the use of appropriate automated SW., Room 4176, Washington, DC perform an environmental review for collection techniques or other forms of 20410–5000; telephone 202–402–3400 the purpose of compliance with its information technology, e.g., permitting (this is not a toll-free number) or email environmental regulations found at 24 electronic submission of responses. CFR Part 50, Protection and HUD encourages interested parties to at [email protected] for a copy of the proposed forms or other available Enhancement of Environmental Quality. submit comment in response to these Part 50 implements the National questions. information. Persons with hearing or speech impairments may access this Environmental Policy Act and Authority: Section 3506 of the Paperwork number through TTY by calling the toll- implementing procedures of the Council Reduction Act of 1995, 44 U.S.C. Chapter 35, free Federal Relay Service at (800) 877– on Environmental Quality, as well as as amended. 8339. the related federal environmental laws Dated: October 2, 2014. FOR FURTHER INFORMATION CONTACT: Liz and executive orders. HUD’s agency- Clifford Taffet, Zepeda, Environmental Specialist, wide provisions—24 CFR 50.3(h)(1) and General Deputy Assistant Secretary for Office of Environment and Energy, 50.32 [copy attached]—regulate how Community Planning and Development. Department of Housing and Urban individual HUD program staffs are to [FR Doc. 2014–24263 Filed 10–9–14; 8:45 am] Development, 451 7th Street SW., utilize such collected data when HUD BILLING CODE 4210–67–P Washington, DC 20410; email Liz itself prepares the environmental review Zepeda at [email protected] and compliance. Separately, individual or telephone 202–402–3988. This is not HUD programs each have their own DEPARTMENT OF HOUSING AND a toll-free number. Persons with hearing regulations and guidance implementing URBAN DEVELOPMENT or speech impairments may access this environmental and related collection [Docket No. FR–5753–N–09] number through TTY by calling the toll- responsibilities. For the next three free Federal Relay Service at (800) 877– years, this approved collection will 60-Day Notice of Proposed Information 8339. continue unchanged under this OMB Collection: Protection and Copies of available documents control number to assure adequate Enhancement of Environmental Quality submitted to OMB may be obtained coverage for all HUD programs subject from Ms. Zepeda. to Part 50. AGENCY: Office of Community Planning and Development, HUD. SUPPLEMENTARY INFORMATION: This Respondents: Businesses, not-for- notice informs the public that HUD is profit institutions, and local ACTION: Notice. seeking approval from OMB for the governments receiving HUD funding.

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Burden Annual Hourly Information collection Number of Frequency Responses hour per burden cost per Annual cost respondents of response per annum response hours response

Total ...... 2,600 1 2,600 2 5,200 $52 $270,400

B. Solicitation of Public Comment is to allow for 60 days of public application is reviewed by HUD This notice is soliciting comments comment. Headquarters and HUD Field Offices from members of the public and affected DATES: Comments Due Date: December and ranked according to the PHA’s parties concerning the collection of 9, 2014. administrative capability, the need for housing assistance, and other factors information described in Section A on ADDRESSES: Interested persons are the following: invited to submit comments regarding specified in a notice of funding (1) Whether the proposed collection this proposal. Comments should refer to availability. The PHAs must establish a of information is necessary for the the proposal by name and/or OMB utility allowance schedule for all proper performance of the functions of Control Number and should be sent to: utilities and other services. Units must the agency, including whether the Colette Pollard, Reports Management be inspected using HUD-prescribed information will have practical utility; Officer, ODAM, Department of Housing forms to determine if the units meet the (2) The accuracy of the agency’s and Urban Development, 451 7th Street housing quality standards (HQS) of the estimate of the burden of the proposed SW., Room 4176, Washington, DC HCV program. After the family is issued collection of information; 20410–5000; telephone 202–402–0306 a HCV to search for a unit, the family (3) Ways to enhance the quality, (this is not a toll-free number) or email must complete and submit to the PHA utility, and clarity of the information to at [email protected] for a copy of a Request for Tenancy Approval when be collected; and the proposed forms or other available it finds a unit which is suitable for its (4) Ways to minimize the burden of information. Persons with hearing or needs. Initial PHAs will use a the collection of information on those speech impairments may access this standardized form to submit portability who are to respond; including through number through TTY by calling the toll- information to the receiving PHA who the use of appropriate automated free Federal Relay Service at (800) 877– will also use the form for monthly collection techniques or other forms of 8339. portability billing. PHAs and owners will enter into HAP Contracts each information technology, e.g., permitting FOR FURTHER INFORMATION CONTACT: electronic submission of responses. Arlette Mussington, Office of Policy, providing information on rents, HUD encourages interested parties to Programs and Legislative Initiatives, payments, certifications, notifications, submit comment in response to these PIH, Department of Housing and Urban and owner agreement in a form questions. Development, 451 7th Street SW., acceptable to the PHA. A tenancy (L’Enfant Plaza, Room 2206), addendum is included in the HAP Authority: Section 3507 of the Paperwork contract as well as incorporated in the Reduction Act of 1995, 44 U.S.C. Chapter 35. Washington, DC 20410; telephone 202– 402–4109, (this is not a toll-free lease between the owner and the family. Dated: October 2, 2014. number). Families that participate in the Clifford Taffet, Homeownership option will execute a General Deputy Assistant Secretary for SUPPLEMENTARY INFORMATION: This statement regarding their Community Planning and Development. notice informs the public that HUD is responsibilities and execute contracts of [FR Doc. 2014–24261 Filed 10–9–14; 8:45 am] seeking approval from OMB for the sale including an additional contract of information collection described in BILLING CODE 4210–67–P sale for new construction units. PHAs Section A. participating in the project-based A. Overview of Information Collection voucher (PBV) program will enter into DEPARTMENT OF HOUSING AND Agreements with developing owners, Title of Information Collection: URBAN DEVELOPMENT HAP contracts with the existing and Housing Choice Voucher (HCV) New Construction/Rehabilitation Program. [Docket No. FR–5759–N–13] owners, Statement of Family OMB Approval Number: 2577–0169. Responsibility with the family and a 60-Day Notice of Proposed Information Type of Request: Revision of currently approved collection with change that lease addendum will be provided for Collection: Housing Choice Voucher execution between the family and the Program eliminates financial forms. Form Numbers: HUD–52515, HUD– owner. AGENCY: Office of the Assistant 52667, HUD–52580, HUD–52580–A, Respondents (i.e. affected public): Secretary for Public and Indian HUD–52517, HUD–52646, HUD–52665, State and Local Governments, Housing, PIH, HUD. HUD–52641, HUD–52641–A, HUD businesses or other non-profits. Estimated Number of Respondents: ACTION: Notice. 52642, HUD 52649, HUD 52531A and B, HUD 52530A, HUD 52530B, HUD 2,302 PHAs. SUMMARY: HUD is seeking approval from 52530C, HUD 52578B. Estimated Number of Responses: the Office of Management and Budget Description of the need for the 2,843,533. (OMB) for the information collection information and proposed use: Public Frequency of Response: Varies by described below. In accordance with the Housing Agencies (PHA) will prepare an form. Paperwork Reduction Act, HUD is application for funding which specifies Average Hours per Response: .44 requesting comment from all interested the number of units requested, as well hours. parties on the proposed collection of as the PHA’s objectives and plans for Total Estimated Burdens Hours: information. The purpose of this notice administering the HCV program. The 1,274,089.

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Number of Frequency of Responses Burden hour Annual burden Hourly cost Information collection respondents response per annum per response hours per response Annual cost

2,302 Varies ...... 2,843,533 .44 1,274,089 $20 $25,481,780

Total ...... 2,302 Varies ...... 2,843,533 .44 1,274,089 20 25,481,780

B. Solicitation of Public Comment impaired (202) 708–2565 (these instructions for completing the This notice is soliciting comments telephone numbers are not toll-free), or application. In order to maximize the from members of the public and affected call the toll-free Title V information line opportunity to utilize a suitable parties concerning the collection of at 800–927–7588. property, providers should submit their information described in Section A on SUPPLEMENTARY INFORMATION: In written expressions of interest as soon the following: accordance with 24 CFR part 581 and as possible. For complete details (1) Whether the proposed collection section 501 of the Stewart B. McKinney concerning the processing of of information is necessary for the Homeless Assistance Act (42 U.S.C. applications, the reader is encouraged to proper performance of the functions of 11411), as amended, HUD is publishing refer to the interim rule governing this the agency, including whether the this Notice to identify Federal buildings program, 24 CFR part 581. information will have practical utility; and other real property that HUD has For properties listed as suitable/to be (2) The accuracy of the agency’s reviewed for suitability for use to assist excess, that property may, if estimate of the burden of the proposed the homeless. The properties were subsequently accepted as excess by collection of information; reviewed using information provided to GSA, be made available for use by the (3) Ways to enhance the quality, HUD by Federal landholding agencies homeless in accordance with applicable utility, and clarity of the information to regarding unutilized and underutilized law, subject to screening for other be collected; and buildings and real property controlled Federal use. At the appropriate time, (4) Ways to minimize the burden of by such agencies or by GSA regarding HUD will publish the property in a the collection of information on those its inventory of excess or surplus Notice showing it as either suitable/ who are to respond; including through Federal property. This Notice is also available or suitable/unavailable. the use of appropriate automated published in order to comply with the For properties listed as suitable/ collection techniques or other forms of December 12, 1988 Court Order in unavailable, the landholding agency has decided that the property cannot be information technology, e.g., permitting National Coalition for the Homeless v. declared excess or made available for electronic submission of responses. Veterans Administration, No. 88–2503– HUD encourages interested parties to OG (D.D.C.). use to assist the homeless, and the submit comment in response to these Properties reviewed are listed in this property will not be available. Properties listed as unsuitable will questions. Notice according to the following categories: Suitable/available, suitable/ not be made available for any other Authority: Section 3507 of the Paperwork unavailable, and suitable/to be excess, purpose for 20 days from the date of this Reduction Act of 1995, 44 U.S.C. Chapter 35. and unsuitable. The properties listed in Notice. Homeless assistance providers Dated: September 30, 2014. the three suitable categories have been interested in a review by HUD of the Merrie Nichols-Dixon, reviewed by the landholding agencies, determination of unsuitability should Deputy Director, Office of Policy, Programs and each agency has transmitted to call the toll free information line at 1– and Legislative Initiatives. HUD: (1) Its intention to make the 800–927–7588 for detailed instructions [FR Doc. 2014–24264 Filed 10–9–14; 8:45 am] property available for use to assist the or write a letter to Ann Marie Oliva at BILLING CODE 4210–67–P homeless, (2) its intention to declare the the address listed at the beginning of property excess to the agency’s needs, or this Notice. Included in the request for (3) a statement of the reasons that the review should be the property address DEPARTMENT OF HOUSING AND property cannot be declared excess or (including zip code), the date of URBAN DEVELOPMENT made available for use as facilities to publication in the Federal Register, the landholding agency, and the property [Docket No. FR–5750–N–41] assist the homeless. Properties listed as suitable/available number. Federal Property Suitable as Facilities will be available exclusively for For more information regarding To Assist the Homeless homeless use for a period of 60 days particular properties identified in this from the date of this Notice. Where Notice (i.e., acreage, floor plan, existing AGENCY: Office of the Assistant property is described as for ‘‘off-site use sanitary facilities, exact street address), Secretary for Community Planning and only’’ recipients of the property will be providers should contact the Development, HUD. required to relocate the building to their appropriate landholding agencies at the ACTION: Notice. own site at their own expense. following addresses: AIR FORCE: Ms. Homeless assistance providers Connie Lotfi, Air Force Real Property SUMMARY: This Notice identifies interested in any such property should Agency, 143 Billy Mitchell Blvd., San unutilized, underutilized, excess, and send a written expression of interest to Antonio, TX 78226, (210)- 925–3047; surplus Federal property reviewed by HHS, addressed to Theresa Ritta, Ms. COE: Ms. Brenda John-Turner, Army HUD for suitability for use to assist the Theresa M. Ritta, Chief Real Property Corps of Engineers, Real Estate, homeless. Branch, the Department of Health and HQUSACE/CEMP–CR, 441 G Street FOR FURTHER INFORMATION CONTACT: Human Services, Room 5B–17, NW., Washington, DC 20314; (202) 761– Juanita Perry, Department of Housing Parklawn Building, 5600 Fishers Lane, 5222; ENERGY: Mr. David Steinau, and Urban Development, 451 Seventh Rockville, MD 20857, (301) 443–6672 Department of Energy, Office of Street SW., Room 7266, Washington, DC (This is not a toll-free number.) HHS Property Management, 1000 20410; telephone (202) 402–3970; TTY will mail to the interested provider an Independence Ave SW., Washington, number for the hearing- and speech- application packet, which will include DC 20585 (202) 287–1503; GSA: Mr.

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Flavio Peres, General Services Marine Corps Air Station Miramar Directions: 46–0420; 46–0058; 16–0380; 15– Administration, Office of Real Property San Diego CA 0198; 15–0189; 15–0185; 15–0184; 48– Utilization and Disposal, 1800 F Street Landholding Agency: Navy 0129; 54–1004; 39–0010; 39–0002 NW., Room 7040 Washington, DC Property Number: 77201440002 Comments: public access denied & no Status: Excess 20405, (202) 501–0084; INTERIOR: Mr. alternative method to gain access w/out Comments: public access denied & no Michael Wright, Acquisition & Property compromising national security. alternative method to gain access w/out Reasons: Secured Area Management, Department of the compromising national security. Interior, 3960 N. 56th Ave. #104, Reasons: Secured Area Los Alamos National Lab Los Alamos Hollywood, FL. 33021; (443) 223–4639; Building 9403, MACS–1 Los Alamos NM 87545 NASA: Mr. Frank T. Bellinger, Facilities Administration Bldg. Engineering Division, National Marine Corps Air Station Miramar Landholding Agency: Energy Aeronautics & Space Administration, San Diego CA Property Number: 41201440001 Code JX, Washington, DC 20546, (202)- Landholding Agency: Navy Status: Excess 358–1124; NAVY: Mr. Steve Matteo, Property Number: 77201440003 Directions: 46–0720; 46–0058; 16–0380; 15– 0198; 15–0189; 15–0185; 15–0184; 48– Department of the Navy, Asset Status: Excess 0129; 54–1004; 39–0010; 39–0002 Management Division, Naval Facilities Comments: public access denied & no alternative method to gain access w/out Comments: public access denied & no Engineering Command, Washington compromising national security. alternative method to gain access w/out Navy Yard, 1330 Patterson Ave. SW., Reasons: Secured Area compromising national security. Suite 1000, Washington, DC 20374; Building 6688 Reasons: Secured Area (202)685–9426 (These are not toll-free null Pennsylvania numbers). Marine Corps Air Station Miramar Tract 01–106, Old Headquarters Dated: October 2, 2014. San Diego CA Building Brian P. Fitzmaurice, Landholding Agency: Navy Property Number: 77201440005 727 Nelson Road Director, Division of Community Assistance, Status: Excess Farmington PA 15437 Office of Special Needs Assistance Programs. Comments: public access denied & no Landholding Agency: Interior TITLE V, FEDERAL SURPLUS PROPERTY alternative method to gain access w/out Property Number: 61201430003 PROGRAM FEDERAL REGISTER REPORT compromising national security. Status: Excess FOR 10/10/2014 Reasons: Secured Area Comments: property has documented and extensive conditions; lead-based; paint; Suitable/Available Properties Florida Building 946 mold; asbestos; flooding; a client threat to Building 946 Tech Road personal safety. Missouri Patrick AFB FL 32925 Reasons: Contamination Masters Campground Landholding Agency: Air Force Virginia 16435 E Stockton Lake Dr. Property Number: 18201430076 Status: Unutilized Visual Imaging Studio, Stockton MO 65785 Building 1145 Landholding Agency: COE Comments: public access denied & no 3 East Bush Street Property Number: 31201430012 alternative method to gain access w/out Status: Underutilized compromising national security. Hampton VA 23681–0001 Comments: 41+yrs. old; 416 sq. ft.; shower; Reasons: Secured Area Landholding Agency: NASA deteriorated; restricted access; contact COE Hawaii Property Number: 71201440001 for more info. Status: Excess Building 245, Marine Corps Comments: public access denied & no Crabtree Cove Park #28835 Base Hawaii Kaneohe Bay alternative method to gain access w/out 16435 E Stockton Lake Dr. Intersection of Mokapu Rd. & E Street compromising national security Stockton MO 65785 Kaneohe HI 96863 Landholding Agency: COE Landholding Agency: Navy Reasons: Secured Area. Property Number: 31201430013 Property Number: 77201440001 Temporary Housing Facility, Status: Underutilized Status: Excess Building 1130T2 Comments: 41+yrs. old; 84 sq. ft.; wood Comments: public access denied & no 7 East Taylor Street structure; toilet; deterioration; contact COE alternative method to gain access w/out Hampton VA 23681–0001 for more info. compromising national security. Landholding Agency: NASA West Virginia Reasons: Secured Area Property Number: 71201440002 Naval Information Operations Building 313, Marine Corps Status: Excess Center Base Hawaii Kaneohe Bay Comments: public access denied & no 133 Hedrick Drive Bldg. 313 is Located Along B Street alternative method to gain access w/out Sugar Grove WV 26815 Kaneohe HI 96863 compromising national security Landholding Agency: GSA Landholding Agency: Navy Reasons: Secured Area. Property Number: 54201430015 Property Number: 77201440004 Status: Excess Status: Excess Child Development Center, GSA Number: 4–N–WV–0560 Comments: public access denied & no Building 1231 & 1231B Directions: Land holding agency—Navy; alternative method to gain access w/out 8 & 8B Lindbergh Way Disposal Agency GSA compromising national security. Hampton VA 23681–0001 Comments: 118 Buildings; 445,134 sq. ft.; Reasons: Secured Area Landholding Agency: NASA Property Number: 71201440003 Navy base; until 09/15 military checkpoint; New Mexico wetlands; contact GSA for more info. Status: Excess 11 Buildings; Los Alamos Comments: public access denied & no Unsuitable Properties National Lab alternative method to gain access w/out Building Los Alamos compromising national security. Los Alamos NM 87545 Reasons: Secured Area. California Landholding Agency: Energy Building 8600, Flight Line Property Number: 41201430014 [FR Doc. 2014–24076 Filed 10–9–14; 8:45 am] Complex Status: Excess BILLING CODE 4210–67–P

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DEPARTMENT OF THE INTERIOR Fish and Wildlife Service, 2493 Portola behavioral patterns, including breeding, Road, Suite B, Ventura, CA 93003. feeding, and sheltering (50 CFR 17.3). Fish and Wildlife Service • In-Person Drop-off, Viewing, or Under limited circumstances we may Pickup: Call 805–644–1766 to make an issue permits to authorize incidental [FWS–R8–2014–N171; appointment during regular business take of listed wildlife species which the FXES11120800000F2–112–FF08E00000] hours at the above address. Act defines as take that is incidental to, Incidental Take Permit Application and Hardbound copies of the and not the purpose of, the carrying out Draft Environmental Assessment for environmental assessment and habitat an otherwise lawful activity. the RE Cinco Solar Facility Project conservation plan are available for Regulations governing permits for Habitat Conservation Plan, Kern viewing at the following locations: threatened species and endangered County, California 1. U.S. Fish and Wildlife Service, 2493 species are at 50 CFR 17.32 and 50 CFR Portola Road, Suite B, Ventura, CA 17.22, respectively. In addition to AGENCY: Fish and Wildlife Service, 93003. meeting other criteria, activities covered Interior. 2. Kern County Library, Boron Branch, by an incidental take permit must not ACTION: Notice of availability; request 26967 20 Mule Team Road, Boron, jeopardize the continued existence in for comment. CA 93516. the wild of federally listed wildlife. FOR FURTHER INFORMATION CONTACT: Applicant’s Proposal SUMMARY: We, the Fish and Wildlife Raymond Bransfield, Fish and Wildlife The applicant requests a 40-year Service (Service), announce receipt of Biologist, U.S. Fish and Wildlife incidental take permit under section an application from RE Barren Ridge 1 Service, at 805–644–1766 (telephone). If 10(A)(1)(b) of the Act. If we approve the LLC, a subsidiary of Recurrent Energy you use a telecommunications device permit, the applicant anticipates taking LLC (applicant), for a 40-year incidental for the deaf, please call the Federal take permit (permit). The Service, in desert tortoise as a result of Information Relay Service at 800–877– construction, operation, maintenance, cooperation and coordination with the 8339. applicant, has prepared a draft and decommissioning activities on 500 Environmental Assessment (EA) under SUPPLEMENTARY INFORMATION: acres of land the species uses for the National Environmental Policy Act Introduction breeding, feeding, and sheltering. The (NEPA) for the applicant’s permit take would be incidental to the application and proposed RE Cinco We announce the availability of our applicant’s routine activities associated Solar Facility Habitat Conservation Plan draft EA for the proposed Cinco Solar with the development and operation of (HCP), as required by the Endangered Facility HCP, in accordance with the a photovoltaic solar facility. The site is Species Act of 1973, as amended (Act). National Environmental Policy Act of located in unincorporated Kern County, If approved, the permit would authorize 1969, as amended (42 U.S.C. 4321 et approximately 6.5 miles (10.46 incidental take for the federally seq.; NEPA), and NEPA implementing kilometers (km)) north of the threatened desert tortoise, associated regulations in the Code of Federal community of California City. With the with construction, operation, Regulations (CFR) at 40 CFR 1506.6, as exception of a portion of State Route 14, maintenance, and decommissioning of a well as the availability of the applicant’s which traverses diagonally through the photovoltaic solar facility in the County section 10(a)(1)(B) permit application in southeast corner of the site, and several of Kern. compliance with section 10(c) of the transmission line right-of-ways that Endangered Species Act (Act) of 1973, diagonally traverse the northwest corner DATES: To ensure consideration, please as amended (16 U.S.C. 1531 et seq.). The of the site, the surrounding area is send your written comments on or draft EA considers the environmental entirely comprised of vacant land with before December 9, 2014. effects associated with issuing the no outbuildings, residences, or similar ADDRESSES: Obtaining Documents: You applicant’s requested incidental take structures. Desert tortoise protocol may request a copy of the proposed HCP permit and implementation of the surveys were conducted in 2010 and and draft EA by email, telephone, fax, proposed HCP, including impacts to the 2011. The Service has determined the or U.S. mail (see below). These threatened desert tortoise (Gopherus proposed project will result in take of documents are also available for public agassizii). Take of desert tortoise would desert tortoise. No other federally listed inspection by appointment during be incidental to the applicant’s activities species are known to occur on the site. normal business hours at the office associated with the construction, To mitigate take of desert tortoise on below. Please send your requests or operation, maintenance, and the project site, the applicant proposes comments by any one of the following decommissioning of a photovoltaic solar to keep the portion of the project site methods, and specify ‘‘Cinco Solar facility in Kern County, California. east of State Route 14 and west of an Facility HCP’’ in your request or existing transmission line undeveloped. comment. Background The applicant would also avoid Submitting Comments: You may Section 9 of the Act and development on one area that contains submit comments or requests for copies implementing Federal regulations in the wash vegetation and one that contains a or more information by one of the Code of Federal Regulations (CFR) at 50 desert tortoise burrow; both of these following methods: CFR 17 prohibit the ‘‘take’’ of wildlife areas are located at the edge of the • Email: [email protected]. species listed as endangered or proposed solar field. The applicant Include ‘‘Cinco Solar Facility’’ in the threatened. The Act defines the term proposes to permanently conserve subject line of the message. ‘‘take’’ as ‘‘to harass, harm, pursue, approximately 500 acres within the • Telephone: Raymond Bransfield, hunt, shoot, wound, kill, trap, capture, western Mojave Desert to mitigate for U.S. Fish and Wildlife, 805–644–1766. or collect listed species, or to attempt to the loss of desert tortoise habitat within • Fax: Raymond Bransfield, U.S. Fish engage in such conduct’’ (16 U.S.C. the proposed project site. The draft HCP and Wildlife Service, 805–644–3958, 1538). ‘‘Harm’’ includes significant includes funding for the Attn: Cinco Solar Facility HCP. habitat modification or degradation that implementation of measures to protect • U.S. mail: Raymond Bransfield, actually kills or injures listed wildlife desert tortoises during construction, Attn: Cinco Solar Facility HCP, U.S. by significantly impairing essential operations, maintenance, and

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decommissioning of the solar facility, combining.’’ Uses authorized for this the Act. If we determine that those and for enhancement and management designation and zoning include crop requirements are met, we will issue a of the acquired lands. production, animal production, permit to the applicant for the The applicant proposes to construct livestock grazing, utility and incidental take of desert tortoise. We and operate a generation tie-in line from communication facilities, resource will make our final permit decision no the solar facility to the nearby Barren extraction, and energy development. If sooner than December 9, 2014. Ridge Substation. Because this route this project is not constructed, Kern Dated: October 6, 2014. would cross lands managed by the County could permit other uses in the Alexandra Pitts, Bureau of Land Management (BLM), the future with issuance of a conditional applicant did not include construction use permit, including solar power Deputy Regional Director, Pacific Southwest Region, Sacramento, California. and operation of this proposed generation, single-family residential generation tie-in line as covered development, or commercial and [FR Doc. 2014–24271 Filed 10–9–14; 8:45 am] activities under its proposed HCP. The institutional uses. BILLING CODE 4310–55–P BLM and Service would consult on the effects of the generation tie-in line on Solar Facility and Gen-Tie Line Alternative the desert tortoise under section 7 of the DEPARTMENT OF THE INTERIOR Under this alternative, the solar Act. Although BLM is conducting an Bureau of Land Management analysis under NEPA for the generation facility would be constructed in an tie-in line as part of the applicant’s identical manner as that described [LLNVS00000.L12100000.DC0000 application for a right-of-way to above under the Proposed Action; LXSS100F0000 241A; 14–08807; MO# construct and operate the line, the draft however, the applicant would construct 4500065255] the generation tie-in line entirely on EA prepared for the applicant’s Notice of Availability Las Vegas and incidental take permit application also non-Federal land. Therefore, the approved incidental take permit would Pahrump Field Offices Draft Resource includes an environmental analysis of Management Plan and Draft the generation tie-in line to ensure the also provide coverage for the construction and operation of a Environmental Impact Statement, Service considers the effects of the Nevada applicant’s entire proposed project. generation tie-in line to be constructed solely on non-Federal lands. The National Environmental Policy Act AGENCY: Bureau of Land Management, environmental impacts from the solar Interior. Compliance plant construction, operations, ACTION: Notice. We provide this notice under section maintenance, and decommissioning 10(c) of the Act and Service regulations would be identical to those under the SUMMARY: In accordance with the for implementing NEPA. We have Proposed Action; however, the National Environmental Policy Act of prepared a draft EA for the proposed environmental impacts and cost of this 1969, as amended, and the Federal Land action and have made it and the alternative would be greater because of Policy and Management Act of 1976, as applicant’s proposed HCP available for the increased length of the electrical amended, the Bureau of Land public inspection (see ADDRESSES). line (1.9 miles (3.06 km) vs. 3.6 miles Management (BLM) has prepared the NEPA requires that a range of (5.79 km)). Las Vegas and Pahrump Field Offices reasonable alternatives, including the Public Review Draft Resource Management Plan proposed action, be described. The draft (RMP)/Draft Environmental Impact EA analyzes three alternatives, The Service invites the public to Statement (EIS), for the Southern described below. comment on the permit application, Nevada District Office, Las Vegas and including the proposed HCP and draft Proposed Action (Preferred Alternative) Pahrump Field Offices, and by this EA, during the public comment period notice is announcing the opening of the Our proposed action is to issue an (see DATES). If you wish to comment, comment period on the Draft RMP/Draft incidental take permit to the applicant, you may submit your comments via one EIS. who would implement the HCP, of the means listed in ADDRESSES. Before described above. If we approve the including your address, phone number, DATES: To ensure that comments will be permit, incidental take of desert tortoise email address, or other personal considered, the BLM must receive would be authorized for the applicant’s identifying information in your written comments on the Draft RMP/ routine activities associated with the comment, you should be aware that Draft EIS within 90 days following the construction, operation, maintenance, your entire comment—including your date the Environmental Protection and decommissioning of a solar facility personal identifying information—may Agency publishes its notice of the Draft in Kern County. be made publicly available at any time. RMP/Draft EIS in the Federal Register. While you may ask us in your comment The BLM will announce any subsequent No Action Alternative to withhold your personal identifying meetings or hearings and any other The draft EA includes a No Action information from public review, we public participation activities related to alternative that would not result in take cannot guarantee that we will be able to the Draft RMP/Draft EIS at least 15 days of desert tortoise. Under this alternative, do so. in advance through public notices, unless the applicant can determine how media releases, and/or mailings. to build the project in a way that avoids Next Steps ADDRESSES: You may submit comments take of the desert tortoise, the proposed Issuance of an incidental take permit related to the Las Vegas and Pahrump solar facility would not be constructed is a Federal proposed action subject to Field Offices Draft RMP/Draft EIS by and the private lands would remain in compliance with NEPA. We will any of the following methods: their current state and be available for evaluate the application, associated • Web site: https://www.blm.gov/epl- other uses in accordance with Kern documents, and any public comments front-office/eplanning/planAndProject County’s general plan, which classifies we receive to determine whether the Site.do?methodName=renderDefault them as ‘‘resource management’’ lands application meets the requirements of PlanOrProjectSite&projectId=2900& zoned as ‘‘agriculture-floodplain NEPA regulations and section 10(a) of dctmId=0b0003e88009debe

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• Email: [email protected] mitigation measures for minerals rather than special management or • Fax: 702–515–5023 development; recreation and travel special designations, to protect sensitive • Mail: BLM Southern Nevada management designations; management resources. The BLM Southern Nevada District Office, Las Vegas/Pahrump of lands and realty actions, including District’s Office preferred alternative is Field Offices Draft RMP/Draft EIS, 4701 delineation of avoidance and exclusion Alternative 3. N. Torrey Pines Drive, Las Vegas, NV areas applicable to rights-of-ways Pursuant to 43 CFR 1610.7–2(b), this 89130. (ROWs), land tenure adjustments, and notice announces a concurrent public Copies of the Las Vegas and Pahrump solar and wind energy development. comment period for potential ACECs. Field Offices Draft RMP/Draft EIS are The planning effort will consider There are 23 new ACECs proposed in available in the Southern Nevada establishment of a national trail Alternative 2, 20 new ACECs proposed District Office at the above address or on management corridor for the in Alternative 3, and 4 new ACECs in the following Web site https://www.blm. congressionally-designated Old Spanish Alternative 4. The ACECs are proposed gov/epl-front-office/eplanning/planAnd National Historic Trail. Eligible river to protect natural and cultural resource ProjectSite.do?methodName=render segments will be evaluated for values and traditional Native American DefaultPlanOrProjectSite&projectId= suitability as components of the use areas. Alternatives 2, 3, and 4 all 2900&dctmId=0b0003e88009debe National Wild and Scenic River System propose to remove the ACEC FOR FURTHER INFORMATION CONTACT: Lee and 23 new Areas of Critical designations from the current Arden Kirk, RMP Team Lead, telephone: 702– Environmental Concern (ACECs) are Historic Sites (1,443 Acres) and 515–5026; address: 4701 N. Torrey proposed. The ACECs are proposed to Crescent Townsite (436 acres) ACECs. Pines Drive, Las Vegas, NV 89130; protect natural and cultural resource Some of the existing ACECs are also email: [email protected]. values and traditional Native American proposed to be expanded or reduced in Persons who use a telecommunications use areas. Alternatives 2, 3, and 4. The new potential ACECs in device for the deaf (TDD) may call the The Draft RMP/Draft EIS analyzes Federal Information Relay Service Alternative 2 include: Bird Spring four management alternatives. Valley (78,958 acres), Bitter Springs (FIRS) at 1–800–877–8339 to contact the Alternative 1 is the No Action (61,733 acres), California Wash (11,998 above individual during normal Alternative, which is the continuation acres), Gale Hills (3,865 acres), business hours. The FIRS is available 24 of current management in the existing Grapevine Spring (85 acres), Hiko Wash hours a day, 7 days a week, to leave a 1998 RMP, as amended. This alternative (847 acres), Jean Lake (11,606 acres), message or question with the above describes the current goals and actions Lava Dune (437 acres), Logandale (6,073 individual. You will receive a reply for management of resources and land acres), Lower Mormon Mesa (46,956 during normal business hours. uses in the planning area. The acres), Mesa Milkvetch (9,183 acres), SUPPLEMENTARY INFORMATION: The Las management direction could also be Moapa Mesquite (1,214 acres), Mt. Vegas and Pahrump Field Offices Draft modified by current laws, regulations, Schrader (283 acres), Muddy Mountains RMP/Draft EIS would replace the and policies. Alternative 2 emphasizes (36,189 acres), Old Spanish Trail existing 1998 Las Vegas Field Office the protection of the planning area’s (49,828 acres), Pahrump Valley (36,823 RMP. The Draft RMP/Draft EIS was resource values while allowing acres), Perkins Ranch (408 acres), Sandy developed through a collaborative commodity uses consistent with current Valley (210 acres), Specter Hills (5,420 planning process. The Las Vegas and laws, regulations, and policies. acres), Spirit Mountain (9,488 acres), Pahrump Field Offices Draft RMP/Draft Management actions would emphasize Stewart Valley (5,204 acres), Stuart EIS decision area encompasses resource values such as habitat for Ranch (278 acres), and Upper Las Vegas approximately 3.1 million acres of wildlife and plant species (including Wash (12,294 acres). Alternative 2 public land administered by the BLM special status species), protection of would also expand the following Southern Nevada District in Clark and riparian areas and water quality, existing ACECs: Amargosa Mesquite Southern Nye counties, Nevada. It does preservation of ecologically important (9,642 acres), Big Dune (2,455 acres), not include private lands, State lands, areas, maintenance of wilderness Keyhole Canyon (639 acres), Mormon Indian reservations, Federal lands not characteristics, and protection of Mesa (159,940 acres), Piute/Eldorado administered by BLM or lands scientifically important cultural and (347,630 acres), and Virgin River (8,500 addressed in the Red Rock Canyon paleontological sites. Access to and acres). Alternative 2 would reduce the National Conservation Area RMP (2005) development of resources within the size of the following existing ACECs: and Sloan Canyon National planning area could occur with Ash Meadows (37,273 acres), Gold Butte Conservation Area RMP (2006). intensive management and mitigation of Part A (184,627 acres), Gold Butte Part The Las Vegas and Pahrump Field surface-disturbing and disruptive B (116,575 acres), Rainbow Gardens Offices Draft RMP/Draft EIS includes activities. Alternative 3 emphasizes a (35,355 acres), and River Mountains goals, objectives and management balance between resource protection (6,697 acres). actions for protecting and preserving and resource use, which provides The new potential ACECs in natural resources which includes air opportunities to use and develop Alternative 3 include: Bird Spring quality, soil and water resources, resources within the planning area Valley (26,997 acres), Bitter Springs vegetation, fish and wildlife, special while ensuring resource protection. (61,733 acres), Gale Hills (3,865 acres), status species, wild horses and burros, Alternative 4 emphasizes opportunities Grapevine Spring (85 acres), Hiko Wash wildland fire management, cultural and to use and develop resources within the (708 acres), Jean Lake (11,606 acres), paleontological resources, visual planning area. It would provide for Lava Dune (437 acres), Lower Mormon resource values, and lands with motorized access and commodity Mesa (42,905 acres), Mesa Milkvetch wilderness characteristics. Multiple production with minimal restrictions (3,512 acres), Moapa Mesquite (1,304 resource uses are addressed which while providing protection of natural acres), Mt. Schrader (283 acres), Muddy include management and forage and cultural resources to the extent Mountains (36,189 acres), Old Spanish allocations for livestock grazing; required by law, regulation, and policy. Trail (33,831 acres), Pahrump Valley delineation of lands open, closed, or This alternative would largely rely on (21,232 acres), Perkins Ranch (408 subject to special stipulations or existing laws, regulations, and policies, acres), Specter Hills (5,420 acres), Spirit

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Mountain (9,488 acres), Stewart Valley your entire comment—including your of the comments received in response to (3,248 acres), Stuart Ranch (278 acres), personal identifying information—may the preliminary alternatives newsletter and Upper Las Vegas Wash (12,294 be made publicly available at any time. agreed that the range of alternatives acres). Alternative 3 would also expand While you can ask us in your comment being considered is appropriate and did the following existing ACECs: Amargosa to withhold your personal identifying not identify any substantive issues or Mesquite (9,642 acres), Keyhole Canyon information from public review, we concerns. (639 acres), Mormon Mesa (167,888 cannot guarantee that we will be able to The planning team has developed six acres), Piute/Eldorado (347,630 acres), do so. and Virgin River (7,493 acres). alternatives (no-action and five action Authority: 40 CFR 1506.6, 40 CFR alternatives), none of which would Alternative 3 would reduce the size of 1506.10, 43 CFR 1610.2 the following existing ACECs: Ash result in substantial changes in the Meadows (37,273 acres), Big Dune Marci Todd, operation and management of the (1,589 acres), Gold Butte Part A (183,440 Associate State Director, Nevada. national historic site. The five action acres), Gold Butte Part B (116,733 acres), [FR Doc. 2014–24135 Filed 10–9–14; 8:45 am] alternatives primarily focus on Rainbow Gardens (35,355 acres), and BILLING CODE 4310–HC–P maintaining and protecting cultural and River Mountains (6,697 acres). natural resources, and expanding The new potential ACECs in interpretation and visitor opportunities Alternative 4 include: Grapevine Spring DEPARTMENT OF THE INTERIOR where appropriate. Preliminary analysis (85 acres), Jean Lake (9,138 acres), of the alternatives revealed no major National Park Service Perkins Ranch (408 acres), and Stuart (significant) effects on the human Ranch (278 acres). Alternative 4 would [NPS–IMR–SACR–13960; environment or impairment of park also expand the following existing PX.PD108787G.00.1] resources and values. ACECs: Mormon Mesa (159,940 acres), Piute/Eldorado (338,767 acres), and Environmental Assessment for the For these reasons the National Park Virgin River (7,493 acres). Alternative 4 General Management Plan for Sand Service determined that the requisite would reduce the size of the following Creek Massacre National Historic Site, conservation planning and existing ACECs: Big Dune (428 acres), Colorado environmental impact analysis Gold Butte Part A (183,440 acres), Gold necessary for updating the general AGENCY: National Park Service, Interior. Butte Part B (116,733 acres), Rainbow management plan can appropriately be ACTION: Gardens (35,355 acres), and River Notice of intent. completed through preparation of an Mountains (6,697 acres). SUMMARY: The National Park Service has EA. The following management determined that an Environmental This draft general management plan/ prescriptions may apply to the Assessment, rather than an EA is expected to be distributed for individual ACECs under consideration, Environmental Impact Statement, is the if formally designated: Avoid or exclude public comment in the fall 2014. The appropriate environmental National Park Service will notify the linear ROWs; avoid or exclude site-type documentation for the general ROWs; close to material site ROWs or public about release of the draft general management plan for Sand Creek management plan/EA by public only allow near Federal-aid highways; Massacre National Historic Site. This close to or place use constraints on fluid meetings, mail, local and regional determination is the result of evaluating media, Web site postings, and other leasable mineral development; close to public comments and considering the means; all announcements will include solid leasable mineral development; analysis required to adequately address information on where and how to obtain pursue withdrawal of locatable mineral environmental impacts in developing development; close to saleable mineral the General Management Plan. a copy of the EA, how to comment on development; close to livestock grazing; the EA, and the length of the public FOR FURTHER INFORMATION CONTACT: pursue reverting area within ACEC from comment period. Following due a herd management area into a herd Alexa Roberts, Superintendent, Sand Creek Massacre National Historic Site, consideration of public comments and area; close to camping; exclude speed- agency consults, at this time a decision based recreation events; exclude non- P.O. Box 249, Eads, CO 81036. Telephone (719) 438–5916. is expected to be made in the winter speed based recreation events; exclude 2014. The official responsible for the commercial recreation activities; closed ADDRESSES: More information about the project can be obtained from the contact final decision on the GMP is the or limited to designated routes for Regional Director; subsequently the motorized travel; place seasonal listed above or online at http://park planning.nps.gov/sand. responsible official for implementing restrictions of ground disturbing the approved GMP is the actions; cap the amount of habitat SUPPLEMENTARY INFORMATION: This Superintendent, Sand Creek Massacre disturbance allowed from Federal general management plan will establish National Historic Site. actions. the overall direction for the national Please note that public comments and historic site, setting broad management Dated: October 1, 2014. information submitted including names, goals for managing the area over the Sue E. Masica, street addresses, and email addresses of next 15 to 20 years. The General Regional Director, Intermountain Region, persons who submit comments will be Management Plan was originally scoped National Park Service. as an Environmental Impact Statement. available for public review and [FR Doc. 2014–24045 Filed 10–9–14; 8:45 am] disclosure at the above address during However, internal discussions and regular business hours (8 a.m. to 4 p.m.), meetings, and comments received in BILLING CODE 4312–CB–P Monday through Friday, except written correspondence and public holidays. scoping sessions held in Colorado, Before including your address, phone Montana, Oklahoma, and Wyoming in number, email address, or other 2008 and again in 2011 did not raise any personal identifying information in your concerns or issues that have the comment, you should be aware that potential for controversial impacts. Most

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DEPARTMENT OF THE INTERIOR The FEIS analyzes two action Haul Road. The outer edges of the alternatives and the no action containment cell structures would be National Park Service alternative, as described below. placed at the park boundary in the river. Alternative A: No Action—under this The initial phase of this alternative alternative, there would be no [NPS–NCR–GWMP–16260; would first establish a breakwater PX.XGWMP0400.00.1] restoration. Current management of the marsh would continue, which includes structure at the southern alignment of Final Environmental Impact Statement providing basic maintenance related to the historic promontory to provide for the Dyke Marsh Restoration and the Haul Road, control of nonnative immediate protection to Dyke Marsh Long-term Management Plan, George invasive plant species, ongoing from erosion. After the breakwater is Washington Memorial Parkway, interpretive and environmental established, the deep channel areas Virginia education activities, scientific research north of the historic promontory would projects, boundary marking, and be filled within the NPS boundary, and AGENCY: National Park Service, Interior. enforcement of existing regulations. the marsh would be restored to the 4- ACTION: Notice of Availability. There would be no manipulation of the foot contour at strategic locations to marsh other than emergency, safety- further reduce the risk of erosion and SUMMARY: The National Park Service related, or limited improvements or storm surges and promote (NPS) announces the availability of a maintenance actions. The destabilized sedimentation within the existing Final Environmental Impact Statement marsh would continue to erode at an marsh. Afterwards, two cells would be (FEIS) for the Dyke Marsh Restoration accelerated rate. constructed along the northern edge of and Long-term Management Plan at the Alternative B: Hydrologic Restoration the breakwater, restoring the original George Washington Memorial Parkway and Minimal Wetland Restoration— extent of the promontory’s land mass. (GWMP), Virginia. The FEIS provides a under alternative B, the focus is on the systematic analysis of alternatives for most essential actions to reestablish All subsequent phases would the restoration and long-term hydrologic conditions that shield the establish containment cells out no management of the tidal freshwater marsh from erosive currents and protect further than the historic marsh marsh and other associated wetland the Hog Island Gut channel and channel boundary. The location of these cells habitats lost or impacted in the Dyke wall. A breakwater structure would be would be prioritized based on the most Marsh Preserve on the Potomac River. constructed on the south end of the benefits the specific locations could marsh, in alignment with the DATES: The NPS will execute a Record provide to the existing marsh. The northernmost extent of the historic of Decision (ROD) no sooner than 30 timing of these subsequent phases and promontory, and wetlands would be days from the date of publication of the the size and number of cells built during restored to strategic areas where the Notice of Availability of the FEIS by the these phases would be dependent upon water is less than 4 feet deep. This Environmental Protection Agency. available funds and materials. alternative also includes fill of some ADDRESSES: The FEIS is available in deep channel areas near the breakwater. In addition to the construction of electronic format online at the NPS’s The final element of this alternative is containment cells, tidal guts would be PEPC Web site (http://parkplanning. the reestablishment of hydrologic cut into the restored marsh area that nps.gov/GWMP). A limited number of connections to the inland side of the would be similar to the historical flow hard copies of the FEIS are available at Haul Road to restore bottomland swamp channels of the original marsh. This GWMP Park Headquarters, 700 George forest areas that were cut off when the alternative, like Alternative B, would Washington Memorial Parkway, Turkey Haul Road was constructed. also introduce breaks in the Haul Road, Run Park, McLean, Virginia 22101. You Approximately 30 acres west of the returning tidal flows to approximately may also request a hard copy by Haul Road could be influenced by tidal 30 acres west of the Haul Road, which contacting Alex Romero, flows as a result. These actions would would help to re-establish the historic Superintendent of GWMP by telephone not necessarily happen in any particular swamp forest originally found on the at (703) 289–2500. order, and may be dictated by available site. Additional wetland may be FOR FURTHER INFORMATION CONTACT: Alex funds. However, it is assumed that the restored south of the new breakwater to Romero, Superintendent, 700 George breakwater would be constructed first. fill out the southernmost historic extent Washington Memorial Parkway, Turkey This alternative would create of the marsh. This area would not be Run Park Headquarters, McLean, approximately 70 acres of various new protected from storms, and would be Virginia 22101; telephone (703) 289– wetland habitats and allow the one of the last features implemented. In continued natural accretion of soils and 2500. total, under this alternative, establishment of wetlands given the approximately 180 acres of various SUPPLEMENTARY INFORMATION: The FEIS new hydrologic conditions. responds to, and incorporates as Alternative C: Hydrologic Restoration wetland habitats could be created. appropriate, agency and public and Fullest Possible Extent of Wetland Dated: July 23, 2014. comments received on the Draft Plan/ Restoration (NPS Preferred Lisa A. Mendelson-Ielmini, Environmental Impact Statement (draft Alternative)—under alternative C, the Acting Regional Director, National Park plan/EIS) which was available for marsh would be restored in a phased Service, National Capital Region. public review from January 15, 2014 to approach up to the historic boundary of [FR Doc. 2014–24021 Filed 10–9–14; 8:45 am] March 18, 2014. A public meeting was the marsh and other adjacent areas held on February 26, 2014, to gather within NPS jurisdictional boundaries. BILLING CODE 4310–DL–P input on the draft plan/EIS. Over three Phased restoration would continue until hundred pieces of correspondence were a sustainable marsh is achieved and the received during the public review overall goals of the project are met. The period. Agency and public comments historic boundaries lie between the and NPS responses are provided in historic promontory and Dyke Island, Appendix D of the FEIS. the triangular island off the end of the

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INTERNATIONAL TRADE by accessing its internet server at http:// Samsung Electronics Co., Ltd., 1320–10 COMMISSION www.usitc.gov. The public record for Seocho 2-dong, Seocho-gu, Seoul this investigation may be viewed on the 137–965, Republic of Korea. [Investigation No. 337–TA–932] Commission’s electronic docket (EDIS) Samsung Electronics America, Inc., 85 at http://edis.usitc.gov. Certain Consumer Electronics and Challenger Road, Ridgefield Park, NJ Display Devices With Graphics FOR FURTHER INFORMATION CONTACT: The 07660. Office of Unfair Import Investigations, Processing and Graphics Processing Samsung Telecommunications America, Units Therein: Notice of Institution of U.S. International Trade Commission, telephone (202) 205–2560. LLC, 1301 Lookout Drive, Richardson, Investigation TX 75802. Authority: The authority for institution of AGENCY: U.S. International Trade this investigation is contained in section 337 Samsung Semiconductor, Inc., 3655 Commission. of the Tariff Act of 1930, as amended, and North First Street, San Jose, CA ACTION: Notice. in section 210.10 of the Commission’s Rules 95134. of Practice and Procedure, 19 CFR 210.10 SUMMARY: Notice is hereby given that a (2014). Qualcomm, Inc., 5775 Morehouse Drive, complaint was filed with the U.S. Scope of Investigation: Having San Diego, CA 92121. International Trade Commission on considered the complaint, the U.S. (c) The Office of Unfair Import September 4, 2014, under section 337 of International Trade Commission, on Investigations, U.S. International Trade the Tariff Act of 1930, as amended, 19 October 6, 2014, ordered that— Commission, 500 E Street SW., Suite (1) Pursuant to subsection (b) of U.S.C. 1337, on behalf of NVIDIA 401, Washington, DC 20436; and Corporation of Santa Clara, California. A section 337 of the Tariff Act of 1930, as amended, an investigation be instituted (4) For the investigation so instituted, supplement to the complaint was filed the Chief Administrative Law Judge, on September 22, 2014. The complaint to determine whether there is a U.S. International Trade Commission, alleges violations of section 337 based violation of subsection (a)(1)(B) of shall designate the presiding upon the importation into the United section 337 in the importation into the States, the sale for importation, and the United States, the sale for importation, Administrative Law Judge. sale within the United States after or the sale within the United States after Responses to the complaint and the importation of certain consumer importation of certain consumer notice of investigation must be electronics and display devices with electronics and display devices with submitted by the named respondents in graphics processing and graphics graphics processing and graphics accordance with section 210.13 of the processing units therein by reason of processing units therein by reason of Commission’s Rules of Practice and infringement of one or more of claims 1, infringement of certain claims of U.S. Procedure, 19 CFR 210.13. Pursuant to 19, and 20 of the ‘488 patent; claims 1– Patent No. 6,198,488 (‘‘the ‘488 patent’’); 19 CFR 201.16(e) and 210.13(a), such 29 of the ‘667 patent; claims 1–5, 7–19, U.S. Patent No. 6,992,667 (‘‘the ‘667 responses will be considered by the patent’’); U.S. Patent No. 7,038,685 (‘‘the 21–23, 25–30, 34–36, 38, 41–43 of the ‘685 patent; claims 5–8, 10, 12–20 and Commission if received not later than 20 ‘685 patent’’); U.S. Patent No. 7,015,913 days after the date of service by the (‘‘the ‘913 patent’’); U.S. Patent No. 24–27 of the ‘913 patent; claims 7, 8, 11–13, 16–21, 23, 24, 28, and 29 of the Commission of the complaint and the 6,697,063 (‘‘the ‘063 patent’’); U.S. notice of investigation. Extensions of Patent No. 7,209,140 (‘‘the ‘140 patent’’); ‘063 patent; claims 1–10, 12, and 14 of the ‘140 patent; and claims 1–6, 9–16, time for submitting responses to the and U.S. Patent No. 6,690,372 (‘‘the ‘372 complaint and the notice of patent’’). The complaint further alleges and 19–25 of the ‘372 patent, and investigation will not be granted unless that an industry in the United States whether an industry in the United good cause therefor is shown. exists as required by subsection (a)(2) of States exists as required by subsection section 337. (a)(2) of section 337; Failure of a respondent to file a timely (2) Pursuant to Commission Rule The complainant requests that the response to each allegation in the 210.50(b)(1), 19 CFR 210.50(b)(1), the Commission institute an investigation complaint and in this notice may be presiding administrative law judge shall and, after the investigation, issue a deemed to constitute a waiver of the take evidence or other information and limited exclusion order and cease and right to appear and contest the hear arguments from the parties and desist orders. allegations of the complaint and this other interested persons with respect to notice, and to authorize the ADDRESSES: The complaint, except for the public interest in this investigation, any confidential information contained as appropriate, and provide the administrative law judge and the therein, is available for inspection Commission with findings of fact and a Commission, without further notice to during official business hours (8:45 a.m. recommended determination on this the respondent, to find the facts to be as to 5:15 p.m.) in the Office of the issue, which shall be limited to the alleged in the complaint and this notice Secretary, U.S. International Trade statutory public interest factors set forth and to enter an initial determination Commission, 500 E Street SW., Room in 19 U.S.C. l337(d)(1), (f)(1), (g)(1); and a final determination containing 112, Washington, DC 20436, telephone (3) For the purpose of the such findings, and may result in the (202) 205–2000. Hearing impaired investigation so instituted, the following issuance of an exclusion order or a cease individuals are advised that information are hereby named as parties upon which and desist order or both directed against on this matter can be obtained by this notice of investigation shall be the respondent. contacting the Commission’s TDD served: By order of the Commission. terminal on (202) 205–1810. Persons (a) The complainant is: with mobility impairments who will NVIDIA Corporation, 2701 San Tomas Issued: October 6, 2014. need special assistance in gaining access Expressway, Santa Clara, CA 95050. Lisa R. Barton, to the Commission should contact the (b) The respondents are the following Secretary to the Commission. Office of the Secretary at (202) 205– entities alleged to be in violation of [FR Doc. 2014–24201 Filed 10–9–14; 8:45 am] 2000. General information concerning section 337, and are the parties upon BILLING CODE 7020–02–P the Commission may also be obtained which the complaint is to be served:

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INTERNATIONAL TRADE Authority: The authority for U.S. International Trade Commission, COMMISSION institution of this investigation is shall designate the presiding contained in section 337 of the Tariff Administrative Law Judge. [Investigation No. 337–TA–933] Act of 1930, as amended, and in section Responses to the complaint and the Certain Stainless Steel Products, 210.10 of the Commission’s Rules of notice of investigation must be Certain Processes for Manufacturing Practice and Procedure, 19 CFR 210.10 submitted by the named respondents in or Relating to Same and Certain (2014). accordance with section 210.13 of the Products Containing Same; Notice of Scope of Investigation: Having Commission’s Rules of Practice and Institution of Investigation considered the complaint, the U.S. Procedure, 19 CFR 210.13. Pursuant to International Trade Commission, on 19 CFR 201.16(e) and 210.13(a), such AGENCY: U.S. International Trade October 6, 2014, ordered that— responses will be considered by the Commission. (1) Pursuant to subsection (b) of Commission if received not later than 20 ACTION: Notice. section 337 of the Tariff Act of 1930, as days after the date of service by the amended, an investigation be instituted Commission of the complaint and the SUMMARY: Notice is hereby given that a to determine whether there is a notice of investigation. Extensions of complaint was filed with the U.S. violation of subsection (a)(1)(A) of time for submitting responses to the International Trade Commission on section 337 in the importation into the complaint and the notice of September 5, 2014, under section 337 of United States, or in the sale of, certain investigation will not be granted unless the Tariff Act of 1930, as amended, 19 stainless steel products, certain good cause therefor is shown. U.S.C. 1337, on behalf of Valbruna processes for manufacturing or relating Failure of a respondent to file a timely Slater Stainless, Inc. of Fort Wayne, to same and certain products containing response to each allegation in the Indiana; Valbruna Stainless Inc., of Fort same by reason of the misappropriation complaint and in this notice may be Wayne, Indiana; and Acciaierie of trade secrets, the threat or effect of deemed to constitute a waiver of the Valbruna S.p.A. of Italy. The complaint which is to destroy or substantially right to appear and contest the alleges violations of section 337 based injure an industry in the United States; allegations of the complaint and this upon the importation into the United (2) For the purpose of the notice, and to authorize the States, the sale for importation, and the investigation so instituted, the following administrative law judge and the sale within the United States after are hereby named as parties upon which Commission, without further notice to importation of certain stainless steel this notice of investigation shall be products, certain processes for the respondent, to find the facts to be as served: alleged in the complaint and this notice manufacturing or relating to same and (a) The complainants are: certain products containing same by Valbruna Slater Stainless, Inc., 2400 and to enter an initial determination reason of the misappropriation of trade Taylor Street, Fort Wayne, IN 46802. and a final determination containing secrets, the threat or effect of which is Valbruna Stainless Inc., 2400 Taylor such findings, and may result in the to destroy or substantially injure an Street, Fort Wayne, IN 46802. issuance of an exclusion order or a cease industry in the United States. Acciaierie Valbruna S.p.A., Viale and desist order or both directed against The complainants request that the della Scienza 25, Vicenza 36100 Italy. the respondent. Commission institute an investigation (b) The respondents are the following Issued: October 6, 2014. and, after the investigation, issue a entities alleged to be in violation of By order of the Commission. limited exclusion order and cease and section 337, and are the parties upon Lisa R. Barton, desist orders. which the complaint is to be served: Viraj Profiles Limited, 10, Imperial Secretary to the Commission. ADDRESSES: The complaint, except for [FR Doc. 2014–24196 Filed 10–9–14; 8:45 am] any confidential information contained Chambers, 1st Floor, Wilson Road, BILLING CODE 7020–02–P therein, is available for inspection Ballard Estate, Mumbai 400038, India. during official business hours (8:45 a.m. Viraj Holdings P. Ltd., 78, Abdul to 5:15 p.m.) in the Office of the Rehman Street, Chippi Chawl, Kalbadevi, Mumbai 400003, India. INTERNATIONAL TRADE Secretary, U.S. International Trade COMMISSION Commission, 500 E Street SW., Room Viraj—U.S.A., Inc., 100 Quentin 112, Washington, DC 20436, telephone Roosevelt Boulevard, Suite 505, Garden [USITC SE–14–034] (202) 205–2000. Hearing impaired City, NY 11530. Flanschenwerk Bebitz GmbH, Sunshine Act Meeting individuals are advised that information Lebendorfer Stra+e 1, Ko¨nnern 06420, on this matter can be obtained by Germany. AGENCY HOLDING THE MEETING: United contacting the Commission’s TDD Bebitz Flanges Works Pvt. Ltd., 140/ States International Trade Commission. terminal on (202) 205–1810. Persons 2 Saravalli Village, Palghar Road, TIME AND DATE: October 14, 2014 at 11:00 with mobility impairments who will Boisar Dist Thane, Maharashtra, India. need special assistance in gaining access a.m. Bebitz U.S.A., 100 Quentin Roosevelt PLACE: Room 101, 500 E Street SW., to the Commission should contact the Boulevard, Suite 505, Garden City, NY Office of the Secretary at (202) 205– Washington, DC 20436, Telephone: 11530. (202) 205–2000 2000. General information concerning Ta Chen Stainless Pipe Co., Ltd., No. the Commission may also be obtained 122, Yi-Lin Road, Rende Township, STATUS: Open to the public by accessing its internet server at Tainan, 71752, Taiwan. MATTERS TO BE CONSIDERED: http://www.usitc.gov. The public record Ta Chen International, Inc., 5855 1. Agendas for future meetings: none. for this investigation may be viewed on Obispo Avenue, Long Beach, CA 90805. 2. Minutes. the Commission’s electronic docket (c) The Office of Unfair Import 3. Ratification List. (EDIS) at http://edis.usitc.gov. Investigations, U.S. International Trade 4. Vote in Inv. Nos. 701–TA–502 and FOR FURTHER INFORMATION CONTACT: The Commission, 500 E Street SW., Suite 731–TA–1227 (Final)(Steel Concrete Office of Unfair Import Investigations, 401, Washington, DC 20436; and Reinforcing Bar from Mexico and U.S. International Trade Commission, (3) For the investigation so instituted, Turkey). The Commission is currently telephone (202) 205–2560. the Chief Administrative Law Judge, scheduled to complete and file its

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determinations and views of the Investigation. On October 29, the not necessary as all comments Commission on October 23, 2014. Commission will receive an update from submitted to http://www.regulations.gov 5. Outstanding action jackets: none. the National Institute of Science and will be posted for public review and are In accordance with Commission Technology (NIST) on the Organization part of the official docket record. policy, subject matter listed above, not of Scientific Area Committees and In accordance with the Federal disposed of at the scheduled meeting, explore issues related to latent Records Act, please note that all may be carried over to the agenda of the fingerprint interoperability of comments received are considered part following meeting. Automated Fingerprint Identification of the public record, and shall be made Systems (AFIS). The Commission will By order of the Commission. available for public inspection online at also receive status reports, to include Issued: October 7, 2014. http://www.regulations.gov. The the introduction of any draft work William R. Bishop, comments to be posted may include products, from the Subcommittees on personally identifiable information Supervisory Hearings and Information Human Factors, Training on Science Officer. and Law, Interim Solutions, and (such as your name, address, etc.) and [FR Doc. 2014–24313 Filed 10–8–14; 11:15 am] Reporting and Testimony. The oral confidential business information BILLING CODE 7020–02–P public comment period at the meeting voluntarily submitted by the will be open from 5:00–5:30 p.m. on commenter. October 29, 2014. Note: Agenda items, You are not required to submit DEPARTMENT OF JUSTICE including designation of presentation personal identifying information in [Docket No. ODAG 151] dates are subject to change. A final order to comment on this meeting. agenda will be posted to the Nevertheless, if you want to submit Notice of Federal Advisory Committee Commission’s Web site in advance of personally identifiable information Meeting the meeting. (such as your name, address, etc.) as Procedures: Draft work products to be part of your comment, but do not want AGENCY: Department of Justice. introduced at the Commission meeting it to be made available for public ACTION: Notice of Federal Advisory will be made available on the inspection and posted online, you must Committee Meeting. Commission’s Web site: http:// include the phrase ‘‘PERSONALLY www.justice.gov/ncfs. The meeting will IDENTIFIABLE INFORMATION’’ in the SUMMARY: This notice announces a be webcast at: http:// first paragraph of your comment. You forthcoming public meeting of the stream.sparkstreetdigital.com/player- must also place all the personally National Commission on Forensic ce.html?id=doj-oct28. The meeting will identifiable information you do not Science. also be open to the public. Seating in want made available for public DATES: The meeting will be held on the meeting room is limited and will be inspection or posted online in the first October 28, 2014, from 12:30 p.m. to available on a first-come, first-served paragraph of your comment and identify 5:30 p.m. and October 29, 2014 from basis. All persons who are interested in what information you want redacted. 9:00 a.m. to 5:30 p.m. Online being on-site for the meeting must If you want to submit confidential registration for the meeting must be register on-line at http://conferences. completed on or before 5:00 p.m. (EST) csrincorporated.com by using business information as part of your October 24, 2014. Electronic comments conference code: 2014–112P. comment, but do not want it to be made on subcommittee draft work products Members of the public may present available for public inspection and must be submitted on or before October oral comments on issues pending before posted online, you must include the 27, 2014. The electronic Federal Docket the Commission. Those individuals phrase ‘‘CONFIDENTIAL BUSINESS Management System (FDMS) will accept interested in making oral comments INFORMATION’’ in the first paragraph comments until Midnight Eastern Time should indicate their intent through the of your comment. You must also at the end of that day. on-line registration form and time will prominently identify confidential Location: Office of Justice Programs, be allocated on a first-come, first-served business information to be redacted 3rd floor ballroom, 810 7th Street NW., basis. Time allotted for an individual’s within the comment. If a comment has Washington, DC 20531. comment period will be limited to no so much confidential business more than 3 minutes. If the number of information that it cannot be effectively FOR FURTHER INFORMATION CONTACT: registrants requesting to speak is greater redacted, all or part of that comment Brette Steele, Senior Forensic Science than can be reasonably accommodated may not be made available for public Advisor and Senior Counsel to the during the scheduled public comment inspection or posted online. Deputy Attorney General, 950 periods, written comments will be Pennsylvania Avenue NW., Washington, Personally identifiable information accepted in lieu of oral comments. and confidential business information DC 20530, by email at Brette.L.Steele@ Posting of Public Comments: To identified and located as set forth above usdoj.gov, or by phone at (202) 305– ensure proper handling of comments, will be redacted and the comment, in 0180. please reference ‘‘Docket No. ODAG redacted form, will be made available SUPPLEMENTARY INFORMATION: 151’’ on all electronic and written Agenda: On October 28, the correspondence. The Department for public inspection and posted on Commission will receive a briefing from encourages all comments on http://www.regulations.gov. the Bureau of Justice Statistics regarding subcommittee work products be The Department of Justice welcomes a proposal to survey law enforcement submitted electronically through http:// the attendance of the public at its forensic science service providers. The www.regulations.gov using the advisory committee meetings and will Commission will also receive status electronic comment form provided on make every effort to accommodate reports, to include the introduction of that site. An electronic copy of this persons with physical disabilities or any draft work products, from the document is also available at the http:// special needs. If you require special Subcommittees on Accreditation and www.regulations.gov Web site for easy accommodations, please indicate your Proficiency Testing, Scientific Inquiry reference. Paper comments that requirements on the online registration and Research, and Medicolegal Death duplicate the electronic submission are form.

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Dated: October 7, 2014. CFR 404.7(a)(1)(i). NASA hereby gives OFFICE OF NATIONAL DRUG James M. Cole, notice of its intent to grant an exclusive, CONTROL POLICY Deputy Attorney General. research only license in the United [FR Doc. 2014–24232 Filed 10–9–14; 8:45 am] States to evaluate the invention Notice of HIDTA Designations BILLING CODE 4410–18–P described and claimed in U.S. Patent Heading: Designation of 26 Counties/ Application No. 13/895,717, NASA Case Cities as High Intensity Drug Trafficking No. KSC–13579, entitled ‘‘Treatment Areas. DEPARTMENT OF JUSTICE System and Method for Removing SUMMARY: The Director of the Office of Halogenated Compounds from National Drug Control Policy designated Office of Justice Programs Contaminated Systems,’’ to Etana, LLC, 26 additional counties/cities as High [OJP (NIJ) Docket No. 1675] having its principal place of business at Intensity Drug Trafficking Areas 424 Copeland Street, Jacksonville, (HIDTA) pursuant to 21 U.S.C. 1706. NIJ STANDARD 0117.01 Public Safety Florida 32235. The patent rights in these The new counties/cities are (1) Madison Bomb Suit Standard inventions have been assigned to the and Nelson Counties in Kentucky, United States of America as represented Tazewell County in Virginia, and AGENCY: National Institute of Justice, Harrison County in West Virginia as OJP, DOJ. by the Administrator of the National Aeronautics and Space Administration. part of the Appalachia HIDTA; (2) Pasco ACTION: Notice and request for The prospective exclusive, research County in Florida as part of the Central comments. only license will comply with the terms Florida HIDTA; (3) Trinity and Siskiyou SUMMARY: In an effort to obtain and conditions of 35 U.S.C. 209 and 37 Counties in California as part of the comments from interested parties, the CFR 404.7. Central Valley California HIDTA; (4) U.S. Department of Justice, Office of Brazoria County in Texas as part of the DATES: The prospective exclusive Justice Programs, National Institute of Houston HIDTA; (5) Rockingham research license may be granted unless, Justice (NIJ) will make available to the County in New Hampshire as part of the within fifteen (15) days from the date of general public the draft: New England HIDTA; (6) Chautauqua, NIJ STANDARD 0117.01 Public Safety this published notice, NASA receives Dutchess, Putnam, and Rockland Bomb Suit Standard For Law written objections including evidence Counties in New York as part of the Enforcement and Public Safety. and argument that establish that the New York/New Jersey HIDTA; (7) Ada The opportunity to provide comments grant of the license would not be and Canyon Counties in Idaho, and on these documents is open to industry consistent with the requirements of 35 Malheur County in Oregon as part of the technical representatives, law U.S.C. 209 and 37 CFR 404.7. Oregon HIDTA; (8) Gallatin County in enforcement agencies and organizations, Competing applications completed and Montana as part of the Rocky Mountain research, development and scientific received by NASA within fifteen (15) HIDTA; (9) Potter and Randall Counties communities, and all other stakeholders days of the date of this published notice in Texas as part of the Texoma HIDTA; and interested parties. Those will also be treated as objections to the and (10) Berkeley County in West individuals wishing to obtain and grant of the contemplated exclusive, Virginia and the Cities of Chesapeake, provide comments on the draft research only license. Hampton, Newport News, Norfolk, documents under consideration are Objections submitted in response to Portsmouth, and Virginia Beach in directed to the following Web site: this notice will not be made available to Virginia as part of the Washington/ https://justnet.org/app/publiccomment/ the public for inspection and, to the Baltimore HIDTA. default.aspx?Id=12 extent permitted by law, will not be FOR FURTHER INFORMATION CONTACT: DATES: The comment period will be released under the Freedom of Questions regarding this notice should open until November 24, 2014. Information Act, 5 U.S.C. 552. be directed to Michael K. Gottlieb, National HIDTA Program Director, FOR FURTHER INFORMATION CONTACT: ADDRESSES: Objections relating to the Office of National Drug Control Policy, David Otterson, by telephone at 301– prospective license may be submitted to Executive Office of the President, 240–6754, or by email at Patent Counsel, Office of the Chief Washington, DC 20503; (202) 395–4868. [email protected] Counsel, Mail Code CC–A, NASA John Dated: September 29, 2014. William J. Sabol, F. Kennedy Space Center, Kennedy Submitted October 6, 2014. Space Center, Florida 32899. Telephone: Acting Director, National Institute of Justice. Daniel Rader, 321–867–2076; Facsimile: 321–867– [FR Doc. 2014–24249 Filed 10–9–14; 8:45 am] Deputy General Counsel. BILLING CODE 4410–18–P 1817. [FR Doc. 2014–24176 Filed 10–9–14; 8:45 am] FOR FURTHER INFORMATION CONTACT: BILLING CODE 3280–F5–P Shelley Ford, Patent Counsel, Office of NATIONAL AERONAUTICS AND the Chief Counsel, Mail Code CC–A, SPACE ADMINISTRATION NASA John F. Kennedy Space Center, NATIONAL SCIENCE FOUNDATION [Notice (14–097)] Kennedy Space Center, Florida 32899. Telephone: 321–867–2076; Facsimile: Proposal Review Panel for Materials Notice of Intent To Grant Exclusive 321–867–1817. Information about other Research; Notice of Meeting Research License NASA inventions available for licensing In accordance with the Federal AGENCY: National Aeronautics and can be found online at http:// Advisory Committee Act (Pub., L. 92– Space Administration. technology.nasa.gov/. 463 as amended), the National Science ACTION: Notice of Intent To Grant Sumara M. Thompson-King, Foundation announces the following Exclusive Research License. meeting: General Counsel. Name: Proposal Review Panel for SUMMARY: This notice is issued in [FR Doc. 2014–24221 Filed 10–9–14; 8:45 am] Materials Research (DMR) #1203. accordance with 35 U.S.C. 209(e) and 37 BILLING CODE 7510–13–P Dates & Times:

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October 22, 2014; 6:00 p.m.–9:00 p.m. ACTION: Notice. comments for this ICR. 79 FR 14302–02. October 23, 2014; 8:00 a.m.–9:30 p.m. The NTSB did not receive any October 24, 2014; 8:00 a.m.–3:30 p.m. SUMMARY: The NTSB is announcing it is comments in response to the request. Place: Norfolk State University, submitting a plan for an Information A. NTSB Training Center Evaluation Norfolk, VA. Collection Request (ICR) to the Office of Type of Meeting: Part-Open. Management and Budget (OMB) for Forms Are Appropriate for Generic Contact Person: Dr. Charles Bouldin, approval, in accordance with the Approval Program Director, Partnership for Paperwork Reduction Act. On May 28, 2010, Administrator, Research and Education in Materials This ICR Plan describes various Office of Information and Regulatory Program, Division of Materials Research, evaluation forms the NTSB plans to use Affairs (OIRA), OMB, issued a Room 1065, National Science to obtain feedback from attendees of memorandum to the Heads of Executive Foundation, 4201 Wilson Boulevard, various NTSB training programs. Departments and Agencies, and Arlington, VA 22230, Telephone (703) Feedback from attendees is important to Independent Regulatory Agencies, 292–4920. the NTSB in ensuring the NTSB’s providing instructions concerning how Purpose of Meeting: To provide training courses and programs are agencies can obtain generic OMB advice and recommendations helpful to attendees in their places of clearances for information collections in concerning further support of the employment; and useful to attendees certain circumstances. Paperwork Partnerships for Research and Education who participate in NTSB investigations Reduction Act—Generic Clearances, in Materials (PREM). and other related agency matters. This available at http://www.whitehouse.gov/ ICR Plan is the second notice, as Agenda sites/default/files/omb/assets/inforeg/ required by OMB regulations PRA_Gen_ICRs_5–28–2010.pdf. The Wednesday, October 22, 2014 concerning approvals of information memorandum states as follows 6–9 p.m. Executive Session and collections. This notice again describes concerning the appropriateness of Dinner for Site Visit Team— the nature of the information collection obtaining such clearances: (Closed) and its expected burden and advises the public it may submit comments on this A generic ICR is a request for OMB Thursday, October 23, 2014 proposed information collection to the approval of a plan for conducting more than one information collection using very similar 8:00 a.m.–8:30 a.m. Executive OMB desk officer for the NTSB. methods when (1) the need for and the session—(Closed) DATES: Submit written comments overall practical utility of the data collection 8:30 a.m.–4:30 p.m. Presentations by regarding this proposed plan for the can be evaluated in advance, as part of the PREM Director, co-PIs, Institutional collection of information by November review of the proposed plan, but (2) the Representatives and program 10, 2014. agency cannot determine the details of the specific individual collections until a later participants (Open) ADDRESSES: Interested members of the time. 4:30 p.m.–6:30 p.m. Executive Session public may submit written comments on for Site Visit Team—(Closed) the collection of information to the The NTSB’s desire to obtain 6:30 p.m.–9:00 p.m. Dinner for Panel OMB Desk Officer for the NTSB at information immediately following a and Faculty—(Open) Office of Management and Budget, 725 training course will assist the NTSB Friday, October 24, 2014 17th Street NW., Washington, DC 20503, Training Center in developing courses 8:00 a.m.–3:00 p.m. Executive Session or via fax: 202–395–5806, (this is not a to achieve the NTSB’s objective of and Director’s Response to toll-free number), or email: OIRA- improving investigators’ and Feedback, Debriefing with PREM [email protected]. Commenters transportation industry peers’ practices Director and co-PIs—(Closed) are encouraged, but not required, to of accident investigation. The mission of Reason for Closing: The work being send a courtesy copy of any comments the NTSB Training Center, in reviewed may include information of a to the National Transportation Safety accordance with 49 U.S.C. 1113(b)(1)(I), proprietary or confidential nature, Board Training Center, 45065 Riverside is to promote safe transport by: • including technical information; Parkway, Ashburn, Virginia 20147. Ensuring and improving the quality financial data, such as salaries and FOR FURTHER INFORMATION CONTACT: of accident investigation through critical personal information concerning James Pritchert, NTSB Training Officer, thought, instruction, and research; individuals associated with the at (571) 223–3927. • Communicating lessons learned, proposals. These matters are exempt SUPPLEMENTARY INFORMATION: In fostering the exchange of new ideas and under 5 U.S.C. 552 b(c), (4) and (6) of accordance with OMB regulations that new experience, and advocating the Government in the Sunshine Act. require this Notice for proposed ICRs, as operational excellence; • Providing a modern platform for Dated: October 6, 2014. well as OMB guidance concerning accident reconstruction and evaluation; Suzanne Plimpton, generic approval of plans for and Acting Committee Management Officer. information collections, the NTSB herein notifies the public that it may • Utilizing its high-quality training [FR Doc. 2014–24161 Filed 10–9–14; 8:45 am] submit comments on this proposed ICR resources to facilitate family assistance BILLING CODE 7555–01–P Plan to the OMB Desk Officer for the and first responder programs, sister NTSB. 5 CFR 1320.10(a). Section agency instruction, and other 1320.10(a) requires this ‘‘notice shall compatible federal activity. NATIONAL TRANSPORTATION direct comments to the Office of In administering training courses SAFETY BOARD Information and Regulatory Affairs of designed to achieve these objectives, the Plan for Generic Information Collection OMB, Attention: Desk Officer for NTSB seeks to maintain a standard of Activity: Submission for OMB Review; [NTSB].’’ Pursuant to § 1320.10(a), the excellence. The NTSB’s goal of Comment Request NTSB will provide a copy of this notice providing materials, instructors, to OMB. methods of instruction, and facility AGENCY: National Transportation Safety On March 13, 2014, the NTSB arrangements that are a worthy Board (NTSB). published a Notice requesting expenditure of Federal funds will

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require the NTSB to obtain feedback on B. Supporting Statement levels. Among all courses, the NTSB the training courses from attendees. The OIRA Administrator’s estimates a total of 600 non-Government This type of information collection is memorandum instructs agencies to attendees complete courses in any given appropriate for generic approval under provide specific information in the year. As a result, the NTSB estimates it the OIRA Administrator’s guidance. The supporting statements describing the will distribute approximately 600 NTSB periodically changes the information collections. In particular, Training Center evaluation forms each identification numbers and subject the supporting statements should year. Each evaluation form will take approximately 11 minutes to complete. matter addressed in NTSB training include the following: The NTSB seeks to emphasize these courses. Such variance renders generic • The method of collection and, if estimations are approximate, as they are approval appropriate. By distributing statistical methods will be used, a discussion depend on the number of courses the evaluation forms, the NTSB will gather of the statistical methodology; NTSB offers in the Training Center. feedback concerning whether attendees • The category (or categories) of respondents; Some courses may be cancelled due to found the instructor knowledgeable and • low registration. In addition, only helpful; whether the course materials The estimated ‘‘burden cap,’’ i.e., the maximum number of burden hours (per year) Government employees may choose to were appropriate; the location and for the specific information collections, and attend other courses. As a result, the course facilities; the ‘‘case studies’’ against which burden will be charged for NTSB can only provide an approximate discussed in the course; and other each collection actually used; estimate of the number of attendees per • similar topics. Each course evaluation The agency’s plans for how it will use year. form will include some course-specific the information collected; questions. Responses to such • The agency’s plans to obtain public 4. Use of the Information Collected evaluations will assist the NTSB in input regarding the specific information Feedback from attendees of NTSB collections (i.e., consultation); and ensuring its courses work to fulfill the • The agency’s internal procedures to Training Center courses is extremely goals listed above. ensure that the specific collections comply important to the NTSB. The NTSB plans Currently, the NTSB offers the with the PRA, applicable regulations, and the its course offerings based on the level of following training courses, about which terms of the generic clearance. interest from potential attendees and on the NTSB seeks approval for evaluation Id. at 2. the degree to which attendees have forms: Accident Investigation found useful the information they 1. Method of Collection Orientation (RPH301); Aircraft Accident learned during such courses. As a result, Investigation (AS101); Aircraft Accident The NTSB will collect the information evaluations of NTSB Training Center Investigation for Aviation Professionals by transmitting the evaluation form to courses will influence future course (AS 301); Cognitive Interviewing Series attendees of each Training Center offerings. The NTSB will rely upon the (IM401S); Family Assistance (TDA301); course. Depending on the provision of completed course Investigating Human Fatigue Factors circumstances, such transmission may evaluations to assist with the planning (IM303); Managing Communications occur via hand delivery, electronic mail, of course offerings. During an Aircraft Accident or Incident postal mail, or express mail, or a 5. Public Input Regarding the (PA302); Managing Communications combination of these methods. Information Collected Following a Major Transportation Respondents will be provided The NTSB does not generally obtain Accident (PA303); Managing instructions concerning how to return public input concerning the scope of, or Transportation Mass Fatality Incidents questionnaires to the Training Center. specific questions on, NTSB Training (TDA406); Marine Accident The NTSB will not use statistical Center evaluation forms. Investigation (MS101); Mass Fatality methodology in reaching any Incidents for Medicolegal Professionals conclusions based on the evaluations. 6. Internal Procedures Instead, the NTSB merely will note the (TDA403); Rotorcraft Accident Lastly, the OIRA Administrator’s total number of respondents in any Investigation (AS102); and Survival memorandum describing generic documents in which it discusses the Factors in Aviation Accidents (AS302). clearances recommends agencies In response to attendee feedback, evaluations. Respondents’ completion of the describe the procedures it will requests for training in specific areas, undertake to ensure information and other considerations, the NTSB will evaluations is voluntary, and the NTSB generally will not contact them more collections to which the generic likely add or remove classes from this clearance applies will comply with the list in the coming years. than once to request completion of the evaluation. Paperwork Reduction Act, applicable The NTSB will tailor each evaluation regulations, and the terms provided in form to ensure it requests feedback 2. Category of Respondents the generic clearance. The NTSB Office specific to the particular course of In its evaluation forms, the NTSB will of General Counsel plans to provide which the NTSB seeks evaluation. generally seek information only from internal guidance to agency personnel Consistent with the OIRA attendees of each course. The NTSB will who offer courses and distribute course Administrator’s guidance concerning have the contact information for each evaluations at the NTSB Training generic approvals, the NTSB will not be attendee, because such information is Center. Such guidance will include this able to finalize draft evaluations specific required when registering for Training publication, as well as the OIRA to each course until the NTSB offers the Center courses. Administrator’s memorandum course. These types of questions are discussing generic clearances, upon unique to the specific course, and 3. Maximum Burden Hours OMB approval of the clearance. The impossible to know prior to the offering The NTSB plans to distribute the internal guidance will include specific of the course. Overall, the types of evaluations to attendees of each instructions concerning use of information the NTSB will solicit in its Training Center course. The NTSB offers evaluation forms, and explain the Training Center course evaluations is 12 different courses per year and applicable provisions of the Paperwork appropriate for a generic approval for provides a repeated program for those Reduction Act and its implementing the information collection. courses with the highest attendance regulations.

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C. Description of Burden NUCLEAR REGULATORY subparts cover specific requirements for COMMISSION obtaining a license or license The NTSB has carefully reviewed exemption, design and performance [Docket No. NRC–2014–0134] previous questionnaires it has used to criteria for irradiators; and radiation obtain information from attendees of Agency Information Collection safety requirements for operating courses the NTSB Training Center Activities: Submission for the Office of irradiators, including requirements for offers. The NTSB assures the public that Management and Budget (OMB) operating irradiators, including these questionnaires have used plain, Review; Comment Request requirements for operator training, coherent, and unambiguous terminology written operating and emergency AGENCY: Nuclear Regulatory in its requests for feedback. In addition, procedures, personnel monitoring, Commission. the questionnaires are not duplicative of radiation surveys, inspection, and other agencies’ collections of ACTION: Notice of the OMB review of maintenance. Part 36 also contains the information, because the NTSB information collection and solicitation recordkeeping and reporting maintains unique authority to offer such of public comment. requirements that are necessary to courses concerning investigations of SUMMARY: ensure that the irradiator is being safely transportation events. 49 U.S.C. The U.S. Nuclear Regulatory operated so that it does not pose any 1113(b)(1)(I). Commission (NRC) has recently submitted to OMB for review the danger to the health and safety of the In general, the NTSB believes the following proposal for the collection of general public and the irradiator evaluation forms will impose a minimal information under the provisions of the employees. burden on respondents: As indicated Paperwork Reduction Act of 1995 (44 The public may examine and have above, the NTSB estimates that each U.S.C. Chapter 35). The NRC hereby copied for a fee publicly-available respondent will spend approximately 11 informs potential respondents that an documents, including the final minutes in completing the evaluation. agency may not conduct or sponsor, and supporting statement, at the NRC’s The NTSB estimates that a maximum of that a person is not required to respond Public Document Room, Room O–1F21, 240 respondents per year would to, a collection of information unless it complete an evaluation. Although the displays a currently valid OMB control One White Flint North, 11555 Rockville NTSB may distribute evaluations to number. The NRC published a Federal Pike, Rockville, Maryland 20852. The perhaps as many as 600 people, historic Register notice with a 60-day comment OMB clearance requests are available at response rates indicate only 40 percent period on this information collection on the NRC’s Web site: http://www.nrc.gov/ of the evaluations will be returned July 2, 2014. public-involve/doc-comment/omb/. The completed. However, the NTSB again 1. Type of submission, new, revision, document will be available on the notes this number will vary, given the or extension: Extension. NRC’s home page site for 60 days after changes in course offerings at the NTSB 2. The title of the information the signature date of this notice. Training Center. collection: 10 CFR part 36, ‘‘Licenses Comments and questions should be and Radiation Safety Requirements for directed to the OMB reviewer listed D. Request for Comments Irradiators.’’ below by November 10, 2014. 3. Current OMB approval number: Comments received after this date will In accordance with 44 U.S.C. 3150–0158. 3506(c)(2)(A), the NTSB seeks feedback 4. How often the collection is be considered if it is practical to do so, from the public concerning this required: Annually. but assurance of consideration cannot proposed plan for information 5. Who will be required or asked to be given to comments received after this collection. In particular, the NTSB asks report: Irradiator licensees licensed by date. the public to evaluate whether the NRC or an Agreement State. Vlad Dorjets, Desk Officer, Office of proposed collection of information is 6. An estimate of the number of Information and Regulatory Affairs necessary; to assess the accuracy of the annual responses: 1,911.28 (7.28 for (3150–0158), NEOB–10202, Office of NTSB’s burden estimate; to comment on reporting [1.04 NRC licensee and 6.24 Management and Budget, Washington, how to enhance the quality, utility, and Agreement State licensees], 56 for DC 20503. recordkeepers [8 NRC licensees and 48 clarity of the information to be Comments can also be emailed to collected; and to comment on how the Agreement State Licensees], and 1,848 _ for third-party disclosures [264 NRC Vlad [email protected] or submitted NTSB might minimize the burden of the by telephone at 202–395–7315. collection of information. licensees and 1,584 Agreement State licensees]). The NRC Clearance Officer is The NTSB will carefully consider all 7. The estimated number of annual Tremaine Donnell, telephone: 301–415– feedback it receives in response to this respondents: 56 (8 NRC licensees and 48 6258. notice. As described above, obtaining Agreement State licensees). the information the NTSB seeks on 8. An estimate of the total number of Dated at Rockville, Maryland, this 7th day of October, 2014. these evaluations in a timely manner is hours needed annually to complete the important to course offerings at the requirement or request: 34,048 hours For the Nuclear Regulatory Commission. NTSB Training Center; therefore, (4,864 NRC licensee hours + 29,184 Tremaine Donnell, obtaining approval from OIRA for these Agreement State licensee hours). NRC Clearance Officer, Office of Information collections of information on a generic 9. Abstract: Part 36 of Title 10 of the Services. basis is a priority for the NTSB. Code of Federal Regulations (10 CFR), [FR Doc. 2014–24252 Filed 10–9–14; 8:45 am] Dated: October 6, 2014. contains requirements for the issuance BILLING CODE 7590–01–P of a license authorizing the use of sealed Christopher A. Hart, sources containing radioactive materials Acting Chairman. in irradiators used to irradiate objects or [FR Doc. 2014–24234 Filed 10–9–14; 8:45 am] materials for a variety of purposes in BILLING CODE 7533–01–P research, industry, and other fields. The

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POSTAL REGULATORY COMMISSION service agreement with substantially all SECURITIES AND EXCHANGE components of the agreement included COMMISSION [Docket No. RM2015–1; Order No. 2206] in the measurement of other products. [Investment Company Act Release No. Semi-Permanent Exception From The Postal Service contends that the 31276; File No. 812–14177] Periodic Reporting of Service cost of implementing a measurement Performance Measurement system would be prohibitive in relation DBX ETF Trust, et al.; Notice of Application AGENCY: Postal Regulatory Commission. to the revenue generated by Alaska Bypass Service and thus falls within the ACTION: Notice. October 6, 2014. 39 CFR 3055.3(a)(1) exclusion. Request AGENCY: Securities and Exchange SUMMARY: The Commission is noticing a at 9–11. Commission (‘‘Commission’’). recent Postal Service filing concerning a II. Notice of Commission Action ACTION: semi-permanent exception from Notice of an application for an order under section 6(c) of the periodic reporting of service The Commission establishes Docket performance measurement for Alaska Investment Company Act of 1940 (the No. RM2015–1 for consideration of ‘‘Act’’) for an exemption from sections Bypass Service. This notice informs the matters related to the proposed semi- public of the filing, invites public 2(a)(32), 5(a)(1), 22(d), and 22(e) of the permanent exception from periodic Act and rule 22c–1 under the Act, under comment, and takes other reporting of service performance administrative steps. sections 6(c) and 17(b) of the Act for an measurement of Alaska Bypass Service. exemption from sections 17(a)(1) and DATES: Comments are due: October 31, Interested persons may submit 17(a)(2) of the Act, and under section 2014. Reply Comments are due: 12(d)(1)(J) for an exemption from November 14, 2014. comments on whether the Postal Service’s Request is consistent with the sections 12(d)(1)(A) and 12(d)(1)(B) of ADDRESSES: Submit comments the Act. electronically via the Commission’s policies of 39 U.S.C. 3652(a)(2) and 39 Filing Online system at http:// CFR 3055.3. Comments are due no later Summary of Application: Applicants www.prc.gov. Those who cannot submit than October 31, 2014. Reply comments request an order that would permit (a) comments electronically should contact are due no later than November 14, series of certain open-end management the person identified in the FOR FURTHER 2014. The public portions of these investment companies to issue shares INFORMATION CONTACT section by filings can be accessed via the (‘‘Shares’’) redeemable in large telephone for advice on filing Commission’s Web site (http:// aggregations only (‘‘Creation Units’’); (b) alternatives. www.prc.gov). secondary market transactions in Shares FOR FURTHER INFORMATION CONTACT: The Commission appoints Lyudmila to occur at negotiated market prices David A. Trissell, General Counsel, at Y. Bzhilyanskaya to serve as a Public rather than at net asset value (‘‘NAV’’); 202–789–6820. Representative in the captioned (c) certain series to pay redemption proceeds, under certain circumstances, SUPPLEMENTARY INFORMATION: proceedings. more than seven days after the tender of Table of Contents III. Ordering Paragraphs Shares for redemption; (d) certain affiliated persons of the series to deposit I. Introduction It is ordered: II. Notice of Commission Action securities into, and receive securities III. Ordering Paragraphs 1. The Commission established from, the series in connection with the Docket No. RM2015–1 for consideration purchase and redemption of Creation I. Introduction of matters raised by the Postal Service’s Units; (e) certain registered management On October 1, 2014, the Postal Service Request. investment companies and unit filed a request for a semi-permanent 2. Pursuant to 39 U.S.C. 505, the investment trusts outside of the same exception from periodic reporting of Commission appoints Lyudmila Y. group of investment companies as the series to acquire Shares; and (f) certain service performance measurement for Bzhilyanskaya to serve as an officer of series to perform creations and Alaska Bypass Service pursuant to 39 the Commission (Public Representative) CFR 3055.3.1 redemptions of Creation Units in-kind to represent the interests of the general Section 3055.3 provides that the in a master-feeder structure. Postal Service may request that a public in these proceedings. Applicants: DBX ETF Trust and db-X product, or a component of a product, 3. Comments by interested persons in Exchange-Traded Funds Inc. be excluded from service performance these proceedings are due no later than (collectively, the ‘‘Trusts’’), DBX measurement reporting upon October 31, 2014. Advisors LLC and DBX Strategic demonstrating that: 4. Reply comments are due no later Advisors LLC (collectively, the ‘‘Initial 1. The cost of implementing a than November 14, 2014. Advisers’’), and ALPS Distributors, Inc. measurement system would be (the ‘‘Distributor’’). 5. The Secretary shall arrange for prohibitive in relation to the revenue DATES: Filing Dates: The application was publication of this order in the Federal generated by the product, or component filed on July 17, 2013, and amended on Register. of a product; July 25, 2014, September 24, 2014, and 2. The product, or component of a By the Commission. October 3, 2014. product, defies meaningful Ruth Ann Abrams, Hearing or Notification of Hearing: An measurement; or order granting the requested relief will 3. The product, or component of a Acting Secretary. [FR Doc. 2014–24189 Filed 10–9–14; 8:45 am] be issued unless the Commission orders product, is in the form of a negotiated a hearing. Interested persons may BILLING CODE 7710–FW–P request a hearing by writing to the 1 United States Postal Service Request for Semi- Permanent Exception from Periodic Reporting of Commission’s Secretary and serving Service Performance Measurement for Alaska applicants with a copy of the request, Bypass Service, October 1, 2014 (Request). personally or by mail. Hearing requests

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should be received by the Commission ‘‘Exchange Act’’) and will act as and any principal underwriter for the by 5:30 p.m. on October 31, 2014, and distributor and principal underwriter of Master Fund, to sell shares of the Master should be accompanied by proof of one or more of the Funds. The Fund to the Feeder Fund beyond the service on applicants, in the form of an distributor of any Fund may be an limitations in section 12(d)(1)(B) of the affidavit, or for lawyers, a certificate of affiliated person, as defined in section Act (‘‘Master-Feeder Relief’’). service. Hearing requests should state 2(a)(3) of the Act (‘‘Affiliated Person’’), Applicants may structure certain Feeder the nature of the writer’s interest, the or an affiliated person of an Affiliated Funds to generate economies of scale reason for the request, and the issues Person (‘‘Second-Tier Affiliate’’), of that and incur lower overhead costs.3 There contested. Persons who wish to be Fund’s Adviser and/or Sub-Advisers. would be no ability by Fund notified of a hearing may request No distributor will be affiliated with any shareholders to exchange Shares of notification by writing to the Exchange (defined below). Feeder Funds for shares of another Commission’s Secretary. 4. Applicants request that the order feeder series of the Master Fund. ADDRESSES: The Commission: Secretary, apply to the initial series of the DBX 6. Each Fund, or its respective Master U.S. Securities and Exchange ETF Trust described in the application Fund, will hold certain securities, Commission, 100 F Street NE., (‘‘Initial Funds’’), as well as any currencies, other assets and other Washington, DC 20549–1090; additional series of the Trusts and other investment positions (‘‘Portfolio Applicants: the Trusts and the Initial open-end management investment Holdings’’) selected to correspond Advisers, 60 Wall Street, New York, companies, or series thereof, that may generally to the performance of its New York 10005; the Distributor, 1290 be created in the future (‘‘Future Underlying Index. Certain of the Funds Broadway, Suite 1100, Denver, CO Funds’’), each of which will operate as will be based on Underlying Indexes 80203. an exchanged-traded fund (‘‘ETF’’) and that will be comprised solely of equity will track a specified index that and/or fixed income securities issued by FOR FURTHER INFORMATION CONTACT: Jill one or more of the following categories Ehrlich, Senior Counsel at (202) 551– includes both long and short positions or uses a 130/30 investment strategy and of issuers: (i) Domestic issuers and (ii) 6819, or David P. Bartels, Branch Chief, non-domestic issuers meeting the at (202) 551–6821 (Division of is comprised of domestic or foreign equity and/or fixed income securities requirements for trading in U.S. Investment Management, Chief 1 markets. Other Funds will be based on Counsel’s Office). (each, an ‘‘Underlying Index’’). Any Future Fund will (a) be advised by the Underlying Indexes that will be SUPPLEMENTARY INFORMATION: The Initial Advisers or an entity controlling, comprised solely of foreign and following is a summary of the controlled by, or under common control domestic, or solely foreign, equity and/ application. The complete application with the Initial Advisers (each, an or fixed income securities (‘‘Foreign may be obtained via the Commission’s ‘‘Adviser’’) and (b) comply with the Funds’’). 7. Applicants represent that each Web site by searching for the file terms and conditions of the application. Fund, or its respective Master Fund, number, or for an applicant using the The Initial Fund and Future Funds, will invest at least 80% of its assets Company name box, at http:// together, are the ‘‘Funds.’’ 2 (excluding securities lending collateral) www.sec.gov/search/search.htm or by 5. Applicants state that a Fund may in the component securities of its calling (202) 551–8090. operate as a feeder fund in a master- respective Underlying Index feeder structure (‘‘Feeder Fund’’). Applicants’ Representations (‘‘Component Securities’’) and TBA Applicants request that the order permit 1. DBX ETF Trust is organized as a Transactions,4 and in the case of a Feeder Fund to acquire shares of Delaware statutory trust, and db-X Foreign Funds, Component Securities another registered investment company Exchange-Traded Funds Inc. is and Depositary Receipts 5 representing organized as a Maryland corporation. in the same group of investment companies having substantially the Each Trust is registered under the Act 3 Operating in a master-feeder structure could as an open-end management investment same investment objectives as the also impose costs on a Feeder Fund and reduce its company with multiple series. Feeder Fund (‘‘Master Fund’’) beyond tax efficiency. The Feeder Fund’s Board will the limitations in section 12(d)(1)(A) of consider any such potential disadvantages against 2. The Initial Advisers are registered the benefits of economies of scale and other benefits as investment advisers under the the Act and permit the Master Fund, of operating within a master-feeder structure. In a Investment Advisers Act of 1940 (the master-feeder structure, the Master Fund—rather 1 ‘‘Advisers Act’’) and will be the Certain of the applicants received a prior order than the Feeder Fund—would generally invest its with respect to the offering of index-based portfolio in compliance with the requested order. investment advisers to the Funds exchange-traded funds. In the Matter of 4 A ‘‘to-be-announced transaction’’ or ‘‘TBA (defined below). Any other Adviser HealthShares, Inc., et al., Investment Company Act Transaction’’ is a method of trading mortgage- (defined below) will also be registered Release Nos. 27553 (Nov. 16, 2006) (notice) and backed securities. In a TBA Transaction, the buyer as an investment adviser under the 27594 (Dec. 7, 2006) (order); In the Matter of and seller agree upon general trade parameters such HealthShares, Inc., et al., Investment Company Act as agency, settlement date, par amount and price. Advisers Act. Each Adviser may enter Release Nos. 27916 (July 27, 2007) (notice) and The actual pools delivered generally are determined into sub-advisory agreements with one 27930 (Aug. 20, 2007) (order); and In the Matter of two days prior to settlement date. or more investment advisers to act as X Exchange-Traded Funds, Inc., et al., Investment 5 Depositary receipts representing foreign sub-advisers to particular Funds (each, Company Act Release Nos. 28766 (June 11, 2006) securities (‘‘Depositary Receipts’’) include (notice) and 28814 (July 7, 2009) (order) American Depositary Receipts and Global a ‘‘Sub-Adviser’’). Any Sub-Adviser will (collectively, the ‘‘Prior Order’’). The Prior Order Depositary Receipts. The Funds, or their respective either be registered under the Advisers does not apply to Long/Short Funds and 130/30 Master Funds, may invest in Depositary Receipts Act or will not be required to register Funds (each as defined herein), and the order representing foreign securities in which they seek thereunder. requested herein by applicants will only cover to invest. Depositary Receipts are typically issued Long/Short Funds and 130/30 Funds. by a financial institution (a ‘‘depositary bank’’) and 3. Each Trust will enter into a 2 All existing entities that intend to rely on the evidence ownership interests in a security or a pool distribution agreement with the requested order have been named as applicants. of securities that have been deposited with the Distributor. The distributor for the Any other existing or future entity that depositary bank. A Fund, or its respective Master Initial Funds will be ALPS Distributors, subsequently relies on the order will comply with Fund, will not invest in any Depositary Receipts the terms and conditions of the order. A Fund of that the Adviser or any Sub-Adviser deems to be Inc. The Distributor is a broker-dealer Funds (as defined below) may rely on the order illiquid or for which pricing information is not (‘‘Broker’’) registered under the only to invest in Funds and not in any other readily available. No affiliated person of a Fund, the Securities Exchange Act of 1934 (the registered investment company. Adviser or any Sub-Adviser will serve as the

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Component Securities. Each Fund, or its strategy will hold some, but not regarding the ability of the Affiliated respective Master Fund, may also invest necessarily all of the Component Index Provider to manipulate the up to 20% of its assets in certain index Securities of its Underlying Index. Underlying Index to the benefit or futures, options, options on index Applicants state that a Fund, or its detriment of the Self-Indexing Fund. futures, swap contracts or other respective Master Fund, using a Applicants further recognize the derivatives, as related to its respective representative sampling strategy will potential for conflicts that may arise Underlying Index and its Component not be expected to track the with respect to the personal trading Securities, cash and cash equivalents, performance of its Underlying Index activity of personnel of the Affiliated other investment companies, as well as with the same degree of accuracy as Index Provider who have knowledge of in securities and other instruments not would an investment vehicle that changes to an Underlying Index prior to included in its Underlying Index but invested in every Component Security the time that information is publicly which the applicable Adviser believes of the Underlying Index with the same disseminated. Prior orders granted to will help the Fund track its Underlying weighting as the Underlying Index. self-indexing ETFs (‘‘Prior Self-Indexing Index. A Fund may also engage in short Applicants expect that each Fund will Orders’’) addressed these concerns by sales in accordance with its investment have an annual tracking error relative to creating a framework that required: (i) objective. the performance of its Underlying Index Transparency of the Underlying 8. Funds will seek to track Underlying of less than 5%. Indexes; (ii) the adoption of policies and Indexes constructed using 130/30 10. Each Fund will be entitled to use procedures not otherwise required by investment strategies (‘‘130/30 Funds’’) its Underlying Index pursuant to either the Act designed to mitigate such or other long/short investment strategies a licensing agreement with the entity conflicts of interest; (iii) limitations on (‘‘Long/Short Funds’’). Each Long/Short that compiles, creates, sponsors or the ability to change the rules for index Fund will establish (i) exposures equal maintains the Underlying Index (each, compilation and the component to approximately 100% of the long an ‘‘Index Provider’’) or a sub-licensing securities of the index; (iv) that the positions specified by the Long/Short arrangement with the applicable index provider enter into an agreement Index 6 and (ii) exposures equal to Adviser, which will have a licensing with an unaffiliated third party to act as approximately 100% of the short agreement with such Index Provider.8 A ‘‘Calculation Agent’’; and (v) certain positions specified by the Long/Short ‘‘Self-Indexing Fund’’ is a Fund for limitations designed to separate Index. Each 130/30 Fund will include which an Affiliated Person, or a Second- employees of the index provider, strategies that: (i) Establish long Tier Affiliate, of the Trusts or a Fund, adviser and Calculation Agent (clauses positions in securities so that total long of the Advisers, of any Sub-Adviser to (ii) through (v) are hereinafter referred exposure represents approximately or promoter of a Fund, or of the to as ‘‘Policies and Procedures’’).10 130% of a Fund’s net assets; and (ii) Distributor (each, an ‘‘Affiliated Index 12. Instead of adopting the same or simultaneously establish short positions Provider’’) will serve as the Index similar Policies and Procedures, in other securities so that total short Provider. In the case of Self-Indexing Applicants propose that each day that a exposure represents approximately 30% Funds, an Affiliated Index Provider will Fund, the NYSE and the national of such Fund’s net assets. Each Business create a proprietary, rules-based securities exchange (as defined in Day, the Adviser for each Fund will methodology to create Underlying section 2(a)(26) of the Act) (an provide full portfolio transparency on Indexes (each an ‘‘Affiliated Index’’).9 ‘‘Exchange’’) on which the Fund’s the Fund’s publicly available Web site Except with respect to the Self-Indexing Shares are primarily listed (‘‘Listing (‘‘Web site’’) by making available the Funds, no Index Provider is or will be Exchange’’) are open for business, Fund’s, or its respective Master Fund’s, an Affiliated Person, or a Second-Tier including any day that a Fund is Portfolio Holdings before the Affiliate, of a Trust or a Fund, of an required to be open under section 22(e) commencement of trading of Shares on Adviser, of any Sub-Adviser to or of the Act (a ‘‘Business Day’’), each Self- the Listing Exchange (defined below).7 promoter of a Fund, or of the Indexing Fund will post on its Web site, The information provided on the Web Distributor. before commencement of trading of site will be formatted to be reader- 11. Applicants recognize that Self- Shares on the Listing Exchange, the friendly. Indexing Funds could raise concerns identities and quantities of the Portfolio 9. A Fund, or its respective Master Holdings that will form the basis for the Fund, will utilize either a replication or 8 The licenses for the Self-Indexing Funds will Fund’s calculation of its NAV at the end representative sampling strategy to track specifically state that the Affiliated Index Provider of the Business Day. Applicants believe (or in case of a sub-licensing agreement, the its Underlying Index. A Fund, or its Adviser) must provide the use of the Underlying that requiring Self-Indexing Funds, and respective Master Fund, using a Indexes and related intellectual property at no cost their respective Master Funds, to replication strategy will invest in the to the Trust and the Self-Indexing Funds. maintain full portfolio transparency will Component Securities of its Underlying 9 The Affiliated Indexes may be made available to provide an effective alternative Index in the same approximate registered investment companies, as well as separately managed accounts of institutional mechanism for addressing any such proportions as in such Underlying investors and privately offered funds that are not potential conflicts of interest. Index. A Fund, or its respective Master deemed to be ‘‘investment companies’’ in reliance 13. Applicants represent that each Fund, using a representative sampling on section 3(c)(1) or 3(c)(7) of the Act for which the Self-Indexing Fund’s Portfolio Holdings Adviser acts as adviser or subadviser ‘‘Affiliated will be as transparent as the portfolio Accounts’’ as well as other such registered depositary bank for any Depositary Receipts held by investment companies, separately managed holdings of existing actively managed a Fund, or its respective Master Fund. accounts and privately offered funds for which it 6 Underlying Indexes that include both long and does not act either as adviser or subadviser 10 See, e.g., In the Matter of WisdomTree short positions in securities are referred to as (‘‘Accounts’’). The Affiliated Accounts and the Investments Inc., et al., Investment Company Act ‘‘Long/Short Indexes.’’ Unaffiliated Accounts, like the Funds, would seek Release Nos. 27324 (May 18, 2006) (notice) and 7 Under accounting procedures followed by each to track the performance of one or more Underlying 27391 (June 12, 2006) (order); In the Matter of Fund, trades made on the prior Business Day (‘‘T’’) Index(es) by investing in the constituents of such IndexIQ ETF Trust, et al., Investment Company Act will be booked and reflected in NAV on the current Underlying Indexes or a representative sample of Release Nos. 28638 (Feb. 27, 2009) (notice) and Business Day (T+1). Accordingly, the Funds will be such constituents of the Underlying Index. 28653 (March 20, 2009) (order); and Van Eck able to disclose at the beginning of the Business Day Consistent with the relief requested from section Associates Corporation, et al., et al., Investment the portfolio that will form the basis for the NAV 17(a), the Affiliated Accounts will not engage in Company Act Release Nos. 29455 (Oct. 1, 2010) calculation at the end of the Business Day. Creation Unit transactions with a Fund. (notice) and 29490 (Oct. 26, 2010) (order).

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ETFs. Applicants observe that the potential conflicts of interest among the of the Self-Indexing Fund’s Board, an framework set forth in the Prior Self- Self-Indexing Funds, their respective Adviser, Affiliated Persons of the Indexing Orders was established before Master Funds, and the Affiliated Adviser (‘‘Adviser Affiliates’’) and the Commission began issuing Accounts, such as cross trading policies, Affiliated Persons of any Sub-Adviser exemptive relief to allow the offering of as well as those designed to ensure the (‘‘Sub-Adviser Affiliates’’) may be actively managed ETFs.11 Unlike equitable allocation of portfolio authorized to provide custody, fund passively managed ETFs, actively transactions and brokerage accounting and administration and managed ETFs do not seek to replicate commissions. In addition, each Adviser transfer agency services to the Self- the performance of a specified index but has adopted policies and procedures as Indexing Funds. Any services provided rather seek to achieve their investment required under section 204A of the by an Adviser, Adviser Affiliates, Sub- objectives by using an ‘‘active’’ Advisers Act, which are reasonably Adviser and Sub-Adviser Affiliates will management strategy. Applicants designed in light of the nature of its be performed in accordance with the contend that the structure of actively business to prevent the misuse, in provisions of the Act, the rules under managed ETFs presents potential violation of the Advisers Act or the the Act and any relevant guidelines conflicts of interest that are the same as Exchange Act or the rules thereunder, of from the staff of the Commission. those presented by Self-Indexing Funds material non-public information by the because the portfolio managers of an Adviser or an associated person (‘‘Inside 17. In light of the foregoing, actively managed ETF by definition Information Policy’’). Any Sub-Adviser Applicants believe it is appropriate to have advance knowledge of pending will be required to adopt and maintain allow the Self-Indexing Funds and their portfolio changes. However, rather than a similar Inside Information Policy. In respective Master Funds to be fully requiring Policies and Procedures accordance with the Code of Ethics 13 transparent in lieu of Policies and similar to those required under the Prior and Inside Information Policy of each Procedures from the Prior Self-Indexing Self-Indexing Orders, Applicants Adviser and Sub-Adviser, personnel of Orders discussed above. believe that actively managed ETFs those entities with knowledge about the 18. The Shares of each Fund will be address these potential conflicts of composition of the Portfolio Deposit 14 purchased and redeemed in Creation interest appropriately through full will be prohibited from disclosing such Units and generally on an in-kind basis. portfolio transparency, as the conditions information to any other person, except Except where the purchase or to their relevant exemptive relief as authorized in the course of their redemption will include cash under the require. employment, until such information is limited circumstances specified below, 14. In addition, Applicants do not made public. In addition, an Index purchasers will be required to purchase believe the potential for conflicts of Provider will not provide any Creation Units by making an in-kind interest raised by an Adviser’s use of the information relating to changes to an deposit of specified instruments Underlying Indexes in connection with Underlying Index’s methodology for the (‘‘Deposit Instruments’’), and the management of the Self Indexing inclusion of component securities, the shareholders redeeming their Shares Funds, their respective Master Funds, inclusion or exclusion of specific will receive an in-kind transfer of and the Affiliated Accounts will be component securities, or methodology specified instruments (‘‘Redemption substantially different from the potential for the calculation or the return of Instruments’’).15 On any given Business conflicts presented by an adviser component securities, in advance of a Day, the names and quantities of the managing two or more registered funds. public announcement of such changes instruments that constitute the Deposit Both the Act and the Advisers Act by the Index Provider. Each Adviser Instruments and the names and contain various protections to address will also include under Item 10.C. of quantities of the instruments that conflicts of interest where an adviser is Part 2 of its Form ADV a discussion of constitute the Redemption Instruments managing two or more registered funds its relationship to any Affiliated Index will be identical, unless the Fund is and these protections will also help Provider and any material conflicts of Rebalancing (as defined below). In address these conflicts with respect to interest resulting therefrom, regardless addition, the Deposit Instruments and 12 the Self-Indexing Funds. of whether the Affiliated Index Provider the Redemption Instruments will each 15. Each Adviser and any Sub- is a type of affiliate specified in Item 10. correspond pro rata to the positions in Adviser has adopted or will adopt, 16. To the extent the Self-Indexing the Fund’s portfolio (including cash pursuant to Rule 206(4)–7 under the Funds or their respective Master Funds positions) 16 except: (a) In the case of Advisers Act, written policies and transact with an Affiliated Person of an bonds, for minor differences when it is procedures designed to prevent Adviser or Sub-Adviser, such impossible to break up bonds beyond violations of the Advisers Act and the transactions will comply with the Act, certain minimum sizes needed for rules thereunder. These include policies the rules thereunder and the terms and transfer and settlement; (b) for minor and procedures designed to minimize conditions of the requested order. In differences when rounding is necessary this regard, each Self-Indexing Fund’s to eliminate fractional shares or lots that 11 See, e.g., In the Matter of Huntington Asset board of directors or trustees (‘‘Board’’) Advisors, Inc., et al., Investment Company Act will periodically review the Self- Release Nos. 30032 (April 10, 2012) (notice) and 15 The Funds must comply with the federal 30061 (May 8, 2012) (order); In the Matter of Russell Indexing Fund’s use of an Affiliated securities laws in accepting Deposit Instruments Investment Management Co., et al., Investment Index Provider. Subject to the approval and satisfying redemptions with Redemption Company Act Release Nos. 29655 (April 20, 2011) Instruments, including that the Deposit Instruments (notice) and 29671 (May 16, 2011) (order); In the 13 Each Adviser has also adopted or will adopt a and Redemption Instruments are sold in Matter of Eaton Vance Management, et al., code of ethics pursuant to Rule 17j–1 under the Act transactions that would be exempt from registration Investment Company Act Release Nos. 29591 and Rule 204A–1 under the Advisers Act, which under the Securities Act of 1933 (‘‘Securities Act’’). (March 11, 2011) (notice) and 29620 (March 30, contains provisions reasonably necessary to prevent In accepting Deposit Instruments and satisfying 2011) (order) and; In the Matter of iShares Trust, et Access Persons (as defined in Rule 17j–1) from redemptions with Redemption Instruments that are al., Investment Company Act Release Nos. 29543 engaging in any conduct prohibited in Rule 17j–1 restricted securities eligible for resale pursuant to (Dec. 27, 2010) (notice) and 29571 (Jan. 24, 2011) (‘‘Code of Ethics’’). rule 144A under the Securities Act, the Funds will (order). 14 The instruments and cash that the purchaser is comply with the conditions of rule 144A. 12 See, e.g., Rule 17j–1 under the Act and Section required to deliver in exchange for the Creation 16 The portfolio used for this purpose will be the 204A under the Advisers Act and Rules 204A–1 Units it is purchasing is referred to as the ‘‘Portfolio same portfolio used to calculate the Fund’s NAV for and 206(4)–7 under the Advisers Act. Deposit.’’ the Business Day.

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are not tradeable round lots; 17 (c) TBA the Fund requires all Authorized quantities of the instruments comprising Transactions, short positions, Participants purchasing or redeeming the Deposit Instruments and the derivatives and other positions that Shares on that day to deposit or receive Redemption Instruments, as well as the cannot be transferred in kind 18 will be (as applicable) cash in lieu of some or estimated Cash Amount (if any), for that excluded from the Deposit Instruments all of the Deposit Instruments or day. The list of Deposit Instruments and and the Redemption Instruments; 19 (d) Redemption Instruments, respectively, Redemption Instruments will apply to the extent the Fund determines, on a solely because: (i) Such instruments are until a new list is announced on the given Business Day, to use a not eligible for transfer through either following Business Day, and there will representative sampling of the Fund’s the NSCC or DTC (defined below); or (ii) be no intra-day changes to the list portfolio; 20 or (e) for temporary periods, in the case of Foreign Funds holding except to correct errors in the published to effect changes in the Fund’s portfolio non-U.S. investments, such instruments list. Each Listing Exchange will as a result of the rebalancing of its are not eligible for trading due to local disseminate, every 15 seconds during Underlying Index (any such change, a trading restrictions, local restrictions on regular Exchange trading hours, through ‘‘Rebalancing’’). If there is a difference securities transfers or other similar the facilities of the Consolidated Tape between the NAV attributable to a circumstances; or (e) if the Fund permits Association, an amount for each Fund Creation Unit and the aggregate market an Authorized Participant to deposit or stated on a per individual Share basis value of the Deposit Instruments or receive (as applicable) cash in lieu of representing the sum of (i) the estimated Redemption Instruments exchanged for some or all of the Deposit Instruments Cash Amount and (ii) the current value the Creation Unit, the party conveying or Redemption Instruments, of the Deposit Instruments. instruments with the lower value will respectively, solely because: (i) Such 22. Transaction expenses, including also pay to the other an amount in cash instruments are, in the case of the operational processing and brokerage equal to that difference (the ‘‘Cash purchase of a Creation Unit, not costs, will be incurred by a Fund when Amount’’). available in sufficient quantity; (ii) such investors purchase or redeem Creation 19. Purchases and redemptions of instruments are not eligible for trading Units in-kind and such costs have the Creation Units may be made in whole or by an Authorized Participant or the potential to dilute the interests of the in part on a cash basis, rather than in investor on whose behalf the Fund’s existing shareholders. Each kind, solely under the following Authorized Participant is acting; or (iii) Fund will impose purchase or circumstances: (a) To the extent there is a holder of Shares of a Foreign Fund redemption transaction fees a Cash Amount; (b) if, on a given holding non-U.S. investments would be (‘‘Transaction Fees’’) in connection with Business Day, the Fund announces subject to unfavorable income tax effecting such purchases or redemptions before the open of trading that all treatment if the holder receives of Creation Units. With respect to purchases, all redemptions or all redemption proceeds in kind.22 Feeder Funds, the Transaction Fee purchases and redemptions on that day 20. Creation Units will consist of would be paid indirectly to the Master will be made entirely in cash; (c) if, specified large aggregations of Shares, Fund.23 In all cases, such Transaction upon receiving a purchase or e.g., at least 25,000 Shares, and it is Fees will be limited in accordance with redemption order from an Authorized expected that the initial price of a requirements of the Commission Participant, the Fund determines to Creation Unit will range from $1 million applicable to management investment require the purchase or redemption, as to $10 million. All orders to purchase companies offering redeemable applicable, to be made entirely in Creation Units must be placed with the securities. Since the Transaction Fees cash; 21 (d) if, on a given Business Day, Distributor by or through an are intended to defray the transaction ‘‘Authorized Participant’’ which is expenses as well as to prevent possible 17 A tradeable round lot for a security will be the either (1) a ‘‘Participating Party,’’ i.e., a shareholder dilution resulting from the standard unit of trading in that particular type of broker-dealer or other participant in the purchase or redemption of Creation security in its primary market. Continuous Net Settlement System of Units, the Transaction Fees will be 18 This includes instruments that can be transferred in kind only with the consent of the the NSCC, a clearing agency registered borne only by such purchasers or original counterparty to the extent the Fund does with the Commission, or (2) a redeemers.24 The Distributor will be not intend to seek such consents. participant in The Depository Trust responsible for delivering the Fund’s 19 Because these instruments will be excluded Company (‘‘DTC’’) (‘‘DTC Participant’’), prospectus to those persons acquiring from the Deposit Instruments and the Redemption Instruments, their value will be reflected in the which, in either case, has signed a Shares in Creation Units and for determination of the Cash Amount (as defined participant agreement with the maintaining records of both the orders below). Distributor. The Distributor will be placed with it and the confirmations of 20 A Fund may only use sampling for this purpose responsible for transmitting the orders acceptance furnished by it. In addition, if the sample: (i) Is designed to generate to the Funds and will furnish to those performance that is highly correlated to the the Distributor will maintain a record of performance of the Fund’s portfolio; (ii) consists placing such orders confirmation that entirely of instruments that are already included in the orders have been accepted, but 23 Applicants are not requesting relief from the Fund’s portfolio; and (iii) is the same for all applicants state that the Distributor may section 18 of the Act. Accordingly, a Master Fund Authorized Participants (as defined below) on a reject any order which is not submitted may require a Transaction Fee payment to cover given Business Day. expenses related to purchases or redemptions of the 21 In determining whether a particular Fund will in proper form. Master Fund’s shares by a Feeder Fund only if it sell or redeem Creation Units entirely on a cash or 21. Each Business Day, before the requires the same payment for equivalent purchases in-kind basis (whether for a given day or a given open of trading on the Listing Exchange, or redemptions by any other feeder fund. Thus, for order), the key consideration will be the benefit that each Fund will cause to be published example, a Master Fund may require payment of a would accrue to the Fund and its investors. For through the NSCC the names and Transaction Fee by a Feeder Fund for transactions instance, in bond transactions, the Adviser may be for 20,000 or more shares so long as it requires able to obtain better execution than Share payment of the same Transaction Fee by all feeder purchasers because of the Adviser’s size, experience consequences for the remaining Fund shareholders funds for transactions involving 20,000 or more and potentially stronger relationships in the fixed that would not occur with an in-kind redemption. shares. income markets. Purchases of Creation Units either As a result, tax consideration may warrant in-kind 24 Where a Fund permits an in-kind purchaser to on an all cash basis or in-kind are expected to be redemptions. substitute cash-in-lieu of depositing one or more of neutral to the Funds from a tax perspective. In 22 A ‘‘custom order’’ is any purchase or the requisite Deposit Instruments, the purchaser contrast, cash redemptions typically require selling redemption of Shares made in whole or in part on may be assessed a higher Transaction Fee to cover portfolio holdings, which may result in adverse tax a cash basis in reliance on clause (e)(i) or (e)(ii). the cost of purchasing such Deposit Instruments.

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the instructions given to the applicable the Fund in Creation Units only. The Creation Units only.26 Applicants state Fund to implement the delivery of its Funds will provide copies of their that investors may purchase Shares in Shares. annual and semi-annual shareholder Creation Units and redeem Creation 23. Shares of each Fund will be listed reports to DTC Participants for Units from each Fund. Applicants and traded individually on an distribution to beneficial owners of further state that because Creation Units Exchange. It is expected that one or Shares. may always be purchased and redeemed more member firms of an Exchange will Applicants’ Legal Analysis at NAV, the price of Shares on the be designated to act as a market maker secondary market should not vary (each, a ‘‘Market Maker’’) and maintain 1. Applicants request an order under materially from NAV. a market for Shares trading on the section 6(c) of the Act for an exemption Exchange. Prices of Shares trading on an from sections 2(a)(32), 5(a)(1), 22(d), and Section 22(d) of the Act and Rule 22c– Exchange will be based on the current 22(e) of the Act and rule 22c–1 under 1 Under the Act bid/offer market. Transactions involving the Act, under section 12(d)(1)(J) of the 4. Section 22(d) of the Act, among the sale of Shares on an Exchange will Act for an exemption from sections other things, prohibits a dealer from be subject to customary brokerage 12(d)(1)(A) and (B) of the Act, and selling a redeemable security that is commissions and charges. under sections 6(c) and 17(b) of the Act currently being offered to the public by 24. Applicants expect that purchasers for an exemption from sections 17(a)(1) or through an underwriter, except at a of Creation Units will include and 17(a)(2) of the Act. current public offering price described institutional investors and arbitrageurs. 2. Section 6(c) of the Act provides that in the prospectus. Rule 22c–1 under the Market Makers, acting in their roles to the Commission may exempt any Act generally requires that a dealer provide a fair and orderly secondary person, security or transaction, or any selling, redeeming or repurchasing a market for the Shares, may from time to class of persons, securities or redeemable security do so only at a time find it appropriate to purchase or transactions, from any provision of the price based on its NAV. Applicants state redeem Creation Units. Applicants Act, if and to the extent that such that secondary market trading in Shares expect that secondary market exemption is necessary or appropriate will take place at negotiated prices, not purchasers of Shares will include both in the public interest and consistent at a current offering price described in 25 institutional and retail investors. The with the protection of investors and the a Fund’s prospectus, and not at a price price at which Shares trade will be purposes fairly intended by the policy based on NAV. Thus, purchases and disciplined by arbitrage opportunities and provisions of the Act. Section 17(b) sales of Shares in the secondary market created by the option continually to of the Act authorizes the Commission to will not comply with section 22(d) of purchase or redeem Shares in Creation exempt a proposed transaction from the Act and rule 22c–1 under the Act. Units, which should help prevent section 17(a) of the Act if evidence Applicants request an exemption under establishes that the terms of the Shares from trading at a material section 6(c) from these provisions. transaction, including the consideration discount or premium in relation to their 5. Applicants assert that the concerns to be paid or received, are reasonable NAV. sought to be addressed by section 22(d) 25. Shares will not be individually and fair and do not involve of the Act and rule 22c–1 under the Act redeemable, and owners of Shares may overreaching on the part of any person with respect to pricing are equally acquire those Shares from the Fund, or concerned, and the proposed satisfied by the proposed method of tender such Shares for redemption to transaction is consistent with the pricing Shares. Applicants maintain that the Fund, in Creation Units only. To policies of the registered investment while there is little legislative history redeem, an investor must accumulate company and the general provisions of regarding section 22(d), its provisions, enough Shares to constitute a Creation the Act. Section 12(d)(1)(J) of the Act as well as those of rule 22c–1, appear to Unit. Redemption requests must be provides that the Commission may have been designed to (a) prevent placed through an Authorized exempt any person, security, or dilution caused by certain riskless- Participant. A redeeming investor may transaction, or any class or classes of trading schemes by principal pay a Transaction Fee, calculated in the persons, securities or transactions, from underwriters and contract dealers, (b) same manner as a Transaction Fee any provisions of section 12(d)(1) if the prevent unjust discrimination or payable in connection with purchases of exemption is consistent with the public preferential treatment among buyers, Creation Units. interest and the protection of investors. 26. Neither the Trusts nor any Fund and (c) ensure an orderly distribution of will be advertised or marketed or Sections 5(a)(1) and 2(a)(32) of the Act investment company shares by otherwise held out as a traditional open- 3. Section 5(a)(1) of the Act defines an eliminating price competition from end investment company or a ‘‘mutual ‘‘open-end company’’ as a management dealers offering shares at less than the fund.’’ Instead, each such Fund will be investment company that is offering for published sales price and repurchasing marketed as an ‘‘ETF.’’ All marketing sale or has outstanding any redeemable shares at more than the published materials that describe the features or security of which it is the issuer. redemption price. method of obtaining, buying or selling Section 2(a)(32) of the Act defines a 6. Applicants believe that none of Creation Units, or Shares traded on an redeemable security as any security, these purposes will be thwarted by Exchange, or refer to redeemability, will other than short-term paper, under the permitting Shares to trade in the prominently disclose that Shares are not terms of which the owner, upon its secondary market at negotiated prices. individually redeemable and will presentation to the issuer, is entitled to Applicants state that (a) secondary disclose that the owners of Shares may receive approximately a proportionate market trading in Shares does not acquire those Shares from the Fund or share of the issuer’s current net assets, involve a Fund as a party and will not tender such Shares for redemption to or the cash equivalent. Because Shares result in dilution of an investment in will not be individually redeemable, Shares, and (b) to the extent different 25 Shares will be registered in book-entry form applicants request an order that would 26 only. DTC or its nominee will be the record or permit the Funds to register as open-end The Master Funds will not require relief from registered owner of all outstanding Shares. sections 2(a)(32) and 5(a)(1) because the Master Beneficial ownership of Shares will be shown on management investment companies and Funds will issue individually redeemable the records of DTC or the DTC Participants. issue Shares that are redeemable in securities.

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prices exist during a given trading day, request would adequately afford Funds Sub-Adviser’’). Any investment or from day to day, such variances occur investor protection. adviser to an Investing Management as a result of third-party market forces, 9. Applicants are not seeking relief Company will be registered under the such as supply and demand. Therefore, from section 22(e) with respect to Advisers Act. Each Investing Trust will applicants assert that secondary market Foreign Funds that do not effect be sponsored by a sponsor (‘‘Sponsor’’). transactions in Shares will not lead to creations and redemptions of Creation 13. Applicants submit that the discrimination or preferential treatment Units in-kind.29 proposed conditions to the requested among purchasers. Finally, applicants relief adequately address the concerns Section 12(d)(1) contend that the price at which Shares underlying the limits in sections trade will be disciplined by arbitrage 10. Section 12(d)(1)(A) of the Act 12(d)(1)(A) and (B), which include opportunities created by the option prohibits a registered investment concerns about undue influence by a continually to purchase or redeem company from acquiring securities of an fund of funds over underlying funds, Shares in Creation Units, which should investment company if such securities excessive layering of fees and overly help prevent Shares from trading at a represent more than 3% of the total complex fund structures. Applicants material discount or premium in outstanding voting stock of the acquired believe that the requested exemption is relation to their NAV. company, more than 5% of the total consistent with the public interest and assets of the acquiring company, or, the protection of investors. Section 22(e) together with the securities of any other 14. Applicants believe that neither a 7. Section 22(e) of the Act generally investment companies, more than 10% Fund of Funds nor a Fund of Funds prohibits a registered investment of the total assets of the acquiring Affiliate would be able to exert undue 30 company from suspending the right of company. Section 12(d)(1)(B) of the Act influence over a Fund. To limit the redemption or postponing the date of prohibits a registered open-end control that a Fund of Funds may have payment of redemption proceeds for investment company, its principal over a Fund, applicants propose a more than seven days after the tender of underwriter and any other broker-dealer condition prohibiting a Fund of Funds a security for redemption. Applicants from knowingly selling the investment Adviser or Sponsor, any person state that settlement of redemptions for company’s shares to another investment controlling, controlled by, or under Foreign Funds will be contingent not company if the sale will cause the common control with a Fund of Funds only on the settlement cycle of the acquiring company to own more than Adviser or Sponsor, and any investment United States market, but also on 3% of the acquired company’s voting company and any issuer that would be current delivery cycles in local markets stock, or if the sale will cause more than an investment company but for sections for the underlying foreign securities 10% of the acquired company’s voting 3(c)(1) or 3(c)(7) of the Act that is held by a Foreign Fund. Applicants stock to be owned by investment advised or sponsored by a Fund of state that the delivery cycles currently companies generally. Funds Adviser or Sponsor, or any practicable for transferring Redemption 11. Applicants request an exemption person controlling, controlled by, or Instruments to redeeming investors, to permit registered management under common control with a Fund of coupled with local market holiday investment companies and unit Funds Adviser or Sponsor (‘‘Fund of schedules, may require a delivery investment trusts (‘‘UITs’’) that are not Funds Advisory Group’’) from process of up to fifteen (15) calendar advised or sponsored by the Advisers controlling (individually or in the days.27 Accordingly, with respect to and are not part of the same ‘‘group of aggregate) a Fund within the meaning of Foreign Funds only, applicants hereby investment companies,’’ as defined in section 2(a)(9) of the Act. The same request relief under section 6(c) from section 12(d)(1)(G)(ii) of the Act as the prohibition would apply to any Fund of the requirement imposed by section Funds (such management investment Funds Sub-Adviser, any person 22(e) to allow Foreign Funds to pay companies are referred to as ‘‘Investing controlling, controlled by or under redemption proceeds within fifteen (15) Management Companies,’’ such UITs common control with the Fund of calendar days following the tender of are referred to as ‘‘Investing Trusts,’’ Funds Sub-Adviser, and any investment Creation Units for redemption.28 and Investing Management Companies company or issuer that would be an and Investing Trusts are collectively investment company but for sections 8. Applicants believe that Congress referred to as ‘‘Funds of Funds’’), to 3(c)(1) or 3(c)(7) of the Act (or portion adopted section 22(e) to prevent acquire Shares beyond the limits of of such investment company or issuer) unreasonable, undisclosed or section 12(d)(1)(A) of the Act; and the advised or sponsored by the Fund of unforeseen delays in the actual payment Funds, and any principal underwriter Funds Sub-Adviser or any person of redemption proceeds. Applicants for the Funds, and/or any Broker controlling, controlled by or under propose that allowing redemption registered under the Exchange Act, to common control with the Fund of payments for Creation Units of a Foreign sell Shares to Funds of Funds beyond Funds Sub-Adviser (‘‘Fund of Funds Fund to be made within fifteen calendar the limits of section 12(d)(1)(B) of the Sub-Advisory Group’’). days would not be inconsistent with the Act. 15. Applicants propose other spirit and intent of section 22(e). 12. Each Investing Management conditions to limit the potential for Applicants suggest that a redemption Company will be advised by an undue influence over the Funds, payment occurring within fifteen investment adviser within the meaning including that no Fund of Funds or calendar days following a redemption of section 2(a)(20)(A) of the Act (the Fund of Funds Affiliate (except to the ‘‘Fund of Funds Adviser’’) and may be 27 Certain countries in which a Fund may invest sub-advised by investment advisers 30 A ‘‘Fund of Funds Affiliate’’ is a Fund of Funds have historically had settlement periods of up to within the meaning of section Adviser, Fund of Funds Sub-Adviser, Sponsor, fifteen (15) calendar days. promoter, and principal underwriter of a Fund of 28 Applicants acknowledge that no relief obtained 2(a)(20)(B) of the Act (each a ‘‘Fund of Funds, and any person controlling, controlled by, from the requirements of section 22(e) will affect or under common control with any of those entities. any obligations applicants may otherwise have 29 In addition, the requested exemption from A ‘‘Fund Affiliate’’ is an investment adviser, under rule 15c6–1 under the Exchange Act section 22(e) would only apply to in-kind promoter, or principal underwriter of a Fund and requiring that most securities transactions be settled redemptions by the Feeder Funds and would not any person controlling, controlled by or under within three business days of the trade date. apply to in-kind redemptions by other feeder funds. common control with any of these entities.

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extent it is acting in its capacity as an 17. Applicants submit that the and other securities, applicants request investment adviser to a Fund) will cause proposed arrangement will not create an relief from section 12(d)(1)(A) and (B). a Fund to purchase a security in an overly complex fund structure. The Feeder Funds would operate in offering of securities during the Applicants note that no Fund, nor its compliance with all other provisions of existence of an underwriting or selling respective Master Fund, will acquire section 12(d)(1)(E). securities of any investment company or syndicate of which a principal Sections 17(a)(1) and (2) of the Act underwriter is an Underwriting Affiliate company relying on section 3(c)(1) or (‘‘Affiliated Underwriting’’). An 3(c)(7) of the Act in excess of the limits 20. Sections 17(a)(1) and (2) of the Act ‘‘Underwriting Affiliate’’ is a principal contained in section 12(d)(1)(A) of the generally prohibit an affiliated person of underwriter in any underwriting or Act, except to the extent permitted by a registered investment company, or an selling syndicate that is an officer, exemptive relief from the Commission affiliated person of such a person, from director, member of an advisory board, permitting the Fund, or its respective selling any security to or purchasing any Fund of Funds Adviser, Fund of Funds Master Fund, to purchase shares of security from the company. Section Sub-Adviser, employee or Sponsor of other investment companies for short- 2(a)(3) of the Act defines ‘‘affiliated the Fund of Funds, or a person of which term cash management purposes or person’’ of another person to include (a) any person directly or indirectly any such officer, director, member of an pursuant to the Master-Feeder Relief. To owning, controlling or holding with advisory board, Fund of Funds Adviser ensure a Fund of Funds is aware of the power to vote 5% or more of the or Fund of Funds Sub-Adviser, terms and conditions of the requested outstanding voting securities of the employee or Sponsor is an affiliated order, the Fund of Funds will enter into other person, (b) any person 5% or more person (except that any person whose an agreement with the Fund (‘‘FOF of whose outstanding voting securities relationship to the Fund is covered by Participation Agreement’’). The FOF Participation Agreement will include an are directly or indirectly owned, section 10(f) of the Act is not an controlled or held with the power to Underwriting Affiliate). acknowledgement from the Fund of Funds that it may rely on the order only vote by the other person, and (c) any 16. Applicants do not believe that the to invest in the Funds and not in any person directly or indirectly controlling, proposed arrangement will involve other investment company. controlled by or under common control excessive layering of fees. The board of 18. Applicants also note that a Fund with the other person. Section 2(a)(9) of directors or trustees of any Investing may choose to reject a direct purchase the Act defines ‘‘control’’ as the power Management Company, including a of Shares in Creation Units by a Fund to exercise a controlling influence over majority of the directors or trustees who of Funds. To the extent that a Fund of the management or policies of a are not ‘‘interested persons’’ within the Funds purchases Shares in the company, and provides that a control meaning of section 2(a)(19) of the Act secondary market, a Fund would still relationship will be presumed where (‘‘disinterested directors or trustees’’), retain its ability to reject any initial one person owns more than 25% of a will find that the advisory fees charged investment by a Fund of Funds in company’s voting securities. The Funds under the contract are based on services excess of the limits of section may be deemed to be controlled by an provided that will be in addition to, 12(d)(1)(A) by declining to enter into a Adviser or an entity controlling, rather than duplicative of, services FOF Participation Agreement with the controlled by or under common control provided under the advisory contract of Fund of Funds. with an Adviser and hence affiliated any Fund, or its respective Master Fund, 19. Applicants also are seeking the persons of each other. In addition, the in which the Investing Management Master-Feeder Relief to permit the Funds may be deemed to be under Company may invest. In addition, under Feeder Funds to perform creations and common control with any other condition B.5., a Fund of Funds redemptions of Shares in-kind in a registered investment company (or Adviser, or a Fund of Funds’ trustee or master-feeder structure. Applicants series thereof) advised by an Adviser or Sponsor, as applicable, will waive fees assert that this structure is substantially an entity controlling, controlled by or otherwise payable to it by the Fund of identical to traditional master-feeder under common control with an Adviser Funds in an amount at least equal to any structures permitted pursuant to the (an ‘‘Affiliated Fund’’). Any investor, compensation (including fees received exception provided in section including Market Makers, owning 5% or pursuant to any plan adopted by a 12(d)(1)(E) of the Act. Section holding in excess of 25% of the Trust or Fund, or its respective Master Fund, 12(d)(1)(E) provides that the percentage such Funds, may be deemed affiliated under rule 12b–1 under the Act) limitations of section 12(d)(1)(A) and (B) persons of the Trust or such Funds. In received from a Fund by the Fund of shall not apply to a security issued by addition, an investor could own 5% or Funds Adviser, trustee or Sponsor or an an investment company (in this case, more, or in excess of 25% of the affiliated person of the Fund of Funds the shares of the applicable Master outstanding shares of one or more Adviser, trustee or Sponsor, other than Fund) if, among other things, that Affiliated Funds making that investor a any advisory fees paid to the Fund of security is the only investment security Second-Tier Affiliate of the Funds. Funds Adviser, trustee or Sponsor or its held by the investing investment 21. Applicants request an exemption affiliated person by a Fund, in company (in this case, the Feeder from sections 17(a)(1) and 17(a)(2) of the connection with the investment by the Fund). Applicants believe the proposed Act pursuant to sections 6(c) and 17(b) Fund of Funds in the Fund. Applicants master-feeder structure complies with of the Act to permit persons that are state that any sales charges and/or section 12(d)(1)(E) because each Feeder Affiliated Persons of the Funds, or service fees charged with respect to Fund will hold only investment Second-Tier Affiliates of the Funds, shares of a Fund of Funds will not securities issued by its corresponding solely by virtue of one or more of the exceed the limits applicable to a fund of Master Fund; however, the Feeder following: (a) Holding 5% or more, or in funds as set forth in NASD Conduct Funds may receive securities other than excess of 25%, of the outstanding Rule 2830.31 securities of its corresponding Master Shares of one or more Funds; (b) an Fund if a Feeder Fund accepts an in- affiliation with a person with an 31 Any references to NASD Conduct Rule 2830 kind creation. To the extent that a ownership interest described in (a); or include any successor or replacement FINRA rule Feeder Fund may be deemed to be (c) holding 5% or more, or more than to NASD Conduct Rule 2830. holding both shares of the Master Fund 25%, of the shares of one or more

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Affiliated Funds, to effectuate purchases transactions with the Fund of Funds.32 Feeder Fund’s proportionate share of and redemptions ‘‘in-kind.’’ Applicants state that the terms of the the Master Fund’s net assets, and the 22. Applicants assert that no useful transactions are fair and reasonable and distributed securities will be valued in purpose would be served by prohibiting do not involve overreaching. Applicants the same manner as they are valued for such affiliated persons from making ‘‘in- note that any consideration paid by a the purposes of calculating the kind’’ purchases or ‘‘in-kind’’ Fund of Funds for the purchase or applicable Master Fund’s NAV. Further, redemptions of Shares of a Fund in redemption of Shares directly from a all such transactions will be effected Creation Units. Both the deposit Fund will be based on the NAV of the with respect to pre-determined Fund.33 Applicants believe that any securities and on the same terms with procedures for ‘‘in-kind’’ purchases of proposed transactions directly between respect to all investors. Finally, such Creation Units and the redemption the Funds and Funds of Funds will be transaction would only occur as a result procedures for ‘‘in-kind’’ redemptions of consistent with the policies of each of, and to effectuate, a creation or Creation Units will be effected in Fund of Funds. The purchase of redemption transaction between the exactly the same manner for all Creation Units by a Fund of Funds Feeder Fund and a third-party investor. purchases and redemptions, regardless directly from a Fund will be Applicants believe that the terms of the of size or number. There will be no accomplished in accordance with the proposed transactions are reasonable discrimination between purchasers or investment restrictions of any such and fair and do not involve redeemers. Deposit Instruments and Fund of Funds and will be consistent overreaching on the part of any person Redemption Instruments for each Fund with the investment policies set forth in concerned, the proposed transactions will be valued in the identical manner the Fund of Funds’ registration are consistent with the policy of each as those Portfolio Holdings currently statement. Applicants also state that the Fund and will be consistent with the held by such Fund and the valuation of proposed transactions are consistent investment objectives and policies of the Deposit Instruments and with the general purposes of the Act and each Fund of Funds, and the proposed Redemption Instruments will be made are appropriate in the public interest. transactions are consistent with the in an identical manner regardless of the 24. To the extent that a Fund operates general purposes of the Act. identity of the purchaser or redeemer. in a master-feeder structure, applicants Applicants do not believe that ‘‘in-kind’’ also request relief permitting the Feeder Applicants’ Conditions purchases and redemptions will result Funds to engage in in-kind creations Applicants agree that any order of the in abusive self-dealing or overreaching, and redemptions with the applicable Commission granting the requested but rather assert that such procedures Master Fund. Applicants state that the relief will be subject to the following will be implemented consistently with customary section 17(a)(1) and 17(a)(2) conditions: each Fund’s objectives and with the relief would not be sufficient to permit general purposes of the Act. Applicants such transactions because the Feeder A. ETF Relief believe that ‘‘in-kind’’ purchases and Funds and the applicable Master Fund 1. The requested relief, other than the redemptions will be made on terms could also be affiliated by virtue of section 12(d)(1) Relief and the section reasonable to applicants and any having the same investment adviser. 17 relief related to a master-feeder affiliated persons because they will be However, applicants believe that in- structure, will expire on the effective valued pursuant to verifiable objective kind creations and redemptions date of any Commission rule under the standards. The method of valuing between a Feeder Fund and a Master Act that provides relief permitting the Portfolio Holdings held by a Fund is Fund advised by the same investment operation of index-based ETFs. identical to that used for calculating adviser do not involve ‘‘overreaching’’ 2. As long as a Fund operates in ‘‘in-kind’’ purchase or redemption by an affiliated person. Such reliance on the requested order, Shares values and therefore creates no transactions will occur only at the of such Fund will be listed on an opportunity for affiliated persons or Exchange. Second-Tier Affiliates of applicants to 32 Although applicants believe that most Funds of 3. Neither the Trusts nor any Fund effect a transaction detrimental to the Funds will purchase Shares in the secondary will be advertised or marketed as an market and will not purchase Creation Units open-end investment company or a other holders of Shares of that Fund. directly from a Fund, a Fund of Funds might seek Similarly, applicants submit that, by to transact in Creation Units directly with a Fund mutual fund. Any advertising material using the same standards for valuing that is an affiliated person of a Fund of Funds. To that describes the purchase or sale of the extent that purchases and sales of Shares occur Creation Units or refers to redeemability Portfolio Holdings held by a Fund as are in the secondary market and not through principal used for calculating ‘‘in-kind’’ transactions directly between a Fund of Funds and will prominently disclose that Shares redemptions or purchases, the Fund a Fund, relief from section 17(a) would not be are not individually redeemable and will ensure that its NAV will not be necessary. However, the requested relief would that owners of Shares may acquire those apply to direct sales of Shares in Creation Units by Shares from the Fund and tender those adversely affected by such securities a Fund to a Fund of Funds and redemptions of transactions. Applicants also note that those Shares. Applicants are not seeking relief from Shares for redemption to a Fund in the ability to take deposits and make section 17(a) for, and the requested relief will not Creation Units only. redemptions ‘‘in-kind’’ will help each apply to, transactions where a Fund could be 4. The Web site, which is and will be deemed an affiliated person, or an affiliated person publicly accessible at no charge, will Fund to track closely its Underlying of an affiliated person of a Fund of Funds because Index and therefore aid in achieving the an Adviser or an entity controlling, controlled by contain, on a per Share basis for each Fund’s objectives. or under common control with an Adviser provides Fund, the prior Business Day’s NAV and investment advisory services to that Fund of Funds. the market closing price or the midpoint 23. Applicants also seek relief under 33 Applicants acknowledge that the receipt of of the bid/ask spread at the time of the sections 6(c) and 17(b) from section compensation by (a) an affiliated person of a Fund calculation of such NAV (‘‘Bid/Ask 17(a) to permit a Fund that is an of Funds, or an affiliated person of such person, for the purchase by the Fund of Funds of Shares of a Price’’), and a calculation of the affiliated person, or an affiliated person Fund or (b) an affiliated person of a Fund, or an premium or discount of the market of an affiliated person, of a Fund of affiliated person of such person, for the sale by the closing price or Bid/Ask Price against Funds to sell its Shares to and redeem Fund of its Shares to a Fund of Funds, may be such NAV. its Shares from a Fund of Funds, and to prohibited by section 17(e)(1) of the Act. The FOF Participation Agreement also will include this 5. Each Fund will post on the Web engage in the accompanying in-kind acknowledgment. site on each Business Day, before

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commencement of trading of Shares on Funds Affiliate from a Fund, or its connection with the investment by the the Exchange, the Fund’s, or its respective Master Fund, or Fund Investing Management Company in the respective Master Fund’s, Portfolio Affiliate in connection with any services Fund made at the direction of the Fund Holdings. or transactions. of Funds Sub-Adviser. In the event that 6. Neither Adviser nor any Sub- 4. Once an investment by a Fund of the Fund of Funds Sub-Adviser waives Adviser to a Self-Indexing Fund, Funds in the securities of a Fund fees, the benefit of the waiver will be directly or indirectly, will cause any exceeds the limits in section passed through to the Investing Authorized Participant (or any investor 12(d)(1)(A)(i) of the Act, the Board of Management Company. on whose behalf an Authorized the Fund, or its respective Master Fund, 6. No Fund of Funds or Fund of Participant may transact with the Self- including a majority of the directors or Funds Affiliate (except to the extent it Indexing Fund) to acquire any Deposit trustees who are not ‘‘interested is acting in its capacity as an investment Instrument for a Self-Indexing Fund, or persons’’ within the meaning of section adviser to a Fund) will cause a Fund, or its respective Master Fund, through a 2(a)(19) of the Act (‘‘non-interested its respective Master Fund, to purchase transaction in which the Self-Indexing Board members’’), will determine that a security in any Affiliated Fund, or its respective Master Fund, any consideration paid by the Fund, or Underwriting. could not engage directly. its respective Master Fund, to the Fund 7. The Board of a Fund, or its of Funds or a Fund of Funds Affiliate respective Master Fund, including a B. Section 12(d)(1) Relief in connection with any services or majority of the non-interested Board 1. The members of a Fund of Funds’ transactions: (i) Is fair and reasonable in members, will adopt procedures Advisory Group will not control relation to the nature and quality of the reasonably designed to monitor any (individually or in the aggregate) a services and benefits received by the purchases of securities by the Fund, or Fund, or its respective Master Fund, Fund, or its respective Master Fund; (ii) its respective Master Fund, in an within the meaning of section 2(a)(9) of is within the range of consideration that Affiliated Underwriting, once an the Act. The members of a Fund of the Fund would be required to pay to investment by a Fund of Funds in the Funds’ Sub-Advisory Group will not another unaffiliated entity in connection securities of the Fund exceeds the limit control (individually or in the aggregate) with the same services or transactions; of section 12(d)(1)(A)(i) of the Act, a Fund, or its respective Master Fund, and (iii) does not involve overreaching including any purchases made directly within the meaning of section 2(a)(9) of on the part of any person concerned. from an Underwriting Affiliate. The the Act. If, as a result of a decrease in This condition does not apply with Board will review these purchases the outstanding voting securities of a respect to any services or transactions periodically, but no less frequently than Fund, the Fund of Funds’ Advisory between a Fund, or its respective Master annually, to determine whether the Group or the Fund of Funds’ Sub- Fund, and its investment adviser(s), or purchases were influenced by the Advisory Group, each in the aggregate, any person controlling, controlled by or investment by the Fund of Funds in the becomes a holder of more than 25 under common control with such Fund. The Board will consider, among percent of the outstanding voting investment adviser(s). other things: (i) Whether the purchases securities of a Fund, it will vote its 5. The Fund of Funds Adviser, or were consistent with the investment Shares of the Fund in the same trustee or Sponsor of an Investing Trust, objectives and policies of the Fund, or proportion as the vote of all other as applicable, will waive fees otherwise its respective Master Fund; (ii) how the holders of the Fund’s Shares. This payable to it by the Fund of Funds in performance of securities purchased in condition does not apply to the Fund of an amount at least equal to any an Affiliated Underwriting compares to Funds’ Sub-Advisory Group with compensation (including fees received the performance of comparable respect to a Fund, or its respective pursuant to any plan adopted by a securities purchased during a Master Fund, for which the Fund of Fund, or its respective Master Fund, comparable period of time in Funds’ Sub-Adviser or a person under rule 12b–1 under the Act) underwritings other than Affiliated controlling, controlled by or under received from a Fund, or its respective Underwritings or to a benchmark such common control with the Fund of Master Fund, by the Fund of Funds as a comparable market index; and (iii) Funds’ Sub-Adviser acts as the Adviser, or trustee or Sponsor of the whether the amount of securities investment adviser within the meaning Investing Trust, or an affiliated person purchased by the Fund, or its respective of section 2(a)(20)(A) of the Act. of the Fund of Funds Adviser, or trustee Master Fund, in Affiliated 2. No Fund of Funds or Fund of or Sponsor of the Investing Trust, other Underwritings and the amount Funds Affiliate will cause any existing than any advisory fees paid to the Fund purchased directly from an or potential investment by the Fund of of Funds Adviser, trustee or Sponsor of Underwriting Affiliate have changed Funds in a Fund to influence the terms an Investing Trust, or its affiliated significantly from prior years. The of any services or transactions between person by the Fund, or its respective Board will take any appropriate actions the Fund of Funds or Fund of Funds Master Fund, in connection with the based on its review, including, if Affiliate and the Fund, or its respective investment by the Fund of Funds in the appropriate, the institution of Master Fund, or a Fund Affiliate. Fund. Any Fund of Funds Sub-Adviser procedures designed to ensure that 3. The board of directors or trustees of will waive fees otherwise payable to the purchases of securities in Affiliated an Investing Management Company, Fund of Funds Sub-Adviser, directly or Underwritings are in the best interest of including a majority of the disinterested indirectly, by the Investing Management shareholders of the Fund. directors or trustees, will adopt Company in an amount at least equal to 8. Each Fund, or its respective Master procedures reasonably designed to any compensation received from a Fund, will maintain and preserve ensure that the Fund of Funds Adviser Fund, or its respective Master Fund, by permanently in an easily accessible and Fund of Funds Sub-Adviser are the Fund of Funds Sub-Adviser, or an place a written copy of the procedures conducting the investment program of affiliated person of the Fund of Funds described in the preceding condition, the Investing Management Company Sub-Adviser, other than any advisory and any modifications to such without taking into account any fees paid to the Fund of Funds Sub- procedures, and will maintain and consideration received by the Investing Adviser or its affiliated person by the preserve for a period of not less than six Management Company or a Fund of Fund, or its respective Master Fund, in years from the end of the fiscal year in

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which any purchase in an Affiliated investment company or company The proposed rule change is available Underwriting occurred, the first two relying on section 3(c)(1) or 3(c)(7) of on the Exchange’s Web site at years in an easily accessible place, a the Act in excess of the limits contained www.nyse.com, at the principal office of written record of each purchase of in section 12(d)(1)(A) of the Act, except the Exchange, and at the Commission’s securities in Affiliated Underwritings to the extent (i) the Fund, or its Public Reference Room. once an investment by a Fund of Funds respective Master Fund, acquires in the securities of the Fund exceeds the securities of another investment II. Self-Regulatory Organization’s limit of section 12(d)(1)(A)(i) of the Act, company pursuant to exemptive relief Statement of the Purpose of, and setting forth from whom the securities from the Commission permitting the Statutory Basis for, the Proposed Rule were acquired, the identity of the Fund, or its respective Master Fund, to Change underwriting syndicate’s members, the acquire securities of one or more In its filing with the Commission, the terms of the purchase, and the investment companies for short-term self-regulatory organization included information or materials upon which cash management purposes or (ii) the statements concerning the purpose of, the Board’s determinations were made. Fund acquires securities of the Master and basis for, the proposed rule change 9. Before investing in a Fund in Fund pursuant to the Master-Feeder and discussed any comments it received excess of the limit in section Relief. on the proposed rule change. The text 12(d)(1)(A), a Fund of Funds and the For the Commission, by the Division of of those statements may be examined at applicable Trust will execute a FOF Investment Management, under delegated the places specified in Item IV below. Participation Agreement stating without authority. The Exchange has prepared summaries, limitation that their respective boards of Kevin M. O’Neill, set forth in sections A, B, and C below, directors or trustees and their Deputy Secretary. of the most significant parts of such investment advisers, or trustee and [FR Doc. 2014–24209 Filed 10–9–14; 8:45 am] statements. Sponsor, as applicable, understand the terms and conditions of the order, and BILLING CODE 8011–01–P A. Self-Regulatory Organization’s agree to fulfill their responsibilities Statement of the Purpose of, and under the order. At the time of its Statutory Basis for, the Proposed Rule SECURITIES AND EXCHANGE Change investment in Shares of a Fund in COMMISSION excess of the limit in section 1. Purpose 12(d)(1)(A)(i), a Fund of Funds will [Release No. 34–73302; File No. SR– notify the Fund of the investment. At NYSEMKT–2014–85] NYSE MKT LLC (‘‘NYSE MKT’’ or the such time, the Fund of Funds will also ‘‘Exchange’’) proposes a rule change that Self-Regulatory Organizations; NYSE transmit to the Fund a list of the names constitutes a stated interpretation with MKT LLC; Notice of Filing and of each Fund of Funds Affiliate and respect to the meaning, administration, Immediate Effectiveness of Proposed Underwriting Affiliate. The Fund of and enforcement of Rule 46—Equities Rule Change That Constitutes a Stated Funds will notify the Fund of any (‘‘Rule 46’’) in connection with the Interpretation With Respect to the changes to the list of the names as soon transfer of qualified Intercontinental Meaning, Administration, and as reasonably practicable after a change Exchange, Inc. (‘‘ICE’’) staff Floor Enforcement of Rule 46—Equities occurs. The Fund and the Fund of Governors to NYSE Regulation, Inc. Funds will maintain and preserve a October 6, 2014. (‘‘NYSE Regulation’’). copy of the order, the FOF Participation Pursuant to Section 19(b)(1) 1 of the Rule 46 permits the Exchange to 4 Agreement, and the list with any Securities Exchange Act of 1934 (the appoint active NYSE MKT members as 5 updated information for the duration of ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Floor Officials. Rule 46 also permits the investment and for a period of not notice is hereby given that on October the Exchange to appoint ‘‘qualified’’ ICE less than six years thereafter, the first 2, 2014, NYSE MKT LLC (the employees to act as Floor Governors, two years in an easily accessible place. ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with one of the more senior types of Floor 6 10. Before approving any advisory the Securities and Exchange Officials. Supplementary Material .10 contract under section 15 of the Act, the Commission (the ‘‘Commission’’) the 4 board of directors or trustees of each proposed rule change as described in Rule 2(a)—Equities states that the term Investing Management Company ‘‘member,’’ when referring to a natural person, Items I, II, and III below, which Items means a natural person associated with a member including a majority of the disinterested have been prepared by the self- organization who has been approved by the directors or trustees, will find that the regulatory organization. The Exchange and designated by such member advisory fees charged under such Commission is publishing this notice to organization to effect transactions on the Exchange contract are based on services provided trading Floor or any facility thereof. solicit comments on the proposed rule 5 Floor Officials are delegated certain authority that will be in addition to, rather than change from interested persons. from the Board of Directors of the Exchange to duplicative of, the services provided supervise and regulate active openings and unusual under the advisory contract(s) of any I. Self-Regulatory Organization’s situations that arise in connection with the making Fund, or its respective Master Fund, in Statement of the Terms of the Substance of bids, offers or transactions on the trading Floor, of the Proposed Rule Change and to review and approve certain trading actions, which the Investing Management such as trades to be effected at wide variations in Company may invest. These findings The Exchange proposes a rule change price and delayed openings and trading halts. and their basis will be fully recorded in that constitutes a stated interpretation 6 Pursuant to Rules 46 and 46A—Equities, Floor the minute books of the appropriate with respect to the meaning, Governors are one of several ranks of the broader Investing Management Company. category of Floor Officials, including, in order of administration, and enforcement of Rule increasing seniority, Floor Officials, Senior Floor 11. Any sales charges and/or service 46—Equities. The Exchange is not Officials, Executive Floor Officials, Floor Governors fees charged with respect to shares of a proposing any changes to the text of the and Executive Floor Governors. See Securities Fund of Funds will not exceed the current version of Rule 46– Equities. Exchange Act Release No. 57627 (April 4, 2008), 73 limits applicable to a fund of funds as FR 19919 (April 11, 2008) (SR–NYSE–2008–19) (discussing New York Stock Exchange LLC set forth in NASD Conduct Rule 2830. 1 15 U.S.C.78s(b)(1). (‘‘NYSE’’) Rules 46 and 46A that NYSE MKT 12. No Fund, or its respective Master 2 15 U.S.C. 78a. adopted following the NYSE’s acquisition of the Fund, will acquire securities of an 3 17 CFR 240.19b–4. Continued

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defines ‘‘qualified’’ employees as appointed to act as staff Floor effect a change that constitutes a stated ‘‘employees of ICE or any of its Governors. Because NYSE Regulation is policy, practice or interpretation with subsidiaries, excluding employees of not proposing to qualify additional staff respect to the meaning, administration, NYSE Regulation, Inc., who shall have not already approved as Floor or enforcement of an existing rule and satisfied any applicable testing or Governors, the Exchange believes there therefore would not impose any burden qualification required by the Exchange would be no violation of Rule 46. on competition. for all Floor Governors.’’ In addition, the interpretation does The prohibition on appointing NYSE not in any way affect the role of Floor C. Self-Regulatory Organization’s Regulation employees to act as Floor Officials or alter the safeguards in place Statement on Comments on the Governors was put in place when the to ensure that staff Floor Governors are Proposed Rule Change Received From ‘‘qualified Exchange employee’’ knowledgeable and able to effectively Members, Participants, or Others category of Floor Official was adopted intervene when needed on the Exchange No written comments were solicited in 2008.7 The prohibition was necessary trading Floor.9 Finally, NYSE or received with respect to the proposed to avoid potential conflicts of interest Regulation does not propose to seek to rule change. insofar as the process for qualifying qualify existing NYSE Regulation Floor Officials, including Floor employees as staff Floor Governors. III. Date of Effectiveness of the Governors, was performed by NYSE Proposed Rule Change and Timing for 2. Statutory Basis Regulation.8 However, while Rule 46 Commission Action prohibits appointment of NYSE The Exchange believes that the The foregoing rule change has become Regulation employees to act as Floor proposed rule change is consistent with effective pursuant to Section Governors, the Exchange believes that Section 6(b) of the Act,10 in general, and 19(b)(3)(A) 12 of the Act and Rule 19b– the Rule does not prohibit already furthers the objectives of Section 6(b)(5) 4(f)(1) 13 thereunder. The proposed rule qualified Floor Governors from of the Act,11 in particular, because it is change effects a change that constitutes becoming NYSE Regulation employees. designed to prevent fraudulent and a stated policy, practice or The hiring by NYSE Regulation of ICE manipulative acts and practices, interpretation with respect to the employees or members who are already promote just and equitable principles of meaning, administration, or qualified to act as Floor Governors trade, remove impediments to and enforcement of an existing rule. would not involve NYSE Regulation in perfect the mechanism of a free and At any time within 60 days of the qualifying those individuals to act as open market and a national market filing of the proposed rule change, the Floor Governors under Rule 46 and system, and protect investors and the Commission may summarily abrogate would therefore not give rise to the real public interest. The Exchange believes such rule change if it appears to the or apparent conflict of interest the that the proposed stated interpretation Commission that such action is prohibition was intended to avoid. helps prevent fraudulent and necessary or appropriate in the public The Exchange believes that the manipulative acts and practices by interest, for the protection of investors, proposed interpretation would facilitate continuing to require high standards for or otherwise in furtherance of the the contemplated transfer of existing qualified Exchange employees to act as purposes of the Act. ICE staff Floor Governors to NYSE Floor Governors in addition to Regulation. The individuals that would members. Similarly, the proposed stated IV. Solicitation of Comments transfer to NYSE Regulation are interpretation promotes just and Interested persons are invited to experienced former Floor members who equitable principles of trade and submit written data, views, and served as senior-level Floor Officials removes impediments to and perfects arguments concerning the foregoing, before becoming employees of ICE and the mechanism of a free and open including whether the proposed rule are already qualified and have been market by ensuring that qualified change is consistent with the Act. Exchange employees are knowledgeable Comments may be submitted by any of Exchange. See Securities Exchange Act Release No. and able to effectively intervene on the the following methods: 58705 (October 1, 2008), 73 FR 46075 (July 30, Exchange trading Floor as needed. For 2008) (SR–Amex–2008–63)). Electronic Comments 7 See Securities Exchange Act Release No. 34– the same reasons, the proposal is also 57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) designed to protect investors as well as • Use the Commission’s Internet (SR–NYSE–2007–2). As noted, NYSE’s version of the public interest. comment form (http://www.sec.gov/ Rule 46 was later adopted by the Exchange. rules/sro.shtml); or 8 B. Self-Regulatory Organization’s NYSE Regulation examined the fitness of • Send an email to rule-comments@ prospective Floor Officials and administered a Statement on Burden on Competition mandatory education program, which all candidates sec.gov. Please include File Number SR– for Floor Official, including Floor Governor, had to The Exchange does not believe that NYSEMKT–2014–85 on the subject line. complete. NYSE Regulation also administered a the proposed rule change will impose qualifying examination. See Securities Exchange any burden on competition that is not Paper Comments Act Release No. 34–57627 (April 4, 2008), 73 FR • 19919 (April 11, 2008) (SR–NYSE–2007–2). NYSE necessary or appropriate in furtherance Send paper comments in triplicate Regulation performed these tasks for Exchange of the purposes of the Act. The to Brent J. Fields, Secretary, Securities Floor Officials following the NYSE’s acquisition of proposed rule change is intended to and Exchange Commission, 100 F Street NYSE MKT in late 2008. On June 14, 2010, the Exchange, NYSE Regulation and FINRA [sic] NE., Washington, DC 20549–1090. 9 retained the Financial Industry Regulatory See Securities Exchange Act Release No. 34– All submissions should refer to File Authority (‘‘FINRA’’) pursuant to a Regulatory 57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) Number SR–NYSEMKT–2014–85. This (SR–NYSE–2007–2) (discussing NYSE Rule later Services Agreement (‘‘RSA’’) to perform the market file number should be included on the surveillance, enforcement and other miscellaneous adopted by the Exchange). These safeguards functions that up to that point had been performed include, among other things, that qualified subject line if email is used. To help the by NYSE Regulation, including all education and Exchange employees, like qualified members, need Commission process and review your testing-related regulatory services on behalf of to be appointed by the Exchange’s chairman in comments more efficiently, please use consultation with the Executive Floor Governors NYSE Regulation, including the Floor Official only one method. The Commission will mandatory education program and qualification and NYSE Regulation Board of Directors and testing. See Securities Exchange Act Release No. approved by the Board of Directors. 62354 (June 22, 2010), 75 FR 36730 (June 28, 2010) 10 15 U.S.C. 78f(b). 12 15 U.S.C. 78s(b)(3)(A). (SR–NYSEAmex–2010–57). 11 15 U.S.C. 78f(b)(5). 13 17 CFR 240.19b–4(f)(6).

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post all comments on the Commission’s prepared by the Exchange. The thereunder applicable to the Exchange Internet Web site (http://www.sec.gov/ Commission is publishing this notice to and, in particular, the requirements of rules/sro.shtml). Copies of the solicit comments on the proposed rule Section 6(b) of the Act.4 Specifically, submission, all subsequent change from interested persons. the Exchange believes the proposed rule amendments, all written statements change is consistent with Section 6(b)(4) I. Self-Regulatory Organization’s with respect to the proposed rule of the Act,5 which requires that Statement of the Terms of the Substance change that are filed with the Exchange rules provide for the equitable of the Proposed Rule Change Commission, and all written allocation of reasonable dues, fees, and communications relating to the The Exchange proposes to amend its other charges among its Trading Permit proposed rule change between the Fees Schedule. The text of the proposed Holders and other persons using its Commission and any person, other than rule change is available on the facilities. those that may be withheld from the Exchange’s Web site (http:// In particular, the Exchange’s proposal public in accordance with the www.c2exchange.com/Legal/), at the to increase the Linkage Routing fee from provisions of 5 U.S.C. 552, will be Exchange’s Office of the Secretary, and $0.50 per contract to $0.65 per contract available for Web site viewing and at the Commission’s Public Reference is reasonable because such increase will printing in the Commission’s Public Room. help offset the costs associated with routing orders through Linkage and Reference Room, 100 F Street NE., II. Self-Regulatory Organization’s paying the transaction fees for such Washington, DC 20549 on official Statement of the Purpose of, and executions at other exchanges. business days between the hours of Statutory Basis for, the Proposed Rule Additionally, the Exchange notes that if 10:00 a.m. and 3:00 p.m. Copies of such Change filing also will be available for a non-customer market participant inspection and copying at the principal In its filing with the Commission, the wishes to avoid the Linkage fee, it may offices of the Exchange. All comments Exchange included statements choose to specify that C2 not route received will be posted without change; concerning the purpose of and basis for orders away on its behalf or designate the Commission does not edit personal the proposed rule change and discussed the order as Immediate or Cancel, which identifying information from any comments it received on the would prevent the order from linking submissions. You should submit only proposed rule change. The text of these [sic] away to another Exchange [sic]. information that you wish to make statements may be examined at the Moreover, a non-customer market available publicly. All submissions places specified in Item IV below. The participant may route directly to should refer to File Number SR– Exchange has prepared summaries, set exchanges posting the best market if NYSEMKT–2014–85, and should be forth in sections A, B, and C below, of desired to avoid Linkage routing fees. submitted on or before October 31, the most significant aspects of such The Exchange next notes that this fee 2014. statements. amount will be assessed to all orders routed via Linkage (excluding Public For the Commission, by the Division of A. Self-Regulatory Organization’s Customer orders in equity options Trading and Markets, pursuant to delegated Statement of the Purpose of, and 14 classes). The Exchange believes that this authority. Statutory Basis for, the Proposed Rule proposed change is equitable and not Kevin M. O’Neill, Change Deputy Secretary. unfairly discriminatory because non- 1. Purpose customer (e.g., broker-dealer [FR Doc. 2014–24226 Filed 10–9–14; 8:45 am] proprietary) orders originate from BILLING CODE 8011–01–P The Exchange proposes to amend its Fees Schedule.3 Specifically, the broker-dealers who are by and large Exchange proposes to increase the more sophisticated than public SECURITIES AND EXCHANGE Linkage Routing fee from $0.50 per customers and can readily control the COMMISSION contract to $0.65 per contract in exchange to which their orders are addition to the applicable C2 taker fee. routed. While there may be some [Release No. 34–73306; File No. SR–C2– sophisticated customers who are 2014–025] The Linkage Routing fee is assessed to all orders routed pursuant to the capable of directing the exchange to Self-Regulatory Organizations; C2 Options Order Protection and Locked/ which their orders are routed, generally, Options Exchange, Incorporated; Crossed Market Plan, excluding Public retail customers submit orders to their Notice of Filing and Immediate Customer orders in equity option brokerages but do not or cannot specify Effectiveness of a Proposed Rule classes. The purpose of the proposed the exchange to which a customer order Change To Amend the Fees Schedule change is to cover increased costs is sent. Therefore, non-customer order associated with routing orders through flow can, in most cases, more easily October 6, 2014. Linkage and paying the transaction fees route directly to other markets if desired Pursuant to Section 19(b)(1) of the for such executions at other exchanges. and thus avoid Linkage routing fees. Securities Exchange Act of 1934 (the Therefore, it is equitable to assess a ‘‘Act’’),1 and Rule 19b–4 thereunder,2 2. Statutory Basis reasonable fee to cover the costs notice is hereby given that on The Exchange believes the proposed incurred for processing non-customer September 30, 2014, C2 Options rule change is consistent with the Linkage orders while continuing to Exchange, Incorporated (the ‘‘Exchange’’ Securities Exchange Act of 1934 (the exempt such Public Customer orders. or ‘‘C2’’) filed with the Securities and ‘‘Act’’) and the rules and regulations Exchange Commission (the B. Self-Regulatory Organization’s Statement on Burden on Competition ‘‘Commission’’) the proposed rule 3 C2 initially filed the proposed fee change on change as described in Items I, II, and September 2, 2014 (SR–C2–2014–021). On C2 does not believe that the proposed III below, which Items have been September 10, 2014, C2 withdrew that filing and rule change will impose any burden on submitted filing SR–C2–2014–022. On September competition that is not necessary or 18, 2014, C2 withdrew SR–C2–2014–022 and 14 17 CFR 200.30–3(a)(12). submitted SR–C2–2014–023. On September 30, 1 15 U.S.C. 78s(b)(1). 2014, C2 withdrew SR–C2–2014–023 and submitted 4 15 U.S.C. 78f(b). 2 17 CFR 240.19b–4. this filing. 5 15 U.S.C. 78f(b)(4).

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appropriate in furtherance of the change should be approved or For the Commission, by the Division of purposes of the Act. In particular, the disapproved. Trading and Markets, pursuant to delegated increase to the Linkage Routing Fee will authority.8 apply equally to all non-customers. IV. Solicitation of Comments Kevin M. O’Neill, Additionally, although different linkage Interested persons are invited to Deputy Secretary. fees are assessed to different market submit written data, views, and [FR Doc. 2014–24207 Filed 10–9–14; 8:45 am] participants (i.e., non-customers vs arguments concerning the foregoing, BILLING CODE 8011–01–P public customers), as described above, including whether the proposed rule non-customer order flow can, in most change is consistent with the Act. cases, more easily route directly to other SECURITIES AND EXCHANGE Comments may be submitted by any of markets if desired and thus avoid COMMISSION the following methods: Linkage fees. Therefore, it is equitable to [Release No. 34–73303; File No. SR– assess a reasonable fee to cover the costs Electronic Comments NASDAQ–2014–096] incurred for processing non-customer Linkage orders while continuing to • Use the Commission’s Internet Self-Regulatory Organizations; The exempt such public customer orders. comment form (http://www.sec.gov/ NASDAQ Stock Market LLC; Notice of The Exchange believes that the proposal rules/sro.shtml); or Filing and Immediate Effectiveness of to increase the linkage fee amount • Send an email to rule-comments@ Proposed Rule Change To Modify assessed to non-customers will not sec.gov. Please include File Number SR– NASDAQ Rule 7018 Fees cause an unnecessary burden on C2–2014–025 on the subject line. intermarket competition because October 6, 2014. although the total fee amount assessed Paper Comments Pursuant to Section 19(b)(1) of the to an order routed via Linkage (i.e., the Securities Exchange Act of 1934 • 1 2 Linkage Routing fee and applicable C2 Send paper comments in triplicate (‘‘Act’’), and Rule 19b–4 thereunder, taker fee) may not always be lower than to Secretary, Securities and Exchange notice is hereby given that on assessed at other exchanges, non- Commission, 100 F Street NE., September 29, 2014, The NASDAQ customer market participants may, as Washington, DC 20549–1090. Stock Market LLC (‘‘NASDAQ’’ or the noted above, choose to specify that C2 ‘‘Exchange’’) filed with the Securities All submissions should refer to File and Exchange Commission not route orders away on its [sic] behalf, Number SR–C2–2014–025. This file designate the order as Immediate or (‘‘Commission’’) a proposed rule change number should be included on the as described in Items I, II and III below, Cancel, or route directly to exchanges subject line if email is used. To help the posting the best market to avoid Linkage which Items have been prepared by the Commission process and review your routing fees. To the extent that the Exchange. The Commission is comments more efficiently, please use proposed changes make C2 a more publishing this notice to solicit attractive marketplace for market only one method. The Commission will comments on the proposed rule change participants at other exchanges, such post all comments on the Commission’s from interested persons. market participants are welcome to Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s become C2 market participants. Statement of the Terms of the Substance submission, all subsequent of the Proposed Rule Change C. Self-Regulatory Organization’s amendments, all written statements Statement on Comments on the with respect to the proposed rule NASDAQ is proposing to modify Proposed Rule Change Received From change that are filed with the NASDAQ Rule 7018 fees assessed for Members, Participants, or Others Commission, and all written execution and routing securities listed on NASDAQ, the New York Stock The Exchange neither solicited nor communications relating to the Exchange (‘‘NYSE’’) and on exchanges received comments on the proposed proposed rule change between the other than NASDAQ and NYSE. rule change. Commission and any person, other than The text of the proposed rule change those that may be withheld from the III. Date of Effectiveness of the is available at nasdaq.cchwallstreet.com public in accordance with the Proposed Rule Change and Timing for at NASDAQ’s principal office, and at provisions of 5 U.S.C. 552, will be Commission Action the Commission’s Public Reference available for Web site viewing and Room. The foregoing rule change has become printing in the Commission’s Public effective pursuant to Section 19(b)(3)(A) Reference Room, 100 F Street NE., II. Self-Regulatory Organization’s of the Act 6 and paragraph (f) of Rule Washington, DC 20549 on official Statement of the Purpose of, and 19b–4 7 thereunder. At any time within business days between the hours of 10 Statutory Basis for, the Proposed Rule 60 days of the filing of the proposed rule a.m. and 3 p.m. Copies of such filing Change change, the Commission summarily may also will be available for inspection and In its filing with the Commission, temporarily suspend such rule change if copying at the principal office of the NASDAQ included statements it appears to the Commission that such Exchange. All comments received will concerning the purpose of, and basis for, action is necessary or appropriate in the be posted without change; the the proposed rule change and discussed public interest, for the protection of Commission does not edit personal any comments it received on the investors, or otherwise in furtherance of identifying information from proposed rule change. The text of those the purposes of the Act. If the submissions. You should submit only statements may be examined at the Commission takes such action, the information that you wish to make places specified in Item IV below. The Commission will institute proceedings available publicly. All submissions Exchange has prepared summaries, set to determine whether the proposed rule should refer to File Number SR–C2– 8 2014–025, and should be submitted on 17 CFR 200.30–3(a)(12). 6 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). 7 17 CFR 240.19b–4(f). or before October 31, 2014. 2 17 CFR 240.19b–4.

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forth in sections A, B, and C below, of which members may earn a $0.0029 per burden on competition is extremely the most significant parts of such share executed rebate are reasonable limited. In this instance, the change to statements. because they will continue to provide a the routing credit tier does not impose significant price reduction for members a burden on competition because A. Self-Regulatory Organization’s that support liquidity on both NASDAQ NASDAQ’s routing services are optional Statement of the Purpose of, and and the Nasdaq Options Market, while Statutory Basis for, the Proposed Rule and are the subject of competition from reducing the Consolidated Volume Change other exchanges and broker-dealers that requirement, which may provide offer routing services, as well as the 1. Purpose incentive to market participants to ability of members to develop their own NASDAQ is proposing to amend increase their [sic] overall liquidity they routing capabilities. In sum, if the Rules 7018(1), (2) and (3) to modify fees provide in order to qualify for the credit. changes proposed herein are assessed for execution and routing In addition, NASDAQ believes that the unattractive to market participants, it is securities listed on NASDAQ (‘‘Tape proposed rule changes are consistent likely that NASDAQ will lose market C’’), NYSE (‘‘Tape A’’) and on exchanges with an equitable allocation of fees share as a result. Accordingly, NASDAQ other than NASDAQ and the NYSE because they reflect an allocation of does not believe that the proposed (‘‘Tape B’’), respectively. Currently rebates to liquidity providers designed changes will impair the ability of under each of the rules noted above, the to encourage beneficial market activity, members or competing order execution Exchange provides a credit of $0.0029 with greater incentives for market venues to maintain their competitive per share executed to a member with (i) participants that provide greater standing in the financial markets. shares of liquidity provided in all liquidity. NASDAQ believes that the proposed C. Self-Regulatory Organization’s securities during the month Statement on Comments on the representing more than 0.10% of rule changes are not unfairly discriminatory because they apply Proposed Rule Change Received From Consolidated Volume during the month, Members, Participants, or Others through one or more of its Nasdaq uniformly to securities of each of the Market Center MPIDs, and (ii) Total Tapes and all members that are eligible Written comments were neither Volume, as defined in Chapter XV, for the tier will receive the credit. solicited nor received. NASDAQ also believes that the changes Section 2 of the Nasdaq Options Market III. Date of Effectiveness of the rules, of 100,000 or more contracts per are not unfairly discriminatory because they increase the availability of higher Proposed Rule Change and Timing for day in a month executed through one or Commission Action more of its Nasdaq Options Market rebates without eliminating any of the MPIDs. The Exchange has the same other means by which a member may The foregoing change has become eligibility requirements for this credit earn a higher rebate under Rule 7018(a). effective pursuant to Section tier and provides the same credit to Lastly, NASDAQ believes that the 19(b)(3)(A)(ii) of the Act.7 At any time members for each of the securities of the changes are not unfairly discriminatory within 60 days of the filing of the three Tapes under its rules.3 NASDAQ because market participants may qualify proposed rule change, the Commission is proposing to reduce the Consolidated for a comparable or a higher rebate summarily may temporarily suspend Volume eligibility requirement of the through alternative means that do not such rule change if it appears to the tier from more than 0.10% to more than require participation in Nasdaq Options Commission that such action is 0.08% for each type of security. The Market. necessary or appropriate in the public Exchange believes that the proposed B. Self-Regulatory Organization’s interest, for the protection of investors, lower Consolidated Volume Statement on Burden on Competition or otherwise in furtherance of the purposes of the Act. requirement will encourage market NASDAQ does not believe that the participant activity and will also proposed rule changes will result in any IV. Solicitation of Comments support price discovery and liquidity burden on competition that is not provision. Interested persons are invited to necessary or appropriate in furtherance submit written data, views, and 2. Statutory Basis of the purposes of the Act, as amended.6 arguments concerning the foregoing, NASDAQ believes that the proposed NASDAQ notes that it operates in a including whether the proposed rule rule change is consistent with the highly competitive market in which change is consistent with the Act. provisions of Section 6 of the Act,4 in market participants can readily favor Comments may be submitted by any of general, and with Sections 6(b)(4) and competing venues if they deem fee the following methods: 5 levels at a particular venue to be 6(b)(5) of the Act, in particular, in that Electronic Comments it provides for the equitable allocation excessive, or rebate opportunities of reasonable dues, fees and other available at other venues to be more • Use the Commission’s Internet charges among members and issuers and favorable. In such an environment, comment form (http://www.sec.gov/ other persons using any facility or NASDAQ must continually adjust its rules/sro.shtml); or system which NASDAQ operates or fees to remain competitive with other • Send an email to rule-comments@ controls, and is not designed to permit exchanges and with alternative trading sec.gov. Please include File Number SR– unfair discrimination between systems that have been exempted from NASDAQ–2014–096 on the subject line. compliance with the statutory standards customers, issuers, brokers, or dealers. Paper Comments This proposal is reasonable, equitable applicable to exchanges. Because • and not unfairly discriminatory for the competitors are free to modify their own Send paper comments in triplicate reasons noted below. fees in response, and because market to Brent J. Fields, Secretary, Securities NASDAQ believes that the proposed participants may readily adjust their and Exchange Commission, 100 F Street rule changes to the rebate tiers through order routing practices, NASDAQ NE., Washington, DC 20549–1090. believes that the degree to which fee All submissions should refer to File 3 See Rules 7018(a)(1), (2) and (3). changes in this market may impose any Number SR–NASDAQ–2014–096. This 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(4) and (5). 6 15 U.S.C. 78f(b)(8). 7 15 U.S.C. 78s(b)(3)(A)(ii).

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file number should be included on the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Officials.5 Rule 46 also permits the subject line if email is used. To help the notice is hereby given that October 2, Exchange to appoint ‘‘qualified’’ ICE Commission process and review your 2014, New York Stock Exchange LLC employees to act as Floor Governors, comments more efficiently, please use (‘‘NYSE’’ or the ‘‘Exchange’’) filed with one of the more senior types of Floor only one method. The Commission will the Securities and Exchange Officials.6 Supplementary Material .10 post all comments on the Commission’s Commission (the ‘‘Commission’’) the defines ‘‘qualified’’ employees as Internet Web site (http://www.sec.gov/ proposed rule change as described in ‘‘employees of ICE or any of its rules/sro.shtml). Copies of the Items I, II, and III below, which Items subsidiaries, excluding employees of submission, all subsequent have been prepared by the self- NYSE Regulation, Inc., who shall have amendments, all written statements regulatory organization. The satisfied any applicable testing or with respect to the proposed rule Commission is publishing this notice to qualification required by the NYSE for change that are filed with the solicit comments on the proposed rule all Floor Governors.’’ Commission, and all written change from interested persons. The prohibition on appointing NYSE Regulation employees to act as Floor communications relating to the I. Self-Regulatory Organization’s proposed rule change between the Governors was put in place when the Statement of the Terms of the Substance ‘‘qualified Exchange employee’’ Commission and any person, other than of the Proposed Rule Change those that may be withheld from the category of Floor Official was adopted public in accordance with the The Exchange proposes a rule change in 2008.7 The prohibition was necessary provisions of 5 U.S.C. 552, will be that constitutes a stated interpretation to avoid potential conflicts of interest available for Web site viewing and with respect to the meaning, insofar as the process for qualifying printing in the Commission’s Public administration, and enforcement of Rule Floor Officials, including Floor Reference Room, 100 F Street NE., 46. The Exchange is not proposing any Governors, was performed by NYSE Washington, DC 20549 on official changes to the text of the current Regulation.8 However, while Rule 46 business days between the hours of version of Rule 46. The proposed rule prohibits appointment of NYSE 10:00 a.m. and 3:00 p.m. Copies of such change is available on the Exchange’s Regulation employees to act as Floor filing also will be available for Web site at www.nyse.com, at the Governors, the Exchange believes that inspection and copying at the principal principal office of the Exchange, and at the Rule does not prohibit already offices of the Exchange. All comments the Commission’s Public Reference qualified Floor Governors from received will be posted without change; Room. becoming NYSE Regulation employees. The hiring by NYSE Regulation of ICE the Commission does not edit personal II. Self-Regulatory Organization’s employees or members who are already identifying information from Statement of the Purpose of, and submissions. You should submit only Statutory Basis for, the Proposed Rule person associated with a member organization who information that you wish to make Change has been approved by the Exchange and designated available publicly. All submissions In its filing with the Commission, the by such member organization to effect transactions should refer to File Number SR– on the Exchange trading Floor or any facility self-regulatory organization included NASDAQ–2014–096, and should be thereof. statements concerning the purpose of, 5 submitted on or before October 31, Floor Officials are delegated certain authority and basis for, the proposed rule change from the Board of Directors of the Exchange to 2014. and discussed any comments it received supervise and regulate active openings and unusual For the Commission, by the Division of situations that arise in connection with the making on the proposed rule change. The text of bids, offers or transactions on the trading Floor, Trading and Markets, pursuant to delegated of those statements may be examined at authority.8 and to review and approve certain trading actions, the places specified in Item IV below. such as trades to be effected at wide variations in Kevin M. O’Neill, The Exchange has prepared summaries, price and delayed openings and trading halts. Deputy Secretary. set forth in sections A, B, and C below, 6 Pursuant to Rules 46 and 46A, Floor Governors are one of several ranks of the broader category of [FR Doc. 2014–24227 Filed 10–9–14; 8:45 am] of the most significant parts of such Floor Officials, including, in order of increasing BILLING CODE 8011–01–P statements. seniority, Floor Officials, Senior Floor Officials, Executive Floor Officials, Floor Governors and A. Self-Regulatory Organization’s Executive Floor Governors. See Securities Exchange SECURITIES AND EXCHANGE Statement of the Purpose of, and Act Release No. 57627 (April 4, 2008), 73 FR 19919 COMMISSION Statutory Basis for, the Proposed Rule (April 11, 2008) (SR–NYSE–2008–19). Change 7 See Securities Exchange Act Release No. 34– 57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) [Release No. 34–73304; File No. SR–NYSE– 1. Purpose (SR–NYSE–2007–2). 2014–54] 8 NYSE Regulation examined the fitness of The New York Stock Exchange LLC prospective Floor Officials and administered a (‘‘NYSE’’ or the ‘‘Exchange’’) proposes a mandatory education program, which all candidates Self-Regulatory Organizations; New rule change that constitutes a stated for Floor Official, including Floor Governor, had to York Stock Exchange LLC; Notice of interpretation with respect to the complete. NYSE Regulation also administered a Filing and Immediate Effectiveness of qualifying examination. See Securities Exchange meaning, administration, and Proposed Rule Change That Act Release No. 34–57627 (April 4, 2008), 73 FR enforcement of Rule 46 in connection 19919 (April 11, 2008) (SR–NYSE–2007–2). On June Constitutes a Stated Interpretation with the transfer of qualified 14, 2010, the Exchange, NYSE Regulation and With Respect to the Meaning, Intercontinental Exchange, Inc. (‘‘ICE’’) FINRA [sic] retained the Financial Industry Administration, and Enforcement of Regulatory Authority (‘‘FINRA’’) pursuant to a staff Floor Governors to NYSE Rule 46 Regulatory Services Agreement (‘‘RSA’’) to perform Regulation, Inc. (‘‘NYSE Regulation’’). the market surveillance, enforcement and other October 6, 2014. Rule 46 permits the Exchange to miscellaneous functions that up to that point had appoint active NYSE members 4 as Floor been performed by NYSE Regulation, including all Pursuant to Section 19(b)(1) 1 of the education and testing-related regulatory services on Securities Exchange Act of 1934 (the behalf of NYSE Regulation, including the Floor 2 15 U.S.C. 78a. Official mandatory education program and 3 17 CFR 240.19b–4. qualification testing. See Securities Exchange Act 8 17 CFR 200.30–3(a)(12). 4 Rule 2(a) states that the term ‘‘member,’’ when Release No. 62355 (June 22, 2010), 75 FR 36729 1 15 U.S.C.78s(b)(1). referring to a natural person, means a natural (June 28, 2010) (SR–NYSE–2010–46).

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qualified to act as Floor Governors market by ensuring that qualified • Send an email to rule-comments@ would not involve NYSE Regulation in Exchange employees are knowledgeable sec.gov. Please include File Number SR– qualifying those individuals to act as and able to effectively intervene on the NYSE–2014–54 on the subject line. Floor Governors under Rule 46 and Exchange trading Floor as needed. For would therefore not give rise to the real the same reasons, the proposal is also Paper Comments or apparent conflict of interest the designed to protect investors as well as • Send paper comments in triplicate prohibition was intended to avoid. the public interest. The Exchange believes that the to Brent J. Fields, Secretary, Securities proposed interpretation would facilitate B. Self-Regulatory Organization’s and Exchange Commission, 100 F Street the contemplated transfer of existing Statement on Burden on Competition NE., Washington, DC 20549–1090. ICE staff Floor Governors to NYSE The Exchange does not believe that All submissions should refer to File Regulation. The individuals that would the proposed rule change will impose Number SR–NYSE–2014–54. This file transfer to NYSE Regulation are any burden on competition that is not number should be included on the experienced former Floor members who necessary or appropriate in furtherance subject line if email is used. To help the served as senior-level Floor Officials of the purposes of the Act. The Commission process and review your before becoming employees of ICE and proposed rule change is intended to comments more efficiently, please use are already qualified and have been effect a change that constitutes a stated only one method. The Commission will appointed to act as staff Floor policy, practice or interpretation with post all comments on the Commission’s Governors. Because NYSE Regulation is respect to the meaning, administration, Internet Web site (http://www.sec.gov/ not proposing to qualify additional staff or enforcement of an existing rule and rules/sro.shtml). Copies of the not already approved as Floor therefore would not impose any burden Governors, the Exchange believes there on competition. submission, all subsequent would be no violation of Rule 46. amendments, all written statements In addition, the interpretation does C. Self-Regulatory Organization’s with respect to the proposed rule not in any way affect the role of Floor Statement on Comments on the change that are filed with the Officials or alter the safeguards in place Proposed Rule Change Received From Commission, and all written to ensure that staff Floor Governors are Members, Participants, or Others communications relating to the knowledgeable and able to effectively No written comments were solicited proposed rule change between the intervene when needed on the Exchange or received with respect to the proposed Commission and any person, other than trading Floor.9 Finally, NYSE rule change. those that may be withheld from the Regulation does not propose to seek to III. Date of Effectiveness of the public in accordance with the qualify existing NYSE Regulation provisions of 5 U.S.C. 552, will be employees as staff Floor Governors. Proposed Rule Change and Timing for Commission Action available for Web site viewing and 2. Statutory Basis printing in the Commission’s Public The foregoing rule change has become The Exchange believes that the Reference Room, 100 F Street NE., effective pursuant to Section Washington, DC 20549 on official proposed rule change is consistent with 19(b)(3)(A) 12 of the Act and Rule 19b– 10 business days between the hours of Section 6(b) of the Act, in general, and 4(f)(1) 13 thereunder. The proposed rule 10:00 a.m. and 3:00 p.m. Copies of such furthers the objectives of Section 6(b)(5) change effects a change that constitutes 11 filing also will be available for of the Act, in particular, because it is a stated policy, practice or inspection and copying at the principal designed to prevent fraudulent and interpretation with respect to the manipulative acts and practices, meaning, administration, or offices of the Exchange. All comments promote just and equitable principles of enforcement of an existing rule. received will be posted without change; trade, remove impediments to and At any time within 60 days of the the Commission does not edit personal perfect the mechanism of a free and filing of the proposed rule change, the identifying information from open market and a national market Commission may summarily abrogate submissions. You should submit only system, and protect investors and the such rule change if it appears to the information that you wish to make public interest. The Exchange believes Commission that such action is available publicly. All submissions that the proposed stated interpretation necessary or appropriate in the public should refer to File Number SR–NYSE– helps prevent fraudulent and interest, for the protection of investors, 2014–54, and should be submitted on or manipulative acts and practices by or otherwise in furtherance of the before October 31, 2014. continuing to require high standards for purposes of the Act. qualified Exchange employees to act as For the Commission, by the Division of Floor Governors in addition to IV. Solicitation of Comments Trading and Markets, pursuant to delegated authority.14 members. Similarly, the proposed stated Interested persons are invited to interpretation promotes just and submit written data, views, and Kevin M. O’Neill, equitable principles of trade and arguments concerning the foregoing, Deputy Secretary. removes impediments to and perfects including whether the proposed rule [FR Doc. 2014–24228 Filed 10–9–14; 8:45 am] the mechanism of a free and open change is consistent with the Act. BILLING CODE 8011–01–P Comments may be submitted by any of 9 See Securities Exchange Act Release No. 34– 57627 (April 4, 2008), 73 FR 19919 (April 11, 2008) the following methods: (SR–NYSE–2007–2). These safeguards include, Electronic Comments among other things, that qualified Exchange employees, like qualified members, need to be • Use the Commission’s Internet appointed by the Exchange’s chairman in comment form (http://www.sec.gov/ consultation with the Executive Floor Governors and NYSE Regulation Board of Directors and rules/sro.shtml); or approved by the Board of Directors. 10 15 U.S.C. 78f(b). 12 15 U.S.C. 78s(b)(3)(A). 11 15 U.S.C. 78f(b)(5). 13 17 CFR 240.19b–4(f)(6). 14 17 CFR 200.30–3(a)(12).

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SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s Newark SFTI Point of Presence. As a COMMISSION Statement of the Purpose of, and consequence, BX is proposing to Statutory Basis for, the Proposed Rule increase the fees assessed under Rule [Release No. 34–73305; File No. SR–BX– Change 7015 for MITCH Wave Ports relating to 2014–047] connectivity to data received wirelessly 1. Purpose to and from Mahwah, which will help Self-Regulatory Organizations; BX is proposing to amend fees offset greater costs incurred in leasing NASDAQ OMX BX, Inc.; Notice of Filing assessed under BX Rule 7015 for remote towers, and purchasing and maintaining of Proposed Rule Change To Amend MITCH Wave Ports for clients co- wireless equipment to cover the Fees for Optional Wireless located at other third-party data centers, increased distance as well as the higher Connectivity for Co-Located Clients through which BX TotalView ITCH costs to house equipment and market data will be distributed after October 6, 2014. connections within the Mahwah data delivery to those data centers via center.7 Pursuant to Section 19(b)(1) of the wireless network. BX currently assesses an installation Securities Exchange Act of 1934 BX offers optional wireless charge for the remote port, at each of the 1 2 (‘‘Act’’), and Rule 19b–4 thereunder, connectivity to clients who had data center locations, of $2,500 for notice is hereby given that on requested such connectivity for other installation, and $5,000 as a monthly September 30, 2014, NASDAQ OMX markets’ data. BX uses network vendors recurring fee.8 Each of the data centers BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed to supply wireless connectivity from the that a client may subscribe to is with the Securities and Exchange Carteret, NJ data center to the data approximately the same distance from Commission (‘‘Commission’’) the centers of other exchanges.3 The vendor the Carteret data center. As discussed proposed rule change as described in installs, tests and maintains the above, BX will be providing a direct Items I, II, and III below, which Items necessary communication equipment connection to NYSE’s data center in have been prepared by the Exchange. for this wireless network between the Mahwah, which is significantly farther The Commission is publishing this data centers. The wireless connectivity from Carteret. The Exchange incurs notice to solicit comments on the is an optional alternative to fiber optic higher costs for housing its equipment proposed rule change from interested network connectivity, providing lower at Mahwah, including higher fees for persons. latency because the wireless signals power, cabinets and connections. I. Self-Regulatory Organization’s travel a straight, unimpeded line and Moreover and as noted above, the Statement of the Terms of the Substance because light waves travel faster through Exchange and its vendors incur higher of the Proposed Rule Change air than through glass (fiber optics). costs in leasing towers and equipment Because wireless transmission of such to connect Carteret to Mahwah. As a The Exchange is proposing a rule data requires an unimpeded line of sight consequence, BX is proposing to change to amend fees assessed to clients between Carteret and the data center of increase the one-time installation charge for wireless connectivity that enables the market to which it is connecting, BX to $5,000, and the monthly recurring fee clients to receive data from BX. and its vendors incur costs associated to $7,500. Specifically, the Exchange proposes to with maintaining hardware and leasing 2. Statutory Basis amend fees assessed for remote multi- towers on which its microwave dishes cast ITCH (‘‘MITCH’’) Wave Ports for and the associated hardware are The Exchange believes that its clients co-located at other third-party mounted, which generally increase as proposal is consistent with Section 6(b) data centers, through which BX distance between data centers increase.4 of the Act 9 in general, and with TotalView ITCH market data will be BX originally planned to create Sections 6(b)(4) and (b)(5) of the Act,10 distributed after delivery to those data wireless connections to a data center in in particular, in that it provides for the centers via wireless network. The text of Newark used by NYSE as a SFTI equitable allocation of reasonable dues, the proposed rule change is available at Network Point of Presence, which is fees and other charges among members http://nasdaqomxbx.cchwallstreet.com, approximately 15 miles from BX’s and issuers and other persons using any at the Exchange’s principal office, and at Carteret data center. In 2013, NYSE facility or system which the Exchange the Commission’s Public Reference began to allow wireless vendors and operates or controls, and is designed to Room. telco vendors to connect directly to its promote just and equitable principles of 5 trade, to remove impediments to and II. Self-Regulatory Organization’s data center in Mahwah, NJ, which is perfect the mechanism of a free and Statement of the Purpose of, and approximately 40 miles from Carteret. Because the wireless data feeds are open market and a national market Statutory Basis for, the Proposed Rule system, and, in general to protect Change designed to offer high-speed and low latency,6 BX determined to direct its investors and the public interest. In its filing with the Commission, the wireless vendors to connect to the The Exchange operates in a highly Exchange included statements Mahwah data center instead of the competitive market in which exchanges concerning the purpose of and basis for offer co-location services as a means to the proposed rule change and discussed 3 NASDAQ OMX acts as re-distributor of these facilitate the trading activities of those any comments it received on the third-party market data feeds, capturing the data at proposed rule change. The text of these the originating data centers and transporting the 7 The Exchange notes that The NASDAQ Stock statements may be examined at the data to the Carteret data center. Market LLC recently increased fees assessed for its 4 Because direct line of sight between Carteret and MITCH Wave Ports that connect to Mahwah. See places specified in Item IV below. The the data centers of other exchanges is not possible, Securities Exchange Act Release No. 73132 Exchange has prepared summaries, set BX’s vendors lease as many towers and associated (September 17, 2014), 79 FR 56836 (September 23, forth in Sections A, B, and C below, of equipment as needed to ensure an unbroken line of 2014) (SR–NASDAQ–2014–092). the most significant aspects of such sight between individual towers, repeating the 8 Clients opting to pay for the remote MITCH statements. signal until it arrives at its destination. Wave Ports will continue to be fee liable for the 5 See http://www1.nyse.com/press/ applicable market data fees as described in BX 1337855269042.html. Rules 7019, 7023, and 7026. 1 15 U.S.C. 78s(b)(1). 6 Wireless connectivity is an optional alternative 9 15 U.S.C. 78f(b). 2 17 CFR 240.19b–4. to higher latency fiber optic network connectivity. 10 15 U.S.C. 78f(b)(4) and (5).

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members who believe that co-location mechanism of a free and open market action is necessary or appropriate in the enhances the efficiency of their trading. and a national market system, and, in public interest, for the protection of Accordingly, fees charged for co- general, to protect investors and the investors, or otherwise in furtherance of location services are constrained by the public interest; and are not designed to the purposes of the Act. If the active competition for the order flow of permit unfair discrimination between Commission takes such action, the such members. If a particular exchange clients, issuers, brokers, or dealers. The Commission shall institute proceedings charges excessive fees for co-location proposal is consistent with these to determine whether the proposed rule services, affected members will opt to requirements because it provides should be approved or disapproved. terminate their co-location arrangements optional connectivity that promotes with that exchange, and adopt a low-latency transfer of data to market IV. Solicitation of Comments possible range of alternative strategies, participants. As is true of all co-location Interested persons are invited to including co-locating with a different services, all co-located clients have the submit written data, views, and exchange, placing their servers in a option to select this voluntary arguments concerning the foregoing, physically proximate location outside connectivity option, and there is no including whether the proposed rule the exchange’s data center, or pursuing differentiation among clients with change is consistent with the Act. trading strategies not dependent upon regard to the fees charged for the Comments may be submitted by any of co-location. Accordingly, the exchange wireless connectivity to, and wirelessly- the following methods: charging excessive fees would stand to received data from Mahwah. lose not only co-location revenues but Electronic Comments B. Self-Regulatory Organization’s also revenues associated with the • Use the Commission’s Internet Statement on Burden on Competition execution of orders routed to it by comment form (http://www.sec.gov/ affected members. BX does not believe that the proposed rules/sro.shtml); or Moreover, the Exchange believes the rule change will result in any burden on • Send an email to rule-comments@ proposed increased fees are reasonable competition that is not necessary or sec.gov. Please include File Number SR– because they are based on the appropriate in furtherance of the BX–2014–047 on the subject line. Exchange’s increased costs incurred in purposes of the Act, as amended. To the connecting to Mahwah. As discussed, contrary, this proposal will promote Paper Comments the greater distance between Carteret competition for distribution of market • Send paper comments in triplicate and Mahwah results in greater costs data by offering an optional direct to Secretary, Securities and Exchange incurred by the Exchange and its connection to the NYSE data center, Commission, 100 F Street NE., vendors, and the Exchange is assessed which will improve the latency of the Washington, DC 20549–1090. higher charges for housing its connection to BX data that would be All submissions should refer to File equipment at Mahwah as compared to available through NYSE’s STFI Point of Number SR–BX–2014–047. This file other exchanges’ locations. The Presence in Newark. As discussed number should be included on the proposed fees allow the Exchange to above, the Exchange believes that fees subject line if email is used. To help the recoup these costs and make a profit, for co-location services, including those Commission process and review your while providing clients the ability to proposed for microwave connectivity, comments more efficiently, please use reduce latency in the transmission of are constrained by the robust only one method. The Commission will data by connecting directly to NYSE’s competition for order flow among post all comments on the Commission’s data center wirelessly. exchanges and non-exchange markets, Internet Web site (http://www.sec.gov/ The Exchange believes the proposed because co-location exists to advance rules/sro.shtml). Copies of the increased fees are equitably allocated in that competition. Further, excessive fees submission, all subsequent that all clients that voluntarily select for co-location services, including for amendments, all written statements connectivity to, and to receive data wireless technology, would serve to with respect to the proposed rule from, BX through this service is [sic] impair an exchange’s ability to compete change that are filed with the charged the same amount for the same for order flow rather than burdening Commission, and all written services. Although the proposed fee is competition. higher than the fees charged for communications relating to the connectivity to other exchanges’ data C. Self-Regulatory Organization’s proposed rule change between the centers, they are reflective of the Statement on Comments on the Commission and any person, other than increased costs associated with Proposed Rule Change Received From those that may be withheld from the connecting to the Mahwah data center. Members, Participants, or Others public in accordance with the Accordingly, the increased fees are Written comments were neither provisions of 5 U.S.C. 552, will be allocated equitably on those that receive solicited nor received. available for Web site viewing and the benefit of the connectivity. printing in the Commission’s Public The Exchange’s proposal is also III. Date of Effectiveness of the Reference Room, 100 F Street NE., consistent with the requirement of Proposed Rule Change and Timing for Washington, DC 20549 on official Section 6(b)(5) of the Act that Exchange Commission Action business days between the hours of rules be designed to promote just and The foregoing change has become 10:00 a.m. and 3:00 p.m. Copies of the equitable principles of trade [sic] to effective pursuant to Section 19(b)(3)(A) filing also will be available for prevent fraudulent and manipulative of the Act,11 and paragraph (f) 12 of Rule inspection and copying at the principal acts and practices, to promote just and 19b–4, thereunder. At any time within offices of the Exchange. All comments equitable principles of trade [sic], to 60 days of the filing of the proposed rule received will be posted without change; foster cooperation and coordination change, the Commission summarily may the Commission does not edit personal with persons engaged in regulating, temporarily suspend such rule change if identifying information from clearing, settling, processing it appears to the Commission that such submissions. You should submit only information with respect to, and information that you wish to make facilitating transactions in securities, to 11 15 U.S.C. 78s(b)(3)(A). available publicly. All submissions remove impediments to and perfect the 12 17 CFR 240.19b–4(f). should refer to File Number SR–BX–

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2014–047 and should be submitted on statements concerning the purpose of, The Exchange does not currently list or before October 31, 2014. and basis for, the proposed rule change any equity securities as a primary listing For the Commission, by the Division of and discussed any comments it received market. Consistent with this fact, Trading and Markets, pursuant to delegated on the proposed rule change. The text Exchange Rule 2101(a) currently states authority.13 of these statements may be examined at that all equity securities traded on the Kevin M. O’Neill, the places specified in Item IV below. ISE Stock Exchange 11 are traded Deputy Secretary. The self-regulatory organization has pursuant to unlisted trading privileges [FR Doc. 2014–24206 Filed 10–9–14; 8:45 am] prepared summaries, set forth in and that the Exchange will not list any such securities before first filing and BILLING CODE 8011–01–P sections A, B and C below, of the most significant aspects of such statements. obtaining Commission approval of rules that incorporate qualitative listing A. Self-Regulatory Organization’s criteria and comply with Rule 10A–3 SECURITIES AND EXCHANGE Statement of the Purpose of, and COMMISSION under the Act.12 To make clear the Statutory Basis for, the Proposed Rule Exchange’s intention to comply with the [Release No. 34–73308; File No. SR–ISE– Change requirements of Rule 10C–1, the 2014–45] 1. Purpose Exchange proposes to amend Rule 2101(a) to state that no equity securities Self-Regulatory Organizations; The Exchange is proposing to add International Securities Exchange, will be listed on the ISE Stock Exchange language to Rule 2101(a), which will until Exchange Rules have been LLC; Notice of Filing and Immediate clarify the fact that the Exchange will amended to also comply with Rule 10C– Effectiveness of Proposed Rule not list equity securities without first 1. Because the Exchange does not Change To Add a Reference to ensuring that Exchange Rules comply presently list any equity securities, the Exchange Act Rule 10C–1 in the with Rule 10C–1, as described below.4 Exchange does not believe it is Exchange’s Rules Concerning Unlisted necessary to make any further Trading Privileges On March 30, 2011, to implement Section 10C of the Act,5 as added by amendments in response Section 952 of October 6, 2014. Section 952 of the Dodd-Frank Wall the Dodd-Frank Act at this time. Pursuant to Section 19(b)(1) of the Street Reform and Consumer Protection 2. Statutory Basis Securities Exchange Act of 1934 (the Act of 2010 (‘‘Dodd-Frank Act’’),6 the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Commission proposed Rule 10C–1 The Exchange believes that its notice is hereby given that on under the Act,7 which directs each proposal is consistent with the September 22, 2014 the International national securities exchange to prohibit requirements of the Act and the rules Securities Exchange, LLC (the the listing of any equity security of any and regulations thereunder that are ‘‘Exchange’’ or the ‘‘ISE’’) filed with the issuer, with certain exceptions, that applicable to a national securities Securities and Exchange Commission does not comply with the rule’s exchange, and, in particular, with the requirements of Section 6(b) of the the proposed rule change, as described requirements regarding compensation 13 in Items I, II, and III below, which items committees of listed issuers and related Act. Specifically, the proposal is consistent with Section 6(b)(5) of the have been prepared by the self- requirements regarding compensation Act,14 which requires exchange rules to regulatory organization. The advisers. On June 20, 2012, the promote just and equitable principles of Commission is publishing this notice to Commission adopted Rule 10C–1.8 Rule trade, remove impediments to, and solicit comments on the proposed rule 10C–1 obligates the Exchange to perfect the mechanism of, a free and change from interested persons. establish listing standards that require open market and a national market each member of a listed issuer’s I. Self-Regulatory Organization’s system, and, in general, protect compensation committee to be a Statement of the Terms of the Substance investors and the public interest. The member of the issuer’s board and to be of the Proposed Rule Change Exchange believes the proposed rule independent, as well as establish certain change fulfills these requirements The ISE proposes to add language to factors that an issuer must consider because it will add language to Rule Rule 2101(a), entitled ‘‘Unlisted Trading when evaluating the independence of a 2101(a) that clarifies the fact that the Privileges,’’ that will make clear that the director.9 Rule 10C–1 also requires the Exchange will not list equity securities Exchange will not list equity securities Exchange to establish standards for without first ensuring that its rules without first ensuring that its rules evaluating the independence of a comply with Rule 10C–1 under the Act comply with Rule 10C–1, which compensation consultant, legal counsel, implements Section 10C of the Act.15 (‘‘Rule 10C–1’’).3 The text of the or other adviser (‘‘Compensation proposed rule change is available on the Consultant’’) and requires a Company to B. Self-Regulatory Organization’s Exchange’s Web site (http:// provide funding to a compensation Statement on Burden on Competition www.ise.com), at the principal office of committee to retain such Compensation The Exchange believes the proposal is the Exchange, and at the Commission’s Consultant.10 consistent with Section 6(b)(8) of the Public Reference Room. Act 16 in that it does not impose any II. Self-Regulatory Organization’s 4 Id. burden on competition that is not Statement of the Purpose of, and 5 15 U.S.C. 78j–3. necessary or appropriate in furtherance 6 Statutory Basis for, the Proposed Rule Public Law 111–203, 124 Stat. 1900 (2010). of the purposes of the Act. The 7 See Securities Act Release No. 9199, Securities Exchange notes that the proposed rule Change Exchange Act Release No. 64149 (March 30, 2011), In its filing with the Commission, the 76 FR 18966 (April 6, 2011) (‘‘Rule 10C–1 11 The ISE Stock Exchange is the Exchange’s self-regulatory organization included Proposing Release’’). 8 See Securities Act Release No. 9330, Securities facility for trading equity securities. Exchange Act Release No. 67220 (June 20, 2012), 77 12 17 CFR 240.10A–3. 13 17 CFR 200.30–3(a)(12). FR 38422 (June 27, 2012) (‘‘Rule 10C–1 Adopting 13 15 U.S.C. 78f(b). 1 15 U.S.C. 78s(b)(1). Release’’). 14 15 U.S.C. 78f(b)(5). 2 17 CFR 240.19b–4. 9 17 CFR 240.10C–1. 15 15 U.S.C. 78j–3. 3 17 CFR 240.10C–1. 10 Id. 16 15 U.S.C. 78f(b)(8).

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change will merely clarify the fact that Paper Comments Paperwork Reduction Act (PRA) of Exchange Rules must comply with Rule • Send paper comments in triplicate 1995, 44 U.S.C. Chapter 35 requires 10C–1 under the Act before any listing to Secretary, Securities and Exchange federal agencies to publish a notice in of equity securities on the Exchange Commission, 100 F Street NE., the Federal Register concerning each becomes effective. Thus, the rule change Washington, DC 20549–1090. proposed collection of information will not impose any burden on before submission to OMB, and to allow All submissions should refer to File intermarket or intramarket competition. 60 days for public comment in response Number SR–ISE–2014–45. This file to the notice. This notice complies with number should be included on the C. Self-Regulatory Organization’s that requirement. Statement on Comments on the subject line if email is used. To help the DATES: Submit comments on or before Proposed Rule Change Received From Commission process and review your December 9, 2014. Members, Participants, or Others comments more efficiently, please use only one method. The Commission will ADDRESSES: Send all comments to Erin The Exchange has not solicited, and Kelley, Director of Research & Policy, does not intend to solicit, comments on post all comments on the Commission’s Internet Web site (http://www.sec.gov/ National Women’s Business Council, this proposed rule change. The Small Business Administration, 5th Exchange has not received any rules/sro.shtml). Copies of the submission, all subsequent Floor, Washington, DC 20416. unsolicited written comments from FOR FURTHER INFORMATION CONTACT: Erin members or other interested parties. amendments, all written statements with respect to the proposed rule Kelley, Director of Research & Policy, III. Date of Effectiveness of the change that are filed with the National Women’s Business Council, Proposed Rule Change and Timing for Commission, and all written 202–205–6826, [email protected], or Commission Action communications relating to the Curtis B. Rich, Management Analyst, 202–205–7030, [email protected]. The Exchange believes that the proposed rule change between the foregoing proposed rule change may Commission and any person, other than SUPPLEMENTARY INFORMATION: The take effect upon filing with the those that may be withheld from the National Women’s Business Council Commission pursuant to public in accordance with the (NWBC) is a non-partisan federal Section19(b)(3)(A) 17 of the Act and Rule provisions of 5 U.S.C. 552, will be advisory council that serves as an 19b–4(f)(6) thereunder 18 because the available for Web site viewing and independent source of advice and foregoing proposed rule change does not printing in the Commission’s Public counsel to the President, Congress, and (i) significantly affect the protection of Reference Room, 100 F Street NE., the Small Business Administration on investors or the public interest, (ii) Washington, DC 20549 on official economic issues of importance to impose any significant burden on business days between the hours of women business owners. Members of competition, and (iii) become operative 10:00 a.m. and 3:00 p.m. Copies of such the Council are prominent women for 30 days after its filing date, or such filing also will be available for business owners and leaders of women’ shorter time as the Commission may inspection and copying at the principal business organizations. As part of NWBC’s annual research designate. office of the Exchange. All comments into issues affecting women business At any time within 60 days of the received will be posted without change; owners, this year NWBC has chosen to filing of the proposed rule change, the the Commission does not edit personal examine how women participate in Commission summarily may identifying information from business incubation and acceleration temporarily suspend such rule change if submissions. You should submit only programs. The goal is to understand the it appears to the Commission that such information that you wish to make characteristics of incubators and action is: (i) Necessary or appropriate in available publicly. All submissions accelerators that affect the business the public interest; (ii) for the protection should refer to File Number SR–ISE– outcomes of female entrepreneurs. In of investors; or (iii) otherwise in 2014–45, and should be submitted on or addition, NWBC hopes to gain insights furtherance of the purposes of the Act. before October 31, 2014. into the factors, both structural and If the Commission takes such action, the For the Commission, by the Division of individual, that affect women’s Commission shall institute proceedings Trading and Markets, pursuant to delegated participation in incubator and to determine whether the proposed rule authority.19 accelerator programs. To accomplish should be approved or disapproved. Kevin M. O’Neill, this, NWBC has acquired the services of IV. Solicitation of Comments Deputy Secretary. a research firm to conduct a cross- [FR Doc. 2014–24208 Filed 10–9–14; 8:45 am] Interested persons are invited to sectional survey of female entrepreneurs BILLING CODE 8011–01–P submit written data, views, and and managers of business incubators arguments concerning the foregoing, and accelerators to better understand including whether the proposed rule female participation in, utilization of, SMALL BUSINESS ADMINISTRATION change is consistent with the Act. and outcomes derived from incubation and acceleration programs. The survey Comments may be submitted by any of Data Collection Available for Public the following methods: will consist of three separate Comments questionnaires targeting female Electronic Comments ACTION: 60-day notice and request for entrepreneurs who have not • Use the Commission’s Internet comments. participated in business incubation or comment form (http://www.sec.gov/ acceleration programs, female rules/sro.shtml); or SUMMARY: The Small Business entrepreneurs who have participated in • Send an email to rule-comments@ Administration (SBA) intends to request business incubation or acceleration sec.gov. Please include File Number approval from the Office of Management programs, and managers representing SR–ISE–2014–45 on the subject line. and Budget (OMB) for the collection of business incubators and accelerators. information described below. The Each questionnaire will take between 12 17 15 U.S.C. 78s(b)(3)(A). and 18 minutes to complete (see below 18 17 CFR 240.19b–4(f)(6). 19 17 CFR 200.30–3(a)(12). for the estimated burden analysis of

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each questionnaire). The survey recommendations to increase female Summary of Information Collection questions will explore a range of issues, participation in business incubator and including individual strategic choices accelerator programs and improve the Title: Participation of Women in and motivations; human capital; social quality of services those programs Business Incubators and Accelerators. capital; financial capital; experiences deliver for women. The Description of Respondents: Female with incubators and accelerators; recommendations will advise NWBC on entrepreneurs who have not selection criteria of incubators and how it can support economic growth by participated in business incubation or accelerators; institutional culture of promoting and enhancing the acceleration programs (non- incubators and accelerators; business contributions of business incubators and participants); female entrepreneurs who models of incubators and accelerators; accelerators to women business owners. have participated in business incubation or acceleration programs (participants); and performance outcomes. Solicitation of Public Comments and managers representing business The data from the survey will be SBA is requesting comments on (a) incubators and accelerators. rigorously analyzed and compared to Whether the collection of information is Form Number: N/A. relevant pre-existing quantitative data necessary for the agency to properly on female entrepreneurs and business perform its functions; (b) whether the Total Estimated Annual Responses: incubators and accelerators to draw burden estimates are accurate; (c) 500 (200 from female entrepreneur non- conclusions about current trends and whether there are ways to minimize the participants; 150 from female generate leads for further NWBC burden, including through the use of entrepreneurs participants; and 150 research. In addition, the results will be automated techniques or other forms of from managers representing business interpreted in consultation with subject information technology; and (d) whether incubators and accelerators). matter experts and relevant stakeholders there are ways to enhance the quality, Total Estimated Annual Hour Burden: to develop best practice policy utility, and clarity of the information. 122.5 hours total.

Female entrepreneurs Managers representing incubators and accel- Total Non-participants Participants erators

Estimated survey hour burden ...... 12 minutes ...... 18 minutes ...... 15 minutes. Sample population hour burden estimate ...... 40 hours ...... 45 hours ...... 37.5 hours ...... 122.5 hours.

Curtis B. Rich, SUPPLEMENTARY INFORMATION: Notice is The number assigned to this disaster Management Analyst. hereby given that as a result of the for physical damage is 14143 6 and for [FR Doc. 2014–24282 Filed 10–9–14; 8:45 am] Administrator’s disaster declaration, economic injury is 14144 0. BILLING CODE 8025–01–P applications for disaster loans may be The State which received an EIDL filed at the address listed above or other Declaration # is Arizona. locally announced locations. (Catalog of Federal Domestic Assistance SMALL BUSINESS ADMINISTRATION The following areas have been Numbers 59002 and 59008) determined to be adversely affected by Dated: October 2, 2014. [Disaster Declaration #14143 and #14144] the disaster: Maria Contreras-Sweet, Arizona Disaster #AZ–00039 Primary Counties: Maricopa. Contiguous Counties: Administrator. AGENCY: U.S. Small Business Arizona; Gila; La Paz; Pima; Pinal; [FR Doc. 2014–24195 Filed 10–9–14; 8:45 am] Administration. Yavapai; Yuma. BILLING CODE 8025–01–P ACTION: Notice. The Interest Rates are:

SUMMARY: This is a notice of an Percent SOCIAL SECURITY ADMINISTRATION Administrative declaration of a disaster for the State of Arizona dated 10/02/ For Physical Damage: Agency Information Collection 2014. Homeowners With Credit Avail- Activities: Proposed Request and Incident: Severe Storms and Flooding. able Elsewhere ...... 4.125 Comment Request Homeowners Without Credit Incident Period: 09/08/2014. Available Elsewhere ...... 2.063 The Social Security Administration Effective Date: 10/02/2014. Businesses With Credit Avail- (SSA) publishes a list of information Physical Loan Application Deadline able Elsewhere ...... 6.000 collection packages requiring clearance Date: 12/01/2014. Businesses Without Credit by the Office of Management and Economic Injury (EIDL) Loan Available Elsewhere ...... 4.000 Budget (OMB) in compliance with Application Deadline Date: 07/02/2015. Non-Profit Organizations With Credit Available Elsewhere ... 2.625 Public Law 104–13, the Paperwork ADDRESSES: Submit completed loan Non-Profit Organizations With- Reduction Act of 1995, effective October applications to: U.S. Small Business out Credit Available Else- 1, 1995. This notice includes revisions Administration, Processing and where ...... 2.625 of OMB-approved information Disbursement Center, 14925 Kingsport For Economic Injury: collections. Road, Fort Worth, TX 76155. Businesses & Small Agricultural SSA is soliciting comments on the FOR FURTHER INFORMATION CONTACT: A. Cooperatives Without Credit accuracy of the agency’s burden Escobar, Office of Disaster Assistance, Available Elsewhere ...... 4.000 estimate; the need for the information; U.S. Small Business Administration, Non-Profit Organizations With- its practical utility; ways to enhance its out Credit Available Else- 409 3rd Street SW., Suite 6050, where ...... 2.625 quality, utility, and clarity; and ways to Washington, DC 20416. minimize burden on respondents,

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including the use of automated can obtain copies of the collection borrower has an obligation to repay the collection techniques or other forms of instruments by writing to the above money; information technology. Mail, email, or email address. • Must be in effect at the time the fax your comments and Statement of Funds You Provided to cash goes to the borrower, that is, the recommendations on the information Another and Statement of Funds You agreement cannot come after the cash is collection(s) to the OMB Desk Officer Received—20 CFR 416.1103(f)—0960– paid; and and SSA Reports Clearance Officer at 0481. SSA uses Forms SSA–2854 • Must be enforceable under State the following addresses or fax numbers. (Statement of Funds You Provided to law, often there are additional (OMB); Office of Management and Another) and SSA–2855 (Statement of requirements from the State. Budget, Attn: Desk Officer for SSA, Funds You Received) to gather Fax: 202–395–6974, Email address: information to verify if a loan is bona SSA collects this information at the [email protected]. fide for Supplemental Security Income time of initial application for SSI or at (SSA); Social Security Administration, (SSI) recipients. Form SSA–2854 asks any point when an individual alleges OLCA, Attn: Reports Clearance the lender for details on the transaction, being party to an informal loan while Director, 3100 West High Rise, 6401 and Form SSA–2855 asks the borrower receiving SSI. SSA collects information Security Blvd., Baltimore, MD 21235, the same basic questions independently. on the informal loan through both Fax: 410–966–2830, Email address: Agency personnel then compare the two interviews and mailed forms. The [email protected]. statements, gather evidence if needed, agency’s field personnel conduct the I. The information collection below is and make a decision on the validity of interviews and mail the form(s) for pending at SSA. SSA will submit it to the bona fide status of the loan. For SSI completion, as needed. The respondents OMB within 60 days from the date of purposes, we consider a loan bona fide are SSI recipients and applicants, and this notice. To be sure we consider your if it meets these requirements: individuals who lend money to them. comments, we must receive them no • Must be between a borrower and Type of Request: Revision of an OMB- later than December 9, 2014. Individuals lender with the understanding that the approved information collection.

Average Number of Frequency of burden per Estimated total Modality of completion respondents response response annual burden (minutes) (hours)

SSA–2854 ...... 20,000 1 10 3,333 SSA–2855 ...... 20,000 1 10 3,333

Totals ...... 40,000 ...... 6,666

II. SSA submitted the information 416.305–416.335, Subpart C—0960– payment amounts. The respondents are collections below to OMB for clearance. 0229. The SSI program provides aged, applicants for SSI or their representative Your comments regarding the blind, and disabled individuals who payees. information collections would be most have little or no income, with funds for Note: This is a correction notice. SSA useful if OMB and SSA receive them 30 food, clothing, and shelter. Individuals published this information collection as days from the date of this publication. complete Form SSA–8000 to apply for an extension on August 8, 2014, at 79 To be sure we consider your comments, SSI. SSA uses the information from we must receive them no later than FR 46293. Since we are revising the paper Form SSA–8000 and its electronic Paperwork Reduction Act Statement, November 10, 2014. Individuals can intranet counterpart, the Modernized obtain copies of the OMB clearance this is now a revision of an OMB- SSI Claims Systems (MSSICS), to packages by writing to approved information collection. determine: (1) Whether SSI claimants [email protected]. Type of Request: Revision of an OMB- meet all statutory and regulatory 1. Application for Supplemental approved information collection. Security Income—20 CFR 416.207 and eligibility requirements; and (2) SSI

Average Number of Frequency of burden per Estimated total Modality of completion respondents response response annual burden (minutes) (hours)

SSA–8000, Paper Version ...... 39,295 1 41 26,852 MSSICS Version ...... 211,802 1 36 127,081 MSSICS with Signature Proxy (attestation) ...... 1,713,671 1 35 999,641

Totals ...... 1,964,768 ...... 1,153,574

2. General Request for Social Security uses this information to track the individuals, institutions, or agencies Records—eFOIA—20 CFR 402.130— number and type of requests; fees requesting information or documents 0960–0716. Interested members of the charged; payment amounts; and SSA under FOIA. public use this electronic request to ask responds to public requests within the Type of Request: Revision of an OMB- SSA for information under the Freedom required 20 days. Respondents are approved information collection. of Information Act (FOIA). SSA also members of the public including

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Average Number of Frequency of burden per Estimated total Modality of completion respondents response response annual burden (minutes) (hours)

eFOIA ...... 2,500 1 3 125

3. Incoming and Outgoing (OPM) created a generic form, the OF– OPM directs agencies to use their own Intergovernmental Personnel Act 69, for agencies to use as a template forms for recording these agreements. Assignment Agreement—5 CFR 334— when collecting information for the IPA Accordingly, SSA modified the OF–69 0960–0792. The Intergovernmental assignment. The OF–69 collects specific to meet our needs, creating the SSA–187 Personnel Act (IPA) mobility program information about the agreement for incoming employees and the SSA– provides for the temporary assignment including: (1) The enrolled employee’s 188 for outgoing employees. of civilian personnel between the name, Social Security number, job title, Respondents are the individuals we Federal Government and State and local salary, classification, and address; (2) describe above who participate in the governments; colleges and universities; the type of assignment; (3) the IPA exchange with SSA. Indian tribal governments; federally- reimbursement arrangement; and (4) an funded research and development explanation as to how the assignment Type of Request: Revision of an OMB- centers; and other eligible organizations. benefits both SSA and the non-federal approved information collection. The Office of Personnel Management organization involved in the exchange.

Average Number of Frequency of burden per Estimated total Modality of completion respondents response response annual burden (minutes) (hours)

Non-Federal employee ...... 10 1 30 5 Non-Federal employer signers ...... 20 1 5 2

Totals ...... 30 ...... 7

Dated: October 6, 2014. FOR FURTHER INFORMATION CONTACT: • Revision to Baseline 2 Initial Faye Lipsky, Sophie Bousquet, 202–330–0663, Release, Dynamic-RNP service ConOps Reports Clearance Director, Social Security [email protected] or The RTCA familiarization, review of Tiger Team Administration. Secretariat, 1150 18th Street NW., Suite results, initiation of B2 proposed [FR Doc. 2014–24231 Filed 10–9–14; 8:45 am] 910, Washington, DC, 20036, or by amendments • BILLING CODE 4191–02–P telephone at (202) 833–9339, fax at (202) Proposed resolutions for comments 833–9434, or Web site at http:// received on Initial Release www.rtca.org. December 18th DEPARTMENT OF TRANSPORTATION SUPPLEMENTARY INFORMATION: Pursuant • Wrap-up and consolidate high-level to section 10(a) (2) of the Federal Federal Aviation Administration roadmap for revision to Baseline 2 Advisory Committee Act (Pub. L. 92– Initial Release Twenty Second Meeting: RTCA Special 463, 5 U.S.C., App.), notice is hereby • Review need for upcoming Committee 214/EUROCAE WG–78: given for a meeting of Special meetings and approve dates and Standards for Air Traffic Data Committee 214/EUROCAE WG–78: locations of Plenary and SG Meetings Communication Services Standards for Air Traffic Data • Any Other Business Communication Services. The agenda • Adjourn AGENCY: Federal Aviation will include the following: Please confirm your attendance to Administration (FAA), U.S. Department December 16th [email protected], of Transportation (DOT). copying marie-france.helbert@ • ACTION: RTCA Special Committee 214 Welcome/Introduction/ fr.thalesgroup.com with subject ‘‘WG78 held jointly with EUROCAE WG–78: Administrative Remarks THALES Dec2014’’ no later than • Standards for Air Traffic Data Approval of the Agenda and the December 1st 2014 with the following Communication Services meeting. Minutes of Plenary 21 security information: • Coordination Activities with ICAO, • Surname, First Name SUMMARY: The FAA is issuing this notice OPDLWG and DCIWG • Nationality to advise the public of twenty second • Revision to Baseline 2 Initial • Place of birth, Date of birth meeting of RTCA Special Committee Release, Dyn RNP, A–IM and ATC • Passport Number, Authority or 214 to be held jointly with EUROCAE Winds Place of delivery, Date of delivery WG–78: Standards for Air Traffic Data • Working Group/Special committee Attendance is open to the interested Communication Services. organization for future work public but limited to space availability. DATES: The meeting will be held With the approval of the chairman, December 17th December 16th to 18th from 9:00 a.m. to members of the public may present oral 5:00 p.m. (Paris Time). • Dynamic-RNP service ConOps statements at the meeting. Persons ADDRESSES: The meeting will be held at familiarization, review of Tiger Team wishing to present statements or obtain Thales Avionics 105 Avenue du General results, initiation of B2 proposed information should contact the person Eisenhower 31100 Toulouse, France. amendments listed in the FOR FURTHER INFORMATION

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CONTACT section. Members of the public ANE–600, 12 New England Executive as a noise compatibility program under may present a written statement to the Park, Burlington, Massachusetts Section 104 (b) of the Act. committee at any time. 01803. The FAA has completed its review of the noise exposure maps and related Issued in Washington, DC, on October 6th, FOR FURTHER INFORMATION CONTACT: 2014. Richard Doucette, Federal Aviation descriptions submitted by the Westover Mohannad Dawoud, Administration, New England Region, Metropolitan Development Corporation. Management Analyst, Business Operations Airports Division, ANE–600, 12 New The specific maps under consideration Group, ANG–A12, Federal Aviation England Executive Park, Burlington MA were: Administration. 01803. —Existing (2014) Conditions Noise Exposure Map NEM–1 [FR Doc. 2014–24262 Filed 10–9–14; 8:45 am] SUPPLEMENTARY INFORMATION: BILLING CODE 4910–13–P —Future (2019) Conditions Noise Authority: 49 U.S.C. 47501–47510; 14 CFR Exposure Map NEM–2 part 150. The FAA has determined that the DEPARTMENT OF TRANSPORTATION This notice announces that the FAA maps for Westover Metropolitan Airport finds that the noise exposure map are in compliance with applicable Federal Aviation Administration submitted for Westover Metropolitan requirements. This determination is Airport is in compliance with Noise Exposure Map Notice; Westover effective on October 8, 2014. applicable requirements of Part 150, FAA’s determination on an airport Metropolitan Airport, Chicopee, effective October 8, 2014. Further, FAA operator’s noise exposure maps is Massachusetts is reviewing a proposed noise limited to a finding that the maps were AGENCY: Federal Aviation compatibility program for that airport developed in accordance with the Administration, DOT. which will be approved or disapproved procedures contained in Appendix A of ACTION: Notice. on or before April 8, 2015. This notice FAR Part 150. Such determination does also announces the availability of this not constitute approval of the SUMMARY: The Federal Aviation program for public review and applicant’s data, information or plans, Administration (FAA) announces its comment. or a commitment to approve a noise determination that the noise exposure Under Section 103 of Title I of the compatibility program or to fund the map for Westover Metropolitan Airport, Aviation Safety and Noise Abatement implementation of that program. If as submitted by the Westover Act of 1979 (hereinafter referred to as questions arise concerning the precise Metropolitan Development Corporation ‘‘the Act’’), codified at 49 U.S.C. 47503, relationship of specific properties to under the provisions of Title I of the an airport operator may submit to the noise exposure contours depicted on a Aviation Safety and Noise Abatement FAA a noise exposure map which meets noise exposure map submitted under Act of 1979, is in compliance with applicable regulations and which Section 103 of the Act, it should be applicable requirements. The FAA also depicts non-compatible land uses as of noted that the FAA is not involved in announces that it is reviewing a the date of submission of such map, a any way in determining the relative proposed noise compatibility program description of projected aircraft locations of specific properties with that was submitted for Westover operations, and the ways in which such regard to the depicted noise contours, or Metropolitan Airport in conjunction operations will affect such map. The Act in interpreting the noise exposure map with the noise exposure map, and that requires such map to be developed in to resolve questions concerning, for this program will be approved or consultation with interested and example, which properties should be disapproved on or before April 8, 2015. affected parties in the local community, covered by the provisions of Section 107 DATES: The effective date of the FAA’s government agencies, and persons using of the Act. These functions are determination on the noise exposure the airport. An airport operator who has inseparable from the ultimate land use map and of the start of its review of the submitted a noise exposure map that is control and planning responsibilities of associated noise compatibility program found by FAA to be in compliance with local government. These local is September 25, 2014. The public the requirements of Federal Aviation responsibilities are not changed in any comment period ends on November 25, Regulation (FAR) Part 150, promulgated way under Part 150 or through FAA’s 2014. pursuant to Title I of the Act, may review of a noise exposure map. ADDRESSES: Interested persons are submit a noise compatibility program Therefore, the responsibility for the invited to comment on the proposed for FAA approval which sets forth the detailed overlaying of noise exposure program. All comments, other than measures the operator has taken, or contours onto the map depicting those properly addressed to local land proposes, for the introduction of properties on the surface rests use authorities will be considered by the additional non-compatible uses. exclusively with the airport operator FAA to the extent practicable. The Westover Metropolitan that submitted the map, or with those Comments on the proposed noise Development Corporation submitted to public agencies and planning agencies compatibility program should also be the FAA, on October 8, 2014, a noise with which consultation is required submitted to the FAA office under the exposure map, descriptions, and other under Section 103 of the Act. The FAA heading: FOR FURTHER INFORMATION documentation that were produced has relied on the certification by the CONTACT. during the Airport Noise Compatibility airport operator, under Section 150.21 Copies of the noise exposure map, the Planning (Part 150) study Westover of FAR Part 150, that the statutorily FAA’s evaluation of the map, and the Metropolitan Airport from August 2013 required consultation has been proposed noise compatibility program to September 2014. It was requested that accomplished. are available for examination at the the FAA review this material as the The FAA has formally received the following locations: noise exposure map, as described in noise compatibility program for Westover Metropolitan Airport, Section 103(a)(1) of the Act, and that the Westover Metropolitan Airport, also Chicopee, Massachusetts. noise mitigation measures, to be effective on October 8, 2014. Federal Aviation Administration, New implemented jointly by the airport and Preliminary review of the submitted England Region, Airports Division, surrounding communities, be approved material indicates that it conforms to the

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requirements for the submittal of noise or more Federal highway projects Background compatibility programs, but that further within the State. The FHWA has Section 327 of title 23, United States review will be necessary prior to determined the application to be Code (U.S.C.), allows for States to apply approval or disapproval of the program. complete, and developed a draft MOU to assume, and for the Secretary of the The formal review period, limited by with the State outlining how the State USDOT (Secretary) to assign, the law to a maximum of 180 days, will be will implement the program, with Secretary’s NEPA responsibilities and completed on or before April 8, 2015. FHWA oversight. The public and all or part of the Secretary’s The FAA’s detailed evaluation will be agencies are now invited to comment on responsibilities for environmental conducted under the provisions of 14 the State’s request and the draft MOU. review, consultation, or other actions CFR part 150, Section 150.33. The In particular, FHWA seeks comments on required under any other Federal primary considerations in the the proposed scope of the assignments environmental law with respect to one evaluation process are whether the and assumptions of responsibilities set or more Federal highway projects. The proposed measures may reduce the level out in the draft MOU for environmental FHWA is authorized to act on behalf of of aviation safety, create an undue reviews, consultations, and other the Secretary with respect to these burden on interstate or foreign activities to be assigned. matters. commerce, or be reasonably consistent DATES: Please submit comments by The State has submitted application with obtaining the goal of reducing November 10, 2014. materials requesting to participate in existing non compatible land uses and this Program. The FHWA has reviewed preventing the introduction of ADDRESSES: To ensure that you do not these application materials, which additional non-compatible land uses. duplicate your docket submissions, Interested persons are invited to please submit them by only one of the include public and agency comments on comment on the proposed program with following means: the application and has determined them complete. The FHWA and the specific reference to these factors. • Federal eRulemaking Portal: Go to State have developed a draft MOU Questions may be directed to the http://www.regulations.gov and follow outlining how the State will implement individual named above under the the online instructions for submitting the Program and how FHWA will heading: FOR FURTHER INFORMATION comments. CONTACT. • oversee the State’s implementation as Facsimile (Fax): 1–202–493–2251. required by 23 U.S.C. 327. The FHWA • Issued in Burlington, Massachusetts, on Mail: Docket Management Facility; now seeks public comments on the September 25, 2014. U.S. Department of Transportation, 1200 State’s request pursuant to 23 CFR Mary T. Walsh, New Jersey Ave. SE., West Building 773.111(a). Manager, Airports Division. Ground, Floor Room W12–140, Under the proposed MOU, FHWA [FR Doc. 2014–23818 Filed 10–9–14; 8:45 am] Washington, DC 20590–0001. would assign to the State the NEPA BILLING CODE 4910–13–P • Hand Delivery: West Building environmental review responsibilities Ground Floor, Room W12–140, 1200 for the following Federal highway New Jersey Ave. SE., Washington, DC projects: DEPARTMENT OF TRANSPORTATION 20590 between 9:00 a.m. and 5:00 p.m. 1. Projects requiring environmental e.t., Monday through Friday, except Federal Highway Administration impact statements (EIS), both on the Federal holidays. State highway system (SHS) and local [Docket No. FHWA–2014–0024] Instructions: You must include the government projects off the SHS that agency name and docket number at the FHWA funds or that require FHWA Application From the State of Texas beginning of your comments. All approvals, except the following EIS Under the Surface Transportation comments received will be posted projects, which FHWA will not assign: Project Delivery Program and without change to http:// Harbor Bridge, Trinity Parkway, and Proposed Memorandum of www.regulations.gov, including any South Padre Island Causeway 2. Understanding (MOU) Assigning personal information provided. 2. Projects requiring environmental FHWA’s Environmental Review assessments, both on the SHS and local Responsibilities to the State FOR FURTHER INFORMATION CONTACT: Michael T. Leary, Director of Planning government projects off the SHS that AGENCY: Federal Highway and Program Development, Federal FHWA funds or that require FHWA Administration (FHWA), DOT. Highway Administration Texas approvals. ACTION: Notice of proposed MOU and Division, 300 E. 8 St., Room 826, 3. Projects qualifying for categorical request for comments. Austin, TX 78701, 7:00 a.m.–4:30 p.m. exclusions (CE), both on the SHS and c.t., (512) 536–5940, michael.leary@ local government projects off the SHS SUMMARY: This notice announces that dot.gov. that FHWA funds or that require FHWA the FHWA has received and reviewed approvals. The FHWA previously an application from the Texas SUPPLEMENTARY INFORMATION: signed a MOU with the State assigning Department of Transportation (State) CE responsibility under the authority in Electronic Access requesting participation in the Surface 23 U.S.C. 326. Upon execution of this Transportation Project Delivery Program An electronic copy of this notice may MOU, the 23 U.S.C. 326 CE MOU (Program). This Program allows for be downloaded from the Federal between FHWA and the State will be States to apply to assume, and for Register’s home page at http:// terminated, and projects included under FHWA to assign, environmental review www.archives.gov and the Government that MOU will be assumed under the responsibilities under the National Printing Office’s database at http:// Program. Environmental Policy Act of 1969 www.access.gpo.gov/nara. An electronic 4. Highway projects within the State (NEPA), and all or part of FHWA’s version of the application materials and that other Federal agencies fund [or responsibilities for environmental proposed MOU may be downloaded by projects without any Federal funding] reviews, consultations, or other actions accessing the DOT DMS docket, as that also include FHWA funding or that required under any Federal described above, at http:// require FHWA approvals. For these environmental law with respect to one www.regulations.gov/. projects, the assigned environmental

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review responsibilities would be limited Water Resources and Wetlands formal consultations, with consent of a to those that FHWA would otherwise • Clean Water Act, 33 U.S.C. 1251– tribe, but FHWA remains responsible for have. 1387 (Section 401, 402, 404, 408, the formal consultation. The State also The FHWA’s NEPA responsibilities Section 319). will not assume FHWA’s include those established in • Coastal Barrier Resources Act, 16 responsibilities for conformity implementing procedures such as 40 U.S.C. 3501–3510. determinations required under section CFR parts 1500–1508, DOT Order • Coastal Zone Management Act, 16 176 of the CAA or any responsibility 5610.1C, 23 CFR part 771, and those U.S.C. 1451–1466. under 23 U.S.C. 134 or 135, or under 49 established through other NEPA-related • Safe Drinking Water Act (SDWA), U.S.C. 5303 or 5304. provisions such as 23 U.S.C. 139. In 42 U.S.C. 300f–300j–26. A copy of the application materials addition to the NEPA review • General Bridge Act of 1946, 33 and proposed MOU may be viewed on responsibilities associated with the U.S.C. 525–533. the DOT DMS Docket, as described above categories of projects, the • Rivers and Harbors Act of 1899, 33 above, or may be obtained by contacting assignment would include FHWA’s U.S.C. 401–406. FHWA or the State at the addresses responsibilities associated with these • Wild and Scenic Rivers Act, 16 provided above. A copy also may be projects under the following U.S.C. 1271–1287. viewed on the State’s Web site at environmental review, consultation, and • Emergency Wetlands Resources www.txdot.gov. other related requirements: Act, 16 U.S.C. 3901, 3921. The FHWA will consider the • Wetlands Mitigation, 23 U.S.C. comments submitted when making its Air Quality 119(g), 133 (b)(14). decision to approve the application and • Clean Air Act (CAA), 42 U.S.C. • Flood Disaster Protection Act, 42 execute the MOU. Any final MOU 7401–7671q, with the exception of any U.S.C. 4001–4130. approved by FHWA may include conformity determinations. Parklands and Other Special Uses changes based on comments received on the proposed MOU. Noise • 23 U.S.C. 138 and 49 U.S.C. 303, • Noise Control Act of 1972, 42 and implementing regulations at 23 CFR (Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning U.S.C. 4901–4918. part 774. • • and Construction. The regulations Compliance with the noise Land and Water Conservation Fund implementing Executive Order 12372 regulations in 23 CFR part 772. Act, 16 U.S.C. 4601–4 to 4601–11. regarding intergovernmental consultation on Wildlife FHWA-Specific Federal programs and activities apply to this program.) • Endangered Species Act of 1973, 16 • Planning and Environmental U.S.C. 1531–1544. Linkages, 23 U.S.C. 168, with the Authority: 23 U.S.C. 327; 42 U.S.C. 4331, • Marine Mammal Protection Act, 16 exception of those FHWA 4332; 23 CFR part 773. U.S.C. 1361–1423h. responsibilities associated with 23 Issued on: October 7, 2014. • Anadromous Fish Conservation U.S.C. 134 and 135. Gregory G. Nadeau, • Act, 16 U.S.C. 757a–757f. Programmatic Mitigation Plans, 23 Acting Administrator, Federal Highway • Fish and Wildlife Coordination Act, U.S.C. 169, with the exception of those Administration. 16 U.S.C. 661–667d. FHWA responsibilities associated with • [FR Doc. 2014–24327 Filed 10–9–14; 8:45 am] Migratory Bird Treaty Act, 16 23 U.S.C. 134 and 135. BILLING CODE 4910–22–P U.S.C. 703–712. Executive Orders Relating to Highway • Magnuson-Stevens Fishery Projects Conservation and Management Act of DEPARTMENT OF TRANSPORTATION 1976, as amended, 16 U.S.C. 1801 et • E.O. 11990, Protection of Wetlands. seq., with Essential Fish Habitat • E.O. 11988, Floodplain Federal Motor Carrier Safety requirements at 1855(b)(2). Management. Administration • E.O. 12898, Federal Actions to Historic and Cultural Resources Address Environmental Justice in [Docket Nos. FMCSA–2008–0362 and FMCSA–2006–26367] • National Historic Preservation Act Minority Populations and Low Income of 1966, as amended, 16 U.S.C. 470 et Populations. • Motor Carrier Safety Advisory seq. E.O. 13112, Invasive Species. Committee (MCSAC) and Medical • 23 U.S.C. 138 (‘‘Section 4(f)’’) and The MOU would allow the State to act Review Board (MRB) Meetings: Public 49 U.S.C. 303 and implementing in the place of FHWA for highway Meetings regulations at 23 CFR part 774. projects in carrying out the functions • Archaeological Resources described above, except with respect to AGENCY: Federal Motor Carrier Safety Protection Act of 1977, 16 U.S.C. 470aa– government-to-government Administration (FMCSA), DOT. 470mm. consultations with federally recognized ACTION: Announcement of advisory • Archeological and Historic Indian tribes. The FHWA will retain committee public meetings. Preservation Act of 1966, as amended, responsibility for conducting formal 16 U.S.C. 469–469c. government-to-government consultation SUMMARY: FMCSA announces a joint • Native American Graves Protection with federally recognized Indian tribes, meeting of its Motor Carrier Safety and Repatriation Act (NAGPRA), 25 which is required under some of the Advisory Committee (MCSAC) and U.S.C. 3001–3013; 18 U.S.C. 1170. listed laws and Executive Orders. The Medical Review Board (MRB) on State will continue to handle routine October 27, 2014, and a meeting of the Social and Economic Impacts consultations with the tribes and MCSAC on Tuesday, October 28. • American Indian Religious Freedom understands that a tribe has the right to MCSAC and the MRB will jointly Act, 42 U.S.C. 1996. direct government-to-government identify concepts the Agency should • Farmland Protection Policy Act consultation with FHWA upon request. consider in relation to Schedule II (FPPA), 7 U.S.C. 4201–4209. The State also may assist FHWA with medications and their use by

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commercial motor vehicle (CMV) that effective September 30, 2013, DEPARTMENT OF TRANSPORTATION drivers in interstate commerce. This through September 30, 2015. MCSAC follows the MRB’s consideration of the provides advice and recommendations Federal Motor Carrier Safety effects of Schedule II medications on to the FMCSA Administrator on motor Administration CMV drivers’ ability to operate safely on carrier safety programs and regulations, [Docket No. FMCSA–2013–0314] September 11, 2013, and July 29–30, and operates in accordance with the 2014. On Tuesday, October 28, the Federal Advisory Committee Act Parts and Accessories Necessary for MCSAC will meet to finalize its (FACA, 5 U.S.C. App 2). Safe Operation; Grant of Exemption for deliberations on financial responsibility Van Hool N.V. and Coach USA requirements for motor carriers and to MRB consider the findings of its AGENCY: Federal Motor Carrier Safety Subcommittee on the Long-Haul Cross- The MRB is composed of five medical Administration (FMCSA), DOT. Border Trucking Pilot Program with experts who each serve 2-year terms. ACTION: Notice of final disposition. Mexico. Meetings are open to the public Section 4116 of SAFETEA–LU requires for their entirety, and there will be a the Secretary of Transportation, with the SUMMARY: The Federal Motor Carrier public comment period at the end of advice of the MRB and the chief medical Safety Administration (FMCSA) each day. examiner, to establish, review, and announces its decision to grant a limited 2-year exemption to Van Hool N.V. and DATES: Times and Dates: The joint revise ‘‘medical standards for operators Coach USA (Van Hool/Coach USA) that meeting will be held on Monday, of commercial motor vehicles that will October 27, 2014, from 9 a.m. to 4:30 ensure that the physical condition of will allow Coach USA/Megabus to p.m., Eastern Daylight Time (E.T.), at operators of commercial motor vehicles operate double deck motorcoaches constructed with a sleeper berth than the Hilton Alexandria Old Town, 1767 is adequate to enable them to operate has an exit that does not meet the King Street, Alexandria, VA 22314 in the vehicles safely.’’ The MRB operates minimum dimensional requirements the Washington and Jefferson Rooms on in accordance with FACA under the the 2nd floor. On Tuesday, October 28, specified in the Federal Motor Carrier terms of its charter, filed November 25, Safety Regulations (FMCSRs). Section the MCSAC will meet at that same 2013. location from 9 a.m. to 4:30 p.m., E.T. 393.76(c)(1) of the FMCSRs requires Copies of all MRB and MCSAC Task II. Meeting Participation sleeper berths installed after January 1, Statements and an agenda for the entire 1963 to have an exit that is at least 18 meeting will be made available in Oral comments from the public will inches high and 36 inches wide. The advance of the meeting at http:// be heard during the last half-hour of the exemption will allow Coach USA/ mrb.fmcsa.dot.gov and http:// meetings each day. Should all public Megabus to operate double deck mcsac.fmcsa.dot.gov. comments be exhausted prior to the end motorcoaches with an exit area from the of the specified period, the comment sleeper berth that, while not meeting the FOR FURTHER INFORMATION CONTACT: Ms. period will close. Members of the public specified dimensions, is only slightly Shannon L. Watson, Senior Advisor to may submit written comments on the smaller in overall size from what is the Associate Administrator for Policy, required in the FMCSRs. FMCSA Federal Motor Carrier Safety topics to be considered during the meeting by Wednesday, October 22, to believes that permitting the reduced exit Administration, U.S. Department of area size will maintain a level of safety Transportation, 1200 New Jersey Federal Docket Management System (FDMC) Docket Number FMCSA–2008– that is equivalent to, or greater than, the Avenue SE., Washington, DC 20590, level of safety achieved without the (202) 385–2395, [email protected]. 0362 for the MRB and FMCSA–2006– 26367 for the MCSAC using any of the exemption. Services for Individuals With following methods: DATES: This exemption is effective from Disabilities • Federal eRulemaking Portal: Go to October 10, 2014 until October 10, 2016. For information on facilities or http://www.regulations.gov. Follow the FOR FURTHER INFORMATION CONTACT: Mr. services for individuals with disabilities online instructions for submitting Luke W. Loy, Vehicle and Roadside or to request special assistance at the comments. Operations Division, Office of Carrier, meeting, contact Eran Segev at (617) Driver, and Vehicle Safety, MC–PSV, • 494–3174, [email protected], by Fax: 202–493–2251. (202) 366–0676; Federal Motor Carrier Wednesday, October 22. • Mail: Docket Management Facility; Safety Administration, 1200 New Jersey SUPPLEMENTARY INFORMATION: U.S. Department of Transportation, 1200 Avenue SE., Washington, DC 20590– I. Background New Jersey Avenue SE., West Building, 0001. Room W12–140, Washington, DC 20590. SUPPLEMENTARY INFORMATION: MCSAC • Hand Delivery: U.S. Department of Background Section 4144 of the Safe, Accountable, Transportation, 1200 New Jersey Flexible, Efficient Transportation Equity Avenue SE., Room W12–140, Section 4007 of the Transportation Act: A Legacy for Users (SAFETEA–LU, Washington, DC, between 9 a.m. and 5 Equity Act for the 21st Century (TEA– Pub. L. 109–59, 119 Stat. 1144, August p.m., E.T. Monday through Friday, 21) [Pub. L. 105–178, June 9, 1998, 112 10, 2005) required the Secretary of Stat. 401] amended 49 U.S.C. 31315 and except Federal holidays. Transportation to establish the MCSAC. 31136(e) to provide authority to grant The Moving Ahead for Progress in the Issued on: October 6, 2014. exemptions from the Federal Motor 21st Century Act (MAP–21, Pub. L. 112– Larry W. Minor, Carrier Safety Regulations (FMCSRs). 141) reauthorized the MCSAC through Associate Administrator for Policy. On August 20, 2004, FMCSA published September 30, 2013, at which time its [FR Doc. 2014–24364 Filed 10–8–14; 4:15 pm] a final rule (69 FR 51589) implementing statutory authority expired, section 4007. Under this rule, FMCSA BILLING CODE 4910–EX–P necessitating the establishment of must publish a notice of each exemption MCSAC as a discretionary committee request in the Federal Register (49 CFR under FACA. Secretary Foxx established 381.315(a)). The Agency must provide

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the public with an opportunity to Van Hool/Coach USA states that square inches), it is significantly inspect the information relevant to the whereas the pre-January 1, 1963, exit larger—more than double—than the pre- application, including any safety dimension requirements accommodated January 1, 1963 requirements (an ellipse analyses that have been conducted. The all types of commercial motor vehicles, having a major axis of 24 inches and a Agency must also provide an the current language of Section minor axis of 16 inches = 301.6 square opportunity for public comment on the 393.76(c)(1) ‘‘is designed to fit sleeper inches). request. berths in commercial trucks’’ and does Entry into and exit from the prototype The Agency reviews the safety ‘‘not take into account the limited space sleeper berth was performed by both analyses and the public comments and available on a motorcoach for utilization FMCSA and Coach USA personnel determines whether granting the of a sleeper berth.’’ during the vehicle inspection. These exemption would likely achieve a level representatives were both adult males, Comments of safety equivalent to or greater than approximately the size/weight of the the level that would be achieved by the On August 6, 2013, FMCSA published Hybrid III 95th percentile male current regulation (49 CFR 381.305). notice of the Van Hool/Coach USA anthropometric test device that is used The decision of the Agency must be application and requested public worldwide for the evaluation of published in the Federal Register (49 comment (78 FR 47817). Advocates for automotive and military safety CFR 381.315(b)). If the Agency denies Highway and Auto Safety (Advocates) restraints, and particularly for seat belt the request, it must state the reason for pointed out that the FMCSA had failed integrity testing.1 Both representatives doing so. If the decision is to grant the to include a copy of the Van Hool/Coach were easily able to enter and exit the exemption, the notice must specify the USA application in the docket for prototype sleeper berth, and each found person or class of persons receiving the public inspection as required by statute that the 26-inch height of the prototype exemption and the regulatory provision and regulation. The Agency placed a sleeper berth entry/exit was much easier or provisions from which an exemption copy of the Van Hool/Coach USA to access than a sleeper berth meeting is granted. The notice must also specify application in the docket, and published the currently-permitted minimum the effective period of the exemption a notice in the Federal Register on allowable height of 18 inches despite (up to 2 years) and explain the terms February 14, 2014 (78 FR 9035) the reduction in overall width of the and conditions of the exemption. The announcing the reopening of the prototype opening. exemption may be renewed (49 CFR comment period for 15 days. The During the inspection of the 381.315(c) and 49 CFR 381.300(b)). Agency received four comments. prototype, FMCSA also found that Van 1. Advocates stated ‘‘The reduced size Hool/Coach USA has designed and Van Hool/Coach USA Application for of the major axis of the sleeper berth included an additional emergency exit Exemption entry/exit portal from 36 inches to 24 in the sleeper berth that provides direct Van Hool/Coach USA applied for an inches results is a significant reduction access to the exterior of the motorcoach. exemption from 49 CFR 393.76(c)(1) to of a critical dimension for egress, even This additional exit is 26 inches wide allow Coach USA/Megabus to operate if it does not necessarily reduce the and 26.5 inches high (689 square double deck motorcoaches with a overall area of the portal dramatically. inches), which, while although it does sleeper berth exit which meets the Reducing the major axis by one-third not meet the specific dimensional requirements of those sleeper berths could impede the ability of a driver to requirements of the current standard, is installed before January 1, 1963. Section respond in a safety emergency . . . larger in area than the current 393.76(c)(1) of the FMCSRs requires Finally, it is likely that the pre-Jan. 1, minimally compliant opening. that, for sleeper berths installed after 1963 entry/exit dimensions were While FMCSA acknowledges that Van January 1, 1963, the exit must be a considered so restrictive and tight for Hool/Coach USA did not present a doorway or opening at least 18 inches drivers who needed to squeeze into or specific safety study providing an high and 36 inches wide. In its out of the sleeper berth that the major analysis of the safety impacts of the application, Van Hool/Coach USA axis of the portal was enlarged requested exemption, the Agency states: significantly, by 50 percent, from 24 to believes that the 9-inch reduction in the 36 inches. Advocates believes that even minimum width of the entry/exit of the Van Hool and Coach USA are making this the current dimensions of the entry/exit request because we jointly developed a sleeper berth from the interior of the double deck motorcoach with sleeper berths portal (not to mention the sleeper berth motorcoach does not degrade the level for passengers (hereafter referred to as sleeper itself) are exceedingly narrow and of safety for a driver exiting or entering coach) where in order to meet the driver should be further enlarged, not the sleeper berth, especially given that hours of service requirements for the routes reduced.’’ the measured height of the prototype planned for this sleeper coach, a sleeper FMCSA response: FMCSA personnel entry is 8 inches taller than the berth must be provided for a 2nd driver. The inspected a Van Hool/Coach USA minimum allowable height of 18 inches. designed sleeper berth compartment in the double deck motorcoach, and took sleeper motor coach meets and exceeds the FMCSA also notes that Van Hool/Coach physical measurements of a prototype of USA has provided a secondary minimum dimensional requirements for the the proposed sleeper berth entry/exit actual sleeper berth, however due to the emergency exit to the exterior of the limited available locations to place the area. The effective sleeper berth entry/ vehicle. sleeper berth within the confines of the exit area is a rectangle, 27 inches wide 2. Mr. Lawrence Hanley of the motorcoach, it is requested that the entry/exit by 26 inches in height, with a smaller Amalgamated Transit Union (ATU) to the sleeper berth be allowed to meet the non-useable corner in the lower right submitted comments opposing the use dimensional requirements for those sleeper side measuring 11 inches in height by of sleeper berths generally, but did not berths manufactured/installed before January 8 inches in width, resulting in a total 1, 1963. The entry/exit of the sleeper berth provide any comments specifically sleeper berth entry/exit area of 614 relating to the reduced size of the exit (as currently designed) has a maximum area square inches. While this is a nominal of 606 square inches, which is sufficient area from the sleeper berth that is the subject to contain an ellipse having a major axis of reduction in access area—approximately of this exemption application. 25 inches and a minor axis of 16 inches, 5 percent—compared to the current which was the requirement for sleeper berths requirements (a rectangular area 18 1 The Hybrid III 95th percentile male dummy is installed prior to January 1, 1963. inches high and 36 inches wide = 648 6′2″ tall and weighs 223 pounds.

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FMCSA Response: The Van Hool/ Terms and Conditions for the 2014, the effective date of this Coach USA application only requests an Exemption exemption (30 days after the exemption exemption from the requirements of During the temporary exemption was filed). section 393.76(c)(1) of the FMCSRs period, Coach USA/Megabus WGNR certifies that the projected relating to the dimensions of the entry/ motorcoaches can be legally operated annual revenues as a result of this exit into the sleeper berth. The Van using the reduced sleeper berth entry/ transaction will not exceed those that Hool/Coach USA prototype sleeper exit dimensions. The motorcoaches would qualify it as a Class III rail carrier berth fully conforms to all other must be constructed using the entry/exit and will not exceed $5 million. requirements pertaining to sleeper configuration as depicted in the If the verified notice contains false or berths in 49 CFR 393.76. application. FMCSA encourages any misleading information, the exemption 3. Mr. John Oakman, Sr. Vice party having information that Van Hool/ is void ab initio. Petitions to revoke the President of Coach USA/Megabus Coach USA, in utilizing this exemption, exemption under 49 U.S.C. 10502(d) commented in support of the is not achieving the requisite level of may be filed at any time. The filing of application, stating ‘‘With this safety immediately to notify the Agency. a petition to revoke will not exemption we will be able to travel with If safety is being compromised, or if the automatically stay the effectiveness of two drivers, while one is driving the continuation of the exemption is not the exemption. Petitions to stay must be other will be able to be in a legal consistent with 49 U.S.C. 31315(b) and filed by October 17, 2014 (at least seven sleeping berth, thus giving us a longer 31136(e), FMCSA will take immediate days prior to the date the exemption safer distance of operation.’’ steps to revoke the exemption. becomes effective). An original and 10 copies of all 4. Mr. Tim Wayland, President and Preemption Chief Operating Officer of ABC pleadings, referring to Docket No. FD Companies commented in support of In accordance with section 381.600 of 35860, must be filed with the Surface the application, stating ‘‘Approving this the FMCSRs, during the period the Transportation Board, 395 E Street SW., exemption would allow Coach USA to exemption is in effect, no State shall Washington, DC 20423–0001. In fulfill its obligations as an operator enforce any law or regulation that addition, a copy of each pleading must towards its drivers in meeting the hours conflicts with or is inconsistent with be served on applicant’s representative, of service requirements. Approval of this exemption with respect to a person Thomas F. McFarland, Thomas F. this exemption will also increase the operating under the exemption. McFarland, P.C., 208 South LaSalle number of models available to the Issued on: October 1, 2014. Street, Suite 1890, Chicago, IL 60604– traveling public. Increasing the number T.F. Scott Darling III, 1112. of models available to the traveling Acting Administrator. Board decisions and notices are public will result in increased ridership, available on our Web site at [FR Doc. 2014–24290 Filed 10–9–14; 8:45 am] ‘‘WWW.STB.DOT.GOV.’’ less traffic congestion and road wear BILLING CODE 4910–EX–P and tear plus positive effects on the Decided: October 7, 2014. environment such as lower emissions By the Board, Rachel D. Campbell, and consumption of natural resources.’’ DEPARTMENT OF TRANSPORTATION Director, Office of Proceedings. FMCSA Decision Brendetta S. Jones, Surface Transportation Board Clearance Clerk. Based on its evaluation of the [Docket No. FD 35860] [FR Doc. 2014–24251 Filed 10–9–14; 8:45 am] application for an exemption, FMCSA BILLING CODE 4915–01–P grants the Van Hool/Coach USA Wisconsin Great Northern Railroad, exemption application. The Agency Inc.—Lease and Operation believes that the safety performance of Exemption—Rail Line of Wisconsin DEPARTMENT OF THE TREASURY motor carriers operating the subject Central, Ltd. double deck motorcoaches during the 2- Internal Revenue Service year exemption period will likely Wisconsin Great Northern Railroad, Inc. (WGNR), a Class III rail carrier, has achieve a level of safety that is Advisory Committee to the Internal filed a verified notice of exemption equivalent to, or greater than, the level Revenue Service; Meeting under 49 CFR 1150.41 to lease from of safety achieved without the 1 exemption. While the proposed entry/ Wisconsin Central, Ltd. (WC), and to AGENCY: Internal Revenue Service (IRS), exit does not meet the specific operate, pursuant to a lease agreement, Treasury. dimensional requirements of section an approximately 6.3-mile line of ACTION: Notice of meeting. railroad between milepost 95.2 near 393.76(c)(1) of the FMCSRs, (1) the Hayward Junction and milepost 101.5 at overall area of the proposed entry/exit is SUMMARY: The Information Reporting Hayward, in Washburn and Sawyer only slightly smaller than that which is Program Advisory Committee (IRPAC) Counties, Wis. will hold a public meeting on required, and (2) FMCSA was able to According to WGNR, the lease does confirm during a physical examination Wednesday, October 29, 2014. not contain any provision or agreement FOR FURTHER INFORMATION CONTACT: Ms. of the double deck motorcoach that that may limit future interchange of operators are able to easily enter/exit the Caryl Grant, National Public Liaison, traffic with a third-party connecting CL:NPL:SRM, Rm. 7559, 1111 proposed sleeper berth. Additionally, carrier. WGNR states that the line Van Hool/Coach USA has designed and Constitution Avenue NW., Washington, connects with WC’s north-south main DC 20224. Phone: 202–317–6851 (not a installed a second emergency exit in the line at milepost 96.0 at Hayward sleeper berth that is 26 inches wide and toll-free number). Email address: Junction, Wis. [email protected]. 26.5 inches high that provides direct The proposed transaction may be access to the exterior of the vehicle. The consummated on or after October 25, SUPPLEMENTARY INFORMATION: Notice is Agency hereby grants the exemption for hereby given pursuant to section a two-year period, beginning October 1 WC is an affiliate of Canadian National Railway 10(a)(2) of the Federal Advisory 10, 2014 until October 10, 2016. Company. Committee Act, 5 U.S.C. App. (1988),

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that a public meeting of the IRPAC will opportunity for public comment on the Abstract: Claimants receiving on the be held on Wednesday, October 29, proposed collection of certain job and apprenticeship training 2014 from 9:00 a.m. to 12:00 p.m. at information by the agency. Under the complete VA Form 22–6553d to report Residence Inn Marriott, 1199 Vermont Paperwork Reduction Act (PRA) of the number of hours worked. Schools or Avenue NW., Washington, DC 20005. 1995, Federal agencies are required to training establishments also complete Report recommendations on issues that publish notice in the Federal Register the form to report whether the may be discussed include: Foreign concerning each proposed collection of claimant’s educational benefits are to be Account Tax Compliance Act; Expand information, including each proposed continued, unchanged or terminated, Use of TIN Matching; Cost Basis revision of currently approved and the effective date of such action. VA Reporting; De minimis Threshold for collection, and allow 60 days for public Form 22–6553d–1 is an identical Form 1099 Corrections; Business master comment in response to the notice. This printed copy of VA Form 22–6553d. file and Form 8822–B; 1099–MISC— notice solicits comments for information Claimants use VA Form 22–6553d–1 Miscellaneous Income; Form W–9 needed to determine a claimant’s when the computer-generated version of Revision; Nonresident Alien continued eligibility for educational VA Form 22–6553d is not available. VA Withholding and Reporting of Payments benefits. uses the data collected to process a for Truck or Rail; Instructions for Form DATES: Written comments and claimant’s educational benefit claim. 2848; Form 8889—Health Savings recommendations on the proposed Affected Public: Individuals or Account; Third Party Sick Pay collection of information should be households. Reporting; Proper Reporting of FSA received on or before December 9, 2014. Estimated Annual Burden: 11,384 Overpayments; ACA and HRA-Like ADDRESSES: Submit written comments hours. Plans; ACA Education Using Plain on the collection of information through Estimated Average Burden per Language; Withholding and Reporting the Federal Docket Management System Respondent: 10 minutes. for Pension Payments to NRAs; (FDMS) at www.Regulations.gov or to Frequency of Response: Monthly. Reporting by Insurance Companies and Nancy J. Kessinger, Veterans Benefits Estimated Number of Respondents: Third Parties under IRC §§ 6055 and Administration (20M35), Department of 68,301. 6056; IRC § 6050W and Form 1099–K; Veterans Affairs, 810 Vermont Avenue Dated: October 7, 2014. Form 1098–T; Form 8300; Coordination NW., Washington, DC 20420 or email to By direction of the Secretary. of Taxpayer Forms with Broker Forms; [email protected]. Please refer to Crystal Rennie, and Rev. Procedure 95–48. Last minute ‘‘OMB Control No. 2900–0178’’ in any agenda changes may preclude advance Department Clearance Officer, Department of correspondence. During the comment Veterans Affairs. notice. Due to limited seating and period, comments may be viewed online [FR Doc. 2014–24213 Filed 10–9–14; 8:45 am] security requirements, please call or through FDMS. email Caryl Grant to confirm your BILLING CODE 8320–01–P FOR FURTHER INFORMATION CONTACT: attendance. Ms. Grant can be reached at Nancy J. Kessinger at (202) 632–8924 or 202–317–6851 or [email protected]. FAX (202) 632–8925. DEPARTMENT OF VETERANS Should you wish the IRPAC to consider SUPPLEMENTARY INFORMATION: AFFAIRS a written statement, please call 202– Under the 317–6851, or write to: Internal Revenue PRA of 1995 (Pub. L. 104–13; 44 U.S.C. [OMB Control No. 2900–0777] Service, Office of National Public 3501–3521), Federal agencies must obtain approval from the Office of Liaison, CL:NPL:SRM, Room 7559, 1111 Proposed Information Collection Management and Budget (OMB) for each Constitution Avenue NW., Washington, (Medical Foster Homes Record collection of information they conduct DC 20224 or email: PublicLiaison@ Keeping Requirements); Activity: or sponsor. This request for comment is irs.gov. Comment Request being made pursuant to Section Dated: October 6, 2014. 3506(c)(2)(A) of the PRA. AGENCY: Veterans Health John Lipold, With respect to the following Administration, Department of Veterans Designated Federal Official, Branch Chief, collection of information, VBA invites Affairs. National Public Liaison. comments on: (1) Whether the proposed ACTION: Notice. [FR Doc. 2014–24173 Filed 10–9–14; 8:45 am] collection of information is necessary SUMMARY: BILLING CODE 4830–01–P for the proper performance of VBA’s The Veterans Health functions, including whether the Administration (VHA), Department of information will have practical utility; Veterans Affairs (VA), is announcing an DEPARTMENT OF VETERANS (2) the accuracy of VBA’s estimate of the opportunity for public comment on the AFFAIRS burden of the proposed collection of proposed collection of certain information; (3) ways to enhance the information by the agency. Under the [OMB Control No. 2900–0178] quality, utility, and clarity of the Paperwork Reduction Act (PRA) of information to be collected; and (4) 1995, Federal agencies are required to Proposed Information Collection publish notice in the Federal Register (Monthly Certification of On-the-Job ways to minimize the burden of the collection of information on concerning each proposed collection of and Apprenticeship Training) Activity: information, including each revised Comment Request respondents, including through the use of automated collection techniques or collection, and allow 60 days for public AGENCY: Veterans Benefits the use of other forms of information comment in response to the notice. This Administration, Department of Veterans technology. notice solicits comments on the Affairs. Title: Monthly Certification of On-the- information needed for Veterans, ACTION: Notice. Job and Apprenticeship Training, VA Veteran Representatives and health care Forms 22–6553d and 22–6553d–1. providers to request reimbursement SUMMARY: The Veterans Benefits OMB Control Number: 2900–0178. from the federal government for Administration (VBA), Department of Type of Review: Revision of a emergency services at a private Veterans Affairs (VA), is announcing an currently approved collection. institution.

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DATES: Written comments and the home, the name of each medical and make early submission of their recommendations on the proposed foster home caregiver who participated, materials to avoid any risk of loss of collection of information should be the name of each resident, whether the eligibility brought about by received on or before December 9, 2014. resident participated, and whether the unanticipated delays, computer service ADDRESSES: Submit written comments resident required assistance. outages, or other delivery-related on the collection of information through Affected Public: Individuals or problems. Households. Federal Docket Management System ADDRESSES: For a Copy of the (FDMS) at www.Regulations.gov; or Estimated Annual Burden: 600 burden hours. Application Package: Copies of the Audrey Revere, Office of Regulatory and application can be downloaded directly Administrative Affairs, Veterans Health Estimated Average Burden per Respondent: 3 minutes. from the SSVF Program Web site at: Administration (10B4), Department of www.va.gov/homeless/ssvf.asp. Veterans Affairs, 810 Vermont Avenue Frequency of Response: Annually. Estimated Number of Respondents: Questions should be referred to the NW, Washington, DC 20420 or email: 1,800. SSVF Program Office via phone at (877) [email protected]. Please refer to 767–0111 (toll-free number) or via email Dated: October 7, 2014. ‘‘OMB Control No. 2900–0777’’ in any at [email protected]. For detailed SSVF correspondence. During the comment By direction of the Secretary. Program information and requirements, period, comments may be viewed online Crystal Rennie, see 38 CFR Part 62. through the FDMS. Department Clearance Officer, Department of Submission of Application Package: FOR FURTHER INFORMATION CONTACT: Veterans Affairs. Two completed, collated, hard copies of Audrey Revere at (202) 461–5694. [FR Doc. 2014–24211 Filed 10–9–14; 8:45 am] the application and two compact discs SUPPLEMENTARY INFORMATION: Under the BILLING CODE 8320–01–P (CD) containing electronic versions of PRA of 1995 (Pub. L. 104–13; 44 U.S.C. the entire application are required. Each 3501–3521), Federal agencies must application copy must (i) be fastened obtain approval from the Office of DEPARTMENT OF VETERANS with a binder clip, and (ii) contain tabs Management and Budget (OMB) for each AFFAIRS listing the major sections of and exhibits collection of information they conduct Funding Availability Under Supportive to the application. Each CD must be or sponsor. This request for comment is Services for Veteran Families Program labeled with the applicant’s name and being made pursuant to Section must contain an electronic copy of the 3506(c)(2)(A) of the PRA. AGENCY: Veterans Health entire application. A budget template With respect to the following Administration, Department of Veterans must be attached in Excel format on the collection of information, VHA invites Affairs. CD, but all other application materials comments on: (1) Whether the proposed ACTION: Notice of funding availability. may be attached in a PDF or other collection of information is necessary format. The application copies and CDs for the proper performance of VHA’s SUMMARY: Funding Opportunity Title: must be submitted to the following functions, including whether the Supportive Services for Veteran address: Supportive Services for Veteran information will have practical utility; Families Program. Families Program Office National Center (2) the accuracy of VHA’s estimate of Announcement Type: Initial. on Homelessness Among Veterans, 4100 the burden of the proposed collection of Funding Opportunity Number: VA– Chester Avenue, Suite 201, information; (3) ways to enhance the SSVF–101014. Philadelphia, PA 19104. Applicants quality, utility, and clarity of the Catalog of Federal Domestic must submit two hard copies and two information to be collected; and (4) Assistance Number: 64.033, VA CDs. Applications may not be sent by ways to minimize the burden of the Supportive Services for Veteran facsimile (FAX). Applications must be collection of information on Families Program. received in the SSVF Program Office by The Department of Veterans Affairs respondents, including through the use 4:00 p.m. Eastern Time on the (VA) is announcing the availability of of automated collection techniques or application deadline date. Applications funds for supportive services grants the use of other forms of information must arrive as a complete package. under the Supportive Services for technology. Materials arriving separately will not be Veteran Families (SSVF) Program. This Titles: Medical Foster Homes included in the application package for Notice of Funding Availability (NOFA) Recordkeeping Requirements. consideration and may result in the contains information concerning the OMB Control Number: 2900–0777. application being rejected. See Section SSVF Program, initial supportive Type of Review: Extension. II.C. of this NOFA for maximum services grant application processes, Abstract: As proposed, § 17.74(q) allowable grant amounts. and the amount of funding available. contains a collection of information Technical Assistance: Information under the Paperwork Reduction Act (44 Awards made for supportive services grants will fund operations beginning regarding how to obtain technical U.S.C. 3501–3521). Paragraph (q) of assistance with the preparation of an § 17.74 requires medical foster homes to approximately March 1, 2015, through February 28, 2018. initial supportive services grant comply with the recordkeeping application is available on the SSVF DATES: requirements of 38 CFR 17.63(i) Applications for supportive Program Web site at: http://www.va.gov/ regarding facility records, and must services grants under the SSVF Program HOMELESS/SSVF.asp. document all inspection, testing, drills must be received by the SSVF Program and maintenance activities required by Office by 4:00 p.m. Eastern Time on FOR FURTHER INFORMATION CONTACT: Mr. this section. Such documentation must December 5, 2014. In the interest of John Kuhn, Supportive Services for be maintained for 3 years or for the fairness to all competing applicants, this Veteran Families Program Office, period specified by the applicable NFPA deadline is firm as to date and hour, and National Center on Homelessness standard, whichever is longer. VA will treat as ineligible for Among Veterans, 4100 Chester Avenue, Documentation of emergency egress and consideration any application that is Suite 201, Philadelphia, PA 19104; (877) relocation drills must include the date, received after the deadline. Applicants 767–0111 (this is a toll-free number). time of day, length of time to evacuate should take this practice into account SUPPLEMENTARY INFORMATION:

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I. Funding Opportunity Description unit and where permanent housing has elect to provide VA with a rank order A. Purpose: The SSVF Program’s been identified and secured but the of their support in lieu of providing purpose is to provide supportive participant cannot immediately be individual letters of support. A CoC is services grants to private non-profit placed in that housing. Only families a community plan to organize and organizations and consumer with children under the age of 18 may deliver housing and services to meet the cooperatives, who will coordinate or receive such assistance; individuals are needs of people who are homeless as provide supportive services to very low- not eligible for SSVF funded emergency they move to stable housing and income Veteran families who: (i) Are housing placement. In the event that maximize self-sufficiency. It includes residing in permanent housing; (ii) are longer term transitional housing or action steps to end homelessness and homeless and scheduled to become emergency housing is needed without prevent a return to homelessness (CoC such restrictions, VA offers community- residents of permanent housing within locations and contact information can based alternatives including the Grant a specified time period; or (iii) after be found at the Department of Housing and Per Diem Program and the Health exiting permanent housing within a and Urban Development’s (HUD) Web Care for Homeless Veterans contract specified time period, are seeking other site, http://www.hudhre.info/ residential care program, as well as a housing that is responsive to such very index.cfm?do=viewCocMaps). This variety of VA-based residential care low-income Veteran family’s needs and coordination should describe the programs. preferences. applicant’s participation in the CoC’s General Housing Stability Assistance coordinated assessment efforts B. Funding Priorities: The overriding means the provision of goods or goal for this NOFA is to ensure that (coordinated assessment refers to a payment of expenses not included in common process for accessing homeless appropriate levels of resources are other sections, but directly related to assistance services including: provided to communities with the supporting a participant’s housing prevention, diversion, emergency greatest need to end Veteran stability. This is a category that may shelter, transitional housing, rapid re- homelessness. VA will provide offer a maximum of $1,500 in assistance housing, supportive services and even approximately $93 million over a 3-year per participant. Such assistance, when permanent supportive housing). In period for non-renewable grants to not available through existing addition, any applicant proposing to eligible entities proposing services for mainstream and community resources, serve an Indian Tribal area is strongly one of the 28 priority Continuums of may include: (i) items necessary for a encouraged to provide a letter of Care (CoC) listed in II.B. VA has participant’s life or safety that are designed this 3-year effort to provide a provided to the participant by a grantee support from the relevant Indian Tribal surge of resources in communities with on a temporary basis in order to address Government. The aim of the provision the highest need. These 28 locations the participant’s emergency situation of supportive services is to assist very have been selected based on factors that (limited to $500 per participant under low-income Veteran families residing in include levels of Veteran homelessness 38 CFR 62.34); (ii) expenses associated permanent housing to remain stably and current unmet service needs. with gaining or keeping employment, housed and to rapidly transition those C. Definitions: Sections 62.2 and such as obtaining uniforms, tools, not currently in permanent housing to 62.11(a) of title 38, Code of Federal certifications, and licenses; (iii) stable housing. SSVF emphasizes the Regulations, contain definitions of terms expenses associated with moving into placement of homeless Veteran families used in the SSVF Program. In addition permanent housing, such as obtaining who are described in regulation as (i) to the definitions included in those basic kitchen utensils, bedding, and very low-income Veteran families who sections, this NOFA includes two other supplies; and (iv) expenses are homeless and scheduled to become program areas: Emergency Housing necessary for securing appropriate residents of permanent housing within Assistance and General Housing permanent housing, such as fees for 90 days, and (ii) very low-income Stability Assistance. applications, brokerage fees, or Veteran families who have exited Emergency Housing Assistance means background checks. permanent housing within the previous the provision of up to 30 days of D. Approach: Grantees will be 90 days to seek other housing that is temporary housing that does not require expected to leverage supportive services responsive to their needs and the participant to sign a lease or grant funds to enhance the housing preferences. Accordingly, VA occupancy agreement. The cost cannot stability of very low-income Veteran encourages eligible entities skilled in exceed the reasonable community families who are occupying permanent facilitating housing stability and standard for such housing. Emergency housing. In doing so, grantees are experienced in operating rapid re- housing is limited to short-term required to establish relationships with housing programs (i.e., administering commercial residences (private local community resources. Therefore, HUD’s Homelessness Prevention and residences are not eligible for such agencies must work through Rapid Re-Housing Program, HUD’s funding) not already funded to provide coordinated partnerships built either Emergency Solution Grant (ESG), or on-demand emergency shelter (such as through formal agreements or the other comparable Federal or community emergency congregate shelters). By informal working relationships resources) to apply for supportive authorizing the limited provision of commonly found amongst strong social services grants. As a crisis intervention SSVF-funded emergency housing, service providers. As part of the program, the SSVF Program is not grantees will be able to ensure that application, under § 62.22(e), all intended to provide long-term support participants do not become homeless applicants are strongly encouraged to for participants, nor will it be able to while they transition to permanent provide letters of support from the VA’s address all of the financial and housing or otherwise be put at risk, Network Homeless Coordinator (or their supportive services needs of pending placement in permanent designee). In addition, applicants are participants that affect housing stability. housing. Appropriate provision of strongly encouraged to provide letters of Rather, when participants require long- emergency housing is limited to those support from the CoC where they plan term support, grantees should focus on cases in which no space is available at to deliver services that reflect the connecting such participants to income a community shelter that would be applicant’s engagement in the CoC’s supports, such as employment and appropriate for placement of a family efforts to coordinate services. CoCs may mainstream Federal and community

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resources (e.g., HUD–VA Supportive housing stability assistance (which plans that will produce sufficient Housing program, HUD Housing Choice includes emergency supplies) in income to sustain Veteran participants Voucher programs, McKinney-Vento accordance with §§ 62.33 and 62.34. in permanent housing after the funded supportive housing programs, Grantees may use a maximum of 50 conclusion of the SSVF intervention. Temporary Assistance for Needy percent of their supportive services Grantees must ensure the availability of Families (TANF), Social Security grant funds to provide this temporary employment and vocational services Income/Social Security Disability financial assistance. either through the direct provision of Insurance (SSI/SSDI) etc.) that can G. Guidance for the Use of Supportive these services or their availability provide ongoing support as required. Services Grant Funds: It is VA policy to through formal or informal service Assistance in obtaining or retaining support a ‘‘Housing First’’ model in agreements. Agreements with Homeless permanent housing is a fundamental addressing and ending homelessness. Veteran Reintegration Programs funded goal of the SSVF Program. Grantees are Housing First establishes housing by the U.S. Department of Labor are expected to provide case management stability as the primary intervention in strongly encouraged. For participants services in accordance with 38 CFR working with homeless persons. The unable to work due to disability, income 62.31. Such case management should Housing First approach is based on must be established through available include tenant counseling, mediation research that shows that a homeless benefits programs. with landlords and outreach to individual or household’s first and 3. As per 38 CFR 62.33, grantees must landlords. primary need is to obtain stable assist participants obtain public E. Authority: Funding applied for housing, and that other issues that may benefits. Grantees must screen all under this NOFA is authorized by 38 affect the household can and should be participants for eligibility for a broad U.S.C. 2044. VA implements the SSVF addressed as housing is obtained. range of entitlements such as TANF, Program by regulation in 38 CFR Part Research supports this approach as an Social Security, the Supplemental 62. Funds made available under this effective means to end homelessness. Nutrition Assistance Program (SNAP), NOFA are subject to the requirements of Housing is not contingent on the Low Income Home Energy the aforementioned regulations and compliance with services; instead, Assistance Program (LIHEAP), the other applicable laws and regulations. participants must comply with a Earned Income Tax Credit (EITC), and F. Requirements for the Use of standard lease agreement and are local General Assistance programs. Supportive Services Grant Funds: The provided with the services and supports Grantees are expected to access the grantee’s request for funding must be that are necessary to help them do so Substance Abuse and Mental Health consistent with the limitations and uses successfully. Services Administration’s SSI/SSDI of supportive services grant funds set Grantees must develop plans that will Outreach, Access, and Recovery (SOAR) forth in 38 CFR Part 62 and this NOFA. ensure that Veteran participants have program either though community In accordance with the regulations and the level of income and economic linkages or by training staff to deliver this NOFA, the following requirements stability needed to remain in permanent SOAR services. In addition, where apply to supportive services grants housing after the conclusion of the available grantees should access awarded under this NOFA: SSVF intervention. Both employment information technology tools to support 1. Grantees may use a maximum of 10 and benefits assistance from VA and case managers in their efforts to link percent of supportive services grant non-VA sources represent a significant participants to benefits. funds for administrative costs identified underutilized source of income stability 4. Grantees are encouraged to provide, in § 62.70. for homeless Veterans. The complexity or assist participants in obtaining, legal 2. Grantees must use a minimum of 60 of program rules and the stigma some services relevant to issues that interfere percent of the temporary financial associate with entitlement programs with the participants’ ability to obtain or assistance portion of their supportive contributes to their lack of use. To this retain permanent housing. (NOTE: Legal services grant funds to serve very low- effect, grantees are encouraged to services provided may be protected income Veteran families who either (i) consider strategies that can lead to from release or review by the grantee or are homeless and scheduled to become prompt and successful access to VA under attorney-client privilege.) residents of permanent housing within employment and benefits that are Support for legal services can include 90 days pending the location or essential to retaining housing. paying for court filing fees to assist a development of housing suitable for 1. Consistent with the Housing First participant with issues that interfere permanent housing, as described in model supported by VA, grantees are with the participant’s ability to obtain or § 62.11(a)(2), or (ii) have exited expected to offer the following retain permanent housing or supportive permanent housing within the previous supportive services: housing counseling; services, including issues that affect the 90 days to seek other housing that is assisting participants in understanding participant’s employability and responsive to their needs and leases; securing utilities; making moving financial security. Grantees (in addition preferences, as described in arrangements; provide representative to employees and members of grantees) § 62.11(a)(3). (NOTE: Grantees may payee services concerning rent and may represent participants before VA request a waiver to decrease this utilities when needed; and mediation with respect to a claim for VA benefits, minimum, as discussed in section and outreach to property owners related but only if they are recognized for that V.B.3.a.) to locating or retaining housing. purpose pursuant to 38 U.S.C. chapter 3. Grantees must use a minimum of 40 Grantees may also assist participants by 59. Further, the individual providing percent of supportive services grant providing rental assistance, security or such representation must be accredited funds to provide the supportive service utility deposits, moving costs or pursuant to 38 U.S.C. chapter 59. of temporary financial assistance paid emergency supplies; or using other 5. Access to mental health and directly to a third party on behalf of a Federal resources, such as the HUD’s addiction services are required by SSVF; participant for child care, emergency ESG, or supportive services grant funds however, grantees cannot fund these housing assistance, transportation, subject to the limitations described in services directly through the SSVF rental assistance, utility-fee payment this NOFA and 38 CFR 62.34. grant. Therefore, applicants must assistance, security deposits, utility 2. As SSVF is a short-term crisis demonstrate, through either formal or deposits, moving costs, and general intervention, grantees must develop informal agreements, their ability to

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promote rapid access and engagement to participant meets at least one of the utility-fee payment assistance, security mental health and addiction services for following conditions: or utility deposits, moving costs and the Veteran and family members. (a) Has moved because of economic general housing stability assistance as 6. VA recognizes that extremely low- reasons two or more times during the 60 necessary. days immediately preceding the income Veterans, with incomes below II. Award Information 30 percent of the area median income, application for homelessness prevention face greater barriers to permanent assistance; A. Overview: This NOFA announces housing placement. In order to support (b) Is living in the home of another the availability of funds for supportive grantees’ efforts to serve this population, because of economic hardship; services grants under the SSVF Program (c) Has been notified in writing that VA has proposed new program and pertains to proposals for initial their right to occupy their current regulations that will expand temporary supportive services grant programs. Up housing or living situation will be financial assistance that may be offered to $93 million will be available through terminated within 21 days after the date to these participants. Grantees must this NOFA. consider the proposed rule when of application for assistance; (d) Lives in a hotel or motel and the B. Funding: Up to $93 million will be developing their response to this NOFA. cost of the hotel or motel stay is not paid available through this NOFA, as VA will The proposed rule was published in the by charitable organizations or by provide funds over a 3-year period for Federal Register on May 9, 2014. Federal, State, or local government non-renewable grants to eligible entities 7. Notwithstanding any other section programs for low-income individuals; proposing services for one of the 28 in this part, grantees are not authorized (e) Is exiting a publicly funded priority CoCs listed below. Currently to use SSVF funds to pay for the institution or system of care (such as a funded SSVF programs cannot apply for following: (i) Mortgage costs or costs health care facility, a mental health renewal funding through this NOFA. needed by homeowners to assist with facility, or correctional institution) Applicants are strongly encouraged to any fees, taxes, or other costs of without a stable housing plan; or include letters of support from the VA’s refinancing; (ii) construction or the cost (f) Otherwise lives in housing that has Network Homeless Coordinator or local of housing rehabilitation; (iii) credit characteristics associated with VA Medical Center Director assigned to card bills or other consumer debt; (iv) instability and an increased risk of the priority city. In addition, applicants medical or dental care and medicines; homelessness, as identified in the should seek letters of support from CoCs (v) mental health, substance use, or recipient’s approved screening tool. where priority communities are located. other therapeutic interventions designed 9. The TANF program may also be CoCs may elect to provide VA with a to treat diagnostic conditions as defined used to address the housing-related rank order of their support in lieu of in the Diagnostic and Statistical Manual needs of families who are homeless or providing individual letters of support. of Mental Disorders (NOTE: Although precariously housed and, along with Available funding for each CoC is as SSVF grant funds cannot be used to pay providing ongoing basic assistance, follows: for the treatment of mental health or provide an array of non-recurrent, short- substance use disorders, grantees are term benefits and services. Such CoC CoC name required to offer such services through benefits and services may include short- No. formal coordinated relationships with term rental or mortgage assistance (to VA and other community providers); prevent eviction or help a homeless AZ–500 .... Arizona Balance of State. CA–500 .... San Jose/Santa Clara City and (vi) home care and home health aides family secure housing), security and typically used to provide care in County. utility payments, moving assistance, CA–501 .... San Francisco. support of daily living activities (this motel and hotel vouchers, and case CA–502 .... Oakland/Alameda County. includes care that is focused on management services. For additional CA–504 .... Santa Rosa/Petaluma/Sonoma treatment for an injury or illness, information on TANF and County. rehabilitation, or other assistance homelessness, please visit the following CA–508 .... Watsonville/Santa Cruz City and generally required to assist those with link to an Information Memorandum County. handicaps or other physical limitations); issued by the United States Department CA–600 .... Los Angeles City and County. (vii) pet care; (viii) entertainment of Health and Human Services CA–601 .... San Diego City and County. CA–602 .... Santa Ana/Anaheim/Orange activities; (ix) direct cash assistance to Administration for Children and program participants; or (x) court- County. Families, Office of Family Assistance, DC–500 ... District of Columbia. ordered judgments or fines. on February 20, 2013, titled, ‘‘Use of FL–508 .... Gainesville/Alachua, Putnam 8. When serving participants who are TANF Funds to Serve Homeless Counties. residing in permanent housing, it is Families and Families at Risk of FL–519 .... Pasco County. required that the defining question to Experiencing Homelessness’’: http:// GA–500 ... Atlanta. ask is: ‘‘Would this individual or family www.acf.hhs.gov/programs/ofa/ GA–501 ... Georgia Balance of State. be homeless but for this assistance?’’ resource/tanf-acf-im-2013-01. IL–510 ...... Chicago. The grantee must use a VA approved 10. Where other funds from LA–503 .... New Orleans/Jefferson Parish. screening tool with criteria that targets community resources are not readily MD–501 ... Baltimore City. MT–500 ... Montana Statewide. those most at-risk of homelessness. To available, grantees may choose to utilize NC–501 ... Asheville/Buncombe County. qualify for SSVF services, a Veteran supportive services grants, subject to the NV–500 .... Las Vegas/Clark County. who is served under Category 1 limitations described in this NOFA and OR–502 ... Medford/Ashland/Jackson Coun- (homeless prevention), the participants in 38 CFR 62.33 and 62.34, to provide ty CoC. must not have sufficient resources or temporary financial assistance. Such OR–505 ... Oregon Balance of State. support networks (e.g., family, friends, assistance may, subject to the SC–502 .... Columbia/Midlands. faith-based or other social networks), limitations in this NOFA and 38 CFR TX–500 .... San Antonio/Bexar County. immediately available to prevent them Part 62, be paid directly to a third party TX–600 .... Dallas City & County/Irving. from becoming homeless. To further on behalf of a participant for child care, TX–607 .... Texas Balance of State. TX–700 .... City of Houston/Harris County. qualify for services under Category 1, transportation, family emergency WA–501 ... Washington Balance of State. the grantee must document that the housing assistance, rental assistance,

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C. Allocation of Funds: Funding will C. Submission Dates and Times: Philadelphia, PA 19104. Applicants be awarded under this NOFA to Applications for supportive services must submit two hard copies and two grantees for a non-renewable 3-year grants under the SSVF Program must be CDs. Applications may not be sent by period beginning approximately March received by the SSVF Program Office by facsimile (FAX). 1, 2015. The following requirements 4:00 p.m. Eastern Time on December 5, V. Application Review Information apply to supportive services grants 2014. Awards made for supportive awarded under this NOFA: services grants will fund operations A. Criteria: 1. Each grant cannot exceed $2 beginning approximately March 1, 2015, 1. VA will only score applicants that million per year ($6 million total). thorough February 28, 2018. meet the following threshold 2. In response to this NOFA, Applications must arrive as a complete requirements: applicants cannot submit more than one package. Materials arriving separately (a) The application is filed within the grant for each identified service area. will not be included in the application time period established in the NOFA, 3. Applicants should fill out separate package for consideration and may and any additional information or applications for each supportive result in the application being rejected. documentation requested by VA under services funding request. Additionally, in the interest of fairness § 62.20(c) is provided within the time D. Supportive Services Grant Award to all competing applicants, this frame established by VA; (b) The application is completed in all Period: All supportive services grants deadline is firm as to date and hour, and parts; will be for a 3-year, non-renewable VA will treat as ineligible for (c) The applicant is an eligible entity; period. consideration any application that is received after the deadline. Applicants (d) The activities for which the III. Eligibility Information should take this practice into account supportive services grant is requested and make early submission of their are eligible for funding under this part; A. Eligible Applicants: In order to be (e) The applicant’s proposed eligible, an applicant must qualify as a materials to avoid any risk of loss of eligibility brought about by participants are eligible to receive private non-profit organization (Section supportive services under this part; 501(c)(3) tax exempt status is required) unanticipated delays, computer service outages, or other delivery-related (f) The applicant agrees to comply or a consumer cooperative as has the with the requirements of this part; meaning given such term in Section 202 problems. D. Intergovernmental Review: This (g) The applicant does not have an of the Housing Act of 1959 (12 U.S.C. section is not applicable to the SSVF outstanding obligation to the Federal 1701q). In addition, tribally designated Program. Government that is in arrears and does housing entities (as defined in Section E. Funding Restrictions: not have an overdue or unsatisfactory 4 of the Native American Housing Approximately $93 million may be response to an audit; and Assistance and Self-Determination Act awarded depending on funding (h) The applicant is not in default by of 1996 (25 U.S.C. 4104)) are eligible. availability and subject to available failing to meet the requirements for any B. Cost Sharing or Matching: None. appropriations for initial supportive previous Federal assistance. IV. Application and Submission services grants to be funded under this 2. VA will use the following criteria Information NOFA. Applicants should fill out to score applicants who are applying for separate applications for each a new supportive services grant: A. Address To Request Application supportive services funding request. (a) VA will award up to 35 points Package: Download directly from the Funding will be awarded under this based on the background, qualifications, SSVF Program Web site at www.va.gov/ NOFA to grantees for a non-renewable experience, and past performance (with homeless/ssvf.asp or send a written 3-year period beginning approximately particular focus on housing placement request for an application to SSVF March 1, 2015. and retention rates for those applicants Program Office, National Center on F. Other Submission Requirements: serving homeless persons) of the Homelessness Among Veterans, 4100 1. Applicants may apply only as new applicant, and any subcontractors Chester Avenue, Suite 201, applicants using the application identified by the applicant in the Philadelphia, PA 19104. Any questions designed for new grants. supportive services grant application. regarding this process should be 2. Additional supportive services VA will consider previous work under referred to the SSVF Program Office via grant application requirements are other SSVF grant awards when scoring phone at (877) 767–0111 (toll-free specified in the initial application this section. number) or via email at [email protected]. package. Submission of an incorrect or (b) VA will award up to 25 points For detailed SSVF Program information incomplete application package will based on the applicant’s program and requirements, see 38 CFR Part 62. result in the application being rejected concept and supportive services plan. B. Content and Form of Application: during threshold review. The (c) VA will award up to 15 points Two completed collated, hard copies of application packages must contain all based on the applicant’s quality the application and two compact discs required forms and certifications. assurance and evaluation plan. (CD) containing electronic versions of Selections will be made based on (d) VA will award up to 15 points the entire application are required. Each criteria described in 38 CFR Part 62 and based on the applicant’s financial application copy must (i) be fastened this NOFA. Applicants and grantees capability and plan. with a binder clip, and (ii) contain tabs will be notified of any additional (e) VA will award up to 10 points listing the major sections of and exhibits information needed to confirm or clarify based on the applicant’s area or to the application. Each CD must be information provided in the application community linkages and relations. labeled with the applicant’s name and and the deadline by which to submit 3. VA will use the following process must contain an electronic copy of the such information. The application to select applicants to receive entire application. A budget template copies and CDs must be submitted to supportive services grants: VA will must be attached in Excel format on the the following address: SSVF Program score all applicants that meet the CD, but all other application materials Office, National Center on threshold requirements set forth in may be attached in a PDF or other Homelessness Among Veterans, 4100 § 62.21 using the scoring criteria set format. Chester Avenue, Suite 201, forth in § 62.22.

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B. Review and Selection Process: VA VI. Award Administration Information C. Reporting: VA places great will review all initial supportive emphasis on the responsibility and services grant applications in response A. Award Notices: Although subject to accountability of grantees. As described to this NOFA according to the following change, the SSVF Program Office in 38 CFR 62.63 and 62.71, VA has steps: expects to announce grant recipients for procedures in place to monitor all applicants in the second quarter of supportive services provided to 1. Score all applications that meet the fiscal year 2015 with grants beginning threshold requirements described in 38 participants and outcomes associated March 1, 2015. Prior to executing a with the supportive services provided CFR 62.21. funding agreement, VA will contact the under the SSVF Program. Applicants 2. Rank those applications who score applicants and make known the amount should be aware of the following: at least 70 cumulative points and of proposed funding and verify that the 1. Upon execution of a supportive receive at least one point under each of applicant would still like the funding. services grant agreement with VA, the categories identified for new Once VA verifies that the applicant is grantees will have a VA regional applicants in § 62.22, paragraphs (a), (b), still seeking funding, VA will execute coordinator assigned by the SSVF (c), (d), and (e). The applications will be an agreement and make payments to the Program Office who will provide ranked in order from highest to lowest grant recipient in accordance with 38 oversight and monitor supportive scores. CFR 62 and other applicable provisions services provided to participants. of this NOFA. 3. Utilize the ranked scores of 2. Grantees will be required to enter applications as the primary basis for B. Administrative and National Policy data into a Homeless Management Information System (HMIS) web-based selection. However, in accordance with Requirements: It is VA’s policy to software application. This data will § 62.23(d), VA will utilize the following support a ‘‘Housing First’’ model in consist of information on the considerations to select applicants for addressing and ending homelessness. participants served and types of funding: Housing First establishes housing stability as the primary intervention in supportive services provided by (a) Preference applications that working with homeless persons. The grantees. Grantees must treat the data provide or coordinate the provision of Housing First approach is based on for activities funded by the SSVF supportive services for very low-income research that shows that a homeless Program separate from that of activities Veteran families transitioning from individual or household’s first and funded by other programs. Grantees will homelessness to permanent housing. primary need is to obtain stable be required to work with their HMIS Consistent with this preference, housing, and that other issues that may Administrators to export client-level applicants are required to spend no less affect the household can and should be data for activities funded by the SSVF than 60 percent of all budgeted addressed as housing is obtained. Program to VA on at least a monthly temporary financial assistance on Housing is not contingent on basis. homeless participants defined in compliance with services; instead, 3. VA shall complete annual § 62.11(a)(2) and (a)(3). Waivers to this participants must comply with a monitoring evaluations of each grantee. 60 percent requirement may be standard lease agreement and are Monitoring will also include the requested when grantees can provided with the services and supports submittal of quarterly and annual demonstrate significant local progress that are necessary to help them do so financial and performance reports by towards eliminating homelessness in successfully. Research supports this the grantee. The grantee will be the target service area. Waiver requests approach as an effective means to end expected to demonstrate adherence to must include data from authoritative homelessness. the grantee’s proposed program concept, as described in the grantee’s sources such as HUD’s Annual Consistent with the Housing First Homeless Assessment Report, annual application. All grantees are subject to model supported by VA, grantees are audits conducted by VA’s Financial Point-In-Time Counts and evidence of expected to offer the following decreased demand for emergency Services Center. supportive services: housing counseling; 4. Grantees will be required to shelter and transitional housing. assisting participants in understanding Waivers for the 60 percent requirement provide each participant with a leases; securing utilities; making moving satisfaction survey which can be may also be requested for services arrangements; provide representative provided to rural Indian tribal areas and submitted by the participant directly to payee services concerning rent and VA, within 45 to 60 days of the other rural areas where shelter capacity utilities when needed; and mediation is insufficient to meet local need. participant’s entry into the grantee’s and outreach to property owners related program and again within 30 days of (b) To the extent practicable, ensure to locating or retaining housing. such participant’s pending exit from the that supportive services grants are Grantees may also assist participants by grantee’s program. In all cases there equitably distributed across geographic providing rental assistance, security or should be a minimum of 30 days regions, including rural communities utility deposits, moving costs or between administration of the two and tribal lands. This equitable emergency supplies, using other Federal surveys. In cases when a brief SSVF distribution criteria will be used to resources, such as the ESG, or intervention results in the first survey ensure that SSVF resources are provided supportive services grant funds subject being administered 30 days after exit, to those communities with the highest to the limitations described in this only one survey shall be provided. need as identified by authoritative NOFA and 38 CFR 62.34. 5. Grantees will be assessed based on sources such as HUD’s Annual As SSVF grants cannot be used to their ability to meet critical performance Homeless Assessment Report, annual fund treatment for mental health or measures. In addition to meeting Point-In-Time Counts and VA Homeless substance use disorders, applicants program requirements defined by the Registry data. must provide evidence that they can regulations and NOFA, grantees will be 4. Subject to the considerations noted provide access to such services to all assessed on their ability to place in paragraph B.3 above, VA will fund program participants through formal participants into housing and the the highest-ranked applications for and informal agreements with housing retention rates of participants which funding is available. community providers. served. Higher placement for homeless

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participants and higher housing most recently published by HUD for requests for supportive services grant retention rates for at-risk participants programs under section 8 of the United funds may not exceed 60 percent of the are expected for very-low income States Housing Act of 1937 (42 U.S.C. total supportive services grant award Veteran families when compared to 1437f) (http://www.huduser.org). without written approval by VA. 2. Veterans with at least one extremely low-income Veteran families 3. By the end of the third quarter of with incomes below 30 percent of the dependent family member. the grantee’s supportive services grant area median income. 3. Veterans returning from Operation Enduring Freedom, Operation Iraqi award period, the grantee’s cumulative VII. Agency Contact Freedom, or Operation New Dawn. requests for supportive services grant funds may not exceed 80 percent of the FOR FURTHER INFORMATION CONTACT: John 4. Veteran families located in a Kuhn, Supportive SSVF Program Office, community, as defined by HUD’s CoC, total supportive services grant award National Center on Homelessness not currently served by a SSVF grantee. without written approval by VA. Among Veterans, 4100 Chester Avenue, 5. Veteran families located in a 4. By the end of the fourth quarter of Suite 201, Philadelphia, PA 19104; (877) community, as defined by HUD’s CoC, the grantee’s supportive services grant 767–0111 (this is a toll-free number); where current level of SSVF services is award period, the grantee’s cumulative [email protected]. not sufficient to meet demand of requests for supportive services grant Category 2 and 3 (currently homeless) VIII. Other Information funds may not exceed 100 percent of the Veteran families. total supportive services grant award. A. VA’s Goals and Objectives for 6. Veteran families located in a rural Funds Awarded Under this NOFA: In area. Signing Authority accordance with 38 CFR 62.22(b)(6), VA 7. Veteran families located on Indian will evaluate an applicant’s ability to Tribal Property. The Secretary of Veterans Affairs, or meet VA’s goals and objectives for the B. Payments of Supportive Services designee, approved this document and SSVF Program. VA’s goals and Grant Funds: Grantees will receive authorized the undersigned to sign and objectives include the provision of payments electronically through the submit the document to the Office of the supportive services designed to enhance U.S. Department of Health and Human Federal Register for publication the housing stability and independent Services Payment Management System. electronically as an official document of living skills of very low-income Veteran Grantees will have the ability to request the Department of Veterans Affairs. Jose families occupying permanent housing payments as frequently as they choose D. Riojas, Chief of Staff, Department of across geographic regions. For purposes subject to the following limitations: Veterans Affairs, approved this of this NOFA, VA’s goals and objectives 1. During the first quarter of the document on October 3, 2014, for also include the provision of supportive grantee’s supportive services grant publication. services designed to rapidly re-house or award period, the grantee’s cumulative Dated: October 7, 2014. prevent homelessness among people in requests for supportive services grant the following target populations who funds may not exceed 35 percent of the William F. Russo, also meet all requirements for being part total supportive services grant award Acting Director, Office of Regulation Policy of a very low-income Veteran family without written approval by VA. & Management, Office of the General Counsel, occupying permanent housing: 2. By the end of the second quarter of Department of Veterans Affairs. 1. Veteran families earning less than the grantee’s supportive services grant [FR Doc. 2014–24281 Filed 10–9–14; 8:45 am] 30 percent of area median income as award period, the grantee’s cumulative BILLING CODE 8320–01–P

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Part II

Department of Labor

Occupational Safety and Health Administration 29 CFR Parts 1910, 1915, 1917, et al. Chemical Management and Permissible Exposure Limits (PELs); Proposed Rule

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DEPARTMENT OF LABOR faxed to the OSHA Docket Office at Docket: To read or download (202) 693–1648. submissions or other material in the Occupational Safety and Health Mail, hand delivery, express mail, or docket go to: www.regulations.gov or the Administration messenger or courier service: Copies OSHA Docket Office at the address must be submitted in triplicate (3) to the above. All documents in the docket are 29 CFR Parts 1910, 1915, 1917, 1918, OSHA Docket Office, Docket No. listed in the index; however, some and 1926 OSHA–2012–0023, U.S. Department of information (e.g. copyrighted materials) Labor, Room N–2625, 200 Constitution is not publicly available to read or [Docket No. OSHA 2012–0023] Avenue NW., Washington, DC 20210. download through the Web site. All submissions, including copyrighted RIN 1218–AC74 Deliveries (hand, express mail, messenger, and courier service) are material, are available for inspection Chemical Management and accepted during the Department of and copying at the OSHA Docket Office. Permissible Exposure Limits (PELs) Labor and Docket Office’s normal FOR FURTHER INFORMATION CONTACT: business hours, 8:15 a.m. to 4:45 p.m. General information and press inquiries: AGENCY: Occupational Safety and Health (E.T.). Mr. Frank Meilinger, Director, Office of Administration (OSHA), DOL. Instructions: All submissions must Communications, U. S. Department of ACTION: Request for Information (RFI). include the Agency name and the OSHA Labor, Room N–3647, 200 Constitution docket number (i.e. OSHA–2012–0023). Avenue NW., Washington, DC 20210, SUMMARY: OSHA is reviewing its overall Submissions, including any personal telephone (202) 693–1999; email approach to managing chemical information provided, are placed in the [email protected]. Technical exposures in the workplace and seeks public docket without change and may information: Ms. Lyn Penniman, Office stakeholder input about more effective be made available online at: of Physical Hazards, OSHA, Room N– and efficient approaches that addresses www.regulations.gov. OSHA cautions 3718, 200 Constitution Avenue NW., challenges found with the current against the inclusion of personally Washington, DC 20210, telephone (202) regulatory approach. This review identifiable information (e.g., social 693–1950; email [email protected]. involves considering issues related to security number, birth dates). SUPPLEMENTARY INFORMATION: updating permissible exposure limits If you submit scientific or technical Table of Contents (PELs), as well as examining other studies or other results of scientific strategies that could be implemented to research, OSHA requests that you also I. Purpose address workplace conditions where provide the following information II. Legal Requirements for OSHA Standards workers are exposed to chemicals. The where it is available: (1) Identification of A. Significant Risk of a Material notice details the role of past court the funding source(s) and sponsoring Impairment: The Benzene Case decisions on the Agency’s current B. Technological and Economic Feasibility organization(s) of the research; (2) the C. The Substantial Evidence Test approach to chemical management for extent to which the research findings the purpose of informing stakeholders of III. History of OSHA’s Efforts To Establish were reviewed by a potentially affected PELs the legal framework in which the party prior to publication or submission A. Adopting the PELs in 1971 Agency must operate. It then describes to the docket, and identification of any B. The 1989 PELs Update possible modifications of existing such parties; and (3) the nature of any C. The 1989 PELs Update is Vacated processes, along with potential new financial relationships (e.g., consulting D. Revising OSHA’s PELs in the Wake of the Eleventh Circuit Decision sources of data and alternative agreements, expert witness support, or approaches the Agency may consider. IV. Reconsideration of Current Rulemaking research funding) between investigators Processes The Agency is particularly interested in who conducted the research and any information about how it may take A. Considerations for Risk Assessment organization(s) or entities having an Methods advantage of newer approaches, given interest in the rulemaking. If you are 1. Current Quantitative Risk Assessment its legal requirements. This RFI is submitting comments or testimony on Methods Typically Used by OSHA To concerned primarily with chemicals the Agency’s scientific and technical Support 6(b) Single Substance that cause adverse health effects from analyses, OSHA requests that you Rulemaking long-term occupational exposure, and is disclose: (1) The nature of any financial 2. Proposed Tiered Approach to Risk not related to activities being conducted Assessment in Support of Updating PELs relationships you may have with any for Chemical Substances under Executive Order 13650, organization(s) or entities having an Improving Chemical Facility Safety and a. General Description and Rationale of interest in the rulemaking; and (2) the Tiered Approach Security. extent to which your comments or b. Hazard Identification and Dose– DATES: Comments must be submitted by testimony were reviewed by an Response Analysis in the Observed the following dates: interested party prior to its submission. Range Hard copy: must be submitted Disclosure of such information is c. Derivation of Low-End Toxicity (postmarked or sent) by April 8, 2015. intended to promote transparency and Exposure (LETE) Electronic transmission or facsimile: d. Margin of Exposure (MOE) as a Decision scientific integrity of data and technical Tool for Low Dose Extrapolation must be submitted by April 8, 2015. information submitted to the record. e. Extrapolation Below the Observed Range ADDRESSES: Comments may be This request is consistent with 3. Chemical Grouping for Risk Assessment submitted by any of the following Executive Order 13563, issued on a. Background on Chemical Grouping methods: January 18, 2011, which instructs b. Methods of Gap Analysis and Filling Electronically: Submit comments agencies to ensure the objectivity of any i. Read-Across Method electronically at: www.regulations.gov, scientific and technological information ii. Trend Analysis which is the Federal eRulemaking used to support their regulatory actions. iii. QSAR iv. Threshold of Toxicological Concern Portal. Follow the instructions online OSHA emphasizes that all material 4. Use of Systems Biology and Other for making electronic submissions. submitted to the rulemaking record will Emerging Test Data in Risk Assessment Fax: Submissions no longer than 10- be considered by the Agency to develop B. Considerations for Technological pages (including attachments) may be the final rule and supporting analyses. Feasibility

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1. Legal Background of Technological CDR Chemical Data Reporting NORA National Occupational Research Feasibility CFD Computational Fluid Dynamics Agenda (NIOSH) 2. Current Methodology of the COSHH Control of Substances Hazardous to NPRM Notice of Proposed Rulemaking Technological Feasibility Requirement Health (U.K.) (OSHA) 3. Role of Exposure Modeling in CrVI Hexavalent Chromium NRC National Research Council (U.S., Technological Feasibility CSTEE Scientific Committee on Toxicity, private) a. Computational Fluid Dynamics Ecotoxicity and the Environment (E.U.) NTP National Toxicology Program (U.S.) Modeling To Predict Workplace CT Control Technology OECD Organization for Economic Exposures DfE Design for the Environment (EPA) Cooperation and Development (multiple b. The Potential Role of REACH in DHHS Department of Health and Human countries, private) Technological Feasibility Services (U.S.) OEL Occupational Exposure Limit c. Technological Feasibility Analysis With DMEL Derived Minimal Effect Level OPPT Office of Pollution Prevention and a Focus on Industries with Highest DNEL Derived No Effect Level Toxics (EPA) Exposures DOE Washington Department of Ecology OSHA Occupational Safety and Health C. Economic Feasibility for Health DOL Department of Labor (U.S.) Administration Standards ECB European Chemicals Bureau (E.U.) OTA Massachusetts Office of Technical 1. OSHA’s Current Approach to Economic ECHA European Chemicals Agency (E.U.) Assistance and Technology Feasibility EPA Environmental Protection Agency PBT Persistent, Bioaccumulative and Toxic 2. Alternative Approaches to Formulating (U.S.) PBZ Personal Breathing Zone Health Standards that Might Accelerate ES Exposure Scenario PCRARM (EPA) Presidential/Congressional the Economic Feasibility Analysis EU European Union Commission on Risk Assessment and Risk 3. Alternative Analytical Approaches to FDA Food and Drug Administration (U.S.) Management Economic Feasibility in Health GAO Government Accountability Office PEL Permissible Exposure Limits Standards (U.S.) PMN Pre-manufacture Notification (EPA) 4. Approaches to Economic Feasibility GHS Globally Harmonized System for the PNEC Predicted No Effect Concentration Analysis for a Comprehensive PELs Classification and Labeling of Chemicals POD Point of Departure Update HazCom 2012 Revised OSHA Hazard PPE Personal Protective Equipment V. Recent Developments and Potential Communication Standard PPM Parts Per Million Alternative Approaches HCS Hazard Communication Standard QCAT Quick Chemical Assessment Tool A. Sources of Information About Chemical (OSHA) (DOE) Hazards HHE Health Hazard Evaluation (NIOSH) QSAR Quantitative Structure-Activity 1. EPA’s High Production Volume HPV High Production Volume (EPA) Relationship Chemicals HPVIS High Production Volume REACH Registration, Evaluation, 2. EPA’s CompTox and ToxCast Information System (EPA) Authorization and Restriction of Chemicals 3. Production and Use Data Under EPA’s HSE Health and Safety Executive (U.K.) (E.U.) Chemical Data Reporting Rule HTS High Throughput Screening REL Recommended Exposure Level 4. Structure-Activity Data for Chemical IFA Federation of Institutions for Statutory RfC Reference Concentration Grouping Accident Insurance and Prevention RFI Request for Information 5. REACH: Registration, Evaluation, (Germany) SAR Structural Activity Relation Authorization, and Restriction of IMIS Integrated Management Information SBREFA Small Business Regulatory Chemicals in the European Union (EU) System (OSHA) Enforcement Fairness Act (U.S.) B. Non-OEL Approaches to Chemical IPCS World Health Organization SDS Safety Data Sheet Management International Programme on Chemical SEP Special Emphasis Program 1. Informed Substitution Safety SIC Standards Industrial Classification 2. Hazard Communication and the Globally IRIS Integrated Risk Information System SIDS Screening Information Data Set Harmonized System (GHS) (EPA) (OECD) 3. Health Hazard Banding ISTAS Institute of Work, Environment, and STEL Short-term Exposure Limit 4. Occupational Exposure Bands Health (Spain) TLV Threshold Value Limit (ACGIH) 5. Control Banding ITC Interagency Testing Committee (EPA TSCA Toxic Substances Control Act (EPA) 6. Task-based Exposure Assessment and TSCA) TTC Threshold of Toxicological Concern Control Approaches IUR Inventory Update Reporting TWA Time-weighted Average VI. Authority and Signature LETE Low-end Toxicity Exposure vPvB Very Persistent and Very Appendix A: History, Legal Background and LOAEL Lowest Observed Adverse Effect Bioaccumulative Significant Court Decisions Level WEEL Workplace Environmental Exposure Appendix B: 1989 PELs Table LOD Limit of Detection Level (AIHA) List of References by Exhibit Number LTFE Lowest Technologically Feasible Exposure I. Purpose List of Acronyms: Request for MA DEP Massachusetts Department of The purpose of this Request for Information on Chemical Management Environmental Protection Information (RFI) is to present and Permissible Exposure Limits MIBK Methyl isobutyl ketone background information and request MOA Modes of Action ACGIH American Conference of MOE Margin of Exposure comment on a number of technical Governmental Industrial Hygienists MRL Minimal Risk Level issues related to aspects of OSHA’s ADI Allowable Daily Intake NAICS North American Industry rulemaking process for chemical AIHA American Industrial Hygiene Classification System hazards in the workplace. In particular, Association NCGC National Institutes of Health the purpose of the RFI is to: AISI American Iron and Steel Institute Chemical Genomics Center • Review OSHA’s current approach to ANSI American National Standards NIEHS National Institute of Environmental chemical regulation in its historical Institute Health Sciences (U.S.) context; APHA American Public Health Association NIOSH National Institute for Occupational • Describe and explore other possible ATSDR Agency for Toxic Substances Safety and Health (U.S.) approaches that may be relevant to Disease Registry NIST National Institute of Standards and BAuA Federal Institute for Occupational Technology (U.S.) future strategies to reduce and control Safety and Health (Germany) NMCSD Navy Medical Center San Diego exposure to chemicals in the workplace; BMD Benchmark Dose NOAEL No Observed Adverse Effect Level and BMDL Benchmark Dose Low NOES National Occupational Exposure • Inform the public and obtain public BMR Benchmark Response Survey input on the best approaches for the

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Agency to advance the development and 2332; Ex. #7). Appendix B to this changing or improving OSHA policies implementation of approaches to reduce Request for Information contains the and procedures regarding the derivation or eliminate harmful chemical table of PELs from the 1989 Air and implementation of PELs, as well as exposures in the 21st century Contaminants Final Rule. The table pursuing new strategies to improve workplace. includes both the PELs originally chemical management in the workplace. By all estimates, the number of adopted by OSHA in 1971 and the PELs The Agency is publishing this notice to chemicals found in workplaces today far established under the 1989 final rule. inform the public of its consideration of exceeds the number which OSHA While the Agency presented analyses of these issues, as well as solicit public regulates, and is growing rapidly. There the risks associated with these input that can be used to inform further is no single source recording all chemicals, as well as the analyses of the deliberations, and the determination of chemicals available in commerce. economic and technological feasibility an appropriate approach. Through its Chemical Data Reporting of the proposed limits for these II. Legal Requirements for OSHA Rule, EPA collects information on chemicals, these analyses were not as Standards chemicals manufactured or imported at detailed as those OSHA would have a single site at 25,000 pounds or greater; prepared for individual rulemakings. In the past, OSHA has received many currently this number exceeds 7,674 The final rule was challenged by both suggestions for updating its PELs, but chemicals (U.S. EPA, 2013a; Ex. #1) industry and labor groups. The 1989 these suggestions often do not take The American Chemistry Council PEL update was vacated by the Eleventh account of the requirements imposed by estimates that approximately 8,300 Circuit Court of Appeals because it the OSH Act, and thus have been of chemicals (or about 10 percent of the found that OSHA had not made limited value to OSHA. OSHA is 87,000 chemicals in the TSCA sufficiently detailed findings that each providing an overview of its legal inventory) are actually in commerce in new PEL would eliminate significant requirements for setting standards in significant amounts (Hogue, 2007; Ex. risk and would be feasible in each order to help commenters responding to #2). By contrast the European Chemicals industry in which the chemical was this RFI to provide suggestions that can Agency database contains 10,203 unique used. (AFL–CIO v. OSHA, 965 F.2d 962 satisfy these requirements. This section substances (as of 9/12/2013) (ECHA, (11th Cir. 1992) (the Air Contaminants summarizes OSHA’s legal requirements, 2013; Ex. #3). Of these, OSHA has case; Ex. #8). This decision is discussed which are discussed in greater detail in occupational exposure limits for only further below and in Appendix A. Appendix A. The next section provides about 470 substances. Most of these are Despite these challenges, health an overview of OSHA’s previous listed as simple limits and appear in professionals and labor and industry attempts to update the PELs. tables (referred to as ‘‘Z-tables’’) in 29 groups have continued to support Section 6(b) of the OSH Act (Ex. #9) CFR 1910.1000, Air Contaminants, addressing PELs which may be outdated provides OSHA with the authority to Subpart Z, Toxic and Hazardous and or inconsistent with the best promulgate health standards. It specifies Substances; Ex. #4. Approximately 30 available current science. The 1989 Air procedures that OSHA must use to have been adopted by OSHA as a part Contaminants rulemaking effort was promulgate, modify, or revoke its of a comprehensive standard, and supported by the American Industrial standards, including publishing the include a number of additional Hygiene Association (AIHA), the proposed rule in the Federal Register, requirements such as regulated areas, air American Conference of Governmental providing interested persons an sampling, medical monitoring, and Industrial Hygienists (ACGIH), and the opportunity to comment, and holding a training However, with few exceptions, American Public Health Association public hearing upon request. However, OSHA’s permissible exposure limits, (APHA), among many other professional much of the labor and analysis that goes (PELs), which specify the amount of a organizations and associations into the final rule starts before the particular chemical substance allowed representing both industry and labor. In publication of the proposal. Section in workplace air, have not been updated an October 2012 survey, members of the 6(b)(5) of the Act specifies: since they were established in 1971 AIHA identified updating OSHA PELs The Secretary, in promulgating standards under expedited procedures available in as their number one policy priority. The dealing with toxic materials or harmful the short period after the OSH Act’s U.S. Chamber of Commerce, in a letter physical agents under this subsection, shall adoption (see 29 CFR 1910.1000; Ex. #4, dated April 8, 2011 to then Deputy set the standard which most adequately 1915.1000; Ex. #5, and 1926.55; Ex. #6). Secretary of Labor, Seth Harris, also assures, to the extent feasible, on the basis of Yet, in many instances, scientific supported updating OSHA’s PELs. the best available evidence, that no employee evidence has accumulated suggesting Much has changed in the world since will suffer material impairment of health or that the current limits are not the OSH Act was signed in 1970. functional capacity even if such employee has regular exposure to the hazard dealt with sufficiently protective. Although OSHA However, workers are essentially by such standard for the period of his has attempted to update its PELs, the covered by the same PELs as they were working life. Development of standards Agency has not been successful, except forty years ago. And while OSHA has under this subsection shall be based upon through the promulgation of a relatively been given no new tools or increased research, demonstrations, experiments, and few substance-specific health standard resources to control workplace such other information as may be rulemakings (e.g., benzene, cadmium, exposures, it has had to conduct appropriate. In addition to the attainment of lead, and asbestos). increasingly complex analyses, which the highest degree of health and safety The most significant effort to update has effectively slowed the process. The protection for the employee, other considerations shall be the latest available the PELs occurred in 1989 when OSHA purpose of this RFI is for OSHA to scientific data in the field, the feasibility of tried to update many of its outdated solicit information as to the best the standards, and experience gained under PELs and to create new PELs for other approach(es) for the Agency to help this and other health and safety laws. substances in a single rulemaking employers and employees devise and Whenever practicable, the standard covering general industry PELs. After implement risk management strategies promulgated shall be expressed in terms of public notice and comment, the Agency to reduce or eliminate chemical objective criteria and of the performance published a general industry rule that exposures in the 21st century workplace desired. lowered PELs for 212 chemicals and environment. This is likely to involve a In general, as this provision has been added new PELs for 164 more (54 FR multi-faceted plan that may include construed by the courts, any workplace

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health standard adopted by OSHA must lessened by a change in practices’’ require industry to meet PELs never meet the following requirements: before it can adopt a new standard. Id. attained anywhere.’’ Id. at 1264–65. (1) The standard must substantially Although the Court declined to Some courts have required OSHA to reduce a significant risk of material establish a set test for determining determine whether a standard is harm. whether a workplace is unsafe, it did technologically feasible on an industry- (2) Compliance with the standard state that a significant risk was one that by-industry basis, Color Pigments must be technically feasible. This means a reasonable person would consider Manufacturers Assoc. v. OSHA, 16 F.3d that the protective measures required by significant and ‘‘take appropriate steps 1157, 1162–63 (11th Cir. 1994; Ex. #13); the standard currently exist, can be to decrease or eliminate.’’ 448 U.S. at AFL–CIO v. OSHA, 965, F.2d 962, 981– brought into existence with available 655. For example, it said, a one in a 82 (11th Cir. 1992) (Air Contaminants; technology, or can be created with 1,000 risk would satisfy the Ex. #8). However, another court has technology that can reasonably be requirement. However, this example upheld technological feasibility findings developed. was merely an illustration, not a hard based on the nature of an activity across (3) Compliance with the standard line rule. The Court made it clear that many industries rather than on an must be economically feasible. This determining whether a risk was industry-by-industry basis, Public means that the standard will not ‘‘significant’’ was not a ‘‘mathematical Citizen Health Research Group v. threaten the industry’s long term straitjacket’’ and did not require the United States Department of Labor, 557 profitability or substantially alter its Agency to calculate the exact F.3d 165,178–79 (3d Cir. 2009; Ex. #14). With respect to economic feasibility, competitive structure. probability of harm. Id. The 1 ppm PEL the courts have stated ‘‘A standard is (4) It must reduce risk of adverse was vacated because OSHA had not feasible if it does not threaten massive health to workers to the extent feasible. made a significant risk finding at the 10 dislocation to . . . or imperil the ppm level. (5) The standard must be supported existence of the industry.’’ Lead I, 647 by substantial evidence in the record, Following the Benzene case, OSHA F.2d at 1265 (Ex. #12). In order to show consistent with prior agency practice or has satisfied the significant risk this, OSHA should ‘‘construct a is supported by some justification for requirement by estimating the risk to reasonable estimate of compliance costs departing from that practice. workers subject to a lifetime of exposure and demonstrate a reasonable likelihood The significant risk, economic and at various possible exposure levels. that these costs will not threaten the technological feasibility, and substantial These estimates have typically been existence or competitive structure of an evidence requirements are of particular based on quantitative risk assessments industry.’’ Id. at 1266. However, ‘‘[T]he relevance in setting PELs, and are in which OSHA, as a general policy, has court probably cannot expect hard and discussed further below. considered an excess risk of one death precise estimates of costs. Nevertheless, per 1000 workers over a 45-year the agency must of course provide a A. Significant Risk of a Material working lifetime as clearly representing Impairment: The Benzene Case reasonable assessment of the likely a significant risk. However, the Benzene range of costs of its standard, and the The significant risk requirement was case does not require OSHA to use such likely effects of those costs on the first articulated in a plurality decision of a benchmark. In the past, OSHA has industry.’’ Id. the Supreme Court in Industrial Union stated that a lower risk of death could While OSHA is not required to show Department, AFL–CIO v. American be considered significant. See, e.g., that all companies within an industry Petroleum Institute, 448 U.S. 607 (1980), Preamble to Formaldehyde Standard, 52 will be able to bear the burden of commonly referred to as the Benzene FR 46168, 46234 (suggesting that risk compliance, at least one court has held case. The petitioners challenged approaching six in a million could be that OSHA is required to show that the OSHA’s rule lowering the PEL for viewed as significant). (Ex. #11) rule is economically feasible on an benzene from 10 ppm to 1 ppm. In B. Technological and Economic industry-by-industry basis. Air support of the new PEL, OSHA found Feasibility Contaminants, 965 F.2d at 982, 986. (Ex. that benzene caused leukemia and that #8) the evidence did not show that there Under section 6(b)(5) of the Act, a was a safe threshold exposure level standard must protect against significant C. The Substantial Evidence Test below which no excess leukemia would risk, ‘‘to the extent feasible, and The ‘‘substantial evidence test’’ is occur; OSHA chose the new PEL of 1 feasibility is understood to have both used by the courts to determine whether ppm as the lowest feasible exposure technological and economic aspects. A OSHA has reached its burden of proof level. The Benzene Court rejected standard is technologically feasible if ‘‘a for policy decisions and factual OSHA’s approach, finding that the OSH typical firm will be able to develop and determinations. ‘‘Substantial evidence’’ Act only required that employers ensure install engineering and work practice is defined as ‘‘such relevant evidence as that their workplaces are safe, that is, controls that can meet the PEL in most a reasonable mind might accept as that their workers are not exposed to operations.’’ United Steelworkers v. adequate to support a conclusion.’’ ‘‘significant risk[s] of harm.’’ 448 U.S. at Marshall, 647 F.2d 1189, 1272 (D.C. Cir. American Textile Mfrs. Inst., Inc. v. 642 (Ex. #10). The Court also made it 1981) (‘‘Lead I’’; Ex. #12). OSHA must Donovan, 452 U.S. 490, 522 (1981; Ex. clear that it is OSHA’s burden to show the existence of ‘‘technology that #15) (quoting Universal Camera Corp. v. establish that a significant risk is is either already in use or has been NLRB, 340 U.S. 474, 477 (1951); Ex. present at the current standard before conceived and is reasonably capable of #16). The substantial evidence test does lowering a PEL, stating that the burden experimental refinement and not require ‘‘scientific certainty’’ before of proof is normally on the proponent. distribution within the standard’s promulgating a health standard (AFL– Thus, the Court held, before deadlines.’’ Id. Where the Agency CIO v. American Petroleum Institute, promulgating a health standard, OSHA presents ‘‘substantial evidence that 448 U.S. 607, 656 (1980); Ex. 10), but is required to make a ‘‘threshold finding companies acting vigorously and in the test does require OSHA to ‘‘identify that a place of employment is unsafe— good faith can develop the technology,’’ relevant factual evidence, to explain the in the sense that significant risks are the Agency is not bound to the logic and the policies underlying any present and can be eliminated or technological status quo, and ‘‘can legislative choice, to state candidly any

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assumptions on which it relies, and to Contaminants final rule was only for each individual substance, discussed present its reasons for rejecting intended to update existing PELs or to over 2,000 studies, reviewed and significant contrary evidence and add PELs for substances within addressed all major comments argument.’’ Lead I, 647 F.2d. at 1207. established boundaries. After extensive submitted to the record, and provided a (Ex. #12) review of all available sources of rationale for each new PEL chosen. occupational exposure limits (OELs), OSHA estimated that over 21 million III. History of OSHA’s Efforts To OSHA selected the ACGIH’s 1987–88 employees were potentially exposed to Establish PELs TLVs as the boundaries for identifying hazardous substances in the workplace The history of OSHA’s PELs has three the substances that would be included and over 4.5 million employees were stages. First, OSHA adopted its current in the proposed rule. OSHA proposed exposed to levels above the applicable PELs in 1971, shortly after coming into 212 more protective PELs and new PELs exposure limits. OSHA projected that existence. Second, OSHA attempted to for 164 substances not previously the final rule would result in a potential update its PELs wholesale in 1989, but regulated. In general, rather than reduction of over 55,000 lost workdays that effort was rejected by the Eleventh performing a quantitative risk due to illnesses per year and that annual Circuit Court of Appeals in 1992. Third, assessment for each chemical, the compliance with this final rule would OSHA has made subsequent, smaller agency looked at whether studies prevent an average of 683 fatalities efforts to update certain PELs, but those showed excess effects of concern at annually from exposures to hazardous efforts have never come to fruition. This concentrations lower than allowed substances. history is summarized below, and under the existing standard. Where they C. The 1989 PELs Update Is Vacated by discussed in further detail in Appendix did, OSHA made a significant risk the Court of Appeals A. finding and either set a PEL (where The update to the Air Contaminants A. Adopting the PELs in 1971 none existed previously) or lowered the existing PEL. These new PELs were standard generally received widespread Under section 6(a), OSHA was based on Agency judgment, taking into support from both industry and labor. permitted an initial two-year window account the existing studies and, as However, there was dissatisfaction on after the passage of the OSH Act to appropriate, safety factors. Safety factors the part of some industry adopt ‘‘any national consensus standard (also called uncertainty factors) are representatives and union leaders, who and any established Federal standard’’ applied to the lowest level an effect is brought petitions for review challenging 29 U.S.C 655(6)(a). OSHA used this seen or to a level where no effects are the standard. For example, some authority in 1971 to establish PELs that seen to derive a PEL. industry petitioners argued that OSHA’s were adopted from federal health In order to determine whether the Air use of generic findings, the inclusion of standards originally set by the Contaminants rule was feasible, OSHA so many substances in one rulemaking, Department of Labor through the Walsh- prepared the regulatory impact analysis. and the allegedly insufficient time Healy Act, in which approximately 400 As part of the analysis, OSHA provided for comment by interested occupational exposure limits were performed an industry survey as well as parties created a record inadequate to selected based on ACGIH’s 1968 list of site visits. The survey was the largest support the new set of PELs. In contrast, Threshold Limit Values (TLVs). In survey ever conducted by OSHA and the unions challenged the approach addition, about 25 additional exposure included responses from 5,700 firms in used by OSHA to promulgate the limits recommended by the American industries believed to use chemicals standard and argued that several PELs Standards Association (now called the addressed in the scope of the Air were not protective enough. The unions American National Standards Institute) Contaminants proposal. (Ex. #18) It was also asserted that OSHA’s failure to (ANSI), were adopted as national designed to focus on industry sectors include any ancillary provisions, such consensus standards. that potentially had the highest as exposure monitoring and medical These standards were intended to compliance costs, identified through an surveillance, prevented employers from provide initial protections for workers analysis of existing exposure data at the ensuring the exposure limits were not from what the Congress deemed to be four-digit SIC (Standards Industrial exceeded, and resulted in less- the most dangerous workplace threats. Classification) code level. OSHA protective PELs. Congress found it was ‘‘essential that analyzed the data collected to determine Although only 23 of the 428 PELs such standards be constantly improved whether the updated PELs were both were challenged, the court ultimately and replaced as new knowledge and technologically and economically decided to vacate the entire rulemaking, techniques are developed.’’ S. Rep. 91– feasible for each industry sector finding that ‘‘OSHA [had] not 1282 at 6. (Ex. #17) However, because covered. sufficiently explained or supported its OSHA has been unable to update the For technological feasibility, OSHA threshold determination that exposure PELs, they remain frozen at the levels at found that ‘‘in the overwhelming to these substances at previous levels which they were initially adopted. majority of situations where air posed a significant risk of these material OSHA’s PELs are also largely based on contaminants [were] encountered by health impairments or that the new acute health effects and do not take into workers, compliance [could] be standard eliminates or reduces that risk consideration newer research regarding achieved by applying known to the extent feasible.’’ Air chronic health effects occurring at lower engineering control methods, and work Contaminants 965 F.2d at 986–987; Ex. occupational exposures. practice improvements.’’ 54 FR at 2789; #8 Ex. #7. For economic feasibility, OSHA With respect to significant risk, the B. The 1989 PELs Update assessed the economic impact of the court held that OSHA had failed to In 1989, OSHA published the Air standard on industry profits at the two- ‘‘explain why the studies mandated a Contaminants final rule, which remains digit SIC code level, and found the particular PEL chosen.’’ Id. at 976. the Agency’s most significant attempt at economic impact not to be significant, Specifically, the court stated that OSHA updating the PELs (54 FR 2332). (Ex. #7) and the new standard therefore failed to quantify the risk from Unlike typical substance-specific economically feasible. individual substances and merely rulemakings, where OSHA develops a In the Air Contaminants final rule, provided conclusory statements that the comprehensive standard, the Air OSHA summarized the health evidence new PEL would reduce a significant risk

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of material health effects.’’ Id. at 975. estimates of cost can be extremely (iii) hydrazine, (iv) perchloroethylene, Further, the court rejected OSHA’s misleading in assessing the impact of (v) manganese, (vi) trimellitic argument that it had relied on safety particular standards on individual anhydride, and (vii) chloroprene. factors in setting the new PELs, stating industries’’ the court said, and Quantitative risk assessments were that OSHA had not adequately ‘‘analyzing the economic impact for an performed in-house, and research supported their use. The court observed entire sector could conceal particular (including site visits) was undertaken to that ‘‘the difference between the level industries laboring under special collect detailed data on uses, worker shown by the evidence and the final disabilities and likely to fail as a result exposures, exposure control technology PEL is sometimes substantial.’’ Id. at of enforcement.’’ Id. While OSHA might effectiveness, and economic 978. It said that OSHA had not ‘‘find and explain that certain impacts characteristics of affected industries. indicated ‘‘how the existing evidence and standards do apply to entire sectors The research and analysis were for individual substances was of an industry’’ if ‘‘coupled with a carried out over several years, after inadequate to show the extent of risk for showing that there are no which OSHA decided not to proceed these factors’’ and that the agency had disproportionately affected industries with rulemaking. (Ex. #22) This ‘‘failed to explain the method by which within the group,’’ OSHA had not decision was influenced by findings that its safety factors were determined.’’ Id. explained why its use of such a ‘‘broad (i) prevalence and intensity of worker ‘‘OSHA may use assumptions but only grouping was appropriate.’’ Id. at 982 exposures for some of the substances to the extent that those assumptions n.28, 983. (e.g., carbon disulfide and hydrazine) have some basis in reputable scientific had declined substantially since the D. Revising OSHA’s PELs in the Wake of evidence,’’ the court concluded. Id. at 1989 rule was promulgated; (ii) industry the Eleventh Circuit Decision 978–79. had voluntarily implemented controls to The Eleventh Circuit court also In the wake of the Eleventh Circuit’s reduce the exposure to safe levels; and rejected OSHA’s technological decision, OSHA has generally pursued a (iii) for others, substantial Agency feasibility findings. The Agency had conservative course in satisfying its resources would have been required to made these findings mainly at the two- judicially imposed analytical burdens. fully assess technological and economic digit SIC level, but also at the three- and The set of resulting analytical impacts. four- digit level where appropriate given approaches OSHA has engaged in is In 1997, OSHA held another meeting the processes involved. The court highly resource-intensive and has with industry and labor on the proposed rejected this approach, finding that constrained OSHA’s ability to prioritize PEL development process. Although the OSHA failed to make industry-specific its regulatory efforts based on risk of project did not result in a rulemaking to findings or identify the specific harm to workers. In 1995, OSHA made revise the PELs, OSHA gained valuable technologies capable of meeting the its first attempt following the Air experience in developing useful proposed limit in industry-specific Contaminants ruling to update a smaller approaches for quantifying non-cancer operations. Id. at 981. While OSHA had number of PELs using a more rigorous health risks through collaboration with identified primary air contaminant analysis of risk, workplace exposures, external reviewers in scientific peer control methods: Engineering controls, and technological and economic reviews of its risk analyses. OSHA is administrative controls and work feasibility. (Ex. #20) OSHA and the now examining ways to better address practices and personal protective National Institute for Occupational chemical exposures given current equipment, the agency, ‘‘only provided Safety and Health (NIOSH) conducted resource constraints and regulatory a general description of how the generic preliminary research on health risks limitations. engineering controls might be used in associated with exposure and extent of For readers who are interested in a the given sector.’’ Id. Though noting that occupational exposure. Sixty priority more detailed account of the legislation OSHA need only provide evidence substances were identified for further and court decisions that shaped OSHA’s sufficient to justify a ‘‘general examination and twenty of the sixty current regulatory framework, Appendix presumption of feasibility,’’ the court substances were selected to form a A to this Request for Information, held that this ‘‘does not grant OSHA priority list. Early in 1996, the Agency History, Legal Background and license to make overbroad generalities announced its plans for a stakeholder Significant Court Decisions, provides as to feasibility or to group large meeting, and identified the twenty additional information. Readers may categories of industries together without priority substances, as well as several want to consult Appendix A as they some explanation of why findings for risk-related discussion topics. (Ex. #21) frame responses to the questions posed the group adequately represents the During the meeting, almost all in this Request for Information. different industries in that group.’’ Id. at stakeholders from industry and labor IV. Reconsideration of Current 981–82. agreed that the PELs needed to be Rulemaking Processes The court rejected OSHA’s economic updated; however, not one group feasibility findings for similar reasons. completely supported OSHA’s As reviewed in Section II (Legal As discussed above, OSHA supported suggested approach. Overall, many of Requirements for OSHA Standards) and its economic feasibility findings for the the stakeholders did not support the Section III (History of OSHA’s Efforts to 1989 Air Contaminants rule based development of a list of priority Establish PELs), OSHA has to use the primarily on the results of a survey of chemicals targeted for potential best available evidence to make findings over 5700 businesses, summarizing the regulation and felt there was a lack of of significant risk, substantial projected cost of compliance at the two- transparency in the process for selecting reductions in risk, and technological digit SIC industry sector level. The court the initial chemicals. and economic feasibility under the Act. held that OSHA was required to show In response to stakeholder input and This section reviews how interpretation that the rule was economically feasible OSHA’s research, the agency selected of 6(b)(5) and subsequent case law has on an industry-by industry basis, and seven of the 20 substances discussed at resulted in the methods it uses when that OSHA had not shown that its the stakeholder meeting for detailed developing risk, technical feasibility, analyses at the two-digit SIC industry analysis of risks and feasibility. The and economic findings as well as the sector level were appropriate to meet chemicals selected were: (i) evidence OSHA has used in the past to this burden. Id. at 982. ‘‘[A]verage Glutaraldehyde, (ii) carbon disulfide, make these findings (i.e., OSHA’s use of

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formal risk assessment modeling to example, OSHA’s risk assessment for understanding and debate about the evaluate significant risk, and the hexavalent chromium estimated that a health benefits of a new or revised Agency’s use of worker exposure data 45-year occupational exposure at the regulation. However, there are also and exposure control effectiveness data PEL of 5mg/m3 would lead to more than drawbacks to the model-based to evaluate technical feasibility and 10 lung cancer cases per 1000 workers approach, and there are situations costs of compliance). exposed. Because this risk exceeds the where a modeling analysis may not be This section also reviews value of one case of lung cancer per necessary or appropriate for OSHA to developments in science and technology 1000 exposed workers, OSHA found it make the significance of risk and how these new advancements may to be significant. The significance of risk determination to support a new or improve the scientific basis for making determinations of other rules since the revised regulation. Model-based risk findings of significant risk, technical Benzene decision have typically analyses tend to require a great deal of feasibility, and economic feasibility. As followed a similar logic. Agency time and resources. an example, the National Academies of Over the three decades since the In some cases, the model-based Science has released extensive reviews Benzene decision, OSHA has gradually approach is essential to OSHA’s of advances in science, toxicology, and built up a highly rigorous approach to significant risk determination, because risk and exposure assessment and derive quantitative estimates of risk it is not evident prior to a modeling evaluated how the Federal government such as those found in the hexavalent analysis whether there is significant risk can potentially utilize these chromium preamble. First, the Agency at current and technologically-feasible advancements in its decision-making reviews the available exposure-response exposures. In other cases, however, it processes (NRC, 2012; Ex. #23, NRC, data for a chemical of interest. It may be evident from the scientific 2009; Ex. #24, NRC, 2007; Ex. #25). evaluates the available data sets and literature or other readily available While new technologies will advance identifies those best suited for evidence that risk at the existing PEL is the public’s understanding in these quantitative analysis. Using the best clearly significant and that it can be critical areas, the Agency has available data, the Agency then substantially reduced by a more obligations under the OSH Act to make conducts extensive statistical analyses stringent regulation without the need for certain findings under 6(b)(5), as to develop an exposure-response model quantitative estimates extrapolated from discussed above in Section III. How that is able to extrapolate probability of an exposure-response model. In OSHA might utilize these new disease at exposures below the observed addition to reducing significant risk of developments to meet the Agency’s data. Once the model is developed, harm, the OSH Act also directs the evidentiary burden will be discussed in OSHA conducts further analyses to Agency to determine that health this section. evaluate the sensitivity of the model to standards for toxic chemicals are error and uncertainties in the modeling feasible. At times, it is evident without A. Considerations for Risk Assessment inputs and approach. The exposure- extensive analysis that the most Methods response model is used to generate stringent PEL feasible can only reduce, 1. Current Quantitative Risk Assessment estimates of risk associated with a not eliminate, significant risk. In such Methods Typically Used by OSHA To working lifetime of occupational cases, the value of a model-based Support 6(b) Single Substance exposure to the chemical of interest over quantitative risk assessment may not Rulemaking a range of PEL options that often warrant the Agency time and resources include exposure levels below those that model-based risk assessment As discussed in Section III, the considered to be technologically requires. Supreme Court requires OSHA to feasible. The entire risk assessment has In situations described above where determine that a significant risk exists always been subject to peer review, from the PEL may be set at the lowest feasible before adopting an occupational safety choice of data set(s) through generation level, OSHA believes that it can and health standard. While the Court of lifetime risk estimates.When the establish significant risk more did not stipulate a means to distinguish proposed rule is released for comment, efficiently instead of relying on significant from insignificant risks, it it receives additional scrutiny from the probabilistic estimates from dose- broadly described the range of risks scientific community, stakeholders, and response modeling as described above. OSHA might determine to be the general public. The Agency uses the OSHA is exploring a number of more significant: feedback of the peer review panel and flexible, scientifically accepted It is the Agency’s responsibility to public comment at the time of proposal approaches that may streamline the risk determine in the first instance what it to further test and develop the risk assessment process and increase the considers to be a ‘‘significant’’ risk. Some analysis. capacity to address a greater number of risks are plainly acceptable and others are This model-based approach to risk chemicals. plainly unacceptable. If, for example, the assessment has a number of important Question IV.A.1: OSHA seeks input odds are one in a billion that a person will advantages. The quantitative risk on the risk assessment process die from cancer by taking a drink of estimates can be easily compared with described above. When is a model-based chlorinated water, the risk clearly could not be considered significant. On the other hand, the level of 1 in 1000 that the Court analysis necessary or appropriate to if the odds are one in a thousand that regular cited as an example of significant risk. determine significance of risk and to inhalation of gasoline vapors that are 2 Sometimes, the best available data come select a new or revised PEL? When percent benzene will be fatal, a reasonable from worker or animal populations with should simpler approaches be person might well consider the risk exposure levels far above the employed? Are there specific significant and take the appropriate steps to technologically feasible levels for which approaches OSHA should consider decrease or eliminate it. (Benzene, 448 U.S. OSHA must evaluate risk, and a risk using when a model-based analysis is at 655). (Ex. #10), model is used to extrapolate from high not required? To the extent possible, OSHA has interpreted the Court’s to low exposures. When large, high- please provide detailed explanation and example to mean that a 1 in 1000 risk quality exposure-response data sets are examples of situations when a model- of serious illness is significant, and has available, a rigorous quantitative based risk analysis is or is not necessary used this measure to guide its analysis can yield robust and fairly to determine significance of risk and to significance of risk determinations. For precise risk estimates to inform public develop a new standard.

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2. Proposed Tiered Approach to Risk the range of feasible exposures is in risk below the observed range for Assessment in Support of Updating close proximity to the exposures where carcinogens. As mentioned earlier, the PELs for Chemical Substances toxicity is observed (i.e., a low MOE) Agency develops appropriate exposure- a. General Description and Rationale of then it may not be necessary to response models (linear or non-linear) Tiered Approach extrapolate exposure-response below that best fit the existing data and are the observed range in order to establish consistent with available information on OSHA is considering a tiered process significant risk. In this situation, OSHA mode of action. The models can be used to exposure-response assessment that would set the PEL at the exposure level to extrapolate risk associated with a may enable the agency to more it determines to be feasible and the working lifetime at occupational efficiently make the significant risk dose-response analysis in the observed exposures below the observed range. findings needed to establish acceptable range should be sufficient to support In some situations, the LETE is further PELs for larger numbers of workplace Agency significant risk findings. The adjusted to calculate worker equivalent chemicals. The approach involves three PEL is set at the lowest feasible level, exposures and to account for how the stages: dose-response analysis in the with the understanding that significant chemical is absorbed, distributed, and observed range, margin of exposure risk of adverse health outcomes remains metabolized, and interacts with target determination, and exposure-response at the new PEL. In the traditional risk tissues in the body. These features and extrapolation (if needed). The process assessment approach described other important issues related to the overlaps with the risk-based previously, OSHA uses quantitative tiered approach to exposure-response methodologies employed by EPA IRIS, exposure-response modeling to estimate assessment are discussed below. OSHA NIOSH, the Agency for Toxic risks below the range of observed believes that there are a number of Substances Disease Registry (ATSDR), exposure, without regard to whether potential advantages to using a tiered the European Union Registration, such exposures are considered to be risk assessment framework including Evaluation, Authorization, and technologically feasible. If the lowest opportunities to rely more heavily on Restriction of Chemicals (REACH) technologically feasible workplace peer-reviewed risk assessments already program, and other organizations that exposures are determined to be far prepared by other Federal agencies. recommend chemical toxicity values or below the LETE (i.e., a high MOE), an b. Hazard Identification and Dose- exposure levels protective of human exposure-response model would be health. The first step is dose-response Response Analysis in the Observed needed to determine significant risk at Range analysis in the observed range. During exposures below the observed range and this step, OSHA analyzes exposures (or to set the appropriate PEL. Hazard identification is the first step doses) and adverse outcomes from If there is a high MOE, then the in the Federal risk assessment human studies or animal bioassays, Agency would move onto the final stage framework as laid out by the National particularly at the lower end of the of the tiered approach, which is Research Council’s ‘red book’ in 1983 exposure range. This involves the exposure-response extrapolation, where (NRC, 1983; Ex. #28). In conducting a derivation of a ‘‘low-end toxicity the dose-response relationship is hazard identification, OSHA evaluates exposure’’ (LETE), which is discussed extrapolated outside the observed range. individual study quality and determines further in section IV.A.2.c. below. Many regulatory agencies, such as EPA, the weight of evidence from The second step is margin of exposure choose to extrapolate outside the epidemiological, experimental, and determination, where LETEs are observed range for non-cancer health supporting data. Study quality favors compared with the range of possible outcomes by applying a series of strong methodology, characterization of exposure limits that OSHA believes to extrapolation factors, also called exposure during critical periods, be feasible for the new or proposed uncertainty factors, to an observed low- adequate sample size/statistical power, standard. Typically, there is a close and end toxicity value, referred to as a point and relevance to the workplace ongoing dialogue between those OSHA of departure (POD). The POD is very population. OSHA gives weight to both technical staff and management similar to the LETE described above. positive and negative studies according responsible for the risk assessment and The distinction between these toxicity to study quality when the Agency their counterparts responsible for the values is discussed later in the evaluates the association between feasibility analyses as the separate subsection. The extrapolation factors are chemical agent and an adverse health determinations are being further explained below. effect. OSHA determines causality based simultaneously developed. Feasibility In many instances, EPA does not use on criteria developed by Bradford Hill analyses, in particular, can take years of the extrapolation factor approach for (Hill, 1965; Ex. #29, Rothman & research, including site visits and cancer effects. Rather, EPA uses dose- Greenland, 1998; Ex. #30). In its review industry surveys. In many of OSHA’s response modeling in the observed of the available evidence, OSHA rulemakings, the lowest feasible PEL range and a linear extrapolation below assesses the chemical’s modes of action can only reduce, not eliminate, the observed range to derive a unit risk (MOA) and the key molecular, significant risk. Thus, OSHA sets many (i.e., risk per unit of exposure). As biological, pathological, and clinical PELs at the lowest feasible level, and described previously, OSHA also uses endpoints that contribute to the health not at a level of occupational exposure dose-response modeling to extrapolate effects of concern. considered to be without significant risk below the observed range for The Mode of Action (MOA) is a risk. This significant risk orientation carcinogens as was done for hexavalent sequence of key events and processes differs from other Federal Agencies, chromium (71 FR 10174–10221; Ex. starting with the interaction of the agent such as EPA and ATSDR that set #26) and methylene chloride (62 FR with a molecular or cellular target(s) environmental exposure levels 1516–1560; Ex. #27). There is a and proceeding through operational and determined to be health protective reasonable body of scientific evidence anatomical changes that result in an without consideration of feasibility. that genotoxic carcinogens, and perhaps adverse health effect(s) of concern. The OSHA is considering using a margin other carcinogenic modes of action, key events are empirically measurable of exposure (MOE) approach to compare display linear, non-threshold behavior molecular or pathological endpoints and the LETE with the range of feasible at very low dose levels. OSHA also uses outcomes in experimental systems. exposure limits. If the MOE indicates dose-response modeling to extrapolate These represent necessary precursor

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steps or biologically-based markers study evaluations to support non- MOE to evaluate the need for low dose along the progression to frank illness occupational risk assessments, OSHA extrapolation as described in the next and injury. believes that, in most cases, these section. MOA informs selection of appropriate evaluations can be adapted to the Traditionally, either the Lowest toxicity-related endpoints and models occupational context. Observed Adverse Effect Level (LOAEL) for dose-response analysis. OSHA then Question IV.A.2: If there is no OSHA or No Observed Adverse Effect Levels conducts a dose-response analysis for PEL for a particular substance used in (NOAEL) has served as easily obtainable critical health effects determined to be your facility, does your company/firm LETE descriptors. More recently, the associated with a chemical, provided develop and/or use internal Benchmark Dose (BMD) methodology there are suitable data available. Dose- occupational exposure limits (OELs)? If has increasingly been applied to derive response analysis requires quantitative so, what is the basis and process for an LETE. The BMD approach uses a measures of both exposure and toxicity- establishing the OEL? Do you use an standard set of empirical models to related endpoints. OSHA gives authoritative source, or do you conduct determine the dose associated with a preference to studies with relevant a risk assessment? If so, what sources pre-selected benchmark response (BMR) occupational routes that display a well- and risk assessment approaches are level. An example is the dose associated defined dose-related change in response applied? What criteria do facilities/firms with a 10 percent incidence (i.e., with adequate power to detect effects at consider when deciding which BMD10) and the statistical lower the exposure levels of interest. The authoritative source to use? For confidence limit (i.e., BMDL10). Agency generally prefers high quality example, is rigorous scientific peer Selection of an appropriate BMR epidemiologic studies for dose-response review of the OEL an important factor? considers biologic as well as statistical analysis over experimental animal Is transparency of how the OEL was factors and a lower BMR is typically models, provided there is adequate developed important? applied for clinically serious outcomes exposure information and confounding Question IV.A.3: OSHA is considering (e.g., lung or heart disease) than for less factors are appropriately controlled. greater reliance on peer-reviewed serious adverse effects (e.g., preclinical OSHA may only adopt standards for toxicological evaluations by other loss of neurological or pulmonary exposure to ‘‘toxic materials and Federal agencies, such as NIOSH, EPA, function). In some cases, more harmful physical agents’’ that causes ATSDR, NIEHS and NTP for hazard sophisticated models can be used in the ‘‘material impairment of health and loss identification and dose-response LETE determination, based on of functional capacity even if such analysis in the observed range. What physiologically-based toxicokinetics, employee has regular exposure to the advantages and disadvantages would toxicodynamics, or dosimetry models hazard dealt with by such standard for result from this approach and could it that relate the administered dose to a the period of his working life.’’ OSH Act be used in support of the PEL update more toxicologically relevant dose § 6(b)(5) (Ex. #9) Therefore, its dose- process? metric at a biological target site, if response analysis considers those c. Derivation of Low-End Toxicity sufficient data is available and the biological endpoints and health Exposure (LETE) models are appropriately validated. This outcomes that can lead to adverse is discussed further below. physiological or clinical harm caused by An important aspect of the dose- Question IV.A.4: OSHA is considering continued exposure over a working response analysis is the determination using the Point of Departure (POD) (e.g., lifetime. This includes key molecular of exposures that can result in adverse BMD, LOAEL, NOAEL), commonly and cellular biomarkers established as outcomes of interest. For most studies, employed by other authoritative necessary precursor events along a response rates ranging from 1 to 10 organizations for carrying out non- critical disease pathway. It is important percent represent the low end of the cancer risk assessments as a suitable that the toxicity-related endpoints observed range. Epidemiologic studies descriptor of the Low End Toxicity observed in experimental animals generally are larger and can show a Exposure (LETE) level that represents a selected for dose-response analysis have lower observed response rate than significant risk of harm. Is this an relevance to humans and are not unique animal studies, which typically have appropriate application of the POD by to the test species. fewer test subjects. EPA, ATSDR and EU OSHA? Are there other exposure values In the past, OSHA, for the most part, REACH also derive an estimated dose at that OSHA should consider for its has undertaken an independent the low end of the observed range (i.e., LETE? evaluation of the evidence in its LETE) as part of their dose-response In many situations, the LETE must be identification of hazards and selection assessments. This dose is referred to as adjusted to represent a typical worker of critical studies and toxicity-related the POD (‘point of departure’) because it exposure. The most common endpoints for dose-response analysis. is used as a starting point for low dose adjustments are to correct for the However, other Federal agencies use the extrapolation or the application of standard occupational exposure same risk assessment framework with uncertainty factors as described above to conditions of eight hours a day/five similar hazard identification and dose- derive toxicity values. EPA, ATSDR and days a week and/or respiratory volume response selection procedures. EPA, EU REACH use the POD/extrapolation during work activity. OSHA and NIOSH ATSDR, NIOSH and others have active factor approach to determine Reference have used a standard ventilation rate of risk assessment programs and have Concentrations (RfC), Minimal Risk 10 m3 of air per 8-hour work shift for recently evaluated many chemicals of Levels (MRL) and Derived No Effect a typical worker undergoing light interest to OSHA. These assessments Levels (DNELs), respectively. OSHA physical work activity. undergo scientific peer review and are believes the LETE is an exposure where Allometric scaling (i.e., BW3/4) is subject to public comment. The Agency studies may have demonstrated recommended by some Federal is considering ways to reduce the time significant risk. However, OSHA does authorities when scaling animal doses and resources needed to independently not intend to use the LETE as the point to human equivalents to account for evaluate the available study data by of extrapolation for determining a ‘‘safe’’ toxicokinetic differences in rates of placing greater reliance on the efforts of exposure level in the manner used by absorption, metabolism, and excretion other credible scientific organizations. the aforementioned agencies. OSHA when more specific data is lacking. Although some organizations use their may use the LETE in calculating an Allometric scaling refers to scaling

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physiological rates and quantities to especially from studies in animals or LTFE likely leads to significant risk of mass or volume of one animal species other experimental systems? harm. In this situation, OSHA would set to another animal species. The The worker-adjusted LETE that is the PEL at the exposure level it relationship is generally dependent on derived from dose-response analysis in determines to be feasible and the dose- body weight (BW), often in the form of the observed range should be regarded response analysis in the observed range y=BWa where y is the physiological as a chemical exposure level that leads should be sufficient to support Agency measure and a is the scaling to significant risk of harm. In most significant risk findings. component. Many physiological and cases, the LETE is expected to elicit a There are several factors that OSHA biochemical processes (such as heart toxic response in 1 to 10 percent of the would need to consider in order to find rate, basal metabolic rate, and worker population. This approximates that the MOE is adequate to avoid low- respiration rate have been found to have an excess risk of 10 to 100 cases of dose risk extrapolation. These include a scaling component of 0.75. impairment per 1000 exposed workers the nature of the adverse outcome, the Allometric scaling is most applicable over a duration that is typically less magnitude of the effect, the when the toxicologically relevant dose than a 45-year working life. This degree methodological designs and is a parent compound or stable of risk would exceed the 1 per 1000 experimental models of the selected metabolite whose absorption rate and probability that OSHA historically studies, the exposure metric associated clearance from the target site is regards as a clearly significant risk. with the outcome, and the exposure period over which the outcome was controlled primarily by first order d. Margin of Exposure (MOE) as a studied. OSHA may regard a larger MOE processes. Allometric scaling is less Decision Tool for Low Dose as acceptable to avoid the need for low- well suited for portal-of-entry effects or Extrapolation when toxicity is a consequence of a dose extrapolation for serious clinical As discussed previously, OSHA’s highly reactive compound or metabolite. effects than a less serious subclinical statutory and legal obligations dictate Portal of entry refers to the tissue or outcome. A larger MOE may also be that PELs be set at the level that found acceptable for irreversible health organ of first contact between the eliminates significant risk, if feasible, or biological system and the agent. This is outcomes that continue to progress with if not, at the lowest feasible level. continued exposure and respond poorly nasal, respiratory tract and pulmonary Therefore, Agency risk assessments are tissues for inhalation; skin for dermal to treatment than reversible health directed at determining significant risk outcomes that do not progress with contact, and mouth and digestive tract at these feasible exposures. Because of for oral exposure. further exposure. Health outcomes that the feasibility constraints, low dose relate to cumulative exposures would In the case of respiratory tract effects extrapolation is not always needed to tolerate higher MOEs than similar from inhalation, EPA recommends make the required risk findings. The outcomes unrelated to cumulative adjusting inhalation doses based on OSHA significant risk orientation differs exposure, especially in short-term generic dosimetry modeling that from other Federal Agencies, such as studies. In some instances, an adverse depends on the form of the chemical EPA and ATSDR. The risk-based EPA outcome observed in experimental (e.g., particle of gas) and site of toxicity RfCs and ATSDR MRLs are intended as animals would tolerate higher MOEs (e.g., portal of entry or systemic) (EPA, environmental exposure levels than the same response in a human 1994; Ex. #31). For example, the human determined to be health protective study that more closely resembles the equivalent for a reactive gas that exerts without consideration of feasibility. occupational situation. its toxic effect on the respiratory tract is NIOSH also develops workplace Other Federal agencies apply the scaled based on animal to human exposure limits. These recommended MOE approach as part of the risk differences in ventilation rate and exposure limits (RELs) are based on risk assessment process. EPA has included regional surface area of the respiratory evaluations using human or animal MOE calculations in risk tract. On the other hand, the dosimetry health effects data. The exposure levels characterizations of environmental model adjustment for an insoluble gas that can be achieved by engineering exposure scenarios to assist in risk that exerts its effect in a tissue remote controls and measured by analytical management decisions (EPA, 2005; Ex. from the lung is scaled by species techniques are considered in the #32). The EU has also applied a very differences in the blood: gas partition development of RELs, but the similar Margin of Safety analysis to coefficient. The generic dosimetry recommended levels are often below characterize results of risk assessment models can accommodate specific what OSHA regards as technologically conclusions (ECB, 2003; Ex. #33). In its chemical data, if available. The models feasible. report on the appropriate uses of risk are only intended to account for human- A MOE approach can assist in assessment and risk management in to-animal differences in bioavailability determining the need to extrapolate risk federal regulatory programs, the and further allometric or extrapolation below the observed range. The Presidential Commission on Risk factors may be needed to account for appropriate MOE for use as a decision Assessment and Risk Management species differences in metabolic tool for low dose extrapolation is the recommended MOE as an approach that activation and toxicodynamics (i.e., LETE divided by an estimate of the provides a common metric for target site sensitivity to an equivalent lowest technologically feasible exposure comparing health risks across different delivered dose). (LTFE). A large MOE (i.e., LETE/LTFE toxicities and public health programs Question IV.A.5: Several ratio) means the LTFE is considerably (PCRARM, 1997; Ex. #34). methodologies have been utilized to below exposures observed to cause Question IV.A.6: OSHA is considering adjust critical study exposures to a adverse outcomes along a critical a Margin of Exposure approach that worker equivalent under representative toxicity pathway. This situation would compares the LETE with the Lowest occupational exposure conditions require low-dose risk extrapolation to Technologically Feasible Exposure including standard ventilation rates, determine whether technologically (LTFE) as a decision tool for low dose allometric scaling, and toxicokinetic feasible exposures lead to significant extrapolation. Is this a reasonable means modeling. What are reasonable and risk. A small MOE means the LTFE of determining if further low dose acceptable methods to determine worker estimate is reasonably close to the extrapolation methods are needed to equivalent exposure concentrations, observed toxic exposures indicating the meet agency significant risk findings?

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What other approaches should be Contaminants 965 F.2d at 978.( Ex. #8) 3. Chemical Grouping for Risk considered? Since the court ruling, the uncertainty Assessment e. Extrapolation Below the Observed factor approach has undergone OSHA is also considering the use of Range considerable refinement. The scientific one or more chemical grouping considerations for applying individual approaches to expedite the risk The last step in the tiered approach is factors have been carefully articulated extrapolation of risk below the observed assessment process. In certain cases, it by EPA and other scientific authorities range. This low-dose extrapolation may be appropriate to extrapolate data in various guidance materials (EPA, would only be needed if the MOE is about one chemical across a group or sufficiently high to warrant further 2002; Ex. #35, IPCS, 2005; Ex. #36, category of similar chemicals. These dose-response analysis. This situation ECHA, 2012a; Ex. #37). For some factors approaches are discussed below. under certain circumstances, it is being occurs when technologically feasible a. Background on Chemical Grouping exposures are far below the LETE and proposed that standard ‘default’ values quantitative estimates of risk could be can be replaced with ‘data-driven’ The term ‘grouping’ or ‘chemical highly informative in the determination values (EPA, 2011; Ex. #38). However, grouping’ describes the general of significant risk. As described in the type and magnitude of the approach to assessing more than one subsection A.1, OSHA has historically uncertainty factor employed for any chemical at the same time. It can used probabilistic risk modeling to individual substance still requires a include formation of a chemical quantitatively estimate risks at exposure degree of scientific judgment. The category or identification of a chemical levels below the observed range. methodology does not provide analogue (OECD, 2007; Ex. #39). Chemical categories or analogues can be Depending on the nature of the quantitative exposure-specific estimates based on the structural relationship exposure-response data, the Agency has of risk, such as one in a thousand, that between the chemicals being grouped. relied on a wide range of different can readily be compared to the models that have included linear Structure-activity relationships (SAR) significant risk probabilities discussed are relationships between a compound’s relative risk (e.g., hexavalent chromium/ in the Benzene decision. lung cancer), logistic regression (e.g., chemical structure and physicochemical cadmium/kidney dysfunction), and The National Research Council’s properties and its biological effects (e.g., physiologically-based pharmacokinetic Science and Decisions report recently cancer) on living systems. Structurally (e.g., methylene chloride/cancer) advocated a dose-response framework diverse chemicals can sometimes be approaches. that provides quantitative risk estimates grouped for risk analysis based on a Probabilistic risk models can require by applying distributions instead of common mechanism/mode of action or considerable time and resources to ‘single value’ factors (NRC, 2009; Ex. metabolic activation pathway (i.e., construct, parameterize, and statistically #24). The critical extrapolation factors, mechanism/mode of action clustering). verify against appropriate study data, such as species differences in toxic Endpoint information for one chemical especially for a large number of response at equivalent target doses and is used to predict the same endpoint for chemical substances. As mentioned inter-individual variability in the another chemical, which is considered previously, several government human population are defined by to be ‘‘similar’’ in some way (usually on authorities responsible for managing the lognormal distribution with an the basis of structural similarity and similar properties and/or activities). risk to human populations posed by estimated standard deviation. This A chemical category is a group of hazardous chemicals commonly use the allows the human equivalent LETE to be computationally less complex chemicals whose physical-chemical, derived in terms of a median and uncertainty factor approach to human health, environmental, statistical lower confidence bound. The extrapolate dose-response below the toxicological, and/or environmental fate observed range. The uncertainty factors distributional nature of the analysis properties are likely to be similar or account for variability in response facilitates extrapolation in terms of a follow a regular pattern as a result of within the human population, probabilistic projection of average and structural similarity, structural uncertainty with regard to the upper bound risk at specific exposures, relationship, or other characteristic(s). A differences between experimental such as X number of individuals chemical category is selected based on animals and humans, and uncertainty projected to develop disease out of 1000 the hypothesis that the properties of a associated with various other data workers exposed to Z level of a toxic series of chemicals with common inferences made in the assessment. For substance within some confidence level features will show coherent trends in each of these considerations, a Y. The NRC report describes several their physical-chemical properties, and numerical value is assigned and the different conceptual models with case more importantly, in their toxicological point of departure is divided by the examples and extrapolation factor effects (OECD, 2007; Ex. #39). product of all applied uncertainty distribution calculations (NRC, 2009; The use of a category approach means factors. The result is an exposure level Ex. #24). that it is possible to identify chemical considered to be without appreciable properties which are common to at least Question IV.A.7: Can the uncertainty risk. OSHA attempted to apply some members of the category. This factor methodology for extrapolating uncertainty factors in the 1989 Air approach provides a basis for Contaminants Rule to ensure that new below the observed range for non-cancer establishing trends in properties across PELs were set at levels that were effects be successfully adapted by that category and extends the measured sufficiently below exposures observed OSHA to streamline its risk assessment data (e.g., toxicological endpoint) to to cause health effects. The Eleventh process for the purpose of setting similar untested chemicals. Circuit ruled that OSHA had failed to updated PELs? Why or why not? Are In the category approach, not every show how uncertainty factors addressed there advantages and disadvantages to chemical in a group needs to have the extent of risk posed by individual applying extrapolation factor exposure-response data in order to be substances and that similarly, OSHA distributions rather than single evaluated. Rather, the overall data for failed to explain the method it used to uncertainty factor values? Please the category as a whole must prove derive the safety factors. Air explain your reasoning. adequate to support a risk assessment.

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The overall data set must allow for an (the source chemical) to predict the been used for determining aquatic assessment of risk for the compounds same endpoint for another chemical (the toxicity or genotoxicity but can be used and adverse outcomes that lack target chemical), which is considered to for evaluating other endpoints as well adequate study. Chemicals may be be ‘‘similar’’ in some way (usually on (OECD, 2007; Ex. #39). grouped for risk assessment based on the basis of structural similarity or on Question IV.A.8: Are QSAR, read- the following: the basis of the same mode or • across, and trend analysis acceptable Common functional group (e.g., mechanisms of action). Read-across methods for developing risk aldehyde, epoxide, ester, specific metal methods have been used to assess assessments for a category of chemicals ion); physicochemical properties and toxicity with similar structural alerts (chemical • Common constituents or chemical in a qualitative or quantitative manner. groupings known to be associated with classes, similar carbon range numbers; The main application for qualitative a particular type of toxic effect, e.g., • Incremental and constant change read-across is in hazard identification. across the category (e.g., a chain-length mutagenicity) or other toxicologically- category); ii. Trend Analysis relevant physiochemical attributes? • The likelihood of common Chemical category members are often Why or why not? Are there other precursors and/or breakdown products, related by a trend (e.g., increasing, suitable approaches? via physical or biological processes, decreasing or constant) for any specific iv. Threshold of Toxicological Concern which result in structurally similar endpoint. The relationship of the (TTC) chemicals (e.g., the metabolic pathway categorical trend could be molecular approach of examining related mass, carbon chain length, or to some The Threshold of Toxicological chemicals such as acid/ester/salt). other physicochemical property. Concern (TTC) refers to the Within a chemical category, data gaps The observation of a trend (increasing, establishment of an exposure level for a may be filled by read-across, trend decreasing or constant) in the group of chemicals below which there analysis and Quantitative Structure- experimental data for a given endpoint would be no appreciable risk to human Activity Relationships (QSARs) and across chemicals can be used as the health. The original concept proposed threshold of toxicological concern. In basis for interpolation and possibly also that a low level of exposure with a some cases, an effect can be present for extrapolation to fill data gaps for negligible risk can be identified for some but not all members of the chemicals with little to no data. many chemicals, including those of category. An example is the glycol Interpolation is the estimation of a value unknown toxicity, based on knowledge ethers, where the lower carbon chain for a member using measured values of their chemical structures. The TTC length members of the category indicate from other members on ‘‘both sides’’ of approach is a form of risk reproductive toxicity but the higher that member within the defined characterization in which uncertainties carbon chain length members of the category spectrum, whereas arising from the use of data on other category do not. In other cases, the extrapolation refers to the estimation of compounds are balanced against the low category may show a consistent trend a value for a member that is near or at level of exposure. The approach was where the resulting potencies lead to the category boundary using measured initially developed by the FDA for different classifications (OECD, 2007; values from internal category members migration of chemicals from consumer Ex. #39). (OECD, 2007; Ex. #39). packaging into food products and used a single threshold value of 1.5mg/day b. Methods of Gap Analysis and Filling iii. QSAR (referred to as the threshold of As a result of grouping chemicals A Quantitative Structure-Activity regulation). based on similarities determined when Relationship (QSAR) is a quantitative The TTC principle extends the employing the various techniques as relationship between a numerical concept used in setting acceptable daily described above, data gap filling in a measure of chemical structure, and/or a allowable intakes (ADIs) by proposing chemical category can be carried out by physicochemical property, and an that a de minimis value can be applying one or more of the following effect/activity. QSARs use mathematical identified for chemicals with little to no procedures: read-across, trend analysis, calculations to make predictions of toxicity data utilizing information from quantitative (Q)SARs and threshold of effects/activities that are either on a structurally related chemicals with toxicological concern (TTC). continuous scale or on a categorical scale. ‘‘Quantitative’’ refers to the nature known toxicities. i. Read-Across Method of the relationship between structurally A decision tree can be developed to The read-across approach uses related chemicals, not the endpoint apply the TTC principle for risk endpoint information for one chemical being predicted. Most often QSARs have assessment decisions:

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For OSHA purposes the TTC toxicity data to risk-based decision California’s EPA Office of approach could be adapted to develop making are laid out in landmark reports Environmental Health Hazard an endpoint-specific LETE value for by the National Research Council (NRC, Assessment. The objectives of NexGen chemicals in a specific category where 2009; Ex. #24, NRC, 2007; Ex. #25). A are to pilot the new NRC risk little to no toxicity data exist utilizing collaborative Federal initiative known assessment framework, refine existing source chemicals within the category as ‘‘Tox21’’ has been established bioinformatics systems, and develop where toxicity data is available. between the National Toxicology specific prototype health risk Program (NTP), the EPA Office of assessments. These objectives are 4. Use of Systems Biology and Other Research and Development, the NIH expected to be achieved through an Emerging Test Data in Risk Assessment Chemical Genomics Center (NCGC), and iterative development process that includes discussion with scientists, risk Toxicity testing is undergoing the Food and Drug Administration managers, and stakeholders. transformation from an approach (FDA) to collaborate on development, validation, and translation of innovative Question IV.A.9: How should OSHA primarily based on pathological utilize the new molecular-based toxicity HTS methods to characterize key steps outcomes in experimental animal data, high throughput and computer- in toxicity pathways (NTP, 2013; Ex. studies to a more predictive paradigm based computational approaches being #40). Tox21 has already screened over a that characterizes critical molecular/ generated on many workplace chemicals cellular perturbations in toxicity 1000 compounds in more than 50 and the updated NRC risk-based pathways using in vitro test systems. quantitative HTS assays that have been decision making framework to inform The paradigm shift is being largely made available to the scientific future Agency risk assessments? driven by the technological advances in community through publically molecular systems biology such as the accessible databases (e.g., EPA ACToR, B. Considerations for Technological use of high throughput screening (HTS) NTP CEBS). EPA has launched a Feasibility assays, new computational methods to program, known as ‘‘NexGen’’, to Before adopting a particular predict chemical properties, and implement the NRC vision and advance regulatory alternative, the Agency must computer models able to associate the next generation of risk assessment demonstrate that it is technologically molecular events with a biological (EPA, 2013b; Ex. #41). NexGen is a feasible. As OSHA currently performs it, response. The vision, strategies, and partnership among EPA, NTP, NCGC, a technological feasibility analysis is frameworks for applying the new AND FDA, along with ATSDR and often one of the most resource-intensive

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aspects of the rulemaking process. The and engineering control feasibility work environment and to evaluate the Agency must identify all of the studies, effectiveness of engineering and other industries that are potentially affected • Site visits, conducted by OSHA, process control measures. and compile the available information NIOSH, or supporting contractors, Exposure profiles are used to establish on current worker exposure and existing • Information from other the baseline exposure conditions for controls for each industry. On occasion, stakeholders, such as federal and state every job category in affected industries. the best information available for agencies, labor organizations, industry Baseline conditions are developed to technological feasibility analyses comes associations, and consensus standards, allow the Agency to estimate the extent from sparse and incomplete data sets. • Unpublished information, such as to which additional controls will be Rather than rely exclusively on such personal communications, meetings, required to achieve a level specified by variable information, OSHA is and presentations, and a regulatory alternative. • considering the use of exposure OSHA Integrated Management Next, the technological feasibility modeling, such as computational fluid Information System (IMIS) data. analysis describes the additional dynamics (CFD) modeling, for a more With this information, OSHA creates controls necessary to achieve the complete picture of worker exposures profiles that identify the industries regulatory alternatives. OSHA relies on and the potential effectiveness of where exposures occur, what operations its traditional hierarchy of controls different control strategies. lead to exposures, and what engineering when demonstrating the feasibility of Additionally, OSHA is looking at other controls and work practices are being control technology. The traditional implemented to mitigate exposures. A sources of information, such as the hierarchy of controls includes, in order technological feasibility analysis is REACH initiative from the European of preference: Substitution, local typically organized by industry sector or Union, that may help the Agency to exhaust ventilation, dust suppression, group of sectors that performs a unique better characterize industries or jobs process enclosures, work practices, and activity involving similar activities. where there is little to no data on housekeeping. OSHA considers use of OSHA identifies the operations that lead worker exposures and control personal protective equipment, such as to exposures in all of these industries, technologies. respirators, to be is the least effective and eventually determines the method for controlling employee 1. Legal Background of Technological feasibility of a PEL by analyzing exposure, and therefore, personal Feasibility whether the PEL can be achieved in protective equipment is considered only OSHA must demonstrate that a PEL, most operations most of the time, as an for limited situations in which all as well as any ancillary provisions, to aggregate across all industries affected. feasible engineering controls have been the extend they are being adopted, are OSHA has also utilized an application implemented, but do not effectively feasible. In general, OSHA determines approach that evaluates the feasibility of reduce exposure to below the that a regulatory alternative is controls for a specific type of process permissible exposure limit. To identify technologically feasible when it has used across a number of industry what additional controls are feasible, evidence that demonstrates the sectors, such as welding, rather than on the Agency conducts a detailed alternative is achievable in most an industry-by-industry basis. investigation of the controls used in operations most of the time. The Agency OSHA develops detailed descriptions different industries based primarily on must also show that sampling and of how the substance is used in different case studies. analytical methods can measure industries, the work activities during OSHA develops preliminary exposures at the proposed PEL within which workers are exposed, and the conclusions regarding feasibility of an acceptable degree of accuracy. OSHA primary sources of exposure. The regulatory alternatives, by identifying makes these determinations in the Agency also constructs exposure the lowest levels of exposure that are technological feasibility analysis, which profiles for each industry, or by job technologically feasible in workplaces. is made available to the public in the category, based on operations To determine whether an alternative is OSHA rulemaking docket. performed. The Agency classifies feasible throughout the spectrum of workers by job categories within those affected industries, OSHA studies 2. Current Methodology of the industries, based on how similar work whether the regulatory alternative is Technological Feasibility Requirement processes are, and to what extent similar achievable in most operations most of To develop its technological engineering controls can be applied to the time by a typical firm. OSHA may feasibility analysis, the Agency must control exposures in those processes. also determine whether a specific first collect the information about the Each exposure profile contains a list process used across a number of industries that are affected by a of affected job categories, summary different industries can be effectively particular hazard, the sources of statistics for each job category and controlled. exposure, the frequency of the exposure, subcategories (such as the mean, median, and range of exposures), and 3. Role of Exposure Modeling in the number of workers exposed to Technological Feasibility various levels, what control measures or the distribution of worker exposures other efforts are being made to reduce using increments based on the In many situations, the Agency has exposure to the hazard, and what regulatory alternatives. found it difficult to develop sampling and analytical methods are OSHA’s technological feasibility comprehensive exposure profiles and available. analyses for PEL-setting standards have determine additional controls because This information is typically obtained traditionally relied on full-shift, of limitations associated with the from numerous sources including: personal breathing zone (PBZ) samples available exposure data. These • Published literature, to create exposure profiles. A PBZ information gaps could be filled by • OSHA Special Emphasis Program sample is the best sample type to incorporating exposure modeling into (SEP) reports, quantify the inhalation exposure of a the technological feasibility process. • NIOSH reports, such as health worker. Area samples are typically not The limitations associated with the data hazard evaluations (HHE), control used to construct exposure profiles but collected include: technology (CT) assessments, surveys, are useful to characterize how much • Limited number of exposure recommendations for exposure control, airborne contamination is present in a samples: On occasions, an exposure

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profile for a job category may be built includes up to 16 different metals phenomena, such as the laminar flow of on a limited number of full-shift whether they are thought to be present a fluid through a cylindrical pipe, these exposure samples, and the Agency has in the sampling environment or not. equations can be solved mathematically. to judge whether the samples available Æ Use of SIC codes in historic IMIS Such solutions describe how a fluid will are representative of the actual exposure data, which do not translate directly move through the specified area, or distribution for that industry. into the NAICS codes currently used in geometry, as a function of time. For • Limit of Detection (LOD) issues: the analyses. more complex physical phenomena, Because only a few exposure samples Æ There is no information in the such as turbulent flow of a fluid through may be available for a job category, the database on the end product being a complex geometry, numerical analysis may include samples reported developed, the action performed to approaches are used to solve the as ‘‘less than’’ values, high LODs, or produce it, or the materials being used governing differential equations. As adjusted LOD values. This causes when the sample is taken. This limits such, CFD modeling uses mathematical inconsistency in the use of LOD samples the interpretation of the data, since an models and numerical methods to and may cause the Agency to under- or analyst is not able to attribute the determine how fluids will behave over-estimate the actual exposure exposure to any particular practice or according to a particular set of variables distribution. process, and cannot recommend and parameters. A mathematical model • Lack of information on controls engineering controls. simulates the physical phenomena associated with data: Information Generally, OSHA has had the most under consideration (i.e. governing regarding working conditions and success using IMIS data to identify and equations of energy, mass, and control strategies associated with collect enforcement case files for further momentum) and, in turn, a numerical exposure samples may not be available. review. Case files from OSHA method solves that model. Overall, CFD This makes it difficult for the Agency to inspections contain more detailed modeling enables scientists and determine the impact of the control information on worker activities and engineers to perform computer strategies for various sources of exposure controls observed at the time simulations in order to make better exposure. Additionally, it is common an exposure sample is taken. Thus, use qualitative and quantitative predictions that the data does not include of case files to a large extent mitigates of fluid flows. information about the exact nature of the limitations of using IMIS data. Some modeling techniques, such as the task performed during the sampling For most health standards, OSHA CFD, allow a user to create a virtual period. Sometimes, samples may not does not have the resources to conduct geometry to simulate actual work exactly correspond to the job category to site visits to obtain the necessary environments using appropriate which OSHA assigns it in the analysis exposure information at firms that are mathematical models and because the job activities performed are representative of all the affected computational methods. The solutions not adequately described. industries. In an effort to develop more predict exposures at any given time and • Limitations of traditional industrial robust exposure profiles, the Agency is in any point in the space of the hygiene sampling: Traditional industrial considering the use of exposure geometry established. A model hygiene practices require a ‘‘before and modeling, such as computational fluid developed with this technique allows after’’ data set to gauge the effectiveness dynamics (CFD) modeling, to the user to evaluate exposures in a of control strategies implemented, and complement the exposure information worker’s personal breathing zone and changes that occur in the working that is already available from literature, identify areas in the work space that environment during the sampling site visits, NIOSH and similar field present high concentrations of the periods. The exact impact of control investigations, and employer-provided contaminant. Because the exposure strategies and environmental conditions data. This technique would potentially concentration can be solved as a cannot be determined easily with only allow OSHA to better estimate function of time, the user can observe one set of samples obtained at a discrete workplace exposures in those how concentration increases or moment in time. It is often the case that environments were data are limited. decreases with time or other changes in OSHA does not have the luxury of Question IV.B.1: OSHA described the model input parameters. This allows ‘‘before and after’’ data sets and must how it obtains information necessary to the user to consider administrative determine how the sample set fits into conduct its industry profiles. Are there controls such as limiting the time of the the exposure profile. additional or better sources of operation, the quantity of material • IMIS data limitations: Since the information on the industries where emitted by the process, or determining Agency may lack exposure data for a exposures are likely, the numbers of how long after an operation a worker particular job category or operation, it workers and current exposure levels can safely enter a previously sometimes relies on IMIS data. OSHA that OSHA could use? contaminated area. In some cases, work does not usually rely on IMIS data in its tasks and processes that are time- a. Computational Fluid Dynamics exposure profiles unless there are no varying can be communicated to the Modeling To Predict Workplace other exposure data available because CFD model through time-varying Exposures the IMIS data can have some significant boundary conditions. limitations, which include the OSHA is considering the use of Models require a defined geometry following: computational fluid dynamics (CFD) to (i.e., work space), and this step in the Æ Insufficient information to model workplace exposure. CFD is a model building may be resource determine if a hazard is present in the discipline of fluid mechanics that uses intensive. To construct geometries of work area in significant amounts as to computer modeling to solve complex complex work environments, OSHA be relevant for an exposure profile. For problems involving fluid flows. Fluid would need to gather the necessary example, an analyst cannot tell from the flow is the physical behavior of fluids, information to model the work information available in the IMIS either liquids or gases, and it is environment. This includes taking database if a sample was targeted for the represented by systems of partial measurements of the work area, hazard in question, or if it was part of differential equations that describe machinery, engineering control a larger metal screening process (if the conservation of energy, mass, and specifications (e.g., exhaust face hazard is a metal), which typically momentum. For some physical velocities, spray systems flow rates),

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and any other objects or activities that advantages of theoretical calculations, than traditional industrial hygiene may affect the air flow in the area of in a general sense, to predict heat sampling for work environments with interest. Moreover, gathering site- transfer and fluid flow processes. Some complex geometries. In these situations, specific information for building CFD of these are: OSHA would have to develop a site visit models can be integrated with • Low Cost: In many current and protocol for gathering dimensions of the traditional industrial hygiene survey future applications, the cost of a work environment of interest. The activities. OSHA is interested in computational method may be lower information to be collected includes the identifying ways to reduce the time and than the corresponding sampling cost. dimensions of the physical space, the money that may be spent recreating As mentioned above, the most resource- ventilation system that affects airflow work environments. One alternative is consuming aspect of solid modeling is patterns, and other details (such as to import facility layouts in an simulating the geometry that resembles location and size of windows, doors, electronic format (such as CAD) into the actual physical space of work and large obstructions). modeling software. If an establishment environments. Despite these limitations, modeling has its facility layout in this format, • Speed: A numerical solution to promises to provide significant then the model designer would not have predict exposures can be obtained very advantages that could help OSHA to take physical measurements and easily in a day. A user could manipulate construct more robust technological recreate the work area by 3–D modeling. different configurations regarding feasibility analyses while reducing the Question IV.B.2: In cases where there worker positioning and engineering considerable amount of resources the is no exposure information available, to controls to find an optimal control Agency already expends on them. In what degree should OSHA rely on strategy. addition to CFD modeling, the Agency modeling results to develop exposure • Complete information: A computer will continue to investigate other profiles and feasible control strategies? solution provides the values of all exposure modeling techniques and their Please explain why or why not. relevant variables throughout the applicability in the rulemaking process. Question IV.B.3: What partnerships domain of interest. These variables Question IV.B.4: Should OSHA use should OSHA seek to obtain cover fluid flow patterns, areas in the only models that have been validated? information required to most efficiently geometry with highest concentrations of If so, what criteria for model validation construct models of work contamination, exposure values at any should be employed? environments? More specifically, how point in the geometry, time profile of Question IV.B.5: What exposure should OSHA select facility layouts to contamination, and exposure results models are you aware of that can be model that are representative of typical based on different control useful for predicting workplace work environments in a particular configurations. Traditional industrial exposures and help OSHA create industry? Note that the considerations hygiene sampling does not allow for this exposure profiles and in what should include variables such as work level of analysis as it measures results circumstances? area dimensions, production volumes based on a particular work environment, At this time, OSHA is primarily and ventilation rates in order to develop and it cannot distinguish how each examining the possibility of models for both large and small scale independent variable (e.g., changes in incorporating CFD models to indoor operations. the workplace during sampling) affects work operations. Most general industry Models must undergo validation and the exposure result. and some construction operations are testing to determine if they provide an • Ability to simulate realistic performed indoors. As the Agency accurate prediction of the physical conditions: A computer solution can conducts more research on the phenomenon under consideration, or in accommodate any environmental applicability of CFD models to predict this case, the concentrations of air condition and the values for all workplace exposures, outdoor models contaminants to which workers could variables that affect the solution can be will also be considered. As such, OSHA be potentially exposed. Sensitivity easily modified to fit a particular is interested in obtaining input from analyses can be used to determine if scenario. parties experienced in these models. model outputs are consistent given Patankar (1980; Ex. #42) also Question IV.B.6: Should OSHA minor changes to grid cell size and time discusses the disadvantages of consider CFD models primarily for step duration. Grid cell size refers to the theoretical predictions to address heat indoor operations, outdoor operations, division of space according to nodes, transfer and fluid flow processes, and or both? What limitations exist with and time step refers to the value they are applicable to exposure these two different types of models? attributed to the time variable to modeling. The solutions obtained Various U.S. federal agencies have numerically solve the equations with depend on the mathematical model used CFD modeling for projects related reference to the nodes. Another method used to simulate the situation, the value to indoor air quality and/or for model evaluation is the comparison of the input parameters, and the occupational health and safety. between the solutions of different numerical method used to obtain a Preliminary research indicates that this models to the same problem in that a solution. As Patankar notes, ‘‘a perfectly CFD modeling work has been performed similarity of findings across multiple satisfactory numerical technique can mostly for academic and research CFD models would provide greater produce worthless results if an purposes. There is little information confidence in the results. Arguably, the inadequate mathematical model is available discussing the use of CFD best performance evaluation is the employed’’. This is why it is imperative modeling for the purposes of litigation comparison of model results to those of that the mathematical model chosen and/or regulatory decision-making. a field experiment that simulates on actually resembles the physical NIOSH has used CFD on a variety of different scales the actual work phenomena under consideration. internal research initiatives that involve environment. The Agency also realizes that even if evaluating and controlling airborne This method of predicting workplace an appropriate mathematical model and exposures. Among other projects, exposures has some potential numerical method are obtained to NIOSH has used CFD modeling to: advantages over traditional industrial describe contamination in a workplace, • Evaluate potential exposure hygiene sampling methods. Patankar the exposure modeling approach may concentrations to hexavalent chromium (1980; Ex. #42) explains some of the prove to be more resource-intensive (CrVI), hexamethylene diisocyanate

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(HDI), methyl isobutyl ketone (MIBK), assess outdoor air quality. However decision-makers, while in the U.S., and others with different ventilation there is little information available on OSHA itself is responsible for control configurations during spray EPA projects that have used CFD to generating, researching, and evaluating painting operations at a Navy aircraft evaluate indoor air quality. the relevant information. paint hangar. In this study, NIOSH also As part of the Labs21 program, EPA, As explained in more detail above, tested and validated the predictive in conjunction with the Department of OSHA creates industry profiles to value of CFD modelling against methods Energy, has published a guidance evaluate the technological feasibility of of physical sampling by conducting document for optimization of laboratory a standard. The objective of these workplace air sampling and comparing ventilation rates (EPA & DOE, 2008; Ex profiles is to estimate the number of with model results. The project was #49). The guidance is geared towards workers potentially exposed to performed with assistance from the architects, engineers, and facilities occupational hazards. OSHA relies on Naval Facilities Engineering Command managers, in order to provide information from numerous sources (NAVFAC) and the Navy Medical Center information about technologies and including the U.S. EPA, U.S. DOL, U.S. San Diego (NMCSD) (NIOSH, 2011a; Ex. practices to use in designing, Census Bureau, NIOSH, scientific #43), constructing, and operating safe, publications, and site visits to identify • Study the effectiveness of sustainable, high-performance specific industries where workers are ventilation systems for controlling laboratories. EPA advocates the use of potentially exposed to hazards. Tuberculosis (NIOSH, 2010; Ex. #44), CFD simulations to determine the Acquiring data from these sources is • Evaluate emission controls for mail airflow characteristics of a laboratory straightforward and usually achieved processing and handling facilities space in order to improve ventilation through standard procedures. However, (NIOSH, 2010; Ex. #44), systems and increase safety and energy these sources often contain data gaps or • Better understand the role airflow efficiency. inconclusive information. Thus, new and ventilation play in disease The Building and Fire Research sources of information are needed to fill transmission in commercial aircraft Laboratory of National Institute of existing data gaps and strengthen cabins (NIOSH, 2010; Ex. #44), Standards and Technology (NIST) OSHA’s analyses. • Simulate different air sampling developed a CFD model to simulate the Since similar types of data are methods to better understand how transport of smoke and hot gases during currently being developed and sampling methods can assess exposure a fire in an enclosed space (NIST, 1997; submitted by manufacturers and (NIOSH, 2010; Ex. #44), and Ex. #50). The results of the study and an importers under REACH, this • Help better understand the extensive literature review indicated to information could provide an additional effectiveness of various forms of NIST that CFD can have significant reference source for OSHA to utilize. exposure control technologies in the benefits in the study of indoor air The incorporation of REACH data into manufacturing and transportation, quality and ventilation. The report OSHA’s technological feasibility warehousing, and utilities in the resulting from this study provides a analyses could greatly assist the Agency National Occupational Research Agenda thorough description of CFD and in creating a more exhaustive, thorough, (NORA) Sectors (NIOSH, 2011b; Ex. provides recommendations for future and complete analysis. The information #45). directions in CFD research. developed during the REACH Additionally, NIOSH has also used The Building and Fire Research registration process could help OSHA CFD models in mine safety research: Laboratory of NIST has also used CFD better understand the industries, uses, • NIOSH conducted a CFD study to to model the effects of outdoor gas processes, and products in which a model the potential for spontaneous generator use on the air concentrations chemical of concern is used, gain heating in particular areas of of carbon monoxide inside nearby knowledge about the risk management underground coal mines (Yuan, L. et al., buildings (NIST, 2009; Ex. #51). Using measures and controls currently in 2006; Ex. #46). The purpose of the CONTAM (a mathematical indoor air place, and develop scenarios where study was to provide insights into the quality model), coupled with CFD exposure may be greatest. Exposure optimization of ventilation systems for simulations, the researchers were able to information generated by manufacturers underground coal mines that face both determine factors (e.g., generator in a chemical safety assessment could methane control and spontaneous positioning, wind direction) that be valuable for completing exposure combustion issues. contributed to elevated carbon profiles on chemicals where current • NIOSH looked at the rate of flame monoxide accumulation in the building. references for field sampling analytical spread along combustible materials in a As OSHA continues to explore the data are limited. In addition, utilizing ventilated underground mine entry. option of incorporating CFD modeling information presented in exposure CFD models were used to estimate the into its technological feasibility scenarios that describe the conditions flame spreading rates of a mine fire analyses, the Agency will conduct under which a chemical can be used (Edwards, J. C., and Hwang, C. C., 2006; further research on existing models. safely (i.e., risk management measures Ex. #47). and operating conditions) could provide • NIOSH has also used CFD modeling b. The Potential Role of REACH in insight on currently employed industry to model inert gas injection and oxygen Technological Feasibility control methods and their effectiveness. depletion in sealed areas of Similar to the evaluation of chemical While the benefits of incorporating underground mines (Trevits, M. A., et substances by the European Chemicals REACH data into OSHA’s technological al., 2010; ; Ex. #48). CFD simulations Agency (ECHA) and the European feasibility analyses seems promising, were created to model inert gas Commission before making a decision to challenges such as data access and data injections that aim to eliminate ban or restrict the use of a substance, validity have been identified as explosive atmospheres that form in OSHA must evaluate information on potential drawbacks. Despite provisions sealed mine areas. The CFD model was health effects, exposure levels, and under REACH that require the public able to quantify oxygen depletion and existing controls before setting a new or availability of data and the sharing of gas leakage rates of the sealed area. revised PEL. However, ECHA requires data with other government agencies, EPA has conducted a substantial chemical manufacturers to generate the the European Chemicals Agency, which amount of work using CFD modeling to information evaluated by government maintains the REACH databases, has not

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yet made some of the information in other geographic jurisdictions, e.g., orders that require analysis of the available, including information other states. benefits and costs of a regulation as a generated for and compiled in the Question IV.B.8: To what extent and whole, and in the case of the Regulatory chemical safety assessment. in what circumstances should OSHA Flexibility Act, some estimate of the Additionally, some manufacturers and argue that feasibility for a regulatory economic impacts on small entities. importers may be prohibited from alternative can be established by However, the degree of industry detail sharing the data generated for REACH proving the feasibility of reducing the provided in OSHA’s economic analyses directly with other entities for non- highest exposures to the level proposed is primarily a function of judicial REACH purposes due to agreements by that regulatory alternative? interpretation of the economic made among the members of groups Question IV.B.9: To what extent and feasibility requirements of the OSH Act. organized under REACH to more in what circumstances can OSHA argue The development of the law on efficiently share the information needed that feasibility for a regulatory economic feasibility is discussed in for the registration of a chemical. alternative can be established by the detail in Section III. Below we discuss Question IV.B.7: How can exposure enforcement of a lower PEL [e.g., the potential alternatives to current information in REACH be incorporated 1989 PEL (See Appendix B)] by an methods of economic feasibility into OSHA’s technological feasibility individual state or states? analysis, and then follow with a brief analysis? Question IV.B.10: What are the discussion on how the other analytical appropriate criteria that OSHA should c. Technological Feasibility Analysis requirements OSHA is required to meet use to assess whether control strategies With a Focus on Industries With might be satisfied. implemented in a process from one Highest Exposures As guided by the courts, OSHA industry are applicable to a process develops economic feasibility analyses OSHA’s technological feasibility from another industry (e.g., similarity of that cover every affected industry and analysis is one of the most resource- chemicals, type, extent and duration of process. OSHA has not always taken intensive parts of the rulemaking exposures, similar uses)? this position. For example, in its process. OSHA typically analyzes Question IV.B.11: Regardless of the economic and technological feasibility exposures in all industries and job industries involved, are there criteria analysis of benzene, OSHA examined categories within those industries that that OSHA should use to show that only industries believed to be the worst show potential for exposures and control strategies implemented in a in terms of significant exposure to determine whether a proposed exposure process from one operation are benzene. Since then, however, OSHA limit can be achieved in most operations applicable to a process from another has attempted to cover all affected most of the time. These can range from operation? Please explain. industries in its feasibility analysis. industries that are constantly The Agency realizes that analyses The courts have suggested that the experiencing exposures in most job performed in this manner may have economic feasibility analysis must be categories above an existing PEL or the some implications for smaller firms that reasonably detailed. In the Air regulatory alternatives, to industries may find it harder to implement Contaminants case, the court said: where only a few job categories have resource intensive control strategies shown elevated exposures. OSHA has than larger firms. Additionally, the Indeed, it would seem particularly also utilized an application approach in important not to aggregate disparate control strategies from the most industries when making a showing of which it analyzed exposure associated problematic industries may not be economic feasibility . . . [R]eliance on such with a specific process across a number similar to those that may be needed for tools as average estimates of cost can be of different industries. industries with lower exposures because extremely misleading in assessing the impact The Agency is investigating whether the processes and sources of exposure of particular standards on individual it is appropriate to focus future require different control methods. industries. AFL–CIO v. OSHA, 965 F.2d 962, technological feasibility analyses only Question IV.B.12: How should OSHA 982 (11th Cir. 1992) (‘‘Air Contaminants’’). on job categories that have the highest take into consideration the size of a (Ex. #8) exposures. An analysis performed in business of facility when determining However, the court added: this manner may reduce the amount of technological feasibility? time and money OSHA has to expend to We are not foreclosing the possibility that C. Economic Feasibility in Health OSHA could properly find and explain that prove feasibility. In many cases the certain impacts and standards do apply to control methods applicable for one Standards entire sectors of an industry. Two-digit SICs industry may also be effective in The purpose of this section is (1) to could be appropriate, but only if coupled reducing exposures in other industries. discuss how and why OSHA currently with a showing that there are no By determining the additional conducts its economic feasibility disproportionately affected industries within engineering controls and work practices analysis of health standards, and (2) to the group. Air Contaminants, 965 F.2d at 982 n.28 necessary to reduce the most elevated examine approaches to economic exposures to a level specified by a feasibility that might involve less time In the hexavalent chromium case, regulatory alternative, the Agency could and fewer resources. Public Citizen Health Research Group v. propose that similar control strategies United States Dep’t of Labor, 557 F.3d (wherever applicable) would also be 1. OSHA’s Current Approach to 165, 178 (3d Cir. 2009; Ex. #14), the effective in reducing lesser exposures to Economic Feasibility court recognized that OSHA had the that same level. In other words, by The Agency’s existing approach to flexibility to demonstrate technological making feasibility findings in the most economic feasibility rests directly on feasibility on a process or activity rather problematic industries, OSHA would relevant language in the OSH Act, as than industry-by-industry basis, if the argue that all other industries would interpreted by the courts, requiring processes or activities are sufficiently also be able to comply with a regulatory OSHA to establish that new standards similar from industry to industry. The alternative. A related possibility is for are economically feasible. OSHA also court, however, did not address the OSHA to make a feasibility conducts economic analysis of its question of whether the same flexibility determination based on enforcement regulations in compliance with other applies to economic feasibility. OSHA, activities of the proposed or lower PEL legislation and as a result of executive especially in health standards, has tried

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to provide the most detailed analysis of are so small that, in OSHA’s view, no development of standards less resource industries and processes that resources reasonable person could think that the intensive would be to have the permit. For most recent health costs could possibly be expected to standards themselves address health standards, this has meant the use of the threaten the existence or competitive issues in a way that involves less lowest level industry codes for which structure of an industry. Where the costs analysis for any given standard. Health industry data are available, and where are not this small, OSHA conducts a standards can be analyzed faster to the more than one process is used in an variety of further economic analysis, extent that there are fewer processes industry, consideration of each process depending on the economic situation, and/or fewer industries to analyze. It separately. Further, in order to assure nature of the costs, the affected would be less time consuming for that a regulation does not alter the industry, and the economic data OSHA to analyze a health standard for competitive structure of an industry, available. a single process rather than a single OSHA normally analyses three size This basic approach to economic substance that is found in dozens of classes of employer within each feasibility analysis has been used for processes. OSHA already has a variety industry: All establishments, small many health standards, and the of process-oriented standards that firms as defined by SBA, and small approach has generally been successful partially address health hazards in such firms with fewer than twenty employees in assuring that OSHA standards are areas as abrasive blasting, welding, and (always smaller than the SBA economically feasible. In the PELs electroplating. Control banding also definitions). For the typical OSHA rulemaking, where OSHA tried a more represents an approach that, following substance-specific health standard, general approach, the court found the the hazard assessment, examines OSHA analyses each of the controls for level of detail inadequate. Similarly, controls for specific processes. In each of the many processes in which the OSHA has encountered problems when control banding, the hazards are generic, substance might appear, and then of the Agency did not have an adequate but the controls are process specific. each industry in which any process level of detail with respect to the Process-oriented approaches would be might appear, and then of three sizes of exposure profile and the technological most useful for processes widely used in establishment within the industry. feasibility analysis, such as for dry-color a variety of settings—abrasive blasting, Finally, OSHA examines the varying formulators of cadmium pigments. degreasing, welding, etc. Industry-by- levels of exposure and controls within OSHA’s eight lookback studies, industry economic feasibility analysis an industry and develops analyses that conducted under both Sections 610 of for a process-oriented approach would reflect these differences within an the Regulatory Flexibility Act and be enormously simplified by the fact the industry. In terms of the form of the Section 5 of Executive Order 12866, controls and their costs would be very analysis, OSHA has followed the advice have not found any instance in which similar across industries. As a result, of the D.C. Circuit to ‘‘construct a subsequent study showed that a OSHA could develop more detailed and reasonable estimate of compliance costs standard had threatened the existence of more secure cost estimates, with full and demonstrate a reasonable likelihood or brought about massive dislocation opportunities for a variety of affected that these costs will not threaten the within an industry. parties to comment on those estimates. OSHA can reasonably say that it has existence or competitive structure of an This approach might also serve to found a methodology such that the industry.’’ United Steelworkers v. greatly simplify the technological Agency’s determinations of economic Marshall, 647 F.2d 1189, 1272 (D.C. Cir. feasibility analysis. On the other hand, feasibility have both been considered 1980; Ex. #12) (‘‘Lead I’’). since process-oriented standards In response to this guidance, OSHA adequate by the courts and proven to be commonly involve multiple substances, develops detailed estimates of the costs accurate in determining regulations to risk assessment issues might be more of a health standard for each affected be feasible when re-evaluated by complex. industry, and by the three size retrospective analysis. However, the categories of establishment. The result is resulting methodology is extremely A related approach to speeding up at that the economic analyses of health resource intensive and time-consuming least portions of substance specific standards routinely contain a series of because OSHA always has to make health standards might be to regulate a tables showing costs for each industry detailed cost estimates and provide single substance process by process in by multiple size classes of firms within detailed statistical data for every single multiple rulemakings—for example, the industry, and sometimes for more process and industry affected. For this regulate exposures to hexavalent than one process per industry. Each reason, OSHA wants to consider chromium in electroplating, then in entry in these tables is documented by whether there may be methods that can welding, and then painting. By detailed explanations of how the costs short-cut this process and still meet all producing process standards in this were estimated for each industry and of OSHA’s legal requirements. manner, rather than waiting until size class and level of exposure. The remainder of this section analyses of all processes and industries OSHA then makes a determination for examines two kinds of alternative is completed, OSHA could potentially each industry whether or not these costs approaches to accelerating the process address the most severe exposures much are likely to threaten the existence or and reducing the resources needed to more rapidly. This approach could also competitive structure of that industry. produce health standards. One kind of allow OSHA to ignore processes where In order to do this, OSHA first alternative involves formulating health the exposures are likely to be small and constructs a ‘‘screening analysis’’ for standards differently. The second kind the chance of exceeding a PEL minimal. each industry. For the purposes of this involves different kinds of analysis Though this approach might result in screening analysis, OSHA combines its OSHA might perform. portions of a substance-specific estimates on the costs per establishment standard being produced more quickly, of various sizes with statistical data on 2. Alternative Approaches to the approach would probably require the profits and revenues of the affected Formulating Health Standards That more resources for multiple hearings establishment sizes, and then calculates Might Accelerate the Economic and docket analyses. A major costs as a percentage of profits and Feasibility Analysis disadvantage of this approach is that it revenues. For most industries, the costs One approach to simplifying, would result in the possibility that in comparison to revenues and profits speeding up, and making the workers in industries not yet regulated

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would have to endure exposures higher commonplace. Benzidine-based dyes York) are enforcing the 1989 PELs in the than those in regulated industries. have disappeared from the U.S. public sector only. California enforces Another disadvantage might be that the marketplace. However, these cases had its own PELs which in many cases are risk assessment would be subject to no effect on the viability of user substantially lower than OSHA’s. multiple public hearings as each industries or their employment. Situations in which most firms in a state industry or process was regulated. Insulation contractors still install meet a potential requirement of a insulation—it just no longer contains standard are particularly convincing 3. Alternative Analytic Approaches to asbestos. Dyers continue to dye textiles because they show that employers are Economic Feasibility of Health and leather all the colors benzidene- not only able to carry out the Standards based dyes imparted, but without using requirement, but can do so even in A different approach to producing benzidene-based dyes. The chief effect competition with employers who are less resource-intensive and time- has been substitution away from a not required to meet such a consuming economic feasibility substance. This has resulted in serious requirement. analyses would be to re-examine economic impacts on a limited number Nevertheless, OSHA is aware that whether OSHA’s basic approach of of producers of the substance but little some care must be taken with evidence estimating the costs of each process, economic impact on the thousands of that all or most firms in an industry or industry, size class, and possible level users of the substance who simply in an industry within a state meet a of control is really necessary in all cases found a substitute. It would seem that requirement. It is particularly important given how the courts have defined such substitution away from a substance to determine whether those who do not economic feasibility. The key to meeting is not the kind of economic change that meet the requirement might require the legal requirements is to return to the would make a regulation economically fundamentally different controls, have concept of economic feasibility. In the infeasible. different costs, or operate in a different Lead I decision, the court stated: OSHA might be able to place major market in spite of being in the same emphasis on evidence that a significant A standard is feasible if it does not threaten statistical industry. Consider a standard ‘‘massive dislocation’’ to . . . or imperil the portion of an industry is already addressing a specific metal. Most firms existence of the industry. No matter how meeting a standard. Such evidence is an in an industry may find the standard initially frightening the projected . . . costs obvious indication that a standard is easy to meet because they only use the of compliance appear, a court must examine both technologically and economically metal in alloys that call for a very small those costs in relation to the financial health feasible for that industry. After all, the percentage of the metal. However, those and profitability of the industry and the actual fact that a majority of employers firms that use alloys with high likely effect of such costs on unit consumer of all sizes in an industry is meeting a percentages of the metal might be prices. More specifically . . . the practical standard, while remaining viable, question is whether the standard threatens unable to meet the standard. This would should be more convincing than a set of not be apparent looking solely at the competitive stability of an industry. Lead cost estimates in an economic analysis I, 647 F.2d at 1265 (citations omitted). (Ex. aggregate industry data. OSHA should #12) predicting that employers in a given take reasonable steps to determine that industry could meet the standard. As the court recognized, this is a those that did not meet the standard do Actual empirical evidence of a not have important technological or strong criterion. In the real world, proposition is normally considered industries are rarely eliminated or have economic characteristics that are superior to theoretical evidence for a different from those that did. their competitive structure radically proposition. There are several reasons Under this approach, OSHA could altered for reasons related to changes in why many or most employers in an conclude that a standard is feasible their costs, and it is changes in costs industry may already meet a standard— where a state already had such a that courts recognized as the principle these include ease of meeting the standard if it first determines that (1) the reason a regulation might not be standard, industry consensus standards, standard is enforced; (2) employers in economically feasible. Radical changes and concern about liability. in industries tend to come from two Similarly, the fact that a state or other the state in fact meet the standard; and major causes. Most are the result of jurisdiction has already implemented a (3) which of the relevant industries and changes in demand such that the public requirement and that firms within the technologies are represented within that is no longer interested in the product or state are generally following the state. service an industry provides, for such requirement would represent very However, in spite of these caveats, it reasons as technological obsolescence or strong evidence that a requirement is would frequently take OSHA less time the existence of better substitutes. Some economically and technologically and fewer resources to demonstrate that radical changes in industries are the feasible. For example, twenty-two states a standard is technologically and result of foreign competition. However, currently operate their own OSHA economically feasible by showing that foreign competition applies largely, in programs that cover both private sector employers in the industry already meet an OSHA context, to manufacturing, but and State and local government the standard than by the full not to construction, utilities, domestic employees, and five states cover public identification of control technologies, transportation, or most services that employees only. Of the twenty-two exposure levels achieved by those OSHA regulates. states that cover both private and public technologies, the costs of the OSHA is not aware of any instance in sector employees, five states (South technologies, and the economic impacts which an OSHA regulation eliminated Carolina, Minnesota, Tennessee, of these technologies that OSHA now or altered the competitive structure of Vermont and Washington) are still undertakes. an industry—though in some cases, a enforcing the 1989 PELs, and did not As noted above, at one point in the combination of liability-based concerns, revert to the less protective PELs when Lead I decision, the court suggested environmental regulations, and OSHA the Court remanded the Air OSHA develop a ‘‘reasonable estimate of regulation may have radically altered Contaminants rule. (Ex. #8) Michigan is costs.’’ However at another point in this the use of a product. For example, also enforcing the 1989 PELs in general decision the same court clarified: asbestos is not used in many industry, but not in construction. Three [T]he court probably cannot expect hard applications where it was once states (Connecticut, Illinois, and New and precise estimates of costs. Nevertheless,

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the agency must of course provide a flexibility analysis or Small Business Cir. 2009; Ex. #14) (‘‘Hexchrome’’) reasonable assessment of the likely range of Regulatory Enforcement Fairness Act (rejecting interpretation that OSH Act costs of its standard, and the likely effects of (SBREFA) Panel is needed can, in most required OSHA to research all those costs on the industry . . . And OSHA cases, be met by focusing on those workplace operations involving can revise any gloomy forecast that estimated sectors and size classes where the most hexavalent chromium exposure to prove costs will imperil an industry by allowing for the industry’s demonstrated ability to pass severe impacts are expected. feasibility, which would ‘‘severely through costs to consumers. Lead I, 647 F.2d Question IV.C.1: Should OSHA hinder OSHA’s ability to regulate at 1266. (Ex. #12) consider greater use of process oriented exposure to common toxins’’); American regulations, such as regulations on Dental Ass’n v. Martin, 984 F.2d 823, OSHA has made little use of the abrasive blasting, welding, or 827 (7th Cir. 1993; Ex. #53) (OSHA not concept of a likely range of costs or of degreasing, as an approach to health required to regulate ‘‘workplace by developing generic approaches to standards? Should such an approach be workplace’’); Assoc. Bldrs & Contrs. Inc. determining a reasonable likelihood that combined with a control banding v. Brock, 862 F.2d 63, 68 (3d Cir. 1988; these costs will not threaten the approach? Ex. #54) (‘‘A requirement that the existence or competitive structure of an Question IV.C.2: Should OSHA Secretary assess risk to workers and industry. consider issuing substance-specific need for disclosure with respect to each OSHA could significantly reduce its standards in segments as the analysis of substance in each industry would resource and time expenditures by a particular process or industry is effectively cripple OSHA’s performance providing ranges of costs, given that the completed rather than waiting until of the duty imposed on it by 29 U.S.C. upper end of the range provides ‘‘a every process and industry using a 655(b)(5); a duty to protect all reasonable likelihood that these costs substance has been thoroughly employees, to the maximum extent will not threaten the existence or analyzed? feasible.’’). competitive structure of an industry.’’ Question IV.C.3: To what extend and Indeed, the requirement that an Such an approach would not only in what circumstances can OSHA argue OSHA standard not threaten ‘‘massive reduce OSHA’s time and effort but also that feasibility for a regulatory dislocation’’ or ‘‘imperil the existence’’ that of the interested public. Too often alternative can be established by the of an industry is an outgrowth of the stakeholders devote significant time and enforcement of a lower PEL (e. g., the idea that OSHA may adopt standards effort questioning cost estimates when 1989 PEL) by an individual state or that may cause marginal firms to go out even the stakeholders’ alternative cost states? of business if they are only able to make estimate would have no effect on 4. Approaches to Economic Feasibility a profit by endangering their employees. whether the costs would threaten the See Industrial Union Dep’t, AFL–CIO v. existence or competitive structure of an Analysis for a Comprehensive PELs Update Hodgson, 499 F.2d 467, 478 (XX Cir. industry. The simple fact is that both 1974; Ex. #55). And the notion that the OSHA and its stakeholders spend far too Following the Eleventh Circuit’s determination must be made on an much time examining the accuracy of direction in the Air Contaminants case industry basis arises from cases in cost estimates even when the highest (956 F.2d at 980–82; Ex. #8) and in which OSHA attempted to do just that; cost estimates considered would have Color Pigments Mfrs. Ass’n v. OSHA, 16 the statute does not require feasibility to little effect on the determination of F.3d 1157, 1161–64 (11th Cir. 1994; Ex. be evaluated in this way. See Lead I, 647 economic feasibility. #13), OSHA has typically performed its F.2d at 1301 (where OSHA attempted to OSHA could also make more effort to economic feasibility analyses on an determine the feasibility of the lead clarify historically the circumstances industry-by-industry basis using the standard on an industry-by-industry under which regulations of any kind lowest level industry codes for which basis, noting that the parties did not have eliminated or altered the industry data are available. While such dispute that feasibility was to be competitive structure of an industry. As an approach best insures that the effect determined in that manner); noted above, OSHA has yet to find an of the standard on small industry Hexchrome, 557 F.3d at 178 (‘‘nothing instance in which OSHA regulations segments will be considered, it is very in 29 U.S.C. 655(b)(5) requires OSHA to eliminated or altered the competitive resource intensive. If OSHA were analyze employee groups by industry, structure of an industry. A more required to use of this approach to nor does the term ‘industry’ even thorough exploration of past address feasibility for a comprehensive appear’’). The approach articulated by experiences with OSHA regulations PELs update, which would require the Air Contaminants court, which might simplify OSHA analyses and addressing the feasibility of new PELs places an affirmative duty on OSHA to make it more empirically based in a for hundreds of chemicals in hundreds establish that proposed standards would variety of situations. of industry segments, it might require not threaten even the smallest industry OSHA believes that it may be able to more resources than the agency would segments before adopting a standard, meet the requirements of Executive have available. creates a heavy analytical burden that is Orders 12866 and 13563 and the There are good reasons to think that not necessarily required by the statute. Regulatory Flexibility Act without the the OSH Act does not require such a As the Lead I court notes, in the case kind of industry-by-industry detail that detailed level of economic analysis to of a standard requiring an employer to OSHA now provides in its economic support a feasibility finding. The adopt only those engineering and analyses. The requirements of executive purpose of the OSH Act is to assure all administrative controls that are feasible, orders for analysis of costs and benefits workers ‘‘safe and healthful working what really is at stake in OSHA’s do not include requirements that they conditions,’’ and therefore it is unlikely feasibility determinations is whether be made available on an industry-by- that Congress intended for OSHA to OSHA has justified creating a industry basis, and OIRA encourages the meet such demanding analytical presumption that the implementation of reporting of ranges as opposed to requirements if it meant that the agency such controls are feasible. 647 F.2d at precise but possibly inaccurate point could not issue a standard addressing 1269–70. Thus, OSHA need not ‘‘prove estimates. OSHA believes that the well-recognized hazards. See, e.g., the standard certainly feasible for all requirements of the executive orders Public Citizen Health Research Group v. firms at all times in all jobs.’’ 647 F.2d and for determining if a regulatory Dep’t of Labor, 557 F.3d 165, 178–79 (3d at 1270. The court recognized that under

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this approach, some employers might The results of this analysis would be consider some application groups for a not be able to comply with a standard, used to build up costs at the industry given chemical as subject to a PELs but noted that the statute offers those level. It is possible that the results of update rulemaking if some other employers several alternatives: such an analysis might be better application groups present feasibility requesting a variance, asserting a characterized in ranges, and of sufficient issues that make them inadvisable feasibility defense in an enforcement precision to establish feasibility at a candidates for a PELs rulemaking? proceeding, or petitioning the agency to level as low as the method that OSHA revise the standard. 647 F.2d at 1270. typically uses. Under this approach, a V. Recent Developments and Potential As noted above, most of OSHA’s determination made in this way would Alternative Approaches current PELs are over 40 years old, and be presumptively sufficient to establish Wide access to information on the are based on science that is even older. feasibility in the absence of contrary Internet and the development of a global It seems unlikely that a statute enacted evidence provided by commenters. If economy has shifted occupational safety to protect workers against chemical such evidence were presented, OSHA and health from a domestic to a global health hazards would preclude OSHA would address it and incorporate it into concern. Countries often struggle with from updating hundreds of those PELs its feasibility analysis supporting the similar experiences and challenges unless it can show that each is feasible final rule. related to exposure to hazardous in each of the smallest industry Question IV.C.4: Should OSHA chemicals, and sharing information and segments in which the chemical is used. consider providing ranges of costs for experiences across borders is a common The question, then, is what level of industries in situations where even the practice. Global data sharing allows for analysis would be sufficient to justify a upper range of the costs would the widespread and rapid dissemination presumption that the standard is obviously not provide a threat to the of available chemical information to feasible, shifting the burden to the existence of competitive structure of an employers, employees, managers, employer as allowed by Lead I. industry? chemical suppliers and importers, risk If OSHA moved forward with a global Question IV.C.5: What peer-reviewed managers, or anyone with access to the PELs update, the Agency might consider economics literature should OSHA Internet. The development of hazard analyzing economic feasibility at a consult when determining whether the assessment tools that take advantage of higher level than it has typically competitive structure of an industry readily available hazard information employed in substance specific health would be altered? Are there any make it possible for employers to standards. In order to do so, OSHA instances where an OSHA standard did implement effective exposure control would need to develop criteria as to threaten the existence or competitive strategies without the need to rely solely what chemicals are suited to be part of structure of an industry? What were on OELs. a PELs rulemaking rather than subject to they and what is the evidence that an a substance-specific rulemaking. For OSHA standard was the origin of the Some of these resources for data and example, if the rulemaking record difficulties? tools that OSHA may use more showed that, for a specific chemical Question IV.C.6: Should OSHA systematically in the future for application group, generally available consider and encourage substitution and hazardous chemical identification exposure controls had not been elimination of substances that cause and/or assessment are addressed in successful in achieving the proposed significant risk in workplaces even if Section V. PEL, then this chemical or at least the such substitution or elimination will A. Sources of Information About application group would be transferred eliminate or alter the competitive Hazardous Chemicals from updated PELs rulemaking to being structure of the industry or industries a candidate for further study and that produce the hazardous substance? In order to design and implement possible inclusion in a substance- Question IV.C.7: Are there other appropriate protective measures to specific rulemaking. The goal under this approaches OSHA could use that would control chemical exposures in the approach would be to develop a provide for more timely and less workplace, employers need reliable reasonable basis for believing that the resource-intensive economic feasibility information about the identities and chemicals and application groups analyses? hazards associated with those remaining in a PELs-update rulemaking Question IV.C.8: In determining the chemicals. OSHA is considering ways in are (1) likely to be economically level of industry detail at which OSHA which recently developed data sources feasible; and (2) subject to relatively should conduct an economic feasibility could be used by the Agency and simple and easily-costed controls that analysis for a comprehensive PELs employers to more effectively manage are likely to be relatively homogenous update, what considerations should chemical hazards in the workplace. across industries. OSHA take into account? What level of Developments in the use of structure— As a result, rather than accumulating detail do you think is sufficient to activity data for grouping chemicals data at the lowest industry level justify the presumption of feasibility for having similar properties, the available regarding exposures and such a standard? Please explain. Environmental Protection Agency’s controls needed for each chemical for Question IV.C.9: Are the High Production Volume (HPV) which a new PEL would be adopted, methodologies suggested above Chemicals, OSHA’s Hazard OSHA could consider a more general appropriate to establish economic Communication standard and the approach. For example, OSHA might feasibility for a comprehensive PELs Globally Harmonized Hazard conduct an economic feasibility analysis update? Why or why not? What other Communication Standard, health hazard at the industry level for which sufficient cost effective methods are available for banding, the European Union’s exposure data are currently available. It OSHA to establish economic feasibility Registration, Evaluation, Authorization, might use a control banding approach in for such a rulemaking? and Restriction of Chemicals (REACH), order to determine the types of controls Question IV.C.10: What factors should are discussed here. OSHA is interested necessary to comply with a new PEL, OSHA consider in determining whether in stakeholders’ comments on how the and validate models to implement each a chemical should be part of an overall Agency may make use of any of these type of control based on variables such PELs update or subject to substance- data sources or other alternative data or as establishment size and process type. specific rulemaking? Should OSHA information sources not discussed here

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to better manage workplace chemical from these hazards? OSHA is also conditions, may lead to toxicological exposures. interested to hear from commenters who responses. The results of this research may currently make use of these data in then can be used to suggest the context 1. EPA’s High Production Volume their worker protection programs. in which decision makers can use the Chemicals data. The EPA’s Endocrine Disruptor 2. EPA’s CompTox and ToxCast One potential source of relevant and Screening Program already has begun timely information on chemicals that EPA has also launched an effort to the scientific review process necessary OSHA may make better use of in the prioritize the tens of thousands to begin using ToxCast data to prioritize future is the data on High Production chemicals that are currently in use for the thousands of chemicals that need to Volume chemicals that are being testing and exposure control. Through be tested for potential endocrine-related collected by the EPA and the its computational toxicology (CompTox) activity. Other potential uses include Organization for Economic Cooperation research, the U.S. Environmental prioritizing chemicals that need testing and Development (OECD). The OECD Protection Agency (EPA) is working to under the Toxic Substances Control Act program lists approximately 5,000 figure out how to change the current and informing the Safe Drinking Water chemicals on its list, and OSHA has approach used to evaluate the safety of Act’s contaminant candidate lists. (EPA, determined that 290, or 62 percent of chemicals. CompTox research integrates 2014b; Ex. #60) EPA contributes the the 470 substances with PELs are advances in biology, biotechnology, results of ToxCast to a Federal agency included on the OECD list. chemistry, and computer science to collaboration called Toxicity Testing in Under the HPV program, EPA has identify important biological processes the 21st Century (Tox21). Tox21 pools identified over 2,000 chemicals that are that may be disrupted by the chemicals those results with chemical research, produced in quantities of one million and trace those biological disruptions to data and screening tools from the pounds a year or more in the United a related dose and human exposure. The National Toxicology Program at the States. It would appear that these combined information helps prioritize National Institute of Environmental chemicals are thus economically chemicals based on potential human Health Science, the National Institutes significant in the US, and there are health risks. Using CompTox, thousands of Health’s National Center for likely to be a large number of workers of chemicals can be evaluated for Advancing Translational Sciences and exposed to them. Through the HPV potential risk at a small cost in a very the Food and Drug Administration. Challenge program, EPA encouraged short amount of time. A major part of (EPA, 2014b; Ex. #60) industry to make health and EPA’s CompTox research is the Toxicity Thus far, Tox21 has compiled environmental effects data on these HPV Forecaster (ToxCastTM). ToxCast is a highthroughput screening data on chemicals publicly available. To date, multiyear effort launched in 2007 that nearly 10,000 chemicals. All ToxCast data on the properties of approximately uses automated chemical screening chemical data are publicly available for 900 HPV chemicals has been made technologies, called ‘‘highthroughput anyone to access and use through user- available through the Agency’s High screening assays,’’ to expose living cells friendly Web applications called Production Volume Information System or isolated proteins to chemicals. The interactive Chemical Safety for (HPVIS) (U.S. EPA, 2012a; Ex. #56). For cells or proteins then are screened for Sustainability (iCSS) Dashboards at each HPV chemical, the database changes in biological activity that may http://actor.epa.gov/actor/faces/. includes information on up to 50 suggest potential toxic effects. OSHA could use this publicly endpoints on physical/chemical These innovative methods have the available information on chemical properties, environmental fate and potential to limit the number of required properties and toxicity as a part of the pathways, ecotoxicity, and mammalian animal-based laboratory toxicity tests Agency’s risk assessments that support health effects. EPA has also used this while, quickly and efficiently screening the revision and development of information to generate publicly large numbers of chemicals. The first permissible exposure limits. Tox21 available chemical hazard phase of ToxCast, called ‘‘proof of could also be used by the Agency for characterizations, which provide a concept’’, was completed in 2009, and screening chemicals and prioritizing for concise assessment of the raw technical it evaluated more than 300 well studied risk management. data on HPV chemicals and evaluate the chemicals (primarily pesticides) in more Question V.A.2. How might the quality and completeness of the data than 500 high-throughput screening information on the properties and received from industry (U.S. EPA, assays. Because most of these chemicals toxicity of chemicals generated by 2013d; Ex. #63). already have undergone extensive CompTox, ToxCast, and/or Tox21 be Data on HPV chemicals submitted animal-based toxicity testing, this utilized by employers to identify through the OECD’s program are enables EPA researchers to compare the chemical hazards and protect workers available through its Global Portal to results of the high-throughput assays from these hazards? OSHA is also Information on Chemical Substances, with those of the traditional animal interested to hear from commenters who eChemPortal (OECD, 2013; Ex. #58). In tests. (EPA, 2014a; Ex. #59) may currently make use of these data in addition to searching data collected Completed in 2013, the second phase their worker protection programs. through the EPA HPV and OECD HPV of ToxCast evaluated over 2,000 programs, eChemPortal allows for chemicals from a broad range of sources, 3. Production and Use Data Under simultaneous searching of 26 databases including industrial and consumer EPA’s Chemical Data Reporting Rule for existing publicly available data on products, food additives, and Under the EPA’s Chemical Data the properties of chemicals, including: potentially ‘‘green’’ chemicals that Reporting (CDR) Rule, issued in 2011, physical/chemical properties, could be safer alternatives to existing EPA collects screening-level, exposure- environmental fate and behavior, chemicals. These chemicals were related information on certain chemicals ecotoxicity, and toxicity. evaluated in more than 700 high- included on the Toxic Substances Question V.A.1. How might publicly throughput assays covering a range of Control Act (TSCA) Chemical Substance available information on the properties high-level cell responses and Inventory and makes that information and toxicity of HPV chemicals be approximately 300 signaling pathways. publicly available to the extent possible. utilized by employers to identify ToxCast research is ongoing to The CDR rule amended the TSCA chemical hazards and protect workers determine which assays, under what Inventory Update Reporting (IUR) rule

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and significantly increased the type and chemicals (Russom et al., 2003; Ex. used for new chemical assessments are amount of information covered entities #64). QSARs are mathematical models publically available (U.S. EPA, 2012b; are required to report. The 2012 that are used to predict measures of Ex. #67). submissions included data on more toxicity from physical characteristics of In Europe, internationally agreed- chemicals and with more in-depth the structure of chemicals, known as upon principles for the validation of information on manufacturing molecular descriptors. (Q)SARs were adopted by OECD (including import), industrial Other U.S. and international agencies Member Countries and the Commission processing and use, and consumer and have explored the use of chemical in 2004. In 2007, the Inter-organization commercial use than data collected groupings to regulate chemicals in order Programme for the Sound Management under the IUR in 2006 (U.S. EPA, 2013a; to fulfill their regulatory and statutory of Chemicals, a cooperative agreement Ex. #1). authorities. Under the TSCA Work Plan, among United Nations Environmental The expanded reporting on chemical the EPA announced in 2013 that it Program (UNEP); International Labor production and use information under would begin to assess 20 flame retardant Organization (ILO); Food and the CDR could help OSHA better chemicals and three non-flame retardant Agriculture Organization of the United understand how workers are exposed to chemicals. EPA utilized a structure- Nations (FAO); World Health chemicals and the industries and based approach, grouping eight other Organization (WHO); United Nations occupations where exposures to flame retardants with similar Industrial Development Organization chemicals might occur. characteristics together with the (UNIDO), United Nations Institute for chemicals targeted for full assessment in Training and Research (UNITAR) and 4.Structure-Activity Data for Chemical three groupings. EPA will use the Organization for Economic Co-operation Grouping information from these assessments to and Development (OECD) published Although toxicity testing for better understand the other chemicals in ‘‘Guidance on Grouping of Chemicals’’ chemicals has increased greatly since the group, which currently lack as part of an ongoing monograph series the passage of the Toxic Substances sufficient data for a full risk assessment. on testing chemicals. REACH registrants Control Act (15 U.S.C. 2601–2629; Ex. EPA uses chemical groupings to fill may rely on (Q)SAR data instead of #62) in the United States, and with data gaps in its New Chemical Program. experimental data, provided the similar legislation elsewhere, toxicity EPA’s New Chemical Program, also registrants can provide adequate and data is only publicly available for a under TSCA, requires anyone who plans reliable documentation of the applied fraction of industrial chemicals. Since to manufacture or import a new method and document the validity of the enactment of TSCA and creation of chemical substance into commerce to the model. Validation focuses on the the TSCA Interagency Testing provide EPA with notice before relevance and reliability of a model Committee (U.S. EPA, 2013c; Ex. #57), initiating the activity. This is called a (ECHA, 2008; Ex. #68). the ITC has recommended testing for pre-manufacture notification (PMN). The EU Scientific Committee on hundreds of chemicals, and chemical EPA received approximately 1,500 new Toxicity, Ecotoxicity and the producers have conducted more than chemical notices each year and has Environment (CSTEE) recommended, in 900 tests for these chemicals. However, reviewed more than 45,000 from 1979 their general data requirements for potentially thousands of industrial through 2005 (GAO, 2007; Ex. #65). regulatory submission, that QSAR data chemicals have not been tested. Because TSCA does not require testing may be used as well as animal data. A With the rapidly expanding before submission of a PMN, SARs and chemical category approach based on development of new chemical QSARs are often used to predict the the metal ion has been extensively used substances and mixtures, the need for environmental fate and ecologic effects. for the classification and labeling of toxicity information to inform chemical In addition, the EPA makes predictions metal compounds in the EU. Other safety management and public health concerning chemical identity, physical/ category entries are based on certain decisions in a timely manner has chemical properties, environmental anions of concern such as oxalates and exceeded the capacity of the transport and partitioning, thiocyanates. For these EU government programs to provide those environmental fate, environmental classifications the category approach data. As a result, programs such as the toxicity, engineering releases to the has often been applied to certain Organization for Economic Cooperation environment, and environmental endpoints of particular concern for the and Development’s (OECD) Screening concentrations. The agency uses a compounds under consideration, but Information Data Set (SIDS) and the U.S. variety of methods to make these has not necessarily been applied to all EPA High Production Volume (HPV) predictions that include SARs, nearest- endpoints of each individual compound Challenge programs were designed to analogue analysis, chemical class in the category of substances. encourage the voluntary development of analogy, mechanisms of toxicity, and The Danish EPA has made extensive data. However, even with the creation of chemical industry survey data and the use of QSARs and has developed a these non-statutory programs, collective professional judgment of QSAR database that contains predicted potentially thousands of non-HPV expert scientific staff, in the absence of data on more than 166,000 substances industrial chemicals go untested. empirical data. The agency uses these (OSPAR Commission, 2000; Ex. #69). A Therefore, chemical prioritization for methods to fill data gaps in an recent publication from the Danish EPA screening and testing requires the assessment and to validate submitted reports the use of QSARs for development and validation of standard data in notifications. Predictions are identification of potential persistent, methods to predict the human and also made by the U.S. EPA Office of bioaccumulative and toxic (PBT) and environmental effects and potential fate Pollution Prevention and Toxics (OPPT) very persistent and very of chemicals. Where screening and under TSCA (Zeeman., 1995; Ex. #66). bioaccumulative (vPvB) substances from testing data are sparse, the use of The OPPT has routinely used QSARs to among the HPV and medium- predictive models called structural predict ecologic hazards, fate, and risks production volume chemicals in the EU. activity relations (SARs) or quantitative of new industrial chemicals, as well as OSHA is considering using a structural activity relationships (QSARs) to identify new chemical testing needs, combination of chemical group can extend the use of limited toxicity for more than two decades. OPPT SAR/ approaches to evaluate multiple and safety data for some untested QSARs for physical/chemical properties chemicals with similar attributes

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utilizing limited data that can be mammalian toxicity; ecotoxicity; characterization process to determine if extrapolated across categories. The environmental fate; manufacture and the operational conditions cause Agency invites comment on how such use; and risk management measures exposures that require risk management grouping approaches have been used to (ECHA, 2012b; Ex. #71). Non- measures to ensure risks of the evaluate risks to worker populations. confidential information from the substance are controlled. Risk Question V.A.3: Are QSAR, read- technical dossiers is published on the characterization consists of the across, and trend analysis useful and ECHA Web site (ECHA, 2012c; Ex. #72). comparison of exposure values derived acceptable methods for developing Companies manufacturing or from each exposure scenario with their hazard information utilizing multiple importing a chemical in quantities of 10 respective DNEL or an analogous health data sets for a specific group of or more tons per year must also conduct benchmark such as Derived Minimal chemicals? a chemical safety assessment. This Effect Level (DMEL) or Predicted No Question V.A.4: Are there other assessment includes the evaluation of: Effect Concentration (PNEC)), acceptable methods that can be used to (1) Human health hazards; (2) established by the registrant. Where no develop hazard information for multiple physicochemical hazards; (3) health benchmark is available, a chemicals within a group? environmental hazards; and (4) qualitative risk characterization is Question V.A.5: What are the persistent, bioaccumulative and toxic required (ECHA, 2009; Ex. #73). advantages and disadvantages of each (PBT), and very persistent and very Manufacturers and importers are method? bioaccumulative (vPvB) potential required to document the information 5. REACH: Registration, Evaluation, (ECHA, 2012b; Ex. #71). If a substance developed during the chemical safety Authorization, and Restriction of is determined to be hazardous or a PBT/ assessment in a chemical safety report, Chemicals in the European Union (EU) vPvB, registrants must then conduct an which is submitted to ECHA. The report exposure assessment, including the then forms the basis for other REACH Safe chemical management is a development of exposure scenario(s) processes, including substance universal concern. The European Union, (ES) and exposure estimation, and a risk evaluation, authorization, and recognizing the need for a more characterization that includes restriction. integrated approach to chemical development of a health effects ECHA and the EU Member States then management, adopted REACH benchmark, such as the Derived No evaluate the information submitted (Registration, Evaluation, Authorization, Effect Level (DNEL). during the registration process to and Restriction of Chemicals) to address An exposure scenario, the main examine the testing proposals, check the chemicals throughout their life cycle. output of the exposure assessment quality of the registration dossiers, and Although REACH applies to European process, documents a set of operational evaluate whether a substance Union Member States, chemical conditions and risk management constitutes a risk to human health or the manufacturers in other countries measures for a specific use of a environment. Following the evaluation exporting to European countries also substance. A number of exposure process, registrants may be required to have to comply with the REACH estimation models have been developed comply with additional actions to requirements to sell their products in in the EU to help the regulated address concerns (i.e., submit further Europe. community create these exposure information, proceed on restriction or The REACH Regulation (EC) No 1907/ scenarios. Exposure scenarios must also authorization procedures under REACH, 2006 became effective on June 1, 2007, be included in the Safety Data Sheets take actions under other legislation, and relies on the generation and (SDS) in order to communicate this etc.). (ECHA, 2012d; Ex. #74). disclosure of data by manufacturers and information down the supply chain. As the implementation of REACH importers of chemicals in order to When an extended SDS with exposure continues, large amounts of information protect human health and the scenarios is received by a chemical user, will be generated by manufacturers, environment from chemical hazards. the exposure scenarios must be importers, and downstream users The regulation also established the reviewed to determine if they are throughout the registration, European Chemicals Agency (ECHA) to applicable to the use situation in that authorization, and restriction processes. coordinate implementation (EC 1907/ facility. If the exposure scenarios are Some of this information is publicly 2006, 2006; Ex. #70). applicable, the user has 12 months to available on ECHA Web sites, and REACH establishes processes for the implement them. If they are not, the includes toxicological information, Registration, Evaluation, Authorization, user has several options to choose from general exposure control and Restriction of Chemicals. REACH to determine appropriate controls. recommendations, and assessments of requires manufacturers and importers to These options include: (1) User the availability of alternatives. The register their chemicals and establish informing supplier of their use, and user generation and availability of this procedures for collecting and assessing convincing supplier to recognize it as an extensive data on chemicals can assist information on the properties, hazards, ‘‘identified use’’ on suppliers safety OSHA, as well as U.S. employers and potential risks and uses of their assessment; (2) user implementing the workers, to further enhance chemical chemicals. The registration process, suppliers conditions of use described in safety and health management by which began in 2010, is being phased- the exposure scenario of the original/ assisting in the assessment of hazards, in based on the tonnage and hazard current safety assessment; (3) user development of exposure control classification of the substances. For substituting the substance for another recommendations, and selection of existing chemicals, it is set to be substance that is covered in a pre- substitutes to help drive the transition completed in June 2018. existing safety assessment; (4) user to safer chemicals in the workplace. For each chemical manufactured or finding another supplier who does As of July, 2013, the REACH database imported in quantities of 1 ton or more provide an exposure scenario that of registered substances is comprised of per year, companies must register the covers the use of the substance; or (5) more than 9900 substances. The substance by providing a technical prepare a downstream user chemical database provides extensive information dossier to ECHA. The technical dossier safety report. (ECHA, 2012c; Ex. #72). to the public from dossiers prepared by includes information on: Substance After completing the exposure chemical manufacturers, importers, and identity; physicochemical properties; assessment, registrants conduct a risk downstream users. OSHA is interested

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in determining whether some hazards present—OELs established for a neurotoxicant causing symptoms of information developed and submitted few chemicals among the many in the peripheral neuropathy, and hexane- under REACH may be helpful to OSHA workplace environment have acetone blends, which amplify the in its own regulatory initiatives. diminished impact in these situations. neurotoxic effects of n-hexane, thus Information submitted under REACH’s Unlike OELs, which are only useful in resulting in risk-shifting from the requirements to assess chemical risks in protecting workers if regular environment to workers (Wilson et al., workplaces may be useful in developing measurement and assessment of 2007; Ex. #76). task-based exposure control plans, or of compliance is completed, alternative While regulatory processes lacking a use in OSHA’s feasibility analyses. risk management approaches focus more robust assessment of alternatives can OSHA is participating in high-level on determining what types of controls result in substitution that is equally discussions with the EU about the are required to reduce exposures detrimental to human health or the feasibility of sharing these data. without necessarily referring to environment, regulatory efforts that Question V.A.6: OSHA is interested in quantitative assessments of exposure to require planning processes and provide the experiences of companies that have evaluate success. guidance and technical assistance on had to prepare chemical dossiers and An important aspect of risk preferred alternatives can minimize risk submit registration information to the assessment and risk management is trade-offs and protect workers, European Chemicals Agency (ECHA) consideration of safer alternatives, consumers, and the environment. For ECHA. In particular, how might the which can often result in a path forward example, in Massachusetts, facilities approaches be used to support that is less hazardous, technically using specific toxic chemicals in certain occupational exposure assessments and feasible, and economically viable. quantities are required to undertake a development of use-specific risk toxics use reduction planning process. management in the United States? 1. Informed Substitution to Safer Agencies provide various resources to Question V.A.7: To what extent is Chemicals and Processes encourage and facilitate the voluntary information developed under REACH While establishing exposure limits for adoption of alternatives. In the case of used by U.S. businesses to promote hazardous chemicals helps to reduce trichloroethylene, the Massachusetts product stewardship and ensure safe workers’ risk of adverse health effects, Office of Technical Assistance and the use of substances and mixtures by the process is costly, time consuming, Toxics Use Reduction Institute provided product users? and does not drive the development or technical assistance, educational Question V.A.8: Should OSHA pursue adoption of safer alternatives that could workshops, a database of safer efforts to obtain data from ECHA that best protect workers. OSHA recognizes alternatives, and performance companies are required to provide that ultimately, an approach to chemical evaluations of alternatives (Toxics Use under REACH? management that incentivizes and spurs Reduction Institute, 2011a; Ex. #78; B. Non-OEL Approaches to Chemical the transition to safer chemicals, Toxics Use Reduction Institute, 2011b; Management products, and processes in a thoughtful, Ex. #79; Toxics Use Reduction Institute, systematic way will most effectively 2011c; Ex. #80). Through these efforts, OSHA’s PELs and its corresponding ensure safe and healthful conditions for Massachusetts companies reduced the hierarchy of controls have been a major workers. use of trichloroethylene by 77 percent focus in the fields of occupational Informed substitution, the considered since 1990, moving to a number of safer health and industrial hygiene for many transition from hazardous chemicals to alternatives in the process (Toxics Use years. Undoubtedly, occupational safer substances or non-chemical Reduction Institute, 2011d; Ex. #81). exposure limits (OELs), which help alternatives, provides a way of moving These cases demonstrate that the reduce workers’ risk of adverse health toward a more preventative chemical transition to safer chemicals, materials, by establishing precise targets for management framework. products, and processes will be best employers to follow, will always be an facilitated not through restrictions or essential part of controlling chemical a. Substitution in Practice bans of chemicals, but rather through exposures in workplaces. However, Whenever a hazardous chemical is the integration of informed substitution regardless of whether a more effective regulated, there is always the potential and guidance on preferred alternatives process for updating OSHA’s PELs can for the chemical to be replaced with a into regulatory efforts. be established, the rapid development of substitute chemical or redesigned new chemical substances and mixtures product or process that poses new and b. Benefits of a Preference for Primary that will continue to leave workers potentially greater hazards to workers, Prevention Strategies exposed to thousands of unregulated consumers, or the environment or The reduction or elimination of a substances make it impractical to solely results in risk-shifting from one group to hazard at the source, as traditionally rely on OELs. Moreover, for many of the another. Regrettably, this potential has embraced by health and safety chemicals and mixtures that have been been realized in a number of cases. For professionals, is not only the most developed since the PELs were initially example: reliable and effective control approach, promulgated, insufficient hazard • The regulation of methylene but also provides a number of benefits information exists to serve as a basis for chloride by EPA, FDA, and OSHA for workers and businesses. developing OELs. While OELs generally spurred the shift to 1-bromopropane, an Preferring primary prevention focus on a single chemical, workers are unregulated neurotoxicant and possible strategies (i.e. elimination and typically exposed to mixtures or carcinogen, in a variety of applications, substitution) can result in the ‘‘total multiple substances in the workplace. such as refrigeration, metal cleaning, elimination of exposure to hazardous Mixed exposures may also result in and vapor and immersion degreasing chemicals, less reliance on worker synergistic or antagonistic effects that applications, as well as in adhesive compliance or equipment maintenance are rarely considered in developing resins (Kriebel et al., 2011; Ex. #75). for success, elimination of the potential OELs. • Air quality regulations in California for accidental or non-routine Workplace risk assessments, and created a market in the vehicle repair overexposures, prevention of dermal corresponding risk management plans, industry for solvent products exposures, and process and should be based on an evaluation of all formulated with n-hexane, a environmental improvements not

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related to worker health’’ (Roelofs et al., consequences, which can result from a comparative chemicals hazard 2003; Ex. #82). precautionary switch away from a assessment tools include the Additionally, making process hazardous chemical without fully GreenScreen (Clean Production Action, improvements designed to reduce or understanding the profile of potential 2012; Ex. #88) and Design for the eliminate workers’ exposures to alternatives, and to enable a course of Environment (DfE) Safer Product hazardous chemicals often results in action based on the best information Labeling Program (U.S. EPA, 2011a; Ex. significant business improvements or that is available or can be estimated. #89). Other existing methods for savings. A 2008 study by the American Informed substitution approaches focus chemical comparison include the Industrial Hygiene Association (AIHA) on identifying alternatives and Column Model (Institut fu¨ r demonstrated the relationship between evaluating their health, safety, and Arbeitsschutz der Deutschen the application of the hierarchy of environmental hazards, potential trade- Gesetzlichen Unfallversicherung, 2011; controls and financial benefits. The offs, and technical and economic Ex. #90) and QuickScan (Netherlands study found that the greatest cost feasibility. Ministry of Infrastructure and the savings and other benefits tended to be Substitution is not limited to Environment, 2002; Ex. #91). Tools and associated with hazard elimination and substitution of one chemical with methods for evaluating performance and the elimination of personal protective another. It can also occur at the cost attributes, while less well equipment (PPE) usage. It also production process or product level. At developed, are also critical for the highlighted the ability of material the product level, substitution may selection of a preferred alternative. substitution to result in very large involve a design change that takes payoffs due to the creation of advantage of the characteristics of new d. Substitution at OSHA efficiencies throughout the business or different materials. A chemical Substitution is not new for OSHA. process (American Industrial Hygiene process design change may eliminate Historically, OSHA attempted to Association, 2008; Ex. #83). For several production steps thereby encourage substitution by setting a ‘‘no example: avoiding or reducing the use of high occupational exposure level’’ for certain • A foundry making automatic diesel hazard chemicals. In some cases, a potential carcinogens where suitable engine blocks enhanced and particular chemistry or the function it substitutes that are less hazardous to aggressively enforced a purchasing serves may be determined to be humans existed for particular uses (45 specification program to eliminate unnecessary. FR 5257–58; Ex. #92). Although this supplied scrap metal contaminated with As implementation of chemical requirement was never fully lead. By eliminating lead from its substitution and product and process implemented, the final rule detailed a supply chain, the company not only changes can be quite complicated, a process for the Agency to analyze the achieved high levels of employee variety of processes, tools, and methods feasibility of substitutes, which required protection, but also enhanced the are critical to achieving informed the consideration of: (1) the safety of the quality of its products and realized substitution. substitute, including the comparative nearly $20 million in savings for the Substitution planning, similar to acute and chronic toxicity of the facility. facility planning for pollution carcinogenic chemical and the • An aircraft manufacturing prevention and source reduction, substitute, and other relevant factors, company, struggling to comply with the establishes practical steps for evaluating such as environmental factors; (2) the OSHA PEL for hexavalent chromium, substitution as a workplace risk technical feasibility of the substitute, transitioned from chromate-based reduction measure. This type of including its relative effectiveness; and primers to non-chromate based primers, planning process supports informed (3) the economic cost of substitution (45 resulting not only in the elimination of substitution by encouraging chemical FR 5258; Ex. #92, 29 CFR 1990.111(k); worker exposure to chromate dusts from users to: Systematically identify Ex. #93, see also 1990.132(b)(6); Ex. #94, rework sanding, but also in quality hazardous chemicals; set goals and 1990.146(k); Ex. #95). improvements of its products, increased priorities for the elimination or OSHA health standards also identify customer satisfaction, productivity reduction of hazardous chemicals; substitution as a preferred exposure gains, avoidance of costly changes to evaluate alternatives; identify preferred control. For example, in the 1989 Air their exhaust ventilation system, and a alternatives; and promote the adoption Contaminants Standard, the Agency savings of $504,694 over the 5-year of identified alternatives. refers to substitution, when properly duration of the project. Alternatives assessment is a process applied, as ‘‘a very effective control of identifying and comparing potential technique’’ and ‘‘the quickest and most c. Informed Substitution chemical and non-chemical alternatives effective means of reducing exposure’’ In order to truly protect workers from that could replace chemicals or (54 FR 2727, 2789; Ex. #7). In addition, chemical hazards, it is important that technologies of concern on the basis of the Agency’s respiratory protection OSHA not only develop health their hazards, performance, and standard mandates the use of accepted standards for hazardous chemicals, but economic viability. A variety of engineering control measures, including also understand alternatives to regulated alternatives assessment processes have the substitution of less toxic materials, chemicals and support a path forward been developed to date (Lavoie et al., as far as feasible, before using that is less hazardous, technically 2010; Ex. #84; Toxics Use Reduction respirators to control occupational feasible, and economically viable. Institute, 2006; Ex. #85; Rossi et al., diseases caused by breathing Informed substitution provides a 2006; Ex. #86; Raphael et al., 2011; Ex. contaminated air (29 CFR 1910.134(a); framework for meeting this goal. #87). Various tools and methods have Ex. #96). Despite this, when complying As previously described, informed been developed to evaluate hazard, with PELs and other health standards in substitution is the considered transition performance, and cost when assessing practice, employers are required to from a potentially hazardous chemical, alternatives. For example, comparative select and implement administrative or material, product, or process to safer chemicals hazard assessments compare engineering controls before using chemical or non-chemical alternatives. potential alternatives based on a variety personal protective equipment, but are The goals of informed substitution are to of hazard endpoints in order to select a not specifically required or encouraged minimize the likelihood of unintended safer alternative. Some examples of to consider elimination or substitution

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before other engineering or In October 2013, OSHA launched an chemicals. For example, the administrative controls. (See 29 CFR effort to encourage employers, workers, Massachusetts Toxics Use Reduction 1910.1000(e); Ex. #97). Thus, and unions to proactively reduce the Act requires entities that use listed substitution may be often overlooked in use of hazardous chemicals in the hazardous chemicals in certain favor of other approaches, such as workplace and achieve chemical use quantities to undertake a planning ventilation and isolation, when that is safer for workers and better for process for reducing the use of those employers are controlling exposures to business. As part of this effort, the chemicals (Massachusetts Department of hazardous chemicals. Agency developed a web toolkit that Environmental Protection, n.d.; Ex. OSHA also considers substitution guides employers and workers in any #77). during the development of PELs. While industry through a seven-step process Existing regulations in the European OSHA does not solely rely on for transitioning to safer chemicals Union place a duty on employers to substitution to make its required (OSHA, 2013a; Ex. #107). Each step replace the use of certain hazardous feasibility findings (62 FR 1494, 1576; contains information, resources, chemicals with safer substitutes, if Ex. #98; 71 FR 10099, 10260; Ex. #99), methods, and tools that will help users technically possible. For example, the Agency, as part of PEL rulemaking eliminate hazardous chemicals or make Directive 2004/37/EC requires the efforts, develops and evaluates informed substitution decisions in the substitution of carcinogens and information about substitution in its workplace by finding a safer chemical, mutagens with less harmful substances technological and economic feasibility material, product, or process. where technically feasible (2004/37/EC, 2004) and Directive 98/24/EC requires analysis, highlighting options available e. Possible Opportunities for Integrating for eliminating or reducing the regulated employers to ensure that risks from Informed Substitution Approaches Into hazardous chemical agents are chemical’s use in various industries and OSHA Activities applications. For example, the eliminated or reduced to a minimum, There are a variety of existing feasibility analysis for methylene preferably by substitution (98/24/EC, regulatory and non-regulatory models chloride describes numerous substitute 1998; Ex. #109). for incorporating informed substitution Other regulations require the use of chemicals and processes, including a into chemical management activities. acceptable substitutes where the uses of detailed table of substitute paint The following are some examples of certain hazardous chemicals are phased- removal methods for 16 applications, entities that have developed and out. This type of approach is currently and evaluates the relative risks for seven utilized informed substitution implemented by U.S. EPA in the context of the more common substitutes for approaches as part of regulatory efforts; of phasing-out ozone depleting methylene chloride (OSHA, 1996; Ex. guidance and policy development; substances. The Clean Air Act requires #100). However, the analysis of education, training, and technical that these substances be replaced by substitutes has varied widely from assistance activities; and data others that reduce risks to human health regulation to regulation. For example, development and research efforts. and the environment. Under the the feasibility analysis for hexavalent Significant New Alternatives Policy i. Models for Regulatory Approaches chromium identifies specific substitute (SNAP) program, EPA identifies and chemicals and processes in many Some regulations and voluntary publishes lists of acceptable and industries, but does not discuss the standards require risk reduction through unacceptable substitutes for ozone- health or safety hazards of the the implementation of a hierarchy of depleting substances (Safe Alternatives substitutes (OSHA, 2006a; Ex. #101), controls that clearly delineates Policy, 2011; Ex. #111). while the feasibility analysis for elimination and substitution as Some chemical management formaldehyde includes only a mention preferred options to be considered and frameworks require the assessment of of the availability of one identified implemented, where feasible, before substitutes before making decisions to substitute for a few industry sectors other controls. For example, the ANSI/ limit or restrict the use of a hazardous (OSHA, 1987; Ex. #102) and the AIHA Z10–2005 standard for chemical. For example, the European feasibility analysis for ethylene oxide Occupational Health and Safety Union REACH Regulation (Registration, does not contain any discussion of Management Systems, a voluntary Evaluation, Authorization and substitutes (OSHA, 1984; Ex. #103). national consensus standard, requires Restriction of Chemicals) requires that OSHA has also included information organizations to implement and an analysis of alternatives, the risks on substitutes in a variety of non- maintain a process for achieving feasible involved in using any alternative, and regulatory documents. New information risk reduction based upon the following the technical and economic feasibility of about available substitutes and preferred order of controls: A. substitution be conducted during substitution trends is included in Elimination; B. Substitution of less applications of authorization for lookback reviews of existing standards hazardous materials, processes, substances of very high concern (EC conducted by the Agency (e.g., lookback operations, or equipment; C. 1907/2006, 2006; Ex. #70). review of the ethylene oxide standard, Engineering controls; D. Warnings; E. Other efforts to spur the transition to lookback review of the methylene Administrative Controls; and F. safer chemicals, products, and processes chloride standard) (OSHA, 2005; Ex. Personal protective equipment (ANSI/ are based on the development of #104; OSHA, 2010; Ex. #105). In some AIHA Z10–2005, 2005; Ex. #108). criteria-based standards for functions or cases, OSHA has also developed European Union Directives 98/24/EC processes that rely on hazardous information on substitution, even where and 2004/37/EC require employers to chemicals. For example, the EPA DfE a PEL has not been established. For eliminate risks by substitution before Safer Product Labeling Program is a example, the OSHA guidance document implementing other types of protection nonregulatory program that recognizes on the best practices for the safe use of and prevention measures (98/24/EC, safe products using established criteria- glutaraldehyde in health care includes 1998; Ex. #109, 2004/37/EC, 2004; Ex. based standards. In order to receive DfE information about drop-in replacements #110). recognition, all chemicals in a and alternative processes available to Some existing laws require firms to formulated product must meet Master reduce or eliminate the use of the undertake planning processes for the Criteria (i.e., toxicological thresholds for chemical (OSHA, 2006b; Ex. #106). reduction of identified hazardous attributes of concern, including: acute

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mammalian toxicity; carcinogenicity; comparing the health risks, iv. Models for Data Development genetic toxicity; neurotoxicity; repeated physicochemical risks, and technical Several efforts, at both the federal and dose toxicity; reproductive and suitability of identified alternatives international levels, attempt to support developmental toxicity; respiratory (German Federal Institute for the transition to safer alternatives sensitization; skin sensitization; Occupational Safety and Health, 2008; through research and data development. environmental toxicity and fate; and Ex. #115). For example, EPA, in collaboration with eutrophication), as well as relevant The German Environment Agency has the non-governmental organization functional-class criteria (i.e., additional also developed guidance on sustainable GreenBlue and industry stakeholders, toxicological thresholds for attributes of chemicals. The guide assists jointly developed a database of cleaning concern for surfactants, solvents, direct- manufacturers, formulators, and end product ingredient chemicals release products, fragrances, and users of chemicals in the selection of (surfactants, solvents, fragrances, and chelating and sequestering agents), sustainable chemicals by providing chelating agents) that meet identified established by the EPA (U.S. EPA, criteria to distinguish between environmental and human health 2011a; Ex. #89). sustainable and non-sustainable criteria (GreenBlue, 2012; Ex. #117). In While there are a number of ways in substances (German Environment which OSHA could consider integrating Spain, the Institute of Work, Agency, 2011; Ex. #116). Environment, and Health (ISTAS) has substitution and alternatives assessment OSHA considered developing into its regulatory efforts, the Agency, in developed a database that is a repository guidance on safer substitutes to of information on substitute chemicals. order to promulgate any such standard, accompany individual chemical would need to make the significant risk, The database can be searched for exposure limit standards in its 2010 technological feasibility, and economic chemical substances, uses/products, regulatory review of methylene feasibility findings required under the processes, or sectors to display chloride. Due to the increased use of OSH Act. However, even without information on substitutes and hazards other hazardous substitutes after regulation, it is important to consider associated with those substitutes methylene chloride was regulated in voluntary models for incorporating (ISTAS, 2012; Ex. #118). In addition, the 1998, the Agency considered informed substitution into chemical European Union SUBSPORT project has establishing guidance recommending management activities. begun to create a Substitution Support that firms check the toxicity of Portal, a state-of-the-art resource on ii. Models for Guidance Development alternatives on the EPA and NIOSH Web safer alternatives to the use of hazardous Some entities have developed sites before using a substitute (OSHA, chemicals. The resource is intended to guidance to promote the transition to 2010; Ex. #105). provide not only information on safer alternatives. The European Union, iii. Models for Education, Training, and alternative substances and technologies, in order to support legislative Technical Assistance but also tools and guidance for substitution mandates, developed substance evaluation and substitution guidance on the process of substitution, Other entities have developed management (SUBSPORT, 2012; Ex. including setting goals, identifying outreach, training, and technical #119). priority chemicals, evaluating assistance efforts for substitution Other efforts focus on the completion substitutes, selecting safer alternatives, planning and the assessment of of alternatives assessments for priority and implementing chemical, material, substitutes for regulated chemicals. The chemicals and uses. Currently, EPA’s and process changes. The guidance Massachusetts Toxics Use Reduction Design for the Environment Program, as establishes and describes a seven step Act, which established a number of well as the Massachusetts Toxics Use substitution framework, providing structures to assist businesses, provides Reduction Institute, has conducted workplaces with a systematic process a good example of such efforts. The alternatives assessments for priority for evaluating chemical risk and Massachusetts Office of Technical chemicals and functional uses, making identifying chemicals that could or Assistance and Technology (OTA) this information publicly available in should be substituted (European provides compliance assistance and on- the process (U.S. EPA, 2012c; Ex. #120; Commission, 2012; Ex. #113). The steps site technical support that helps Toxics Use Reduction Institute, 2006; include: Assessing the current level of facilities use less toxic processes and Ex. #85). risk; deciding on risk reduction needs; boost economic performance. The In addition, some research efforts assessing the margins of change; looking Massachusetts Toxics Use Reduction attempt to fill data gaps with regards to for alternatives; checking the Institute provides training, conducts the toxicological properties of existing consequences of a change; deciding on research, and performs alternatives chemicals. While some efforts to change; and deciding on how and when assessments in order to educate conduct toxicity testing for chemicals is to implement change. businesses on the existence of safer taking place at the federal level (U.S. Similarly, the German Federal alternatives and promote the on-the- EPA, 2011b; Ex. #121, U.S. EPA, 2012d; Institute for Occupational Safety and ground adoption of these alternatives. Ex. #122), there have not been Health (BAuA) established guidance to Toxics Use Reduction Planners systematic efforts to conduct targeted support the employer’s duty, as (TURPs), certified by the Massachusetts toxicology studies for specific mandated in the German Hazardous Department of Environmental Protection substitutes of interest. Substances Ordinance, to evaluate (MA DEP), prepare, write and certify the Question V.B.1: To what extent do substitutes to hazardous substances and required toxics use reduction plans and you currently consider elimination and implement substitution where less are continually educated about best substitution for controlling exposures to hazardous alternatives are identified practices in toxics use reduction. Taken chemical hazards? (German Federal Institute for together, these services provide a robust Question V.B.2: What approaches Occupational Safety and Health, 2011; resource for regulated businesses on the would most effectively encourage Ex. #114). The guidance, TRGS 600, transition to safer alternatives businesses to consider substitution and includes a framework for identifying (Massachusetts Department of adopt safer substitutes? and evaluating substitutes and Environmental Protection, n.d.; Ex. Question V.B.3: What options would establishes criteria for assessing and #77). be least burdensome to industry,

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especially small businesses? What comparing the toxicity based on On March 26, 2012, OSHA published options would be most burdensome? nineteen human and environmental major modifications to the HCS. (77 FR Question V.B.4: What information and hazard endpoints, assigning a level of 17574–17896; Ex. #125). These support do businesses need to identify concern of high, moderate, or low for modifications are being phased in over and transition to safer alternatives? each endpoint based on various several years, and will be completely What are the most effective means to established criteria (Clean Production implemented in June 2016. Referred to provide this information and support? Action, 2012; Ex. #88). as HazCom 2012, the revised rule Question V.B.5: How could OSHA A number of robust frameworks have incorporates a new approach to leverage existing data resources to also been developed to assess the assessing the hazards of chemicals, as provide necessary substitution feasibility of adopting alternatives for well as conveying information about information to businesses? hazardous chemicals based on them to employees. The revised rule is v. Effectively Implementing Informed environmental, performance, economic, based on the United Nations’ Globally Substitution Approaches human health, and safety criteria. The Harmonized System for the Massachusetts Toxics Use Reduction Classification and Labeling of Chemicals The goals of informed substitution Institute developed and implemented a (GHS), which established an cannot be achieved without the methodology for assessing alternatives international, harmonized approach to development and application of tools to hazardous chemicals based on hazard communication. and methods for identifying, comparing, performance, technical, financial, The original HCS was a performance- and selecting alternatives. Existing tools environmental, and human health and methods range in complexity, from oriented rule that prescribed broad rules parameters (TURI, 2006; Ex. #85). for hazard communication but allowed quick screening tools to detailed Similarly, the U.S. EPA DfE program has comparative hazard assessment chemical manufacturers and importers also developed and implemented an to determine how the information was methodologies to robust frameworks for alternatives assessment framework to evaluating alternatives based on hazard, conveyed. In contrast, HazCom 2012 is characterize alternatives based on the specification-oriented. Thus, while the performance, and economic feasibility. assessment of chemical hazards as well Illustrative examples, which represent HCS requires chemical manufacturers as the evaluation of availability, and importers to determine the hazards the range of tools available, are functionality, economic, and life cycle described below. of chemicals, and prepare labels and considerations (Lavoie et al., 2010; Ex. safety data sheets (SDSs), HazCom 2012 Some assessment tools provide #84, U.S. EPA, 2012c; Ex. #120). methods for rapid evaluation of goes further by specifying a detailed Although some tools and methods scheme for hazard classification and chemical hazards based on readily exist, as discussed above, further available information. These types of prescribing harmonized hazard research and development in this area is information on labels. In addition, SDSs tools are critical for small and medium- critical for the effective implementation sized businesses, which often lack must follow a set order of information, of informed substitution. and the information to be provided in resources and expertise to evaluate and Question V.B.6: What tools or each section is also specified. compare chemical hazards. In the state methods could be used by OSHA and/ of Washington, the Department of or employers to conduct comparative Hazard classification means that a Ecology (DOE) has developed the Quick hazard assessments? What criteria chemical’s hazards are not only Chemical Assessment Tool (QCAT) to should be considered when comparing identified, they are characterized in allow businesses to identify chemicals chemical hazards? terms of severity of the effect or weight that are not viable alternatives to a Question V.B.7: What tools or of evidence for the effect. Thus, the chemical of concern by assigning an methods could be used by OSHA and/ assessment of the hazard involves appropriate grade for the chemical or employers to evaluate and compare identifying the ‘‘hazard class’’ into based on nine high priority hazard the performance and cost attributes of which a chemical falls (e.g., target organ endpoints (Washington Department of alternatives? What criteria should be toxicity), as well as the ‘‘hazard Ecology, 2012; Ex. #123). Similarly, the considered when evaluating category’’—a further breakdown of the Institute for Occupational Safety and performance and cost? hazardous effect generally based on Health of the German Federation of either numerical cut-offs, or an Institutions for Statutory Accident 2. Hazard Communication and the assessment of the weight of the Insurance and Prevention (IFA) Globally Harmonized System (GHS) evidence. For target organ toxicity, for developed the Column Model as a tool OSHA promulgated its Hazard example, chemicals for which there is for businesses to evaluate chemicals Communication Standard (HCS) (29 human evidence of an effect are likely based on six hazard categories using CFR 1910.1200; Ex. #124) in 1983 to to be classified under Category 1, the information obtained from chemical require employers to obtain and provide most hazardous category, thus safety data sheets (IFA, 2011; Ex. #90). information to their employees on the indicating the highest classification for Other existing tools provide more hazards associated with the chemicals the effect. If the only data available are detailed methodologies for conducting a used in their workplaces. After thirty animal studies, the chemical may fall in comparative hazard assessment, which years of implementation, the HCS has Category 2—still potentially hazardous require greater expertise, data, and resulted in extensive information being to humans, but lower in terms of the resources to complete. The disseminated in American workplaces weight of evidence for the effect. Table- GreenScreen, created by Clean through labels on containers, safety data I illustrates how such a chemical hazard Production Action, provides a sheets (SDSs), and worker training classification may be assigned by hazard methodology for evaluating and programs. class and hazard category

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The process of classifying chemicals Once a chemical is placed into a toxicology data for a chemical or other under HazCom 2012 means that all hazard class and hazard category, agent. Health hazard banding presumes chemicals will be fully characterized as HazCom 2012 (and the GHS) specifies it is possible to group chemicals or other to their hazards, as well as degree of the harmonized information that must agents into categories of similar toxicity hazardous effect, using a standardized appear on the label. Referred to as ‘‘label or hazard characteristics. process with objective criteria. Thus, elements,’’ these include a pictogram, Health hazard banding assigns OSHA could use this system to select signal word, hazard statement(s), and chemicals with similar toxicities into certain hazard classes and categories to precautionary statement(s). In addition, hazard groups (or bands. The set priorities. For example, the Agency the label must have a product identifier occupational health professional can could decide to identify substances that and supplier contact information. The use this classification or hazard band, are characterized as Class 1 Carcinogens use of standardized label elements will along with information on worker or as Reproductive Toxicants as its help to ensure consistency and exposures to the substance, to do comprehensibility of the information, priorities. Then chemicals that fall into exposure risk assessment. Hazard which will make HazCom 2012 more those hazard categories could be further banding, along with exposure effective in terms of conveying information, is a useful risk assessment investigated to determine other relevant information to employees and tool, particularly in situations where factors, such as numbers of employees employers. The approach taken in the toxicity data are sparse. Hazard banding exposed, use of the chemical, risk GHS strengthens the protections of the can also aid in the prioritization and assessment, etc. The HazCom 2012 OSHA HCS in several ways, and hazard ranking of chemicals in the information could lead to a more introduces the possibility of the Agency workplace. NIOSH is working with structured and consistent priority using the information generated under OSHA and a variety of stakeholder system than previously attempted HazCom 2012 to help frame a more groups (federal agencies, industry, labor approaches. (Ex. #126) OSHA could also comprehensive approach to ensuring organizations, and professional investigate whether the hazard occupational chemical safety and associations) to develop guidance on categories lend themselves to health. establishing the technical criteria, establishing regulatory provisions for decision logic, and minimum dataset for 3. Health Hazard Banding hazard classes and categories rather the hazard band process. than for individual substances. The ‘‘Health hazard banding’’ can be 4. Occupational Exposure Banding availability of specific hazard defined as a qualitative framework to categorization for chemicals could allow develop occupational hazard NIOSH has proposed an approach, this to be done on a grouping basis— assessments given uncertainties caused occupational exposure banding, which either in regulation, or in guidance. by limitations in the human health or would sort chemicals into five bands (A

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through E), with each band representing solved before. Control banding uses the The Control of Substances Hazardous a different hazard level. Chemicals with solutions that experts have developed to Health (COSHH) guidance issued by the lowest toxicity would be grouped in previously to control occupational the Safety Executive (HSE) of the United Band A, while the moist toxic chemicals chemical exposures, and suggests them Kingdom is one model of control would be grouped in Band E. The for other tasks with similar exposure banding (Health and Safety Executive, proposed process includes a three-tiered situations. It focuses resources on 2013; Ex. #129). Under the 2002 COSHH evaluation system based on the exposure controls, and describes how regulation, employers must conduct a availability of toxicological data to strictly a risk needs to be managed. risk assessment to decide how to define a range of concentrations for Control banding is a more prevent employees from being exposed controlling chemical exposures. A Tier comprehensive qualitative risk to hazardous substances in the 1 evaluation relies on hazard codes and characterization and management workplace. COSHH principles first categories from GHS, and intended for strategy that goes further in assigning require that exposure is prevented by chemicals for which little information prescribed control methods to address employers, to the extent possible, by exists. Therefore, a chemical in Band D chemical hazards. It is designed to allow means of: or E in the Tier 1 process is a bad actor employers to evaluate the need for • Changing the way tasks are carried and should be targeted for elimination exposure control in an operation and to out so that exposures aren’t necessary and or substitution. Tier 2 and 3 require identify the appropriate control strategy anymore; professional expertise. Once NIOSH given the severity of the hazard present • Modifying processes to cut out completes their validation work of the and magnitude of exposure. The hazardous by-products or wastes; or three tiers, they plan to develop tools to strength of control banding is that it is • Substituting a non-hazardous or facilitate evaluating hazard data and based on information readily available less hazardous substance for a assigning chemicals to hazard bands as to employers on safety data sheets hazardous substance with new well as educational materials for health (SDSs), without the need for exposure substances (or use the same substance in and safety professionals, managers, and measurements or access to occupational a different form) so that there is less risk workers. (Exs. #127 & #128) health expertise (except in certain to health. circumstances). Control banding If exposures to hazardous substances 5. Control Banding involves not only the grouping of cannot be prevented entirely, then Control banding is a well-established workplace substances into hazard bands COSHH requires employers to approach of using the hazard statements (based on combinations of hazard and adequately control them (Control of from a label and/or safety data sheet exposure information) but also links the Substances Hazardous to Health (SDS) to lead an employer to bands to a suite of control measures, Regulations, 2002; Ex. #130). recommended control measures. This such as general dilution ventilation, Recognizing that many small employers approach has been used successfully in local exhaust ventilation, containment, may not have access to the required a number of countries, particularly in and use of personal protective expertise, and also to reduce the need Europe where such as system of hazard equipment (PPE). for a professional and to promote classification has been in use for some Under control banding, one must consistency in the assessment process, time. HazCom 2012 opens up the consider the chemical’s hazardous the HSE developed an approach to possibility that control banding can be properties, physical properties, and assessment and control of chemical further developed and refined in the exposure potential in order to determine hazards using control banding U.S., either as guidance or regulatory the level of exposure control desired. methodologies spelled out in the 2002 provisions. It is a particularly useful The criteria used for categorizing regulation. This control banding way to provide information for small chemicals include hazard information approach is described in detail in businesses to effectively control such as flammability, reactivity, and the COSHH Essentials. Employers may use chemicals without necessarily going nature of known health effects. These the guidance spelled out in the COSHH through the process of exposure characteristics are associated with Essentials guide to determine the monitoring and other technical defined hazard phrases (e.g., ‘‘Causes appropriate control approach for the approaches to ensuring compliance. It severe skin burns and eye damage’’ or chemical hazard in question. Each also will give employers better ‘‘Causes liver damage,’’ or control approach covers a range of information to conduct risk assessments ‘‘Reproductive hazard’’). These actions that work together to reduce of their own workplaces, and thus select standardized phrases have been familiar exposure: (1) General Ventilation, (2) better control measures. in the EU as ‘‘R-phrases’’ and are found Engineering Controls, (3) Containment, Health hazard banding can be used in on SDSs. and lastly, (4) Special—a scenario where conjunction with control banding to use Different hazard bands exist along a employers should seek expert advice to the information available on the hazard continuum ranging from less hazardous select appropriate control measures. to guide the assessment and chemicals to more hazardous chemicals. The first step outlined under the management of workplace risks. In fact, Once the appropriate hazard group has COSHH Essentials guidance is to health hazard banding is the first step in been determined from the hazard consult the safety data sheet for each the control banding process. Control statements (e.g., ‘‘Hazard Group B’’), chemical in use. Employers must record banding determines a control measure exposure potential is evaluated based on the date of assessment, the name of the (for example dilution ventilation, the quantity in use, volatility (for chemical being assessed, the supplier of engineering controls, containment, etc.) liquids), or particulate nature (for the chemical, and the task(s) for which based on a range or ‘‘band’’ of hazards solids). After evaluating these properties the chemical is used. (such as skin/eye irritant, very toxic, and categorizing the chemical into Step two involves the determination carcinogenic, etc.), and exposures hazard and exposure bands, the of the health hazard. Employers (small, medium, or large exposure). This chemicals are matched, based on their ascertain the hazard by assessing the approach is based on the fact that there band categorization, to the appropriate possible health effects from the hazard are a limited number of control control strategy, with more stringent statements provided on the SDS, the approaches, and that many chemical controls applied for substances that are amount in use, and the dustiness or exposure problems have been met and placed in high-toxicity bands. volatility of the chemical in use.

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Employers reference the hazard described as ‘‘small’’ (grams or ‘‘low’’, ‘‘medium’’, or ‘‘high’’ volatility statements found on chemical safety milliliters), ‘‘medium’’ (kilograms or based upon the chemical’s boiling point data sheets against a table of COSHH liters), or ‘‘large’’ (tons or cubic meters). and ambient or process operating hazard groups in order to categorize When in doubt, COSHH Essentials temperatures. them into the appropriate hazard group principles encourage employers to err In Step three of the COSHH Essentials (‘‘A’’ through ‘‘E’’, and possibly ‘‘S’’). on the side of the larger quantity in guide, employers identify the Chemicals in Group A tend to be making their determination. appropriate control approach. Tables regarded as less harmful and may, for Additionally, the physical state of example, cause temporary irritation. chemicals effect how likely they are to provided by the COSHH Essentials Chemicals in Group E are the most get into the air and this affects the guide show the control approaches for hazardous and include known control approach to be utilized. For hazard groups ‘‘A’’ through ‘‘E’’ carcinogens. Group S encompasses solids, COSHH Essentials guides according to quantity of chemical in use substances that have special employers to make a determination of and its dustiness/volatility. Table-II considerations for damage caused via either ‘‘Low’’, ‘‘Medium’’, or ‘‘High’’ illustrates how the control approaches contact with the eyes or skin. dustiness based upon visible criteria are assigned. The control approaches Additionally, Step two requires observed during the use of these referred to by number in the table are: employers to make some determinations chemicals. Employers may also use 1) General Ventilation, 2) Engineering about the quantity and physical state of look-up tables provided in the COSHH Control, 3) Containment, and 4) Special. chemicals in use. They must decide if Essentials guide to make a (Health and Safety Executive, 2009; Ex. the amount of chemical in use would be determination of whether liquids have #131).

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Additionally, the COSHH Essentials control banding will provide a higher reduce significant risk of material guide provides detailed control level of control than is necessary. impairment and for technological and guidance sheets for a range of common COSHH Essentials and other control economic feasibility? tasks. Consultation of these task-specific banding concepts developed in Europe Question V.B.10.: Please describe guidance sheets constitutes Step four were based initially on the European your experience in using health hazard under COSHH Essentials. Step five of Union’s pre-GHS classification and and/or control banding to address COSHH Essentials involves the labeling system. Since the European exposures to chemicals in the employer deciding on how best to Union has adopted the GHS in its workplace. implement control measures as classification and labeling rules, these Question V.B.11.: Are additional prescribed. COSHH Essentials risk phrases will no longer be available. studies available that have examined the principles also stress the importance of Control banding approaches are now effectiveness of health hazard and employers reviewing their assessments based on the hazard statements in the control banding strategies in protecting regularly, especially if there is a GHS. OSHA’s adoption of the GHS to workers? significant change in workplace modify the HCS opens up the Question V.B.12.: How can OSHA processes or environment. Employers opportunity to use a control banding most effectively use the concepts of are encouraged to incorporate exposure approach to chemical exposures in health hazard and control banding in level monitoring, health surveillance, American workplaces based on the developing health standards? and relevant training. hazard classification system. This V.B.13.: How might OSHA use A number of European Union nations would be an alternative to focusing on voluntary guidance approaches to assist (e.g., United Kingdom, Germany, PELs that could achieve the goal of risk businesses (particularly small France, Netherlands, Norway, and management for many chemicals and businesses) with implementing the Belgium) and Asian nations (Singapore operations in workplaces. principles of hazard banding in their and Korea) already utilize control OSHA is interested in exploring how chemical safety plans? Could the GHS banding methods comparable to COSHH it might employ these non-OEL chemical classifications be the starting Essential methods for management of a approaches in a regulatory framework to point for a useful voluntary hazard variety of chemical exposures in the address hazardous substances where the banding scheme? What types of workplace. available hazard information does not A number of studies have been yet provide a sufficient basis for the information, tools, or other resources conducted to assess the validity of a Agency’s traditional approach of using could OSHA provide that would be control banding model for control of risk assessment to establish a PEL. most effective to assist businesses, exposure to chemicals. Jones and Nicas OSHA believes that a hazard banding unions, and other safety and health (2006; Ex. #132) reviewed the COSHH approach could allow the Agency to stakeholders with operationalizing Essentials model for hazard-banding in establish specification requirements for hazard banding principles in the vapor degreasing and bag-filling tasks. the control of chemical exposures more workplace? Their study showed that the model did efficiently, offering additional flexibility Question V.B.14.: Should OSHA not identify adequate controls in all to employers, while maintaining the consider greater use of specification scenarios with approximately eighteen safety and health of the workforce. standards or guidance as an approach to percent of cases leaving workers Although health hazard banding and developing health standards? If so, for potentially under-protected. However, control banding show some promise as what kinds of operations are in a similar study, Hashimoto et al. vehicles for providing guidance to specification approaches best suited? (2007; Ex. #133) showed that hazard- occupational health professionals for 6. Task-based Exposure Assessment and banding tended to overestimate the level controlling exposures to workers, their Control Approaches of control and therefore was more use in a regulatory scheme presents protective. In 2011, Lee et al. (Ex. #134) challenges. For example, the agency Job hazard analysis is a safety and found that for a paint manufacturing would need to consider how, if it were health management tool in which facility using mixtures of chemicals to require such approaches, the OSH certain jobs, tasks, processes or with different volatilities, exposure to Act’s requirement that standards that procedures are evaluated for potential the chemicals with higher volatility had reduce significant risk to the extent hazards or risks, and controls are a higher likelihood to exceed the feasible might be satisfied. implemented to protect workers from predicted hazard-band. Lee also OSHA is also interested in exploring injury and illness. Likewise, task-based recommended further research for more the development of voluntary guidelines assessment and control is a system that precise task identification to better for incorporation of control banding into categorizes the task or job activity in enable implementation of task-specific safety and health management programs terms of exposure potential and control measures. in U.S. workplaces. These efforts might requirements for specific actions to NIOSH provides a thorough review include the development and control the exposure are implemented, and critical analysis of the concepts, dissemination of compliance assistance regardless of occupational exposure protective nature, and potential barriers materials (publications, safety and limits. Tasks are isolated from the to implementation of control banding health topic Web pages, computer deconstruction of a larger process that is programs (NIOSH, 2009; Ex. #135). software and smartphone apps, e-Tools) in turn part of an overall operation or NIOSH concluded that control banding as well as consultation services to assist project in an industrial setting. As can be used effectively for performing small businesses. industrial engineering explores the workplace risk assessments and Question V.B.8: How could OSHA use optimization of complex processes or implementing control solutions for the information generated under systems through an evaluation of the many, but not all occupational hazards. HazCom 2012 to pursue means of integrated system of people, equipment, Additionally, NIOSH found that while managing and controlling chemical materials, and other components, the in some situations in which control exposures in an approach other than task-based system attempts to evaluate banding cannot provide the precision substance-by-substance regulation? work activities to define uniform and accuracy necessary to protect Question V.B.9: How could such an exposure scenarios and their variables worker health, and in some cases approach satisfy legal requirements to and establish targeted control strategies.

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Task-based exposure potential can be hazards in construction (ASSE, 2012; working man and woman in the Nation’’ for defined using readily available data Ex. #139). The standard requires the first time, a legal right to ‘‘safe and including process operating procedures, employers to first identify tasks healthful working conditions.’’ OSH Act task observation and analysis, job involving the use of chemicals and § 2(a); 29 U.S.C. 651. (Ex. #9) Congress recognized that ‘‘the problem of assuring safe activity description, chemical inventory create a hazard communication and healthful workplaces for our men and and toxicity information (hazard inventory for these tasks. Then the women ranks in importance with any that communication), historical exposure employer must determine the hazard engages the national attention today.’’ S. Rep. data, existing exposure databases, level and exposure level, and finally 91–1282 at 2 (1970; Ex. #17). Indeed, when employee surveys, and current exposure develop a control plan based on the establishing the OSH Act, Congress was data. Based on this exposure hazard and exposure classifications. If concerned about protecting workers from assessment, the task is matched with the chemicals used in the task are low known hazards as well as from the numerous specific requirements for exposure hazard and the task is low exposure, new hazards entering the workplace: control. Control specifications can draw then the control plan requires following Occupational diseases which first on a broad inventory of exposure the SDS and label precautions. If, commanded attention at the beginning of the industrial revolution are still undermining controls and administrative tools to however, the task involves greater than the health of workers. . . . Workers in dusty reduce and prevent worker exposure to minimal hazard or exposure, a more trades still contract various respiratory the identified hazardous substances. protective control plan must be diseases. Other materials long in industrial OSHA is interested in exploring task- developed. use are only now being discovered to have based control approaches as a technique However, developing specification toxic effects. In addition, technological for developing specification standards standards governing exposure to health advances and new processes in American for the control of hazardous substances standards for general industry industry have brought numerous new in the workplace as an alternative or operations presents a different hazards to the workplace. S. Rep. 91–1282 at 2. supplement to PELs. Such an approach challenge. Given the diversity in the may offer the advantage of providing nature of industrial operations across a Many of the occupational diseases first discovered during the industrial revolution, employers with specific guidance on range of industry sectors that might be and which later spurred Congress to create how to protect workers from exposure affected by a chemical standard, OSHA OSHA, still pose a significant harm to U.S. and reduce or eliminate the need for is concerned that it will be more workers. While the number of hazardous conducting regular exposure difficult to develop specification chemicals to which workers are exposed has assessments to evaluate the standards for exposure controls that are increased exponentially due to new effectiveness of exposure control specific enough to clearly delineate formulations of chemical mixtures, OSHA strategies. OSHA has developed obligations of employers to protect has not been successful in establishing specification-oriented health standards employees, and yet are general enough standards that adequately protect workers from hazardous chemical exposures, even in the past, in particular, those for lead to provide employers flexibility to from the older, more familiar chemicals. and asbestos in construction. implement controls that are suitable for OSHA’s PELs are mandatory limits for air More recently, OSHA developed a their workplaces and that allow for contaminants above which workers must not control-specification-based approach for future innovation in control be exposed. OSHA PELs generally refer to controlling exposures to crystalline technologies. differing amounts of time during which the silica dust in construction operations Question V.B.15: OSHA requests worker can be exposed: (1) Time weighted (OSHA, 2009; Ex. #136, OSHA, 2013b; comment on whether and how task- averages (TWAs) which establish average Ex. #137). Construction operations are based exposure control approaches limits for eight-hour exposures; (2) short-term particularly amenable to specification limits (STELs) which establish limits for might be effectively used as a regulatory short term exposures; and (3) ceiling limits, standards due to the task-based nature strategy for health standards. which set never-to-be exceeded maximum of the work. The National Institute for VI. Authority and Signature exposure levels. Occupational Safety and Health OSHA’s PELs have existed nearly as long (NIOSH), the Center to Protect Workers’ David Michaels, Ph.D., MPH, as the agency itself. Most of OSHA’s current Rights—a research arm of the Building Assistant Secretary of Labor for PELs were adopted by the agency in 1971. and Construction Trades Department, Occupational Safety and Health, U.S. OSHA currently has PELs for approximately AFL-CIO—has developed and used a Department of Labor, 200 Constitution 470 hazardous substances, which are ‘‘Task-Based Exposure Assessment Avenue NW., Washington, DC 20210, included in the Z-Tables in general industry at 29 CFR part 1910.1000 (Ex. #4) and in Model (T–BEAM)’’ for construction. The directed the preparation of this notice. three maritime subsectors: Part 1915.1000 characteristic elements of T–BEAM are: OSHA is issuing this notice under 29 (Shipyard Employment; Ex. #5); part 1917 (1) an emphasis on the identification, U.S.C. 653, 655, 657; 33 U.S.C. 941; 40 (Marine Terminals; Ex. #140); and part 1918 implementation, and evaluation of U.S.C. 3704 et seq.; Secretary of Labor’s (Longshoring; Ex. #141). Z-Tables that apply engineering and work practice controls; Order 1–2012 (77 FR 3912, 1/25/2012); in construction are found at part 1926.55 (Ex. and (2) use of experienced, specially and 29 CFR Part 1911. #6). There are inconsistencies in the PELs that apply across industry sectors which trained construction workers Signed at Washington, DC, on September (construction safety and health resulted from the regulatory history of each 30, 2014. divergent industry sector. specialists) in the exposure assessment David Michaels, As discussed in further detail below, the process. A task-based approach was Assistant Secretary of Labor for Occupational Agency attempted to update the general used because tasks, or specialized skills, Safety and Health. industry PELs in 1989, but that revision was form the single greatest thread of vacated by judicial decision in 1992. As continuity in the dynamic environment Appendix A: History, Legal such, the 1971 PELs remain the exposure of construction (Susi et al., 2000; Ex. Background, and Significant Court limits with which most U.S. workplaces are #138). Decisions required to comply. The Agency also A new American National Standards promulgates ‘‘comprehensive’’ substance- I. Background specific standards (e.g., lead, methylene Institute Standard (ANSI A10.49) based Since the OSH Act was enacted in 1970, chloride) which, in addition to PELs, require on GHS health hazard categories and OSHA has made significant achievements additional ancillary provisions such as utilizing a task-based approach is also toward improving the health and safety of housekeeping, exposure monitoring, and being developed to address chemical America’s workers. The OSH Act gave ‘‘every medical surveillance.

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II. OSHA’s Statutory Authority, Adoption of the exposure limits that apply to construction 1950s and 1960s. In contrast, the ACGIH the PELs in 1971, and the 1989 Attempted were derived from the 1970 ACGIH TLVs and annually reviews chemical substances and Revision certain substance specific Sec. 6(b) standards. updates its list of TLVs®. Where OSHA The industry sector that is referred to today currently has PELs for approximately 470 A. The Purpose of the OSH Act and OSHA’s as ‘‘Maritime’’ has a long and somewhat chemical hazards, the ACGIH recommends Authority To Regulate Hazardous Chemicals confusing history. The Department of Labor TLVs® for more than 700 chemical The OSH Act vests the Secretary of Labor has had some authority since 1958 for the substances and physical agents, with the power to ‘‘promulgate, modify, or maritime industry under the Longshore and approximately 200 of which have been revoke’’ mandatory occupational safety and Harbor Workers Compensation Act (33 U.S.C. updated since 1971. (FACOSH, 2012; Ex. health standards. OSH Act section 6(b), 29 901 et seq.). Specifically authority was #145). U.S.C. 655(b). An ‘‘occupational safety and granted under Public Law 89–742 for the C. Section 6(b) Notice and Comment health standard,’’ as defined by section 3(8) Secretary of Labor to issue regulations to Rulemaking of the OSH Act, is a ‘‘standard which protect the health and safety of requires conditions, or the adoption or use of longshoremen, marine terminal workers, ship Section 6(b) of the OSH Act provides one or more practices, means, methods, repairers, shipbuilders, and ship breakers. OSHA with the authority to promulgate operations, or processes, reasonably Under Section 4(b)(2) of the OSH Act, 33 health standards. OSHA promulgates two necessary or appropriate to provide safe or U.S.C. 941 (Ex. #143) became OSHA main types of health standards: (i) PELs, and healthful employment and places of standards in 1971. (ii) comprehensive standards, which, as the employment.’’ OSH Act section 3(8), 29 At that time, the Shipyard standards were name implies, consist of provisions to protect U.S.C. 652(8). (Ex. #9) in three parts of 29 CFR; part 1915 for ship workers in addition to PELs. Section 6(b)(5) The OSH Act provides three separate repairing, part 1916 for shipbuilding and part imposes specific requirements governing the approaches for promulgating standards. The 1917 for shipbreaking. In 1982 parts 1915, adoption of health standards: first approach, in section 6(a) of the OSH Act, 1916 and 1917 were consolidated into a new [T]he Secretary, in promulgating standards provided OSHA with an initial two-year part 1915, Shipyards. As a consequence of dealing with toxic materials or harmful window in which to adopt standards without their history, the PELs applicable to the new physical agents under this subsection, shall hearing or public comment. Additionally, part 1915, Shipyards, are complex. set the standard which most adequately sections 6(b) and 6(c) provide methods Depending upon the specific operation, assures, to the extent feasible, on the basis of currently available to the agency for either the 1970 TLVs or 1971 PELS the best available evidence, that no employee promulgating health standards. Section 6(b) (originally 1968 TLVs) apply. See §§ 1915.11, will suffer material impairment of health or allows OSHA to create and update standards 1915.12, 1915.32 and 1915.33 (Ex. #144). functional capacity even if such employee through notice and comment rulemaking, Additionally, several of the OSHA single- has regular exposure to the hazard dealt with and section 6(c) provides OSHA with the substance standards apply. by such standard for the period of his authority to set emergency temporary Pursuant to the Longshoremen and Harbor working life. Development of standards standards. OSHA has not successfully Worker Compensation Acts of 1958 under this subsection shall be based upon adopted an emergency temporary standard amendments, in 1960 OSHA issued research, demonstrations, experiments, and for over thirty years, and it is not discussed regulations protecting longshore employees, such other information as may be further here. along with marine terminal employees. These appropriate. In addition to the attainment of regulations were adopted as OSHA standards the highest degree of health and safety B. The Adoption of the PELs Under Section and later recodified. In 1983, OSHA issued protection for the employee, other 6(a) a final standard specifically covering marine considerations shall be the latest available Under section 6(a), OSHA was permitted to terminals (29 CFR part 1917) separately from scientific data in the field, the feasibility of adopt ‘‘any national consensus standard and longshoring. The Marine Terminal Standard the standards, and experience gained under any established Federal standard’’ so long as basically requires that no employee be this and other health and safety laws. the standard ‘‘improved safety or health for exposed to air contaminants over the limits Whenever practicable, the standard specifically designated employees.’’ 29 set in the 1971 Z-Tables. See §§ 1917.2, promulgated shall be expressed in terms of U.S.C. 655(a). The purpose of providing 1917.22, 23, 25. (Ex. #140) objective criteria and of the performance OSHA with this two-year window ‘‘was to Longshoring operations continue to be desired. establish as rapidly as possible national regulated by 29 CFR Part 1918 (Ex. #141). 29 U.S.C. 655(6)(b)(5). (Ex. #9) occupational safety and health standards OSHA has consistently interpreted that the The courts have elaborated on the findings with which industry is familiar.’’ S. Rep. 91– air contaminant exposure limits set forth in OSHA must make before adopting a 6(b)(5) 1282 at 6. When establishing this fast track 1910.1000 (Ex. #4) are applicable pursuant to standard. One such case, Industrial Union to rulemaking, Congress emphasized the 1910.5(c) to longshoring because no Dept., AFL–CIO v. American Petroleum temporary nature of the approach, noting that quantitative exposure limits are set forth for Institute, 448 U.S. 607 (1980) (the Benzene these ‘‘standards may not be as effective or air contaminants, other than carbon case; Ex. #10), has had a major impact on up to date as is desirable, but they will be monoxide. OSHA rulemaking by establishing a useful for immediately providing a As discussed above, the Agency was given threshold requirement that before the agency nationwide minimum level of health and authority to adopt standards to provide can promulgate a health standard it must safety.’’ S. Rep. 91–1282 at 6. (Ex. #17) initial protections for workers from what the show that a significant risk of material Establishing PELs was one of the first Congress deemed to be the most dangerous impairment exists, which can be eliminated actions taken by OSHA. Most of the PELs workplace threats. Congress felt that it was or lessened by a change in practices. contained in the Tables Z–1, Z–2, and Z–3 ‘‘essential that such standards be constantly Additionally, the phrase ‘‘to the extent of 29 CFR 1910.1000 (Ex. #4) for general improved and replaced as new knowledge feasible’’ in section 6(b)(5) has been industry, as well as those in construction and and techniques are developed.’’ S. Rep. 91– interpreted by the courts to require that maritime were adopted during the initial 1282 at 6. (Ex. #17) However, because OSHA OSHA show that a standard is both two-year window under section 6(a). OSHA has been unable to update the PELs, they economically and technologically feasible. adopted approximately 400 occupational remain frozen at the levels at which they American Textile v. Donovan, 452 U.S. 490 exposure limits for general industry that were were initially adopted. OSHA’s PELs are (1981) (the Cotton Dust case; Ex. #15); United based on the American Conference of largely based on acute health effects and do Steelworkers v. Marshall, 647 F.2d 1189, Governmental Industrial Hygienist’s (ACGIH) not take into consideration newer research 1264 (D.C. Cir. 1980) (the Lead I case; Ex. 1968 list of Threshold Value Limits (TLVs). regarding chronic effects occurring at lower #12). These cases will be discussed in greater In addition, about 25 additional exposure occupational exposures. Thus, although there detail in Section III of this Appendix. limits recommended by the American have been radical changes in our Standards Association (presently called the understanding of airborne contaminants, D. 1989 Air Contaminants Standard American National Standards Institute) updates in technology, and changes to In 1989, OSHA published the Air (ANSI), were adopted as national consensus industry practices, OSHA’s PELs are still Contaminants final rule, which remains the standards. 36 FR 10466 (Ex. #142). Currently based on research performed during the Agency’s most significant attempt at

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updating the PELs. Unlike typical substance- In reviewing the evidence, OSHA first prepared the regulatory impact analysis in specific rulemakings, where OSHA develops determined whether the studies and analyses two phases. The first phase of its feasibility a comprehensive standard, the Air were valid and of reasonable scientific analyses involved using secondary databases Contaminants final rule was only intended to quality. Second, it determined, based on the to collect information on the chemicals to be update existing PELs and to add new PELs studies, if the published documentation of regulated and the industries in which they for substances not currently regulated. As the REL or TLV would meet OSHA’s legal were used. These databases provided such, the final rule did not include ancillary requirements for setting a PEL. Thus, OSHA information on the toxicity and health effects provisions (e.g. exposure monitoring, reviewed the evidence of significant risk at of exposure to chemicals covered by the medical surveillance, requirements for the existing PEL or, if there was no PEL, at rulemaking, on engineering controls, and on personal protective equipment, or labeling) exposures which might exist in the emergency response procedures. (54 FR 2725; because OSHA determined that these workplace in the absence of any limit. Third, Ex. #7). provisions would delay and unnecessarily OSHA reviewed the studies to determine if Two primary databases were used to complicate the PELs update. Appendix B. to the new PEL would lead to substantial collect information on the nature and extent this Request for Information contains the reduction in significant risk. 54 FR 2372. of employee exposures to the substances table of PELs from the 1989 Air OSHA’s determination of where the new covered by the rule. One database was the Contaminants Final Rule. The table includes PEL should be set was based on its review 1982 NIOSH National Occupational Exposure both PELs originally adopted by OSHA in and analysis of the information found in Survey (NOES), which collected information 1971 and the PELs established under the these sources. OSHA set the new PELs based from 4,500 businesses on the number of 1989 final rule. on a review of the available evidence. 54 FR workers exposed to hazardous substances. In order to determine a starting point for 2402. Safety factors were applied on a case- The second database was OSHA’s Integrated updating the general industry PELs for by-case basis. (54 FR 2365, 2399; Ex. #7). Management Information System (IMIS) chemicals on Tables Z–1, Z–2, and Z–3 of 29 Based on the analysis discussed above, which contains air samples taken since 1979 CFR 1910.1000 (Ex. #4), and for creating new OSHA summarized the health evidence for by OSHA industrial hygienists during PELs for some substances not listed in those each individual substance and determined compliance inspections. OSHA also tables, OSHA analyzed existing databases when and at what level a new limit was consulted industrial hygienists and engineers and lists of occupational exposure limits necessary to substantially reduce a who provided information about the (OELs) to determine the scope of the significant risk of material impairment of exposure controls in use, the number and rulemaking. After extensive review of all health or functional capacity among size of plants that would be impacted by the available sources of OELs, including the American workers. The following example rulemaking, and the estimated costs National Institute for Occupational Safety illustrates the type of analysis that OSHA associated with meeting the new PELs. (54 and Health (NIOSH) Recommended Exposure conducted for each substance: FR 2373, 2725, 2736; Ex. #7). Levels (RELs), the American Conference of OSHA had no former limit for potassium As part of the second phase of its Industrial Hygienists (ACGIH) Threshold hydroxide. A ceiling limit of 2 mg/m(3) was feasibility analyses, OSHA performed an Limit Values (TLVs®), the American proposed by the Agency based on the ACGIH industry survey and site visits. The survey Industrial Hygiene Association (AIHA) recommendation, and NIOSH (Ex. 8–47, was the largest survey ever conducted by Workplace Environmental Exposure Levels Table N1) concurred with this proposal. OSHA and included responses from 5,700 (WEELs), and limits from other countries, OSHA has concluded that this limit is firms in industries believed to use chemicals OSHA ultimately selected the ACGIH’s 1987– necessary to afford workers protection from included in the scope of the Air 88 TLVs to identify the basis for which irritant effects and is establishing the 2-mg/ Contaminants proposal. It was designed to substances and corresponding exposure m(3) ceiling limit for potassium hydroxide in focus on industry sectors that potentially had values that would be included in the the final rule. the highest compliance costs, identified proposed rule. 53 FR 20977. The TLVs were selected as a reference point because of the [One commenter] (Ex. 3–830) commented through an analysis of existing exposure data number of substances they covered, the that there was no basis for establishing an at the four-digit SIC (Standards Industrial availability of written documentation on how occupational limit for potassium hydroxide. Classification) code level. 54 FR 2843. The the TLVs were selected, and the general OSHA disagrees and notes that the irritant survey gathered data on chemicals, acceptance of the TLVs by industrial effects of potassium hydroxide dusts, mists, processes, exposures and controls currently hygienists, other occupational health and aerosols have been documented (ACGIH in use, which ‘‘permitted OSHA to refine the professionals, and industry. (53 FR 20967; 1986/Ex. 1–3, p. 495; Karpov 1971/Ex. 1– Phase I preliminary estimates of technical Ex. #18, 54 FR 2375; Ex. #7) 1115). Although dose-response data are and economic feasibility. Site visits to 90 After determining the scope of hazardous lacking for this substance, it is reasonable to firms were conducted to verify the data chemicals to be included in the rulemaking, expect potassium hydroxide to exhibit collected on chemicals, processes, controls, OSHA began the process of identifying the irritant properties similar to those of sodium and employee exposures.’’ 54 FR 2725; see most appropriate new PELs to be proposed. hydroxide, a structurally related strong also 54 FR 2736–39, 2768, 2843–69. OSHA considered both the ACGIH TLVs and alkali. In its criteria document, NIOSH OSHA analyzed the data collected in the NIOSH RELs as a starting point. (53 FR (1976k/Ex. 1–965) cites a personal phases I and II to determine whether the 20966–67; Ex. #18) When the TLV and REL communication (Lewis 1974), which reported updated PELs were both technologically and were similar, OSHA reviewed both the that short-term exposures (2 to 15 minutes) economically feasible for each industry ACGIH documentation and the NIOSH to 2 mg/m(3) sodium hydroxide caused sector covered. 54 FR 2374. recommendation. Where the TLV and REL ‘‘noticeable’’ but not excessive upper For technological feasibility, OSHA ‘‘differed significantly,’’ OSHA reviewed the respiratory tract irritation. Therefore, OSHA evaluated engineering controls and work studies and reasoning upon which the finds that the 2-mg/m(3) ceiling limit will practices available within industry sectors to NIOSH and ACGIH recommendations were provide workers with an environment that reduce employee exposures to the new PELs. based to determine which was more minimizes respiratory tract irritation, which In general, it found three types of controls appropriate. OSHA presumed that a the Agency considers to be material might be employed to reduce exposures: significant difference did not exist between impairment of health. To reduce these risks, Engineering controls, work practice and the TLV and the REL for a chemical when: OSHA is establishing a ceiling limit of 2 mg/ administrative controls, and personal (a) The TLV and REL values are the same; m(3) for potassium hydroxide. (54 FR 2332 protective equipment. Engineering controls (b) TLV and REL values differ by less than et seq.) included local exhaust ventilation, general 10 percent; OSHA proposed making 212 PELs more ventilation, isolation of the worker and (c) The TLV and REL Time Weighted protective and setting new PELs for 164 enclosure of the source of the emission, and Averages (TWA) are the same, but there are substances not previously regulated by product substitution. Work practice controls differences in the Short Term Exposure Limit OSHA. Substances for which the PEL was included housekeeping, material handling (STEL) or Ceiling (C); or already aligned with a newer TLV were not procedures, leak detection, training, and (d) The TWA in one data base is the same, included. personal hygiene. Personal protective or one-half, the STEL/C in the other data In order to determine whether the Air equipment included respirators, and where base. 53 FR 20977. Contaminants rule was feasible, OSHA the chemicals involved presented skin

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hazards, protective gloves and clothing. 54 Based on the survey, OSHA determined protective enough. The unions also asserted FR 2789–90, 2840. that 74 percent of establishments with that OSHA’s failure to include any ancillary OSHA found that many processes required hazardous chemicals had no exposures in provisions, such as exposure monitoring and to reduce exposure were ‘‘relatively excess of the new PELs and would incur no medical surveillance, prevented employers standardized throughout industry and are costs, 22 percent would incur costs to from ensuring the exposure limits were not used [to control exposures] for a variety of implement additional engineering controls, exceeded and resulted in less-protective substances.’’ 54 FR 2373–74. It ‘‘examined and 4 percent would be required to provide PELs. typical work processes found in a cross personal protective equipment only for Fifteen of the twenty-five lawsuits were section of industries’’ and had industry maintenance workers. 54 FR 2851. OSHA settled; of the remaining suits, nine were experts identify the major processes that had estimated the total compliance cost to be from industry groups challenging seven the potential for hazardous exposures above $788 million per year annualized over ten specific exposure limits, and one was from the new PELs, requiring new controls. For years at a ten percent discount rate. 54 FR the unions challenging 16 substances. each affected industry group, OSHA 2851. OSHA assessed the economic impact of Pursuant to 28 U.S.C. 2112(a), all petitions reviewed the data it had collected to the standard on industry profits on the two- for review were consolidated for disposition ‘‘identify examples of successful application digit SIC level. Assuming industry would not and transferred to the Eleventh Circuit Court of controls to these processes.’’ 54 FR 2790. be able to pass the additional costs on to of Appeals. AFL–CIO v. OSHA, 965, F.2d Based on its review OSHA found that customers, the average change in profits was 962, 981–82 (11th Cir. 1992) (Air ‘‘engineering controls and improved work less than one percent, with the largest change Contaminants). Although only 23 of the new practices [were] available to reduce exposure in SIC 30 (Rubber and Plastics) of 2.3 PELs were challenged, the court ultimately levels in almost all circumstances.’’ 54 FR percent. 54 FR 2885, 2887. Alternatively, decided to vacate the entire rulemaking, 2727. In some cases, it found respirators or assuming that industry could pass on all finding that ‘‘OSHA [had] not sufficiently other protective equipment was necessary. 54 costs associated with the rule to its explained or supported its threshold FR 2727, 2813–15, 2840. For each relevant customers, OSHA determined that for no determination that exposure to these industry sector (which was at the 2, 3, or 4 industry sector would prices increase on substances at previous levels posed a digit SIC code level, depending on the average more than half of a percent. 54 FR significant risk of these material health processes involved). As the court explained 2886, 2887. In neither case was the economic impairments or that the new standard in Air Contaminants, 965 F.2d at 981 (Ex. impact significant, OSHA found, and the new eliminates or reduces that risk to the extent #8): standard was therefore considered by the feasible.’’ Air Contaminants, 965 F.2d at 986– The SIC codes classify by type of activity Agency to be economically feasible. (54 FR 987; Ex. #8. for purposes of promoting uniformity and 2733, 2887; Ex. #7) After publishing the Air Contaminants comparability in the presentation of data. As The Air Contaminants final rule was Final Rule for general industry, OSHA the codes go from two and three digits to four published on January 19, 1989. In the final proposed amending the PELs for the digits, the groupings become progressively rule, OSHA summarized the health evidence maritime and construction industry sectors more specific. For example, SIC Code 28 for each individual substance, discussed over and establishing PELs to cover the agriculture represents ‘‘Chemicals and Allied Products,’’ 2,000 studies, reviewed and addressed all industry sector. OSHA published a Notice of SIC Code 281 represents ‘‘Industrial major comments submitted to the record, and Proposed Rulemaking (NPRM) on June 12, Inorganic Chemicals,’’ and SIC Code 2812 provided a rationale for each new PEL 1992, which included more protective includes only ‘‘Alkalies and Chlorine.’’ chosen. The final rule differed from the exposure limits for approximately 210 OSHA prepared a list of the processes proposal in a number of ways as OSHA substances currently regulated in the identified and the engineering controls and changed many of its preliminary assessments construction and maritime industries and personal protective equipment (PPE) required presented in the proposal based on added new exposure limits for approximately to reach the new PELs. 54 FR 2814–39. In comments submitted to the record. 160 chemicals to protect these workers. (57 almost all cases, the OSHA list showed that Ultimately, the final rule adopted more FR 26002; Ex. #146). The notice also the new PELs could be reached through a protective PELs for 212 previously regulated proposed approximately 220 PELs to cover combination of ventilation and enclosure substances, set new PELs for 164 previously the agriculture industry. OSHA extended the controls. 54 FR 2816–39. OSHA received and unregulated substances, and left unchanged comment period indefinitely while it addressed numerous comments on the an additional 52 substances, for which lower considered possible responses to the Air controls it proposed for use in various PELs were initially proposed. OSHA Contaminants court decision. Once it became industries. 54 FR 2790–2813. OSHA found estimated over 21 million employees were clear that an appeal would not be pursued, that ‘‘in the overwhelming majority of potentially exposed to hazardous substances the Agency halted work on the project. situations where air contaminants [were] in the workplace and over 4.5 million encountered by workers, compliance [could] employees were currently exposed to levels III. Significant Court Decisions Shaping be achieved by applying known engineering above the old PELs or in the absence of a OSHA’s Rulemaking Process and OSHA’s control methods, and work practice PEL. OSHA projected the final rule would Approach to Updating Its Permissible improvements.’’ 54 FR 2789. result in potential reduction of over 55,000 Exposure Limits To assess economic feasibility, OSHA ‘‘made estimates of the costs to reduce lost workdays due to illnesses per year and OSHA’s Air Contaminants final rule is the exposure based on the scale of operations, annual compliance with this final rule would agency’s most significant attempt to move type of process, and degree of exposure prevent an average of 683 fatalities annually away from developing individual, substance- reduction needed’’ based primarily on the from exposures to hazardous substances. 54 specific standards. As discussed above in results of the survey. 54 FR 2373, 2841–51. FR 2725. Section II, this rule attempted to establish or For each survey respondent, OSHA identified The update to the Air Contaminants revise 376 exposure limits for chemicals in the processes employed at the plant and standard generally received wide support a single rulemaking. OSHA’s efforts in made a determination about whether workers from both industry and labor. However, there reducing occupational illnesses and the would be exposed to a chemical in excess of was dissatisfaction on the part of some mortality associated with hazardous a new PEL. 54 FR 2843–47. For those industry representatives and union leaders, chemical exposure has largely been through processes where the new PEL would be who brought petitions for review challenging developing substance specific standards, exceeded, OSHA estimated the cost of the standard. For example, some industry such as Hexavalent Chromium general controls necessary to meet the PEL. 54 FR petitioners argued that OSHA’s use of generic industry (29 CFR 1910.1026; Ex. #26), 2947–51. Process control costs were then findings, the inclusion of so many substances shipyards (29 CFR 1915.1026), and summed by establishment and costs ‘‘for the in one rulemaking, and the allegedly construction (29 CFR 1926.1026) and survey establishment were then weighted (by insufficient time provided for comment by Methylene Chloride (29 CFR 1910.1052; Ex. SIC and size) to represent compliance costs interested parties created a record inadequate #27). These standards, in addition to setting for the universe of affected plants.’’ 54 FR to support the new set of PELs. In contrast, PELs, establish other provisions to help 2851. OSHA received and addressed many the unions challenged the generic approach reduce risk to workers, such as requirements comments on its cost approach and used by OSHA to promulgate the standard to monitor exposure, train workers and assumptions. (54 FR 2854–62; Ex. #7). and argued that several PELs were not conduct medical surveillance, if appropriate.

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However, due to the associated time and rulemaking used to update or create new change in practices’’ before it can adopt a costs, promulgating comprehensive rules for PELs for 376 chemicals in a single new standard. Benzene, 448 U.S. at 642; Ex. individual chemical hazards is an ineffective rulemaking was permissible under the OSH #10. approach to address all chemical hazard Act. Although the Eleventh Circuit Although the Court declined to establish a exposures because of the sheer number of determined that the Air Contaminants final set test for determining whether a workplace chemicals and mixtures to which workers are rule did not fit within the classic definition is unsafe, it did provide guidance on what exposed on a daily basis. To date, only 30 of a generic rulemaking, the court upheld the constitutes a significant risk. The Court comprehensive individual standards have format used by OSHA to update the PELs. Air stated a significant risk was one that a been successfully published by the Agency to Contaminants, 965 F.2d at 972. The court, in reasonable person would consider significant address hazardous chemicals in the so holding, reasoned ‘‘nothing in the OSH and ‘‘take appropriate steps to decrease or workplace. Act prevented OSHA from addressing eliminate.’’ Benzene, 448 U.S. at 655 (Ex. The courts have had a significant impact multiple substances in a single rulemaking.’’ #10). For example, it said, a one in a 1,000 on OSHA’s rulemaking process by Air Contaminants, 965 F.2d at 972. The court risk would satisfy the requirement. However, articulating specific burdens OSHA must also upheld OSHA’s statutory authority to this example was merely an illustration, not meet before promulgating a standard. It was select the substances and determine the a hard line rule. The Court made it clear that because the Air Contaminants court found parameters of its rules. However, the court determining whether a risk was ‘‘significant’’ that OSHA had failed to meet some of these stated that even though OSHA was permitted was not a ‘‘mathematical straitjacket’’ and burdens that the court vacated OSHA’s to promulgate multi-substance rules, each did not require the Agency to calculate the attempt to update the PELs. This section substance was required to ‘‘stand exact probability of harm. 448 U.S. at 655. discusses the important cases laying out independently, i.e., . . . each PEL must be OSHA was not required to support a OSHA’s burdens under the OSH Act, and supported by substantial evidence in the significant risk finding ‘‘with anything summarizes the reasons the Air record considered as a whole and approaching scientific certainty’’ and was Contaminants court gave for finding that accompanied by adequate explanation.’’ Air free to use ‘‘conservative assumptions’’ in OSHA had not satisfied those burdens. These Contaminants, 965 F.2d at 972; Ex. #8. interpreting the evidence. 448 U.S. at 656. cases influence what steps OSHA may take Still, because OSHA had not made a in the future to update the PELs. C. Significant Risk of a Material Impairment significant risk finding at the 10 ppm level 1. The Benzene Case and Significant Risk (indeed, the Court characterized the evidence A. The Substantial Evidence Test: OSHA’s of leukemia in the record at the 10 ppm level Burden of Proof for Promulgating Health The significant risk requirement was first as ‘‘sketch[y]’’), the Court vacated the new Standards articulated in 1980 in a plurality decision of the Supreme Court in Benzene, 448 U.S. 607. PEL and remanded the matter to OSHA. The test used by the courts to determine The petitioners in Benzene challenged 2. OSHA’s Post-Benzene Approach to whether OSHA has reached its burden of OSHA’s rule lowering its PEL for benzene Significant Risk and Air Contaminants proof is the ‘‘substantial evidence test.’’ This from 10 ppm to 1 ppm. In support of the new test, which applies to policy decisions as In past rulemakings involving hazardous PEL, OSHA found that benzene caused well as factual determinations, is set forth in chemicals, OSHA satisfied its requirement to leukemia and that the evidence did not show section 6(f) of the OSH Act, which states: show that a significant risk of harm is present that there was a safe threshold exposure level ‘‘the determinations of the Secretary shall be by estimating the risk to workers subject to below which no excess leukemia would conclusive if supported by substantial a lifetime of exposure at various possible occur. Applying its policy to treat evidence in the record considered as a exposure levels. These estimates have carcinogens as posing a risk at any level of whole.’’ 29 U.S.C. 655(f). ‘‘Substantial typically been based on quantitative risk exposure where such a threshold could not evidence’’ has been defined as ‘‘such relevant assessments. As a general policy, OSHA has be established, OSHA chose the new PEL of evidence as a reasonable mind might accept considered a lifetime excess risk of one death 1 ppm based on its finding that it was the as adequate to support a conclusion.’’ Cotton or serious illness per 1000 workers associated lowest feasible exposure level. This was Dust, 452 U.S. at 522; Ex. #15 (quoting with occupational exposure over a 45 year because Section 6(b)(5) of the OSH Act Universal Camera Corp. v. NLRB, 340 U.S. working life as clearly representing a requires standards to be set at the most 474, 477 (1951) Ex. #16). significant risk. However, as noted above, protective level that is feasible. See Benzene, Although the substantial evidence test Benzene does not require OSHA to use such 448 U.S. at 633–37; Ex. #10. requires OSHA to show that the record as a a rigid or formulaic criterion. Nevertheless, whole supports the final rule, OSHA is not The Benzene Court rejected OSHA’s OSHA has taken a conservative approach and required to wait for ‘‘scientific certainty’’ approach. First, it found that the OSH Act has used the 1:1,000 example as a useful before promulgating a health standard. did not require employers to ‘‘eliminate all benchmark for determining significant risk. Benzene, 448 U.S. at 656 (Ex. #10). Rather, risks of harm from their workplaces.’’ The This approach has often involved the use of to meet its burden of proof under the OSH Act defines ‘‘occupational safety and the quantitative risk assessment models ‘‘substantial evidence test,’’ the agency need health standard’’ to be standard that require OSHA has employed in developing only ‘‘identify relevant factual evidence, to the adoption of practices which are substance-specific health standards. explain the logic and the policies underlying ‘‘reasonably necessary or appropriate to In the Air Contaminants rule, OSHA any legislative choice, to state candidly any provide safe or healthful employment and departed from this approach. Rather, as noted assumptions on which it relies, and to places of employment’’. OSH Act § 3(8), 29 above, it looked at whether studies showed present its reasons for rejecting significant U.S.C. 652(8); Ex. #9. excess effects of concern at concentrations contrary evidence and argument.’’ Lead I, 647 Relying on this definition, the Court found lower than allowed under OSHA’s existing F.2d. at 1207; Ex. #12. that the Act only required that employers standard. Where they did, OSHA made a ensure that their workplaces are safe, that is, significant risk finding and either set a PEL B. The Air Contaminants Case that their workers are not exposed to (where none existed previously) or lowered OSHA published the Air Contaminants ‘‘significant risk[s] of harm.’’ 448 U.S. at 642. the existing PEL. These new PELs were based final rule on January 19, 1989. As discussed Second, the Court made clear that it is on agency judgment, taking into account the in Section II, the standard adopted more OSHA’s burden to establish that a significant existing studies, and as appropriate, safety protective PELs for 212 previously regulated risk is present at the current standard before factors. Both industry and union petitioners substances, set new PELs for 164 previously lowering a PEL. The burden of proof is challenged aspects of OSHA’s approach to unregulated substances, left unchanged the normally on the proponent, the Court noted, making its significant risk determinations. PELs for 52 substances for which lower limits and there was no indication in the OSH Act The AFL–CIO argued that OSHA’s rule was had been proposed, and raised the PEL for that Congress intended to change this rule. ‘‘systematically under protective,’’ and one substance. 54 FR 2332. The rule was 448 U.S. at 653, 655. Thus, the Court held asserted that 16 of the exposure limits in the challenged by both industry and labor that, before promulgating a health standard, final rule were too high. For example, the groups, which both raised a series of issues OSHA is required to make a ‘‘threshold AFL–CIO argued that OSHA had made a regarding the validity of the final rule. finding that a place of employment is unsafe– policy determination not to lower the PELs The first issue addressed by the court was in the sense that significant risks are present for carbon tetrachloride and vinyl bromide whether OSHA’s ‘‘generic’’ approach to and can be eliminated or lessened by a even though the exposure limits chosen

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would continue to pose a residual risk in some basis in reputable scientific evidence,’’ 1. Technological Feasibility excess of 3.7 deaths per 1,000 workers the court concluded. Air Contaminants, 965 A standard is technologically feasible if ‘‘a exposed over the course of their working F.2d at 978–979. See Section IV. A. for typical firm will be able to develop and lifetime. The court agreed with the AFL–CIO, additional discussion of the use of safety install engineering and work practice finding that OSHA failed to provide adequate factors in risk assessment. controls that can meet the PEL in most evidence to support the higher PEL chosen Ultimately, although the Eleventh Circuit operations.’’ Lead I, 647 F.2d at 1272. by the agency. The court found that some of noted that OSHA ‘‘probably established that Standards are permitted to be ‘‘technology the PELs chosen by the Agency were at levels most or all of the substances involved do forcing,’’ meaning that OSHA can require that would continue to pose a significant risk pose a significant risk at some level,’’ the industries to ‘‘develop new technology’’ or of material health impairment, and court determined that OSHA failed to ‘‘impose a standard which only the most concluded that OSHA’s decision was due to adequately explain or provide evidence to technologically advanced plants in an time and resource constraints, rather than support its conclusion that ‘‘exposure to industry have been able to achieve, even if legitimate considerations, such as feasibility. these substances at previous levels posed a only in some of their operations some of the Air Contaminants, 965 F.2d at 976–77; Ex. significant risk . . . or that the new standard time.’’ Lead I, 647 F.2d at 1264; Ex. #12. #8. eliminates or reduces that risk to the extent Technological feasibility analysis generally Conversely, the American Iron and Steel feasible.’’ Air Contaminants, 965 F.2d at 987. focuses on demonstrating that PELs can be Institute (AISI; Ex. #147) argued that OSHA Therefore, the court vacated the rule and achieved through engineering and work set the PELs for certain substances below the remanded it to the agency. practice controls. However, the concept of level substantiated by the evidence. AISI 3. Material Impairment technological feasibility applies to all aspects argued that OSHA failed to quantify the risk of the standard, including air monitoring, of material health impairment at present Under section 6(b)(5), OSHA must set housekeeping, and respiratory protection exposure levels posed by individual standards to protect employees against requirements. Some courts have required substances and instead relied on assumptions ‘‘material impairment of health or functional OSHA to determine whether a standard is in order to select its updated PELs. The court capacity.’’ This requirement was technologically feasible on an industry-by- agreed with the AISI, finding that although uncontroversial in Benzene, since the effect industry basis, Color Pigments Manufacturers OSHA summarized the studies on health on which OSHA regulated was leukemia. Assoc. v. OSHA, 16 F.3d 1157 (Ex. #13), effects in the final rule, it did not explain However, in Air Contaminants, AISI argued 1162–63 (11th Cir. 1994); Air Contaminants, why the ‘‘studies mandated a particular PEL that not all of the health effects addressed by 965 F.2d at 981–82 (Ex. #8), while another chosen.’’ Air Contaminants, 965 F.2d at 976. OSHA in the final rule were material health court has upheld technological feasibility Specifically, the court stated that OSHA effects. Specifically, AISI stated that the findings based on the nature of an activity failed to quantify the risk from individual category of ‘‘sensory irritation,’’ which OSHA across many industries rather than on a pure substances and merely provided conclusory used as an endpoint to set PELs for 79 industry basis, Public Citizen Health statements that the new PEL would reduce a substances, failed to distinguish between Research Group v. United States Department significant risk of material health effects. Air ‘‘materially impairing sensory irritation and of Labor, 557 F.3d 165,178–79 (3d Cir. 2009; Contaminants, 965 F.2d at 975. the less serious sort.’’ AISI brief at page 24. Ex. #14). OSHA argued to the court that it relied on The court rejected AISI’s argument. It Regardless, OSHA must show the existence safety factors in setting PELs. Safety or accepted OSHA’s explanation that material of ‘‘technology that is either already in use uncertainty factors are used to ensure that impairments may be any health effect, or has been conceived and is reasonably exposure limits for a hazardous substance are permanent or transitory, that seriously capable of experimental refinement and set sufficiently below the levels at which threatens the health or job performance of an distribution within the standard’s adverse effects have been observed to assure employee, and held that, ‘‘OSHA is not deadlines,’’ Lead I, 647 F.2d 1272. Where the adequate protection for all exposed required to state with scientific certainty or agency presents ‘‘substantial evidence that employees. As explained in the 1989 Air precision the exact point at which each type companies acting vigorously and in good Contaminants rule, regulators use safety of sensory or physical irritation becomes a faith can develop the technology,’’ the agency factors in this context to account for material impairment.’’ Air Contaminants, 965 is not bound to the technological status quo, statistical limitations in studies showing no F.2d at 975. ‘‘Section 6(b)(5) of the [OSH] Act and ‘‘can require industry to meet PELs never observed effects, the uncertainties in charges OSHA with addressing all forms of attained anywhere.’’ Lead I, 647 F.2d 1265; extrapolating effects observed in animals to ‘material impairment of health or functional Ex. #12. humans, and variation in human responses. capacity,’’ and not exclusively those causing OSHA usually demonstrates the The size of the proper safety factor is a matter ‘death or serious physical harm’ or ‘grave technological feasibility of a PEL by finding of professional judgment. 54 FR 2397–98 danger’ from exposure to toxic substances, establishments in which the PEL is already The Eleventh Circuit rejected OSHA’s use the court held. Air Contaminants, 965 F.2d being met and identifying the controls in use, of safety factors in the Air Contaminants rule, at 975; Ex. #8. or by arguing that even if the PEL is not however. While noting that the Benzene case currently being met in a given operation, the held that OSHA is permitted ‘‘to use D. Technological and Economic Feasibility PEL could be met with specific additional conservative assumptions in interpreting data Once OSHA makes its threshold finding controls. OSHA is also concerned with . . ., risking error on the side of that a significant risk is present at the current determining whether the conditions under overprotection rather than under protection,’’ PEL or in the absence of a PEL and can be which the PEL can be met in specific plants Benzene, 448 U.S. at 656, the Air reduced or eliminated by a standard, the are generalizable to an industry as whole. Contaminants court found that OSHA had Agency considers feasibility. First, the This approach is very resource-intensive, as not adequately supported the use of safety feasibility requirement that originated in it commonly requires gathering detailed factors in this rule. The court observed that Section 6(b)(5) of the OSH Act requires that information on exposure levels and controls ‘‘the difference between the level shown by the standard be ‘‘technologically feasible,’’ for each affected operation and process in an the evidence and the final PEL is sometimes which generally means an industry has to be industry. OSHA’s inspection databases substantial,’’ and assumed that though ‘‘it is able to develop the technology necessary to usually do not record this information, and not expressly stated, that for each of those comply with the requirements in the consequently OSHA makes site visits for the substances OSHA applied a safety factor to standard. Lead I, 647 F.2d at 1264–65; Ex. specific purpose of determining arrive at the final standard.’’ 965 F.2d at 978. #12. technological feasibility. (See Section IV. of OSHA had not indicated ‘‘how the existing Second, the standard must be this Request for Information for a detailed evidence for individual substances was ‘‘economically feasible,’’ meaning that an discussion of how OSHA determines inadequate to show the extent of risk for industry as a whole must be able to absorb technological feasibility and possible these factors,’’ and ‘‘failed to explain the the impact of the costs associated with alternatives to current methods.) method by which its safety factors were compliance with the standard. Id. at 1265. As noted above, in the Air Contaminants determined.’’ Air Contaminants, 965 F.2d at OSHA has historically made determinations rule, OSHA made its feasibility 978. ‘‘OSHA may use assumptions but only on technological feasibility and economic determination by gathering information on to the extent that those assumptions have feasibility separately. work processes that might expose workers

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above the new PELs, and identifying controls provided by the standard. As the Supreme OSHA had failed to meet its burden. The that had been successfully implemented to Court noted, Congress considered the costs of court held that OSHA was required to show reduce the exposure to the new limits. It creating a safe and healthful workplace to be that the rule was economically feasible on an made these findings mainly at the two-digit the cost of doing business. Cotton Dust, 452 industry-by industry basis, and that OSHA SIC level, but also at the three- and four-digit U.S. at 514, 520; Ex. #15. Instead, standards had not shown that its analyses at the two- level where appropriate given the processes are economically feasible if the standard will digit SIC industry sector level were involved. The Air Contaminants court not substantially alter the industry’s appropriate to meet this burden. Air rejected this approach, finding that OSHA competitive structure. Forging Indus. Ass’n v. Contaminants, 965 F.2d at 982. OSHA argued failed to make industry-specific findings or Secretary of Labor, 773 F.2d 1436, 1453 (4th the generic nature of the rulemaking allowed identify the specific technologies capable of Cir. 1985; Ex. #148). In order to make a the agency ‘‘a great latitude in grouping meeting the proposed limit in industry- determination of economic feasibility, OSHA industries in order to estimate ‘average’ specific operations. Air Contaminants, 965 should ‘‘construct a reasonable estimate of costs,’’ and that ‘‘the costs were sufficiently F.2d at 981. While OSHA had identified compliance costs and demonstrate a low per sector to demonstrate feasibility not primary air contaminant control methods: reasonable likelihood that these costs will only for each sector, but each sub-sector.’’ Air engineering controls, administrative controls not threaten the existence or competitive Contaminants, 965 F.2d at 983. However, the and work practices and personal protective structure of an industry,’’ Lead I, 647 F.2d at court found that ‘‘average estimates of cost equipment, the agency, ‘‘only provided a 1272, noting that such analyses will not can be extremely misleading in assessing the general description of how the generic provide absolute certainty: engineering controls might be used in the impact of particular standards on individual [T]he court probably cannot expect hard industries’’ and observed that ‘‘analyzing the given sector.’’ Air Contaminants, 965 F.2d at and precise estimates of costs. Nevertheless, 981. Though noting that OSHA need only economic impact for an entire sector could the agency must of course provide a conceal particular industries laboring under provide evidence sufficient to justify a reasonable assessment of the likely range of special disabilities and likely to fail as a ‘‘general presumption of feasibility,’’ the costs of its standard, and the likely effects of result of enforcement.’’ Air Contaminants, court held that this ‘‘does not grant OSHA those costs on the industry . . . . And OSHA license to make overbroad generalities as to can revise any gloomy forecast that estimated 965 F.2d at 982. The court allowed that feasibility or to group large categories of costs will imperil an industry by allowing for OSHA could ‘‘find and explain that certain industries together without some explanation the industry’s demonstrated ability to pass impacts and standards do apply to entire of why findings for the group adequately through costs to consumers. 647 F.2d at sectors of an industry’’ if ‘‘coupled with a represents the different industries in that 1266–67. showing that there are no disproportionately group.’’ Air Contaminants, 965 F.2d at 981– affected industries within the group.’’ Air Again, courts have required OSHA to 82. Accordingly, the court held that OSHA Contaminants, 965 F.2d at 982 n.28. But in determine whether a standard is failed to establish the technological economically feasible on an industry-by- this case, the court found, OSHA had not feasibility of the new PELs in its final rule. industry basis. See Air Contaminants, 965 explained why its use of such a ‘‘broad Air Contaminants, 965 F.2d at 982. As noted F.2d at 982 (Ex. #8). Both to meet grouping was appropriate.’’ Air below, in a subsequent rulemaking the requirements for any Regulatory Flexibility Contaminants, 965 F.2d at 983; Ex. #8. reviewing court accepted OSHA’s approach Act (5 U.S.C. 603, 604) analysis and to assure Ultimately, the court held that OSHA did of grouping numbers of industries. that standards do not threaten the not sufficiently explain or support its 2. Economic Feasibility competitive structure of an industry, OSHA threshold determination that exposures With respect to economic feasibility, the also analyzes the economic impacts on above the new PELs posed significant risks courts have stated ‘‘A standard is feasible if different size classes within an industry. of material health impairment, or that the it does not threaten ‘‘massive dislocation’’ to However, OSHA is not required to show that new PELs eliminated or reduced the risks to . . . or imperil the existence of the industry.’’ all companies within an industry will be able the extent feasible. Finding that ‘‘OSHA’s United Steelworkers v. Marshall, 647 F.2d to bear the burden of compliance or overall approach to this rulemaking is . . . 1189, 1265 (D.C. Cir. 1980) Lead I,). In order ‘‘guarantee the continued existence of flawed,’’ the court vacated the entire Air to show this, the same court suggested, individual employers.’’ Lead I, 647 F.2d at Contaminant rulemaking, rather than just the OSHA should ‘‘construct a reasonable 1265 (Ex. #12) (quoting Industrial Union 23 chemicals that were contested by union estimate of compliance costs and Dep’t, AFL–CIO v. Hodgson, 499 F.2d 467, and industry representatives. Air demonstrate a reasonable likelihood that 478 (D.C. Cir. 1974) Ex. #55)). Contaminants, 965 F.2d at 987(Ex. #8). these costs will not threaten the existence or As discussed above, OSHA supported its The Eleventh Circuit denied OSHA’s competitive structure of an industry.’’ The economic feasibility findings for the 1989 Air petition for rehearing. No longer having a same court noted, ‘‘[T]he court probably Contaminants rule based primarily on the basis to enforce the 1989 PELs, OSHA cannot expect hard and precise estimates of results of a survey of over 5700 businesses, directed its compliance officers to stop costs. Nevertheless, the agency must of summarizing the projected cost of enforcing the updated limits through a course provide a reasonable assessment of compliance at the two-digit SIC industry memo, which was followed by a Federal the likely range of costs of its standard, and sector level. It found that compliance costs Register Notice on June 30, 1993, revoking the likely effects of those costs on the would average less than one percent of the new limits. 58 FR 35338–35351; (Ex. industry.’’ Lead I, 647 F.2d at 1265; Ex. #12. profits, and, alternatively, that prices would #19). Economic feasibility does not entail a cost- increase by less than one half percent. benefit analysis of the level of protection Nonetheless, the Eleventh Circuit held that Appendix B: 1989 PELs Table TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Acetaldehyde ...... 75–07–0 ...... 100 180 150 270 ...... Acetic acid ...... 64–19–7 ...... 10 25 ...... Acetic anhydride ...... 108–24–7 ...... 5 20 ...... Acetone ...... 67–64–1 ...... 750 1800 1000 24006 ...... Acetonitrile ...... 75–05–8 ...... 40 70 60 105 ...... 2-Acetylamino-fluorine; see 1910.1014 ...... 53–96–3. Acetylene dichloride; see 1,2-Dichloroethylene ...... 540–59–0. Acetylene tetrabromide ...... 79–27–6 ...... 1 14 ...... Acetylsalicylic acid (Aspirin) ...... 50–78–2 ...... 5 ...... Acrolein ...... 107–02–8 ...... 0.1 0.25 0.3 0.8 ...... Acrylamide ...... 79–06–1 ...... 0.03 ...... X

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Acrylic acid ...... 79–10–7 ...... 10 30 ...... X Acrylonitrile; see 1910.1045 ...... 107–13–1 ...... Aldrin ...... 309–00–2 ...... 0.25 ...... X Allyl alcohol ...... 107–18–6 ...... 2 5 4 10 ...... X Allyl chloride...... 107–05–1 ...... 1 3 2 6 ...... Allyl glycidyl ether (AGE) ...... 106–92–3 ...... 5 22 10 44 ...... Allyl propyl disulfide ...... 2179–59–1 ...... 2 12 3 18 ...... alpha-Alumina ...... 1344–28–1 ...... Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Aluminum (as Al) Metal ...... 7429–90–5. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Pyro powders ...... 5 ...... Welding fumes ...... 5 ...... Soluble salts ...... 2 ...... Alkyls ...... 2 ...... 4-Aminodiphenyl; see 1910.1011 ...... 92–67–1. 2-Aminoethanol; see Ethanolamine ...... 141–43–5. 2-Aminopyridine ...... 504–29–0 ...... 0.5 2 ...... Amitrole ...... 61–82–5 ...... 0.2 ...... Ammonia ...... 7664–41–7 ...... 35 27 ...... Ammonium chloride fume ...... 12125–02–9 ...... 10 ...... 20 ...... Ammonium sulfamate ...... 7773–06–0. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... n-Amyl acetate ...... 628–63–7 ...... 100 525 ...... Sec-Amyl acetate ...... 626–38–0 ...... 125 650 ...... Aniline and homologs ...... 62–53–3 ...... 2 8 ...... X Anisidine (o-, p-isomers) ...... 29191–52–4 ...... 0.5 ...... Antimony and compounds (as Sb) ...... 7440–36–0 ...... 0.5 ...... ANTU (alpha naphthyl-thiourea) ...... 86–88–4 ...... 0.3 ...... Arsenic, organic compounds (as As) ...... 7440–38–2 ...... 0.5 ...... Arsenic, inorganic compounds (as As); see 1910.1018 .... Varies with com- ...... pound. Arsine ...... 7784–42–1 ...... 0.05 0.2 ...... Asbestos; see 1910.1001 ...... Varies ...... Atrazine ...... 1912–24–9 ...... 5 ...... Azinphos-methyl ...... 86–50–0 ...... 0.2 ...... X Barium, soluble compounds ...... 7440–39–3 ...... 0.5 ...... Barium sulfate ...... 7727–43–7. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Benomyl ...... 17804–35–2. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Benzene; see 1910.1028. See Table Z–2 for the limits 71–43–2. applicable in the operations or sectors excluded in 1910.1028. Benzidine; see 1910.1010 ...... 92–87–5. p-Benzoquinone; see Quinone ...... 106–51–4. Benzo(a)pyrene; see Coal tar pitch volatiles Benzoyl peroxide ...... 94–36–0 ...... 5 ...... Benzyl chloride ...... 100–44–7 ...... 1 5 ...... Beryllium and beryllium compounds (as Be) ...... 7440–41–7 ...... 0.002 ...... 1.005 ...... 0.025 ...... Biphenyl; see Diphenyl ...... 92–52–4. Bismuth telluride, undoped ...... 1304–82–1. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Bismuth telluride, Se-doped ...... 1304–82–1 ...... 5 ...... Borates, tetra, sodium salts: Anhydrous ...... 1330–43–4 ...... 10 ...... Decahydrate ...... 1303–96–4 ...... 10 ...... Penta-hydrate ...... 12179–04–3 ...... 10 ...... Boron oxide ...... 1303–86–2. Total dust ...... 10 ...... Respirable Frac- ...... 5 ...... tion. Boron tribromide ...... 10294–33–4 ...... 1 10 ...... Boron trifluoride ...... 7637–07–2 ...... 1 3 ...... Bromacil ...... 314–40–9 ...... 1 10 ...... Bromine ...... 7726–95–6 ...... 0.1 0.7 0.3 2 ...... Bromine pentafluoride ...... 7789–30–2 ...... 0.1 0.7 ...... Bromoform ...... 75–25–2 ...... 0.5 5 ...... X Butadiene (1,3- Butadiene); see 1910.1051 ...... 106–99–0. Butane ...... 106–97–8 ...... 800 1900 ...... Butanethiol; see Butyl mercaptan ...... 109–79–5. 2-Butanone (Methyl ethyl ketone) ...... 78–93–3 ...... 200 590 300 885 ......

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

2-Butoxyethanol ...... 111–76–2 ...... 25 120 ...... X n-Butyl-acetate ...... 123–86–4 ...... 150 710 200 950 ...... sec-Butyl acetate ...... 105–46–4 ...... 200 950 ...... tert-Butyl acetate ...... 540–88–5 ...... 200 950 ...... Butyl acrylate ...... 141–32–2 ...... 10 55 ...... n-Butyl alcohol ...... 71–36–3 ...... 50 150 X sec-Butyl alcohol ...... 78–92–2 ...... 100 305 ...... tert-Butyl alcohol...... 75–65–0 ...... 100 300 150 450 ...... Butylamine ...... 109–73–9 ...... 5 15 X tert-Butyl Chromate (as CrO3) ...... 1189–85–1 ...... 0.1 X n-Butyl glycidyl ether (BGE) ...... 2426–08–6 ...... 25 135 ...... n-Butyl lactate ...... 138–22–7 ...... 5 25 ...... Butyl mercaptan ...... 109–79–5 ...... 0.5 1.5 ...... o-sec-Butylphenol ...... 89–72–5 ...... 5 30 ...... X p-tert-Butyltoluene ...... 98–51–1 ...... 10 60 20 120 ...... Cadmium (all forms, as Cd); see 1910.1027 See Table 7440–43–9. Z–2 for the limits applicable in the operations or sec- tors excluded in 1910.1027. Calcium carbonate ...... 1317–65–3. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Calcium cyanamide ...... 156–62–7 ...... 0.5 ...... Calcium hydroxide; see particulates not otherwise regu- 1305–62–0 ...... 5 ...... lated. Calcium oxide ...... 1305–78–8 ...... 5 ...... Calcium silicate ...... 1344–95–2 ...... Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Calcium sulfate ...... 7778–18–9. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Camphor, synthetic ...... 76–22–2. Camphor, synthetic ...... 76–22–2 ...... 2 ...... Caprolactam ...... 105–60–2. Dust ...... 1 ...... 3 ...... Vapor ...... 5 20 10 40 ...... Captafol (Difolatan®) ...... 2425–06–1 ...... 0.1 ...... Captan ...... 133–06–2 ...... 5 ...... Carbaryl (Sevin®) ...... 63–25–2 ...... 5 ...... Carbofuran (Furadan®) ...... 1563–66–2 ...... 0.1 ...... Carbon black ...... 1333–86–4 ...... 3.5 ...... Carbon dioxide ...... 124–38–9 ...... 10,000 18,000 30,000 54,000 ...... 0 0 Carbon disulfide ...... 75–15–0 ...... 4 12 12 36 ...... X Carbon monoxide ...... 630–08–0 ...... 35 40 ...... 200 229 ...... Carbon tetrabromide ...... 558–13–4 ...... 0.1 1.4 0.3 4 ...... Carbon tetrachloride ...... 56–23–5 ...... 2 12.6 ...... Carbonyl fluoride ...... 353–50–4 ...... 2 5 5 15 ...... Catechol (Pyrocatechol) ...... 120–80–9 ...... 5 20 ...... X Cellulose ...... 9004–34–6. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Cesium hydroxide ...... 21351–79–1 ...... 2 ...... Chlordane ...... 57–74–9 ...... 0.5 ...... X Chlorinated camphene ...... 8001–35–2 ...... 0.5 ...... 1 ...... X Chlorinated diphenyl oxide ...... 55720–99–5 ...... 0.5 ...... Chlorine ...... 7782–50–5 ...... 0.5 1.5 1 3 ...... Chlorine dioxide...... 10049–04–4 ...... 0.1 0.3 0.3 0.9 ...... Chlorine trifluoride ...... 7790–91–2 ...... 0.1 0.4 ...... Chloro-acetaldehyde ...... 107–20–0 ...... 1 3 ...... alpha-Chloroaceto-phenone (Phenacy1 chloride) ...... 532–27–4 ...... 0.05 0.3 ...... Chloroacetyl chloride ...... 79–04–9 ...... 0.05 0.2 ...... Chlorobenzene ...... 108–90–7 ...... 75 350 ...... o-Chloro-benzylidene malononitrile ...... 2698–41–1 ...... 0.05 0.4 X Chloro-bromomethane ...... 74–97–5 ...... 200 1050 ...... 2-Chloro-1,3-butadiene; see beta-Chloroprene ...... 126–99–8 ...... Chloro-difluoromethane ...... 75–45–6 ...... 1000 3500 ...... Chlorodiphenyl (42% Chlorine) (PCB) ...... 53469–21–9 ...... 1 ...... X Chlorodiphenyl (54% Chlorine) (PCB) ...... 11097–69–1 ...... 0.5 ...... X 1-Chloro,2,3-epoxypropane; see Epichlorohydrin ...... 106–89–8. 2-Chloroethanol; see Ethylene chlorohydrin ...... 107–07–3. Chloroethylene; see Vinyl chloride ...... 75–01–4. Chloroform (Trichloro-methane) ...... 67–66–3 ...... 2 9.78 ...... bis(Chloro-methyl) ether; see 1910.1008 ...... 542–88–1. Chloromethyl methyl ether; see 1910.1006 ...... 107–30–2. 1-Chloro-l-nitropropane ...... 600–25–9 ...... 2 10 ...... Chloropenta-fluoroethane ...... 76–15–3 ...... 1000 6320 ...... Chloropicrin ...... 76–06–2 ...... 0.1 0.7 ......

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

beta-Chloroprene ...... 126–99–8 ...... 10 35 ...... X o-Chlorostyrene ...... 2039–87–4 ...... 50 285 75 428 ...... o-Chlorotoluene ...... 95–49–8 ...... 50 250 ...... 2-Chloro-6-trichloro-methyl pyridine ...... 1929–82–4. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Chlorpyrifos ...... 2921–88–2 ...... 0.2 ...... X Chromic acid and chromates (as CrO3); see 1910.1026. Varies with com- ...... 0.1 ...... See Table Z–2 for the exposure limit for any operations pound. or sectors where the exposure limit in 1910.1026 is stayed or are otherwise not in effect. Chromium (II) compounds (as Cr) ...... Varies with com- ...... 0.5 ...... pound. Chromium (III) compounds (as Cr) ...... Varies with com- ...... 0.5 ...... pound. Chromium metal and insoluble salts ...... 7440–47–3 ...... 1 ...... Chrysene; see Coal tar pitch volatiles Clopidol ...... 2971–90–6. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Coal dust (less than 5% Si02), quartz, respirable fraction N/A ...... 2 ...... Coal dust (greater than or equal to 5% Si02) respirable N/A ...... 0.1 ...... quartz fraction. Coal tar pitch volatiles (benzene soluble fraction), anthra- 8007–45–2 ...... 0.2 ...... cene, BaP, phenanthrene, acridine, chrysene, pyrene. Cobalt metal, dust, and fume (as Co) ...... 7440–48–4 ...... 0.05 ...... Cobalt carbonyl (as Co) ...... 10210–68–1 ...... 0.1 ...... Cobalt hydrocarbonyl (as Co) ...... 16842–03–8 ...... 0.1 ...... Coke oven emissions; See 1910.1029 Copper ...... 7440–50–8. Fume (as Cu) ...... 0.1 ...... Dusts and mists ...... 1 ...... (as Cu). Cotton dust, raw This 8-hour TWA applies to respirable dust as measured by a vertical elutriator cotton dust or equivalent instrument. The time-weighted average ap- plies to the cotton waste processing operations of waster recycling (sorting, blending, cleaning, and willowing) and garnetting. See also 1910.1043 for cot- ton dust limits applicable to other sectors. Crag herbicide (Sesone) ...... 136–78–7. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Cresol, all isomers ...... 1319–77–3; 95– 5 22 ...... X 48–7; 108–39–4; 106–44–5. Crotonaldehyde ...... 123–73–9; 4170– ...... 2 6 ...... 30–3. Crufomate ...... 106–44–5 ...... 5 ...... Cumene ...... 98–82–8 ...... 50 245 ...... X Cyanamide ...... 420–04–2 ...... 2 ...... Cyanides (as CN) ...... 151–50–0 ...... 5 ...... Cyanogen ...... 460–19–5 ...... 10 20 ...... Cyanogen chloride ...... 506–77–4 ...... 0.3 0.6 ...... Cyclohexane ...... 110–82–7 ...... 300 1050 ...... Cyclohexanol ...... 108–93–0 ...... 50 200 ...... X Cyclohexanone ...... 108–94–1 ...... 25 100 ...... X Cyclohexene ...... 110–83–8 ...... 300 1015 ...... Cyclohexylamine ...... 108–91–8 ...... 10 40 ...... Cyclonite ...... 121–82–4 ...... 1.5 ...... X Cyclopentadiene ...... 542–92–7 ...... 75 200 ...... Cyclopentane ...... 287–92–3 ...... 600 1720 ...... Cyhexatin ...... 13121–70–5 ...... 5 ...... 2,4–D (Dichlorophenoxy-acetic acid) ...... 94–75–7 ...... 10 ...... Decaborane ...... 17702–41–9 ...... 0.05 0.3 0.15 0.9 ...... X Demeton-(Systox®) ...... 8065–48–3 ...... 0.1 ...... X Diborane ...... 19207–45–7 ...... 0.1 0.1 ...... Dichlorodiphenyltri-chloroethane (DDT) ...... 50–29–3 ...... 1 ...... X Dichlorvos (DDVP) ...... 62–73–7 ...... 1 ...... X Diacetone alcohol (4-Hydroxy-4-methyl-2-pentanone) ...... 123–42–2 ...... 50 240 ...... 1,2-Diaminoethane; see Ethylenediamine ...... 107–15–3. Diazinon ...... 333–41–5 ...... 0.1 ...... X Diazomethane ...... 334–88–3 ...... 0.2 0.4 ...... 1,2-Dibromo-3-chloropropane; see 1910.1044 ...... 96–12–8. 2–N-Dibutylamino-ethanol ...... 102–81–8 ...... 2 14 ...... Dibutyl phosphate ...... 107–66–4 ...... 1 5 2 10 ...... Dibutyl phthalate ...... 84–74–2 ...... 5 ...... Dichloro-acetylene ...... 7572–29–4 ...... 0.1 0.4 ......

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

o-Dichlorobenzene ...... 95–50–1 ...... 50 300 ...... p-Dichlorobenzene ...... 106–46–7 ...... 75 450 110 675 ...... 3,3′-Dichloro-benzidine; see 1910.1007 ...... 91–94–1. Dichlorodifluoro-methane ...... 75–71–8 ...... 1000 4950 ...... 1,3-Dichloro-5,5-dimethyl hydantoin ...... 118–52–5 ...... 0.2 ...... 0.4 ...... 1,1-Dichloroethane ...... 75–34–3 ...... 100 400 ...... 1,2-Dichloroethylene ...... 540–59–0 ...... 200 790 ...... Dichloroethyl ether...... 111–44–4 ...... 5 30 10 60 ...... X Dichloro-methane; see Methylene chloride ...... 75–09–2. Dichloromono-fluoromethane ...... 75–43–4 ...... 10 40 ...... 1,1-Dichloro- 1-nitroethane ...... 594–72–9 ...... 2 10 ...... 1,2-Dichloropropane; see Propylene dichloride ...... 78–87–5. 1,3-Dichloropropene ...... 542–75–6 ...... 1 5 ...... X 2,2-Dichloro-propionic acid ...... 75–99–0 ...... 1 6 ...... Dichloro-tetrafluoroethane ...... 76–14–2 ...... 1000 7000 ...... Dicrotophos ...... 141–66–2 ...... 0.25 ...... X Dicyclo-pentadiene ...... 77–73–6 ...... 5 30 ...... Dicyclo-pentadienyl iron ...... 102–54–5. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Dieldrin ...... 60–57–1 ...... 0.25 ...... X Diethanolamine ...... 111–42–2 ...... 3 15 ...... Diethylamine ...... 109–89–7 ...... 10 30 25 75 ...... 2-Diethylamino-ethanol ...... 100–37–8 ...... 10 50 ...... Diethylene triamine ...... 111–40–0 ...... 1 4 ...... Diethyl ether; see Ethyl ether ...... 60–29–7. Diethyl ketone ...... 96–22–0 ...... 200 705 ...... Diethyl phthalate ...... 84–66–2 ...... 5 ...... Difluorodibromo-methane ...... 75–61–6 ...... 100 860 ...... Diglycidyl ether (DGE) ...... 2238–07–5 ...... 0.1 0.5 ...... Dihydroxy-benzene; see Hydroquinone ...... 123–31–9. Diisobutyl ketone ...... 108–83–8 ...... 25 150 ...... Diisopropylamine ...... 108–18–9 ...... 5 20 ...... X 4-Dimethylamino-azobenzene; see 1910.1015 ...... 60–11–7. Dimethoxy-methane; see Methylal ...... 109–87–5. Dimethyl acetamide ...... 127–19–5 ...... 10 35 ...... X Dimethylamine ...... 124–40–3 ...... 10 18 ...... Dimethylamino-benzene; see Xylidine ...... 1300–73–8. Dimethylaniline (N,N-Dimethylaniline)...... 121–69–7 ...... 5 25 10 50 ...... X Dimethyl-benzene; see Xylene ...... Varies with isomer. Dimethyl-1,2-dibromo-2,2-dichloroethyl phosphate ...... 300–76–5 ...... 3 ...... X Dimethyl-formamide ...... 68–12–2 ...... 10 30 ...... X 2,6-Dimethyl-4-heptanone; see Diisobutyl ketone ...... 108–83–8. 1,1-Dimethyl-hydrazine ...... 57–14–7 ...... 0.5 1 ...... X Dimethyl-phthalate ...... 131–11–3 ...... 5 ...... Dimethyl sulfate ...... 77–78–1 ...... 0.1 0.5 ...... X Dinitolmide (3,5-Dinitro-o-toluamide) ...... 148–01–6 ...... 5 ...... Dinitrobenzene (all isomers) ...... (alpha): 528–29–0 ...... 1 ...... X (meta): 99–65–0. (para-): 100–25–4. Dinitro-o-cresol ...... 534–52–1 ...... 0.2 ...... X Dinitrotoluene ...... 121–14–2 ...... 1.5 ...... X Dioxane (Diethylene dioxide) ...... 123–91–1 ...... 25 90 ...... X Dioxathion (Delnav) ...... 78–34–2 ...... 0.2 ...... X Diphenyl (Biphenyl) ...... 92–52–4 ...... 0.2 1 ...... Diphenylamine ...... 122–39–4 ...... 10 ...... Diphenylmethane diisocyanate; see Methylene bisphenyl 101–68–8. isocyanate. Dipropylene glycol methyl ether ...... 34590–94–8 ...... 100 600 150 900 ...... X Dipropyl ketone ...... 123–19–3 ...... 50 235 ...... Diquat ...... 85–00–7 ...... 0.5 ...... Di-sec octyl phthalate (Di-2-ethylhexyl phthalate) ...... 117–81–7 ...... 5 ...... 10 ...... Disulfiram ...... 97–77–8 ...... 2 ...... Disulfoton ...... 298–04–4 ...... 0.1 ...... X 2,6-Di-tert-butyl-p-cresol ...... 128–37–0 ...... 10 ...... Diuron ...... 330–54–1 ...... 10 ...... Divinyl benzene ...... 108–576 ...... 10 50 ...... Emery ...... 112–62–9. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Endosulfan ...... 115–29–7 ...... 0.1 ...... X Endrin ...... 72–20–8 ...... 0.1 ...... X Epichlorohydrin ...... 106–89–8 ...... 2 8 ...... X EPN ...... 2104–64–5 ...... 0.5 ...... X 1,2-Epoxypropane; see Propylene oxide ...... 75–56–9. 2,3-Epoxy-l-propanol; see Glycidol ...... 556–52–5. Ethanethiol; see Ethyl mercaptan ...... 75–08–1. Ethanolamine ...... 141–43–5 ...... 3 8 6 15 ......

VerDate Sep<11>2014 17:41 Oct 09, 2014 Jkt 235001 PO 00000 Frm 00046 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 mstockstill on DSK4VPTVN1PROD with PROPOSALS2 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 61429

TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Ethion ...... 563–12–2 ...... 0.4 ...... X 2-Ethoxyethanol [In Process of 6(b) Rulemaking] ...... 110–80–5. 2-Ethoxyethyl acetate (Cellosolve acetate) [In Process of 111–15–9. 6(b) Rulemaking]. Ethyl acetate ...... 141–78–6 ...... 400 1400 ...... Ethyl acrylate ...... 140–88–5 ...... 5 20 25 100 ...... X Ethyl alcohol (Ethanol) ...... 64–17–5 ...... 1000 1900 ...... Ethylamine ...... 75–04–7 ...... 10 18 ...... Ethyl amyl ketone (5-Methyl-3-heptanone) ...... 106–68–3 ...... 25 130 ...... Ethyl benzene...... 100–41–4 ...... 100 435 125 545 ...... Ethyl bromide...... 74–96–4 ...... 200 890 250 1110 ...... Ethyl butyl ketone (3-Heptanone) ...... 106–35–4 ...... 50 230 ...... Ethyl chloride ...... 75–00–3 ...... 1000 2600 ...... Ethyl ether...... 60–29–7 ...... 400 1200 500 1500 ...... Ethyl formate ...... 109–94–4 ...... 100 300 ...... Ethyl mercaptan ...... 75–08–1 ...... 0.5 1 ...... Ethyl silicate ...... 78–10–4 ...... 10 85 ...... Ethylene chlorohydrin ...... 107–07–3 ...... 1 3 X Ethylenediamine ...... 107–15–3 ...... 10 25 ...... Ethylene dibromide; see Table Z–2 ...... 106–93–4. Ethylene dichloride ...... 107–06–2 ...... 1 4 2 8 ...... Ethylene glycol ...... 107–21–1 ...... 50 125 ...... Ethylene glycol dinitrate ...... 628–96–6 ...... 0.1 ...... X Ethylene glycol methyl acetate; see Methyl cellosolve ac- 110–49–6. etate. Ethyleneimine; see 1910.1012 ...... 151–56–4. Ethylene oxide; see 1910.1047 ...... 75–21–8. Ethylidene chloride; see 1,1-Dichloroethane ...... 75–34–3. Ethylidene norbornene ...... 16219–75–3 ...... 5 25 ...... N-Ethylmorpholine ...... 100–74–3 ...... 5 23 ...... X Fenamiphos ...... 22224–92–6 ...... 0.1 ...... X Fensulfothion (Dasanit) ...... 115–90–2 ...... 0.1 ...... Fenthion ...... 55–38–9 ...... 0.2 ...... X Ferbam ...... 14484–64–1. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Ferrovanadium dust ...... 12604–58–9 ...... 1 ...... 3 ...... Fluorides (as F) ...... Varies with com- ...... 2.5 ...... pound. Fluorine ...... 7782–41–4 ...... 0.1 0.2 ...... Fluoro-trichloromethane (Trichlorofluoro-methane) ...... 75–69–4 ...... 1000 5600 ...... Fonofos ...... 944–22–9 ...... 0.1 ...... X Formaldehyde; see 1910.1048 ...... 50–00–0. Formamide ...... 75–12–7 ...... 20 30 30 45 ...... Formic acid ...... 64–18–6 ...... 5 9 ...... Furfural ...... 98–01–1 ...... 2 8 ...... X Furfuryl alcohol ...... 98–00–0 ...... 10 40 15 60 ...... X Gasoline ...... 8006–61–9 ...... 300 900 500 1500 ...... Gemanium tetrahydride ...... 7782–65–2 ...... 0.2 0.6 ...... Glutaraldehyde ...... 111–30–8 ...... 0.2 0.8 ...... Glycerin (mist) ...... 56–81–5. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Glycidol ...... 556–52–5 ...... 25 75 ...... Glycol monoethyl ether; see 2-Ethoxyethanol ...... 110–80–5. Grain dust (oat, wheat, barley) ...... N/A ...... 10 ...... Graphite, natural respirable dust ...... 7782–42–5 ...... 2.5 ...... Graphite, synthetic ...... N/A. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Guthion®; see Azinphos methyl ...... 86–50–0. Gypsum ...... 7778–18–9. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Hafnium ...... 7440–58–6 ...... 0.5 ...... Heptachlor ...... 76–44–8 ...... 0.5 ...... X Heptane (n-Heptane)...... 142–82–5 ...... 400 1600 500 2000 ...... Hexachloro-butadiene ...... 87–68–3 ...... 0.02 0.24 ...... Hexachlorocyclo-pentadiene ...... 77–47–4 ...... 0.01 0.1 ...... Hexa-chloroethane ...... 67–72–1 ...... 1 10 ...... X Hexachloro-naphthalene ...... 1335–87–1 ...... 0.2 ...... X Hexafluoro-acetone ...... 684–16–2 ...... 0.1 0.7 ...... X n-Hexane ...... 110–54–3 ...... 50 180 ...... Hexane isomers ...... Varies with com- 500 1800 1000 3600 ...... pound. 2-Hexanone (Methyl n-butyl ketone) ...... 591–78–6 ...... 5 20 ...... Hexone (Methyl isobutyl ketone) ...... 108–10–1 ...... 50 205 75 300 ...... sec-Hexyl acetate ...... 108–84–9 ...... 50 300 ......

VerDate Sep<11>2014 17:41 Oct 09, 2014 Jkt 235001 PO 00000 Frm 00047 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 mstockstill on DSK4VPTVN1PROD with PROPOSALS2 61430 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules

TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Hexylene glycol ...... 107–41–5 ...... 25 125 ...... Hydrazine ...... 302–01–2 ...... 0.1 0.1 ...... X Hydrogenated terphenyls ...... 61788–32–7 ...... 0.5 5 ...... Hydrogen bromide ...... 10035–10–6 ...... 3 10 ...... Hydrogen chloride ...... 7647–01–0 ...... 5 7 ...... Hydrogen cyanide ...... 74–90–8 ...... 4.7 5 ...... X Hydrogen fluoride (as F) ...... 7664–39–3 ...... 3 ...... 6 ...... Hydrogen peroxide ...... 7722–84–1 ...... 1 1.4 ...... Hydrogen selenide (as Se) ...... 7783–07–5 ...... 0.05 0.2 ...... Hydrogen sulfide ...... 7783–06–4 ...... 10 14 15 21 ...... Hydroquinone ...... 123–31–9 ...... 2 ...... 2-Hydroxypropyl acrylate ...... 999–61–1 ...... 0.5 3 ...... X Indene ...... 95–13–6 ...... 10 45 ...... Indium and compounds (as In) ...... 7440–74–6 ...... 0.1 ...... Iodine ...... 7553–56–2 ...... 0.1 1 ...... Iodoform ...... 75–47–8 ...... 0.6 10 ...... Iron oxide (dust and fume as Fe) Total particulate ...... 1309–37–1 ...... 10 ...... Iron pentacarbonyl (as Fe) ...... 13463–40–6 ...... 0.1 0.8 0.2 1.6 ...... Iron salts (soluble) (as Fe) ...... Varies with com- ...... 1 ...... pound. Isoamyl acetate ...... 123–92–2 ...... 100 525 ...... Isoamyl alcohol (primary and secondary) ...... 123–51–3 ...... 100 360 125 450 ...... Isobutyl acetate ...... 110–19–0 ...... 150 700 ...... Isobutyl alcohol ...... 78–83–1 ...... 50 150 ...... Isooctyl alcohol ...... 26952–21–6 ...... 50 270 ...... X Isophorone ...... 78–59–1 ...... 4 23 ...... Isophorone diisocyanate ...... 4098–71–9 ...... 0.005 ...... 0.02 ...... X 2-Isopropoxy-ethanol ...... 109–59–1 ...... 25 105 ...... Isopropyl acetate ...... 108–21–4 ...... 250 950 310 1185 ...... Isopropyl alcohol ...... 67–63–0 ...... 400 980 500 1225 ...... Isopropylamine ...... 75–31–0 ...... 5 12 10 24 ...... N-Isopropylaniline ...... 768–52–5 ...... 2 10 ...... X Isopropyl ether ...... 108–20–3 ...... 500 2100 ...... Isopropyl glycidyl ether (IGE) ...... 4016–14–2 ...... 50 240 75 360 ...... Kaolin ...... N/A...... Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Ketene ...... 463–51–4 ...... 0.5 0.9 1.5 3 ...... Lead inorganic (as Pb); see 1910.1025 ...... 7439–92–1. Limestone ...... 1317–65–3. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Lindane ...... 58–89–9 ...... 0.5 ...... X Lithium hydride ...... 7580–67–8 ...... 0.025 ...... L.P.G. (Liquefied petroleum gas) ...... 68476–85–7 ...... 1000 1800 ...... Magnesite ...... 546–93–0. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Magnesium oxide fume, total particulate ...... 1309–48–4. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Malathion ...... 121–75–5. Total dust ...... 10 ...... X Respirable fraction ...... 5 ...... X Maleic anhydride ...... 108–31–6 ...... 0.25 1 ...... Manganese compounds (as Mn) ...... 7439–96–5 ...... 5 ...... Manganese fume (as Mn) ...... 7439–96–5 ...... 1 ...... 3 ...... Manganese cyclopentadienyl tricarbonyl (as Mn) ...... 12079–65–1 ...... 0.1 ...... X Manganese tetroxide (as Mn) ...... 1317–35–7 ...... 1 ...... Marble ...... 1317–65–3. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Mercury (aryl and inorganic) (as Hg) ...... 7439–97–6 ...... 0.1 X Mercury (organo) alkyl compounds (as Hg) ...... 7439–97–6 ...... 0.01 ...... 0.03 ...... X Mercury (vapor) (as Hg) ...... 7439–97–6 ...... 0.05 ...... X Mesityl oxide ...... 141–79–7 ...... 15 60 25 100 ...... Methacrylic acid ...... 79–41–4 ...... 20 70 ...... X Methanethiol; see Methyl mercaptan ...... 74–93–1. Methomyl (Lannate) ...... 16752–77–5 ...... 2.5 ...... Methoxychlor ...... 72–43–5. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... 2-Methoxyethanol; see Methyl cellosolve ...... 109–86–4. 4-Methoxyphenol ...... 150–76–5 ...... 5 ...... Methyl acetate ...... 79–20–9 ...... 200 610 250 760 ...... Methyl acetylene (Propyne) ...... 74–99–7 ...... 1000 1650 ...... Methyl acetylene-propadiene mixture (MAPP) ...... 1000 1800 1250 2250 ...... Methyl acrylate ...... 96–33–3 ...... 10 35 ...... X

VerDate Sep<11>2014 17:41 Oct 09, 2014 Jkt 235001 PO 00000 Frm 00048 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 mstockstill on DSK4VPTVN1PROD with PROPOSALS2 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 61431

TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Methyl-acrylonitrile ...... 126–98–7 ...... 1 3 ...... X Methylal (Dimethoxy-methane) ...... 109–87–5 ...... 1000 3100 ...... Methyl alcohol...... 67–56–1 ...... 200 260 250 325 ...... X Methylamine ...... 74–89–5 ...... 10 12 ...... Methyl amyl alcohol; see Methyl isobutyl carbinol ...... 108–11–2. Methyl n-amyl ketone ...... 110–43–0 ...... 100 465 ...... Methyl bromide ...... 74–83–9 ...... 5 20 ...... X Methyl butyl ketone; see 2-Hexanone ...... 591–78–6. Methyl cellosolve (2-Methoxyethanol) ...... 109–86–4 ...... 25 80 ...... X Methyl cellosolve acetate (2-Methoxyethyl acetate) ...... 110–49–6 ...... 25 120 ...... X Methyl chloride...... 74–87–3 ...... 50 105 100 210 ...... Methyl chloroform (1,1,1-Trichloroethane) ...... 71–55–6 ...... 350 1900 450 2450 ...... Methyl 2-cyanoacrylate ...... 137–05–3 ...... 2 8 4 16 ...... Methyl cyclohexane ...... 108–87–2 ...... 400 1600 ...... Methyl-cyclohexanol ...... 25639–42–3 ...... 50 235 ...... o-Methylcyclo-hexanone ...... 583–60–8 ...... 50 230 75 345 ...... X Methylcyclo-pentadienyl manganese tricarbonyl (as Mn) .. 12108–13–3 ...... 0.2 ...... X Methyl demeton ...... 8022–00–2 ...... 0.5 ...... X 4,4′-Methylene bis(2-chloroaniline) (MBOCA) ...... 101–14–4 ...... 0.02 0.22 ...... X Methylene bis(4-cyclo-hexylisocyanate) ...... 5124–30–1 ...... 0.01 0.11 X Methylene chloride; see 1910.1052 ...... 75–09–2. Methylene-dianiline; see 1910.1050 ...... 101–77–9. Methyl ethyl ketone peroxide (MEKP) ...... 1338–23–4 ...... 0.7 5 ...... Methyl formate ...... 107–31–3 ...... 100 250 150 375 ...... Methyl hydrazine (Monomethyl hydrazine) ...... 60–34–4 ...... 0.2 0.35 X Methyl iodide ...... 74–88–4 ...... 2 10 ...... X Methyl isoamyl ketone ...... 110–12–3 ...... 50 240 ...... Methyl isobutyl carbinol ...... 108–11–2 ...... 25 100 40 165 ...... X Methyl isobutyl ketone; see Hexone ...... 108–10–1. Methyl isocyanate ...... 624–83–9 ...... 0.02 0.05 ...... X Methyl isopropyl ketone ...... 563–80–4 ...... 200 705 ...... Methyl mercaptan ...... 74–93–1 ...... 0.5 1 ...... Methyl methacrylate ...... 80–62–6 ...... 100 410 ...... Methyl parathion ...... 298–00–0 ...... 0.2 ...... X Methyl propyl ketone; see 2-Pentanone ...... 107–87–9. Methyl silicate ...... 681–84–5 ...... 1 6 ...... alpha-Methyl styrene...... 98–83–9 ...... 50 240 100 485 ...... Methylene bisphenyl isocyanate (MDI) ...... 101–68–8 ...... 0.02 0.2 ...... Metribuzin ...... 21087–64–9 ...... 5 ...... Mica; see Silicates ...... N/A. Molybdenum (as Mo) ...... 7439–98–7. Soluble com- ...... 5 ...... pounds. Insoluble com- ...... 10 ...... pounds total dust. Insoluble com- ...... 5 ...... pounds. Respirable fraction Monocrotophos (Azodrin) ...... 6923–22–4 ...... 0.25 ...... Monomethyl aniline ...... 100–61–8 ...... 0.5 2 ...... X Morpholine ...... 110–91–8 ...... 20 70 30 105 ...... X Naphtha (Coal tar) ...... 8030–30–6 ...... 100 400 ...... Naphthalene ...... 91–20–3 ...... 10 50 15 75 ...... alpha-Naphthylamine; see 1910.1004 ...... 134–32–7. beta-Naphthylamine; see 1910.1009 ...... 91–59–8. Nickel carbonyl (as Ni) ...... 13463–39–3 ...... 0.001 0.007 ...... Nickel, metal and insoluble compounds (as Ni) ...... 7440–02–0 ...... 1 ...... Nickel, soluble compounds (as Ni) ...... 7440–02–0 ...... 0.1 ...... Nicotine ...... 54–11–5 ...... 0.5 ...... X Nitric acid ...... 7697–37–2 ...... 2 5 4 10 ...... Nitric oxide ...... 10102–43–9 ...... 25 30 ...... p-Nitroaniline ...... 100–01–6 ...... 3 ...... X Nitrobenzene ...... 98–95–3 ...... 1 5 ...... X p-Nitrochloro-benzene ...... 100–00–5 ...... 1 ...... X 4-Nitrodiphenyl; see 1910.1003 ...... 92–93–3. Nitroethane ...... 79–24–3 ...... 100 310 ...... Nitrogen dioxide ...... 10102–44–0 ...... 1 1.8 ...... Nitrogen trifluoride ...... 7783–54–2 ...... 10 29 ...... Nitroglycerin ...... 55–63–0 ...... 0.11 ...... X Nitromethane ...... 75–52–5 ...... 100 250 ...... 1-Nitropropane ...... 108–03–2 ...... 25 90 ...... 2-Nitropropane ...... 79–46–9 ...... 10 35 ...... N-Nitrosodimethyl-amine; see 1910.1016 ...... 62–75–9. Nitrotoluene ...... o-isomer 88–72–2 2 11 ...... X m-isomer 99–08–1 p-isomer 99–99–0. Nitrotrichloro-methane; see Chloropicrin ...... 76–06–2.

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Nonane ...... 111–84–2 ...... 200 1050 ...... Octachloro-naphthalene ...... 2234–13–1 ...... 0.1 ...... 0.3 ...... X Octane ...... 111–65–9 ...... 300 1450 375 1800 ...... Oil mist, mineral ...... 8012–95–1 ...... 5 ...... Osmium tetroxide (as Os) ...... 20816–12–0 ...... 0.0002 0.002 0.0006 0.006 ...... Oxalic acid ...... 144–62–7 ...... 1 ...... 2 ...... Oxygen difluoride ...... 7783–41–7 ...... 0.05 0.1 ...... Ozone ...... 10028–15–6 ...... 0.1 0.2 0.3 0.6 ...... Paraffin wax fume ...... 8002–74–2 ...... 2 ...... Paraquat, respirable dust ...... 4685–14–7 ...... 0.1 ...... X Parathion ...... 56–38–2 ...... 0.1 ...... X Particulates not otherwise regulated ...... N/A. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Pentaborane ...... 19624–22–7 ...... 0.005 0.01 0.015 0.03 ...... Pentachloro-naphthalene ...... 1321–64–8 ...... 0.5 ...... X Pentachloro-phenol ...... 87–86–5 ...... 0.5 ...... X Pentaerythritol ...... 115–77–5. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Pentane ...... 109–66–0 ...... 600 1800 750 2250 ...... 2-Pentanone (Methyl propyl ketone) ...... 107–87–9 ...... 200 700 250 875 ...... Perchloro-ethylene (Tetrachloro-ethylene) ...... 127–18–4 ...... 25 170 ...... Perchloromethyl mercaptan ...... 594–42–3 ...... 0.1 0.8 ...... Perchloryl fluoride ...... 7616–94–6 ...... 3 14 6 28 ...... Perlite. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Petroleum distillates (Naphtha) ...... 8002–05–9 ...... 400 1600 ...... Phenol ...... 108–95–2 ...... 5 19 ...... X Phenothiazine ...... 92–84–2 ...... 5 ...... X p-Phenylene diamine ...... 106–50–3 ...... 0.1 ...... X Phenyl ether, vapor ...... 101–84–8 ...... 1 7 ...... Phenyl ether-biphenyl mixture, vapor ...... N/A ...... 1 7 ...... Phenylethylene; see Styrene ...... 100–42–5. Phenyl glycidyl ether (PGE) ...... 122–60–1 ...... 1 6 ...... Phenylhydrazine ...... 100–63–0 ...... 5 20 10 45 ...... X Phenyl mercaptan ...... 108–98–5 ...... 0.5 2 ...... Phenylphosphine ...... 638–21–1 ...... 0.05 0.25 ...... Phorate ...... 298–02–2 ...... 0.05 ...... 0.2 ...... X Phosdrin (Mevinphos®) ...... 7786–34–7 ...... 0.01 0.1 0.03 0.3 ...... X Phosgene (Carbonyl chloride) ...... 75–44–5 ...... 0.1 0.4 ...... Phosphine ...... 7803–51–2 ...... 0.3 0.4 1 1 ...... Phosphoric acid ...... 7664–38–2 ...... 1 ...... 3 ...... Phosphorus (yellow) ...... 7723–14–0 ...... 0.1 ...... Phosphorus oxychloride ...... 10025–87–3 ...... 0.1 0.6 ...... Phosphorus pentachloride ...... 10026–13–8 ...... 1 ...... Phosphorus pentasulfide ...... 1314–80–3 ...... 1 ...... 3 ...... Phosphorus trichloride ...... 7719–12–2 ...... 0.2 1.5 0.5 3 ...... Phthalic anhydride ...... 85–44–9 ...... 1 6 ...... m-Phthalodinitrile ...... 626–17–5 ...... 5 ...... Picloram ...... 1918–02–1. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Picric acid ...... 88–89–1 ...... 0.1 ...... X Piperazine dihydrochloride ...... 142–64–3 ...... 5 ...... Pindone (2-Pivalyl- 1,3-indandione) ...... 83–26–1 ...... 0.1 ...... Plaster of Paris ...... 7778–18–9. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Platinum (as Pt) ...... 7440–06–4. Metal ...... 1 ...... Soluble salts ...... 0.002 ...... Portland cement ...... 65997–15–1. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Potassium hydroxide ...... 1310–58–3 ...... 2 ...... Propane ...... 74–98–6 ...... 1000 1800 ...... Propargyl alcohol ...... 107–19–7 ...... 1 2 ...... X beta-Propriolactone; see 1910.1013 ...... 57–57–8. Propionic acid ...... 79–09–4 ...... 10 30 ...... Propoxur (Baygon) ...... 114–26–1 ...... 0.5 ...... n-Propyl acetate ...... 109–60–4 ...... 200 840 250 1050 ...... n-Propyl alcohol ...... 71–23–8 ...... 200 500 250 625 ...... n-Propyl nitrate...... 627–13–4 ...... 25 105 40 170 ...... Propylene dichloride ...... 78–87–5 ...... 75 350 110 510 ...... Propylene glycol dinitrate ...... 6423–43–4 ...... 0.05 0.3 ...... Propylene glycol monomethyl ether ...... 107–98–2 ...... 100 360 150 540 ......

VerDate Sep<11>2014 19:13 Oct 09, 2014 Jkt 235001 PO 00000 Frm 00050 Fmt 4701 Sfmt 4702 E:\FR\FM\10OCP2.SGM 10OCP2 mstockstill on DSK4VPTVN1PROD with PROPOSALS2 Federal Register / Vol. 79, No. 197 / Friday, October 10, 2014 / Proposed Rules 61433

TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Propylene imine ...... 75–55–8 ...... 2 5 ...... X Propylene oxide ...... 75–56–9 ...... 20 50 ...... Propyne; see Methyl acetylene ...... 74–99–7. Pyrethrum ...... 8003–34–7 ...... 5 ...... Pyridine ...... 110–86–1 ...... 5 15 ...... Quinone ...... 106–51–4 ...... 0.1 0.4 ...... Resorcinol ...... 108–46–3 ...... 10 45 20 90 ...... Rhodium (as Rh), metal fume and insoluble compounds 7440–16–6 ...... 0.1 ...... Rhodium (as Rh), soluble compounds ...... 7440–16–6 ...... 0.001 ...... Ronnel ...... 299–84–3 ...... 10 ...... Rosin core solder pyrolysis products, as formaldehyde ...... 0.1 ...... Rotenone ...... 83–79–4 ...... 5 ...... Rouge. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Selenium compounds (as Se) ...... 7782–49–2 ...... 0.2 ...... Selenium hexafluoride (as Se) ...... 7783–79–1 ...... 0.05 0.4 ...... Silica, amorphous, precipitated and gel ...... 6 ...... Silica, amorphous, diatomaceous earth, containing less 68855–54–9 ...... 6 ...... than 1% crystalline silica. Silica, crystalline cristobalite respirable dust ...... 14464–46–1 ...... 0.05 ...... Silica, crystalline, quartz, respirable dust ...... 14808–60–7 ...... 0.1 ...... Silica, crystalline tripoli (as quartz), respirable dust ...... 1317–95–9 ...... 0.1 ...... Silica, crystalline tridymite respirable dust ...... 15468–32–3 ...... 0.05 ...... Silica, fused, respirable dust ...... 60676–86–0 ...... 0.1 ......

Silicates (less than 1% crystalline silica)

Mica (respirable dust) ...... 12001–26–2 ...... 3 ...... Soapstone, total dust ...... 6 ...... Soapstone, respirable dust ...... 3 ...... Talc (containing asbestos): Use asbestos limit; see 1910.1001. Talc (containing no asbestos), respirable dust ...... 14807–96–6 ...... 2 ...... Tremolite; asbestiform—see 1910.1001; non- ...... asbestiform—see 57 FR 24310, June 8, 1992. Silicon ...... 7440–21–3. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Silicon carbide ...... 409–21–2. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Silicon tetrahydride ...... 7803–62–5 ...... 5 7 ...... Silver, metal and soluble compounds (as Ag) ...... 7440–22–4 ...... 0.01 ...... Soapstone; see Silicates Sodium azide ...... 26628–22–8. (as HN3) ...... 0.1 ...... X (as NaN3 ) ...... 0.3 X Sodium bisulfite ...... 7631–90–5 ...... 5 ...... Sodium fluoroacetate ...... 62–74–8 ...... 0.05 ...... 0.15 ...... X Sodium hydroxide ...... 1310–73–2 ...... 2 ...... Sodium metabisulfite ...... 7681–57–4 ...... 5 ...... Starch ...... 9005–25–8. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Stibine ...... 7803–52–3 ...... 0.1 0.5 ...... Stoddard solvent ...... 8052–41–3 ...... 100 525 ...... Strychnine ...... 57–24–9 ...... 0.15 ...... Styrene ...... 100–42–5 ...... 50 215 100 425 ...... Subtilisins (Proteolytic enzymes) ...... 1395–21–7 ...... 0. 00006 ...... Sucrose ...... 57–50–1. Total dust ...... 15 ...... Respirable fraction ...... 5 ...... Sulfur dioxide ...... 7446–09–5 ...... 2 5 5 13 ...... Sulfur hexafluoride ...... 2551–62–4 ...... 1000 6000 ...... Sulfuric acid ...... 7664–93–9 ...... 1 ...... Sulfur monochloride ...... 10025–67–9 ...... 1 6 ...... Sulfur pentafluoride ...... 5714–22–7 ...... 0.01 0.1 ...... Sulfur tetrafluoride ...... 7783–60–0 ...... 0.1 0.4 ...... Sulfuryl fluoride ...... 2699–79–8 ...... 5 20 10 40 ...... Sulprofos ...... 35400–43–2 ...... 1 ...... Systox®; see Demeton ...... 8065–48–3. 2,4,5–T ...... 93–76–5 ...... 10 ...... Talc; see Silicates. Tantalum, metal and oxide dust ...... 7440–25–7 ...... 5 ...... TEDP (Sulfotep) ...... 3689–24–5 ...... 0.2 ...... X Tellurium and compounds (as Te) ...... 13494–80–9 ...... 0.1 ...... Tellurium hexafluoride (as Te) ...... 7783–80–4 ...... 0.02 0.2 ......

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Temephos ...... 3383–96–8. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... TEPP ...... 107–49–3 ...... 0.05 ...... X Terphenyls ...... 26140–60–3 ...... 0.5 5 ...... 1,1,1,2-Tetrachloro-2,2-difluoroethane ...... 76–11–9 ...... 500 4170 ...... 1,1,2,2-Tetrachloro 1,2-difluoroethane ...... 76–12–0 ...... 500 4170 ...... 1,1,2,2-Tetrachloro-ethane ...... 79–34–5 ...... 1 7 ...... X Tetrachoro-ethylene; see Perchloro-ethylene ...... 127–18–4. Tetrachloro-methane; see Carbon tetrachloride ...... 56–23–5. Tetrachloro-naphthalene ...... 1335–88–2 ...... 2 ...... X Tetraethyl lead (as Pb) ...... 78–00–2 ...... 0.075 ...... X Tetrahydrofuran ...... 109–99–9 ...... 200 590 250 735 ...... Tetramethyl lead (as Pb) ...... 75–74–1 ...... 0.075 ...... X Tetramethyl succinonitrile ...... 3333–52–6 ...... 0.5 3 ...... X Tetranitro-methane ...... 509–14–8 ...... 1 8 ...... Tetrasodium pyrophosphate ...... 7722–88–5 ...... 5 ...... Tetryl (2,4,6-Trinitro-phenyl-methyl-nitramine) ...... 479–45–8 ...... 0.1 ...... X Thallium, soluble compounds (as Tl) ...... 7440–28–0 ...... 0.1 ...... X 4,4′-Thiobis (6-tert-Butyl-m-cresol) ...... 96–69–5. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Thioglycolic acid ...... 68–11–1 ...... 1 4 ...... X Thionyl chloride ...... 7719–09–7 ...... 1 5 ...... Thiram ...... 137–26–8 ...... 5 ...... Tin, inorganic compounds (except oxides) (as Sn) ...... 7440–31–5 ...... 2 ...... Tin, organic compounds (as Sn) ...... 7440–31–5 ...... 0.1 ...... X Tin oxide (as Sn) ...... 7440–31–5 ...... 2 ...... Titanium dioxide ...... 13463–67–7. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Toluene ...... 108–88–3 ...... 100 375 150 560 ...... Toluene-2,4-diisocyanate (TDI)...... 584–84–9 ...... 0.005 0.04 0.02 0.15 ...... m-Toluidine ...... 108–44–1 ...... 2 9 ...... X o-Toluidine ...... 95–53–4 ...... 5 22 ...... X p-Toluidine ...... 106–49–0 ...... 2 9 ...... X Toxaphene; see Chlorinated camphene ...... 8001–35–2. Tremolite; see Silicates ...... N/A. Tributyl phosphate ...... 126–73–8 ...... 0.2 2.5 ...... Trichloroacetic acid ...... 76–03–9 ...... 1 7 ...... 1,2,4-Trichloro-benzene ...... 120–82–1 ...... 5 40 ...... 1,1,1-Trichloroethane; see Methyl chloroform ...... 71–55–6. 1,1,2-Trichloroethane ...... 79–00–5 ...... 10 45 ...... X Trichloro-ethylene ...... 79–01–6 ...... 50 270 200 1080 ...... Trichloro-methane; see Chloroform ...... 67–66–3. Trichloro-naphthalene ...... 1321–65–9 ...... 5 ...... X 1,2,3-Trichloropropane ...... 96–18–4 ...... 10 60 ...... 1,1,2-Trichloro-1,2,2-trifluoroethane ...... 76–13–1 ...... 1000 7600 1250 9500 ...... Triethylamine ...... 121–44–8 ...... 10 40 15 60 ...... Trifluorobromo-methane ...... 75–63–8 ...... 1000 6100 ...... Trimellitic anhydride ...... 552–30–7 ...... 0.005 0.04 ...... Trimethylamine ...... 75–50–3 ...... 10 24 15 36 ...... Trimethyl benzene ...... 25551–13–7 ...... 25 125 ...... Trimethyl phosphite ...... 121–45–9 ...... 2 10 ...... 2,4,6-Trinitrophenyl; see Picric acid ...... 88–89–1. 2,4,6-Trinitrophenylmethyl nitramine; see Tetryl ...... 479–45–8. 2,4,6-Trinitrotoluene (TNT) ...... 118–96–1 ...... 0.5 ...... X Triorthocresyl phosphate ...... 78–30–8 ...... 0.1 ...... X Triphenyl amine ...... 603–34–9 ...... 5 ...... Triphenyl phosphate ...... 115–86–6 ...... 3 ...... Tungsten (as W) ...... 7440–33–7. Insoluble com- ...... 5 ...... 10 ...... pounds. Soluble com- ...... 1 ...... 3 ...... pounds. Turpentine ...... 8006–64–2 ...... 100 560 ...... Uranium (as U) ...... 7440–61–1. Soluble com- ...... 0.05 ...... pounds. Insoluble com- ...... 0.2 ...... 0.6 ...... pounds. n-Valeraldehyde ...... 110–62–3 ...... 50 175 ...... Vanadium ...... 1314–62–1. Respirable Dust as ...... 0.05 ...... V205. Fume (as V205) ...... 0.05 ...... Vegetable Oil Mist ...... N/A. Total dust ...... 15 ......

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TABLE Z–1–A—LIMITS FOR AIR CONTAMINANTS—Continued [From the vacated 1989 final rule—Ex. #149]

TWA STEL Ceiling Skin Substance Cas No. Designa- ppm mg/m3 ppm mg/m3 ppm mg/m3 tion

Respirable fraction ...... 5 ...... Vinyl acetate ...... 108–05–4 ...... 10 30 20 60 ...... Vinyl benzene; see Styrene ...... 100–42–5. Vinyl bromide ...... 593–60–2 ...... 5 20 ...... Vinyl chloride; see 1910.1017 ...... 75–01–4. Vinyl cyanide; see Acrylonitrile ...... 107–13–1. Vinyl cyclohexene dioxide ...... 106–87–6 ...... 10 60 ...... X Vinylidene chloride (1,1-Dichloro-ethylene) ...... 75–35–4 ...... 1 4 ...... Vinyl toluene ...... 25013–15–4 ...... 100 480 ...... VM & P Naphtha ...... 8032–32–4 ...... 300 1350 400 1800 ...... Warfarin ...... 81–81–2 ...... 0.1 ...... Welding fumes (total particulate)* ...... N/A ...... 5 ...... Wood dust, all soft and hard woods, except Western red N/A ...... 5 ...... 10 ...... cedar. Wood dust, western red cedar ...... N/A ...... 2.5 ...... Xylenes (o-, m-, p-isomers) ...... 1330–20–7 ...... 100 435 150 655 ...... m-Xylene alpha, alpha’ diamine ...... 1477–55–0 ...... 0.1 X Xylidine ...... 1300–73–8 ...... 2 10 ...... X Yttrium ...... 7440–65–5 ...... 1 ...... Zinc chloride fume ...... 7646–85–7 ...... 1 ...... 2 ...... Zinc chromate (as CrO3); see 910.1026. See Table Z–2 Varies with com- for the exposure limit for any operations or sectors pound. where the exposure limit in 1910.1026 is stayed or are otherwise not in effect. Zinc oxide fume ...... 1314–13–2 ...... 5 ...... 10 ...... Zinc oxide ...... 1314–13–2. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Zinc stearate ...... 557–05–1. Total dust ...... 10 ...... Respirable fraction ...... 5 ...... Zirconium compounds (as Zr) ...... 7440–67–7 ...... 5 ...... 10 ...... 1(30 minutes).

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GHS Column Model: An aid to substitute Protection of Workers from the Risks Retrieved from: http://www.turi.org/Our_ assessment. Berlin, Germany: Deutsche Related to Exposure to Carcinogens or Work/Training/TUR_Planner_Program/ Gesetzliche Unfallversicheung e.V. Mutagens at Work, 2004/37/EC (2004). About_TUR_Plans_and_Planning. (DGUV). Ex. #111: Safe Alternatives Policy, 42 U.S.C. Ex. #79: Toxics Use Reduction Institute. Ex. #91: Netherlands Ministry of 7671K (2011). (2011b). Trichloroethylene and Infrastructure and the Environment. Ex. #113: European Commission. (2012). chlorinated solvents reduction. Retrieved (2002). Implementation strategy on Minimising chemical risk to workers’ from: http://www.turi.org/Our_Work/ management of substances: 2nd progress health and safety through substitution. Green_Cleaning_Lab/How_We_Can_ report. 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TCE facts: Use nationally and in 1990.132(b)(6) (2011). Occupational Safety and Health (BAuA), Massachusetts. Retrieved from: http:// Ex. #95: OSHA Cancer Policy, 29 CFR Technical Rule on Hazardous Substances www.turi.org/About/Library/TURI- 1990.146(k) (2011). (TRGS) 600 (Aug. 2008). Publications/Massachusetts_Chemical_ Ex. #96: Respiratory Protection, 29 CFR Ex. #116: German Environment Agency Fact_Sheets/Trichloroethylene_TCE_ 1910.134(a) (2011). (Umweltbundesamt). (2011). Guide on Fact_Sheet/TCE_Facts/Use_Nationally_ Ex. #97: Air Contaminants, 29 CFR sustainable chemicals: A decision tool and_in_Massachusetts. 1910.1000(e) (2011). for substance manufacturers, Ex. #82: Roelofs, C.R., Barbeau, E.M., Ex. #98: Occupational Exposure to Methylene formulators, and end users of chemicals. Ellenbecker, M.J., & Moure-Eraso, R. Chloride, 62 FR 1494 (Jan. 10, 1997). Retrieved from: http:// (2003). Prevention strategies in industrial Ex. #99: Occupational Exposure to www.umweltdaten.de/publikationen/ hygiene: A critical literature review. Hexavalent Chromium, 71 FR 10099 fpdf-l/4169.pdf. AIHA Journal, 64(1), 62–67. (Feb. 28, 2006). Ex. #117: GreenBlue. (2012). CleanGredients. Ex. #83: American Industrial Hygiene Ex. #100: Occupational Safety and Health Retrieved from: http:// Association. (2008). Demonstrating the Administration. (1996). Final economic www.cleangredients.org/home. business value of industrial hygiene: and regulatory flexibility analysis for Ex. #118: Institute of Work, Environment, Methods and findings from the value of OSHA’s standard for occupational and Health (ISTAS). (2012). RISCTOX. the industrial hygiene profession study. exposure to methylene chloride. Retrieved from: http://www.istas.net/ Retrieved from: http://www.aiha.org/ Ex. #101: Occupational Safety and Health risctox/en/. votp_new/pdf/votp_report.pdf. Administration. (2006a). Final economic Ex. #119: SUBSPORT. (2012). Substitution Ex. #84: Lavoie, E.T., Heine, L.G., Holder, H., and regulatory flexibility analysis for Support Portal. Retrieved from: http:// Rossi, M.S., Lee II, R.E., Connor, E.A., OSHA’s final standard for occupational www.subsport.eu/about-the-project. . . . Davies, C.L. (2010). Chemical exposure to hexavalent chromium. Ex. #120: U.S. Environmental Protection alternatives assessment: Enabling Ex. #102: Occupational Safety and Health Agency. (2012c). Alternatives substitution to safer chemicals. Administration. (1987). Regulatory assessments. Retrieved from: http:// Environmental Science & Technology, impact and regulatory flexibility analysis www.epa.gov/dfe/alternative_ 44(24), 9244–9249. of the formaldehyde standard. assessments.html. Ex. #85: Toxics Use Reduction Institute. Ex. #103: Occupational Safety and Health Ex. #121: U.S. Environmental Protection (2006). Five chemicals alternatives Administration. (1984). Regulatory Agency. (2011b). The U.S. assessment study. Retrieved from: impact and regulatory flexibility analysis Environmental Protection Agency’s http://www.turi.org/About/Library/TURI- of the final standard for ethylene oxide. strategic plan for evaluating the toxicity Publications/2006_Five_Chemicals_ Ex. #104: Occupational Safety and Health of chemicals. Retrieved from: http:// Alternatives_Assessment_Study. Administration. (2005). Regulatory www.epa.gov/spc/toxicitytesting/. Ex. #86: Rossi, M., Tickner, J., & Geiser, K. Review of the Occupational Safety and Ex. #122: U.S. Environmental Protection (2006). Alternatives assessment Health Administration’s Ethylene Oxide Agency. (2012d). Overview of National framework of the Lowell Center for Standard [29 CFR 1910.1047]. Research Council toxicity testing Sustainable Production. Lowell, MA: Ex. #105: Occupational Safety and Health strategy. Retrieved from: http:// Lowell Center for Sustainable Administration. (2010). Regulatory www.epa.gov/pesticides/science/nrc- Production. Retrieved from: http:// Review of 29 CFR 1910.1052: Methylene toxtesting.html. www.chemicalspolicy.org/downloads/ chloride. Ex. #123: Washington Department of Ecology. FinalAltsAssess06.pdf. Ex. #106: Occupational Safety and Health (2012). Ecology Quick Chemical Ex. #87: Raphael, D.O. & Geiger, C.A. (2011). Administration. (2006b). Best practices Assessment Tool 1.2 Methodology. Precautionary policies in local for the safe use of glutaraldehyde in Retrieved from: http://www.ecy.wa.gov/ government: Green chemistry and safer health care (OSHA 3254–08N 2006). programs/hwtr/ChemAlternatives/ alternatives. New Solutions, 21(3), 345– Ex. #107: Occupational Safety and Health documents/QCAT2012-03-20final.pdf. 358. Administration. (2013a). Transitioning to Ex. #124: Hazard Communication, 29 CFR Ex. #88: Clean Production Action. (2012). safer chemicals: a toolkit for employers 1910.1200 (2012). GreenScreen for Safer Chemicals v1.2. and workers. Retrieved from: http:// Ex. #125: Hazard Communication, 77 FR Retrieved from: http:// www.osha.gov/dsg/safer_chemicals/. 17574 (Mar. 26, 2012). www.cleanproduction.org/ Ex. #108: American National Standard for Ex. #126: National Safety Council, Greenscreen.v1-2.php. Occupational Health and Safety Fundamentals of Industrial Hygiene

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(2012) ed. Plog, B.A. and Quinlan, P. J. Comparison with Measurement-based Ex. #141: Safety and Health Regulations for Chapter 31, International Developments Comprehensive Risk Assessment. Longshoring. 29 CFR 1918 (2012). in Occupational Safety and Health, Silk, Journal of Occupational Health, 49, 482– Ex. #142: National Consensus Standards and J. and Brigandi, P. 492. Established Federal Standards, 36 FR Ex. #127: Taylor-McKernan, L. and Seaton M. Ex. #134: Lee, E.G., Slaven, J., Bowen, R.B., 10466 (May 29, 1971). (2014) The Banding Marches On, NIOSH Harper, M. (2011). Evaluation of the Ex. #143: Longshore and Harbor Workers’ Proposes a New Process for Occupational COSHH Essentials Model with a Mixture Compensation, 33 U.S.C. 901–950 Exposure Banding. The Synergist, May, of Organic Chemicals at a Medium-Sized (2006). p. 44–46. Paint Producer. Annals of Occupational Ex. #144: Occupational Safety and Health Ex. #128: Laszcz-Davis, C., Maier, A., Hygiene, 55(1), 16–29. Standards for Shipyard Employment, 29 Perkins, J. (2014) The Hierarchy of OELs, Ex. #135: National Institute for Occupational CFR 1915.11, 1915.12, 1915.32, 1915.33 A New Organizing Principle for Safety and Health (NIOSH). (2009). (2012). Occupational Risk Assessment, The Qualitative risk characterization and Synergist, March, p. 27–30. management of occupational hazards: Ex. #145: Federal Advisory Committee on Ex. #129: Health and Safety Executive. control banding (CB), a literature review Occupational Safety and Health (2013). COSHH Essentials. Retrieved and critical analysis (DHHS (NIOSH) (FACOSH). (2012). Recommendations for from: http://www.hse.gov.uk/coshh/ Publication No. 2009–152). Consideration by the U.S. Secretary of essentials/. Ex. #136: Occupational Safety and Health Labor on the Adoption and Use of Ex. #130: Control of Substances Hazardous to Administration. (2009). Controlling silica Occupational Exposure Limits by Health Regulations, 2002 No. 2677 exposures in construction (OSHA 3362– Federal Agencies. (2002). 05 2009). Ex. #146: Air Contaminants Proposed Rule, Ex. #131: Health and Safety Executive. Ex. #137: Occupational Safety and Health 57 FR 26002 (Jun. 12, 1992). (2009). The technical basis for COSHH Administration. (2013b). Notice of Ex. #147: American Iron and Steel Institute essentials: easy steps to control proposed rulemaking for occupational (AISI). (1990). On Petition for Review of chemicals. Retrieved from: http://coshh- exposure to respirable crystalline silica. Final Rule of Occupational Safety and essentials.org.uk/assets/live/CETB.pdf. Ex. 138: Susi, et. al. (2000). The use of a task- Health Administration: Industry Ex. #132: Jones, R.M., Nicas, M., (2006) based exposure assessment model (T– Petitioners’ Joint Procedural Brief. Evaluation of COSHH Essentials for BEAM) for assessment of metal fume Ex. #148: Forging Indus. Ass’n v. Secretary of vapor degreasing and bag filling exposures during welding and thermal Labor, 773 F.2d 1436, 1453 (4th Cir. operations. Annals of Occupational cutting. Applied Occupational and 1985). Hygiene, 50(2), 137–147. Environmental Hygiene, 15(1): 26–38. Ex. #149: 1989 PELs Table. 54 FR 2332, Ex. #133: Hashimoto, H., Toshiaki, G., Ex. #139: Burg, F. (2012). Standards insider. 2923–2959. Nakachi, N., Suzuki, H., Takebayashi, T., Professional Safety, 57(3), 24–25. Kajiki, S., Mori, K. (2007) Evaluation of Ex. #140: Marine Terminals, 29 CFR 1917.2, [FR Doc. 2014–24009 Filed 10–9–14; 8:45 am] the Control Banding Method— 1917.22, 1917.23, 1917.25 (2012). BILLING CODE 4510–26–P

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Part III Department of the Treasury Office of the Comptroller of the Currency 12 CFR Part 50 Federal Reserve System 12 CFR Part 249 Federal Deposit Insurance Corporation 12 CFR Part 329 Liquidity Coverage Ratio: Liquidity Risk Measurement Standards; Final Rule

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DEPARTMENT OF THE TREASURY their consolidated subsidiaries that are • Agency Web site: http:// depository institutions with $10 billion www.federalreserve.gov. Follow the Office of the Comptroller of the or more in total consolidated assets. The instructions for submitting comments at Currency final rule focuses on these financial http://www.federalreserve.gov/apps/ institutions because of their complexity, foia/proposedregs.aspx. 12 CFR Part 50 funding profiles, and potential risk to • Federal eRulemaking Portal: http:// [Docket ID OCC–2013–0016] the financial system. Therefore, the www.regulations.gov. Follow the agencies do not intend to apply the final instructions for submitting comments. RIN 1557–AD74 rule to community banks. In addition, • E-Mail: regs.comments@ the Board is separately adopting a federalreserve.gov. FEDERAL RESERVE SYSTEM modified minimum liquidity coverage • Fax: (202) 452–3819 or (202) 452– ratio requirement for bank holding 3102. 12 CFR Part 249 companies and savings and loan • Mail: Robert deV. Frierson, [Regulation WW; Docket No. R–1466] holding companies without significant Secretary, Board of Governors of the insurance or commercial operations Federal Reserve System, 20th Street and RIN 7100–AE03 that, in each case, have $50 billion or Constitution Avenue NW., Washington, FEDERAL DEPOSIT INSURANCE more in total consolidated assets but DC 20551. CORPORATION that are not internationally active. The All public comments are available from final rule is effective January 1, 2015, the Board’s Web site at http://www. 12 CFR Part 329 with transition periods for compliance federalreserve.gov/generalinfo/foia/ with the requirements of the rule. proposedregs.aspx as submitted, unless RIN 3064–AE04 DATES: Effective Date: January 1, 2015. modified for technical reasons. Liquidity Coverage Ratio: Liquidity Comments must be submitted on the Accordingly, your comments will not be Risk Measurement Standards Paperwork Reduction Act burden edited to remove any identifying or estimates only by December 9, 2014. contact information. Public comments AGENCY: Office of the Comptroller of the may also be viewed electronically or in ADDRESSES: You may submit comments paper form in Room MP–500 of the Currency, Department of the Treasury; on the Paperwork Reduction Act burden Board’s Martin Building (20th and C Board of Governors of the Federal estimates only. Comments should be Street NW.) between 9:00 a.m. and 5:00 Reserve System; and Federal Deposit directed to: Insurance Corporation. p.m. on weekdays. OCC: Because paper mail in the ACTION: Final rule. A copy of the PRA OMB submission, Washington, DC area and at the OCC is including any reporting forms and SUMMARY: The Office of the Comptroller subject to delay, commenters are instructions, supporting statement, and of the Currency (OCC), the Board of encouraged to submit comments by other documentation will be placed into Governors of the Federal Reserve email if possible. Comments may be OMB’s public docket files, once System (Board), and the Federal Deposit sent to: Legislative and Regulatory approved. Also, these documents may Insurance Corporation (FDIC) are Activities Division, Office of the be requested from the agency clearance adopting a final rule that implements a Comptroller of the Currency, Attention: officer, whose name appears below. quantitative liquidity requirement 1557–0323, 400 7th Street SW., Suite For further information contact the consistent with the liquidity coverage 3E–218, Mail Stop 9W–11, Washington, Federal Reserve Board Acting Clearance ratio standard established by the Basel DC 20219. In addition, comments may Officer, John Schmidt, Office of the Committee on Banking Supervision be sent by fax to (571) 465–4326 or by Chief Data Officer, Board of Governors (BCBS). The requirement is designed to electronic mail to regs.comments@ of the Federal Reserve System, promote the short-term resilience of the occ.treas.gov. You may personally Washington, DC 20551, (202) 452–3829. liquidity risk profile of large and inspect and photocopy comments at the Telecommunications Device for the Deaf internationally active banking OCC, 400 7th Street SW., Washington, (TDD) users may contact (202) 263– organizations, thereby improving the DC 20219. For security reasons, the OCC 4869, Board of Governors of the Federal banking sector’s ability to absorb shocks requires that visitors make an Reserve System, Washington, DC 20551. arising from financial and economic appointment to inspect comments. You FDIC: You may submit written stress, and to further improve the may do so by calling (202) 649–6700. comments by any of the following measurement and management of Upon arrival, visitors will be required to methods: liquidity risk. The final rule establishes present valid government-issued photo • Agency Web site: http:// a quantitative minimum liquidity identification and to submit to security www.fdic.gov/regulations/laws/federal/. coverage ratio that requires a company screening in order to inspect and Follow the instructions for submitting subject to the rule to maintain an photocopy comments. comments on the FDIC Web site. amount of high-quality liquid assets (the For further information or to obtain a • Federal eRulemaking Portal: http:// numerator of the ratio) that is no less copy of the collection please contact www.regulations.gov. Follow the than 100 percent of its total net cash Johnny Vilela or Mary H. Gottlieb, OCC instructions for submitting comments. outflows over a prospective 30 calendar- Clearance Officers, (202) 649–5490, for • E-Mail: [email protected]. day period (the denominator of the persons who are hard of hearing, TTY, Include ‘‘Liquidity Coverage Ratio Final ratio). The final rule applies to large and (202) 649–5597, Legislative and Rule’’ on the subject line of the message. internationally active banking Regulatory Activities Division, Office of • Mail: Gary A. Kuiper, Counsel, organizations, generally, bank holding the Comptroller of the Currency, 400 7th Executive Secretary Section, NYA–5046, companies, certain savings and loan Street SW., Suite 3E–218, Mail Stop Attention: Comments, FDIC, 550 17th holding companies, and depository 9W–11, Washington, DC 20219. Street NW., Washington, DC 20429. institutions with $250 billion or more in Board: You may submit comments, • Hand Delivery/Courier: The guard total assets or $10 billion or more in on- identified by Docket R–1466, by any of station at the rear of the 550 17th Street balance sheet foreign exposure and to the following methods: Building (located on F Street) on

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business days between 7:00 a.m. and B. Summary of Comments on the Proposed applied to nonbank financial companies 5:00 p.m. Rule and Significant Comment Themes designated by the Financial Stability • Public Inspection: All comments C. Overview of the Final Rule and Oversight Council (Council) for received will be posted without change Significant Changes From the Proposal supervision by the Board that do not D. Scope of Application of the Final Rule have substantial insurance activities to http://www.fdic.gov/regulations/laws/ 1. Covered Companies federal/ including any personal 2. Covered Depository Institution (covered nonbank companies), large, information provided. Subsidiaries internationally active banking For further information or to request a 3. Companies that Become Subject to the organizations, and their consolidated copy of the collection please contact LCR Requirements subsidiary depository institutions with Gary Kuiper, Counsel, (202) 898–3719, II. Minimum Liquidity Coverage Ratio total assets of $10 billion or more (each, Legal Division, Federal Deposit A. The LCR Calculation and Maintenance a covered company).2 The Board also Insurance Corporation, 550 17th Street Requirement proposed to implement a modified 1. A Liquidity Coverage Requirement NW., Washington, DC 20429. version of the liquidity coverage ratio 2. The Liquidity Coverage Ratio Stress requirement (modified LCR) as an FOR FURTHER INFORMATION CONTACT: Period enhanced prudential standard for bank OCC: Kerri Corn, Director, (202) 649– 3. The Calculation Date, Daily Calculation holding companies and savings and 6398, or James Weinberger, Technical Requirement, and Comments on LCR loan holding companies with $50 Expert, (202) 649–5213, Credit and Reporting billion or more in total consolidated Market Risk Division; Linda M. B. High-Quality Liquid Assets assets that are not internationally active Jennings, National Bank Examiner, (980) 1. Liquidity Characteristics of HQLA 2. Qualifying Criteria for Categories of and do not have substantial insurance 387–0619; Patrick T. Tierney, Assistant HQLA activities (each, a modified LCR holding Director, or Tiffany Eng, Attorney, 3. Requirements for Inclusion as Eligible company). Legislative and Regulatory Activities HQLA The BCBS published the international Division, (202) 649–5490, for persons 4. Generally Applicable Criteria for Eligible liquidity standards in December 2010 as who are deaf or hard of hearing, TTY, HQLA a part of the Basel III reform package 3 5. Calculation of the HQLA Amount (202) 649–5597; or Tena Alexander, and revised the standards in January Senior Counsel, or David Stankiewicz, C. Net Cash Outflows 1. The Total Net Cash Outflow Amount 2013 (as revised, the Basel III Revised Senior Attorney, Securities and Liquidity Framework).4 The agencies Corporate Practices Division, (202) 649– 2. Determining Maturity 3. Outflow Amounts are actively involved in the BCBS and 5510; Office of the Comptroller of the 4. Inflow Amounts its international efforts, including the Currency, 400 7th Street SW., III. Liquidity Coverage Ratio Shortfall development of the Basel III Revised Washington, DC 20219. IV. Transition and Timing Liquidity Framework. Board: Constance Horsley, Assistant V. Modified Liquidity Coverage Ratio To devise the Basel III Revised Director, (202) 452–5239, David Emmel, A. Threshold for Application of the Liquidity Framework, the BCBS Manager, (202) 912–4612, Adam S. Modified Liquidity Coverage Ratio gathered supervisory data from multiple Trost, Senior Supervisory Financial Requirement. jurisdictions, including a substantial B. 21 Calendar-Day Stress Period Analyst, (202) 452–3814, or J. Kevin amount of data related to U.S. financial Littler, Senior Supervisory Financial C. Calculation Requirements and Comments on Modified LCR Reporting institutions, which was reflective of a Analyst, (202) 475–6677, Credit, Market VI. Plain Language variety of time periods and types of and Liquidity Risk Policy, Division of VII. Regulatory Flexibility Act historical liquidity stresses. These Banking Supervision and Regulation; VIII. Paperwork Reduction Act historical stresses included both April C. Snyder, Senior Counsel, (202) IX. OCC Unfunded Mandates Reform Act of idiosyncratic and systemic stresses 452–3099, Dafina Stewart, Senior 1995 Determination across a range of financial institutions. Attorney, (202) 452–3876, Jahad Atieh, I. Overview The BCBS determined the LCR Attorney, (202) 452–3900, Legal parameters based on a combination of Division, Board of Governors of the A. Background and Summary of the historical data analysis and supervisory Federal Reserve System, 20th and C Proposed Rule judgment. Streets NW., Washington, DC 20551. For On November 29, 2013, the Office of The proposed rule would have the hearing impaired only, the Comptroller of the Currency (OCC), established a quantitative minimum Telecommunication Device for the Deaf the Board of Governors of the Federal LCR requirement that builds upon the (TDD), (202) 263–4869. Reserve System (Board), and the Federal liquidity coverage methodologies FDIC: Kyle Hadley, Chief, Deposit Insurance Corporation (FDIC) traditionally used by banking Examination Support Section, (202) (collectively, the agencies) invited organizations to assess exposures to 898–6532; Eric Schatten, Capital comment on a proposed rule (proposed contingent liquidity events. The Markets Policy Analyst, (202) 898–7063, rule or proposal) to implement a the Netherlands, Russia, Saudi Arabia, Singapore, Capital Markets Branch Division of Risk liquidity coverage ratio (LCR) Management Supervision, (202) 898– South Africa, Sweden, Switzerland, Turkey, the requirement that would be consistent United Kingdom, and the United States. The OCC, 6888; Gregory Feder, Counsel, (202) with the international liquidity Board, and FDIC actively participate in BCBS and 898–8724, or Suzanne Dawley, Senior standards published by the Basel its international efforts. Documents issued by the BCBS are available through the Bank for Attorney, (202) 898–6509, Supervision Committee on Banking Supervision Branch, Legal Division, Federal Deposit International Settlements Web site at http:// (BCBS).1 The proposed rule would have www.bis.org. Insurance Corporation, 550 17th Street 2 78 FR 71818 (November 29, 2013). NW., Washington, DC, 20429. 1 The BCBS is a committee of banking supervisory 3 BCBS, ‘‘Basel III: International framework for SUPPLEMENTARY INFORMATION: authorities that was established by the central bank liquidity risk measurement, standards and governors of the G10 countries in 1975. It currently monitoring’’ (December 2010), available at http:// Table of Contents consists of senior representatives of bank www.bis.org/publ/bcbs188.pdf (Basel III Liquidity supervisory authorities and central banks from Framework). I. Overview Argentina, Australia, Belgium, Brazil, Canada, 4 BCBS, ‘‘Basel III: The Liquidity Coverage Ratio A. Background and Summary of the China, France, Germany, Hong Kong SAR, India, and liquidity risk monitoring tools’’ (January 2013), Proposed Rule Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, available at http://www.bis.org/publ/bcbs238.htm.

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proposed rule was designed to officials and members of the U.S. Additionally, a few commenters complement existing supervisory Congress), public interest groups, expressed concerns about the overall guidance and the requirements of the private individuals, and other interested impact of the requirements, citing the Board’s Regulation YY (12 CFR part parties. In addition, agency staffs held a impact of the standard on covered 252) on internal liquidity stress testing number of meetings with members of companies’ costs, competitiveness, and and liquidity risk management that the the public and obtained supplementary existing business practices, as well as Board issued, in consultation with the information from certain commenters. the impact upon non-financial OCC and the FDIC, pursuant to section Summaries of these meetings are companies more broadly. As described 165 of the Dodd-Frank Wall Street available on the agencies’ public Web in more detail below, the agencies have Reform and Consumer Protection Act of sites.6 addressed these issues by reducing 5 2010 (Dodd-Frank Act). The proposed Although many commenters generally burdens where appropriate, while rule also would have established supported the purpose of the proposed ensuring that the final rule serves the transition periods for conformance with rule to create a standardized minimum purpose of promoting the safety and the requirements. liquidity requirement, most commenters soundness of covered companies. The The proposed LCR would have either expressed concern regarding the agencies found that certain comments required a covered company to maintain proposal overall or criticized specific concerning the costs and benefits of the proposed rule to be relevant to their an amount of unencumbered high- aspects of the proposed rule. The deliberations, and, on the basis of these quality liquid assets (HQLA amount) agencies received a number of and other considerations, made the sufficient to meet its total stressed net comments regarding the differences changes discussed below. cash outflows over a prospective 30 between the proposed rule and the Basel calendar-day period, as calculated in The proposed rule would have III Revised Liquidity Framework, required covered companies to comply accordance with the proposed rule. The together with comments on the proposed rule outlined certain with a minimum LCR of 80 percent interaction of this proposal with other beginning on January 1, 2015, 90 categories of assets that would have rulemakings issued by the agencies. qualified as high-quality liquid assets percent beginning on January 1, 2016, Comments about differences between and 100 percent beginning on January 1, (HQLA) if they were unencumbered and the proposed rule and the Basel III able to be monetized during a period of 2017, and thereafter. These transition standard were mixed. Some commenters periods were similar to, but shorter stress. HQLA that are unencumbered expressed support for the areas in which and controlled by a covered company’s than, those set forth in the Basel III the proposed rule was more stringent Revised Liquidity Framework, and were liquidity risk management function than the Basel III Revised Liquidity would enhance the ability of a covered intended to preserve the strong liquidity Framework and others stated that positions many U.S. banking company to meet its liquidity needs having more conservative treatment for during an acute short-term liquidity organizations have achieved since the assessing the LCR could disadvantage recent financial crisis. The proposed stress scenario. A covered company the U.S. banking system. Commenters would have determined its total net rule also would have required covered questioned whether the proposal should companies to calculate their LCR daily, cash outflow amount by applying the impose heightened standards compared proposal’s outflow and inflow rates, beginning on January 1, 2015. A number to the Basel III Revised Liquidity of commenters expressed concerns with which reflected a standardized stress Framework and requested that the final scenario, to the covered company’s the proposed transition periods as well rule’s calculation of the LCR conform to as the operational difficulties of meeting funding sources, obligations, and assets the Basel III standard in order to the proposed requirement for daily over a prospective 30 calendar-day maintain consistency and comparability calculation of the LCR. Additionally, period. The net cash outflow amount for internationally. A commenter noted that some commenters expressed concerns modified LCR holding companies would the proposed rule would create a burden regarding the scope of application of the have reflected a 21 calendar-day period. for those institutions required to comply proposed rule, with regard to both the The proposed rule would have been with more than one liquidity standard application of the proposed rule to generally consistent with the Basel III throughout their global operations. covered nonbank companies and the Revised Liquidity Framework; however, Another commenter argued that the proposed rule’s delineation between there were instances where the agencies proposed rule’s divergence from the covered companies and modified LCR believed supervisory or market Basel III Revised Liquidity Framework holding companies. conditions unique to the United States would make it more difficult to Commenters generally expressed a required the proposal to differ from the harmonize with global standards. desire to see a wider range of asset Basel III standard. Commenters also expressed concern classes included as HQLA or to have B. Summary of Comments on the about the interaction between the some asset classes and funding sources Proposed Rule and Significant proposed rule and other proposed or treated as having greater liquidity than Comment Themes recently finalized rules that affect a proposed. The agencies received covered company’s LCR, such as the comments that highlighted the Each of the agencies received over 100 agencies’ supplementary leverage ratio 7 differences between the types of assets comments on the proposal from U.S. and the Commodity Futures Trading included as HQLA under the U.S. and foreign firms, public officials Commission’s liquidity requirements for proposal and those that might be (including state and local government derivatives clearing organizations.8 included under the Basel III Revised Liquidity Framework. For example, the 5 See Board, ‘‘Enhanced Prudential Standards for Bank Holding Companies and Foreign Banking 6 See http://www.regulations.gov/index.jsp# agencies proposed excluding some asset Organizations,’’ 79 FR 17240 (March 27, 2014) !docketDetail;D=OCC-2013-0016 (OCC); http:// classes from HQLA that may have _ (Board’s Regulation YY); OCC, Board, FDIC, Office www.fdic.gov/regulations/laws/federal/2013/2013 _ _ qualified under the Basel III Revised of Thrift Supervision, and National Credit Union liquidity coverage ae04.html (FDIC); http://www. _ Liquidity Framework given the Administration, ‘‘Interagency Policy Statement on federalreserve.gov/newsevents/reform systemic.htm Funding and Liquidity Risk Management,’’ 75 FR (Board). agencies’ concerns about their relative 13656 (March 22, 2010) (Interagency Liquidity 7 79 FR 24528 (May 1, 2014). lack of liquidity. Many of these Policy Statement). 8 76 FR 69334 (November 8, 2011). comments related to the exclusion in

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the proposed rule of state and municipal terms. Commenters generally approved savings and loan holding companies, securities from HQLA. Commenters of the potential categorization of certain also without significant commercial expressed concern that the exclusion of deposits as operational deposits but operations) that, in each case, have $50 municipal securities from HQLA could expressed concern that other deposits billion or more in total consolidated lead to higher funding costs for were excluded from the category. assets, but are not covered companies municipalities, which could affect local Similarly, some commenters expressed for the purposes of the final rule.11 economies and infrastructure. concern that the outflow rates assigned The final rule requires a covered Likewise, the agencies’ proposed to committed facilities extended to company to maintain an amount of method for determining a covered special purpose entities (SPEs) did not HQLA meeting the criteria set forth in company’s HQLA amount elicited many differentiate between different types of this final rule (the HQLA amount, comments. A number of these SPEs. which is the numerator of the ratio) that comments focused on the treatment of Several commenters expressed is no less than 100 percent of its total deposits from public sector entities that concern that the proposed modified LCR net cash outflows over a prospective 30 are required by law to be secured by would have required net cash outflows calendar-day period (the denominator of eligible collateral and would have been to be calculated over a 21 calendar-day the ratio). The agencies recognize that, treated as secured funding transactions stress period. Commenters argued that under certain circumstances, it may be under the proposed rule. Commenters using a 21 calendar-day period would necessary for a covered company’s LCR expressed concern that the treatment of create significant operational burden as to fall briefly below 100 percent to fund secured deposits in the calculation of a it is an atypical period that does not unanticipated liquidity needs.12 covered company’s HQLA amount align well with their existing systems However, a LCR below 100 percent may would lead to distortions in the LCR and processes. Commenters also also reflect a significant deficiency in a calculation and to reduced acceptance expressed concerns regarding the covered company’s management of of public deposits by covered transition periods and the daily liquidity risk. Therefore, consistent with companies. calculation requirement applicable to the proposed rule, the final rule The proposed rule would have modified LCR holding companies. establishes a framework for a flexible required covered companies to hold an supervisory response when a covered C. Overview of the Final Rule and amount of HQLA to meet their greatest company’s LCR falls below 100 percent. Significant Changes From the Proposal liquidity need within a prospective 30 Under the final rule, a covered company calendar-day period rather than at the Consistent with the proposed rule, the must notify the appropriate Federal end of that period. By requiring a final rule establishes a minimum LCR banking agency on any business day covered company to calculate its total requirement applicable, on a that its LCR is less than 100 percent. In net cash outflow amount using its peak consolidated basis, to large, addition, if a covered company’s LCR is cumulative net outflow day, the internationally active banking below 100 percent for three consecutive proposal would have taken into account organizations with $250 billion or more business days, the covered company potential maturity mismatches between in total consolidated assets or $10 must submit to its appropriate Federal a covered company’s contractual billion or more in total on-balance sheet banking agency a plan for remediation outflows and inflows during the 30 foreign exposure, and to consolidated of the shortfall.13 These procedures, calendar-day period. The agencies subsidiary depository institutions of which are described in further detail in received many comments on the these banking organizations with $10 section III of this Supplementary methodology for calculating the peak billion or more in total consolidated Information section, are intended to cumulative net cash outflow amount, assets.9 Unlike the proposed rule, enable supervisors to monitor and specifically in regard to the treatment of however, the final rule will not apply to respond appropriately to the unique non-maturity outflows. Some covered nonbank companies or their circumstances that give rise to a covered commenters felt that the approach had consolidated subsidiary depository company’s LCR shortfall. merits because it captured potential institutions. Instead, as discussed The agencies emphasize that the LCR liquidity shortfalls within the 30 further below in section I.D, the Board is a minimum requirement and calendar-day period, whereas others will establish any LCR requirement for organizations that pose more systemic argued that that it was overly such companies by order or rule. The risk to the U.S. banking system or whose conservative, unrealistic, and final rule does not apply to foreign liquidity stress testing indicates a need inconsistent with the Basel III Revised banking organizations or U.S. Liquidity Framework. intermediate holding companies that are 11 Total consolidated assets for the purposes of Generally, commenters expressed that required to be established under the the proposed rule would have been as reported on the outflow rates used to determine total Board’s Regulation YY, other than those a covered company’s most recent year-end Consolidated Reports of Condition and Income or net cash outflows were too high with companies that are otherwise covered Consolidated Financial Statements for Bank 10 respect to specific outflow categories. companies. Holding Companies, Federal Reserve Form FR Y– Commenters also expressed concern As discussed in section V of this 9C. Foreign exposure data would be calculated in that specific outflow rates were applied Supplementary Information section, and accordance with the Federal Financial Institutions consistent with the proposal, the Board Examination Council 009 Country Exposure Report. to overly narrow or overly broad The agencies have retained these standards in the categories of exposures in certain cases. also is separately adopting a modified final rule as proposed. Several commenters requested the version of the LCR for bank holding 12 During the transition period, for covered agencies to clarify whether the outflow companies and savings and loan companies, the agencies will consider a shortfall to and inflow rates under the final rule are holding companies without significant be a liquidity coverage ratio lower than 80 percent insurance operations (or, in the case of in 2015 and lower than 90 percent in 2016. designed to reflect an idiosyncratic 13 During the period when a covered company is stress at a particular institution or required to calculate its LCR monthly, the covered general market distress. The agencies 9 Like the proposed rule, the final rule does not company must promptly consult with the received a number of comments on the apply to institutions that have opted to use the appropriate Federal banking agency to determine advanced approaches risk-based capital rule. See 12 whether a plan would be required if the covered criteria for determining whether a CFR part 3 (OCC), 12 CFR part 217 (Board), and 12 company’s LCR is below the minimum requirement deposit was an operational deposit and CFR part 324 (FDIC). for any calculation date that is the last business day on the definitions of certain related 10 12 CFR 252.153. of the calendar month.

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for higher liquidity reserves may need to final rule by applying outflow and commenters relating to the types of take additional steps beyond meeting inflow rates, which reflect certain operational services that would be the minimum ratio in order to meet standardized stressed assumptions, covered by the rule and the requirement supervisory expectations. The LCR will against the balances of a covered to exclude certain deposits from being complement existing supervisory company’s funding sources, obligations, classified as operational. Additionally, guidance and the more qualitative and transactions, and assets over a the agencies have limited the outflow internal stress test requirements in the prospective 30 calendar-day period. rate that must be applied to maturing Board’s Regulation YY. Inflows that can be included to offset secured funding transactions such that Under the final rule, certain categories outflows are limited to 75 percent of the outflow rate should generally not be of assets may qualify as eligible HQLA outflows to ensure that covered greater than the outflow rate for an and may contribute to the HQLA companies are maintaining sufficient unsecured funding transaction with the amount if they are unencumbered by on-balance sheet liquidity and are not same wholesale counterparty. The liens and other restrictions on transfer overly reliant on inflows, which may agencies have also revised the outflow and can therefore be converted quickly not materialize in a period of stress. rates for committed credit and liquidity into cash without reasonably expecting As further described in section II.C of facilities to SPEs so that only SPEs that to incur losses in excess of the this Supplementary Information section rely on the market for funding receive applicable LCR haircuts during a stress and discussed in the proposal, the the 100 percent outflow rate. This period. Consistent with the proposal, measure of net cash outflow and the change should address commenters’ the final rule establishes three categories outflow and inflow rates used in its concerns about inappropriate outflow of HQLA: level 1 liquid assets, level 2A determination are meant to reflect rates for SPEs that are wholly funded by liquid assets and level 2B liquid assets. aspects of historical stress events long-term bank loans and similar The fair value, as determined under U.S. including the recent financial crisis. facilities and do not have the same generally accepted accounting Consistent with the Basel III Revised liquidity risk characteristics as those principles (GAAP), of a covered Liquidity Framework and the agencies’ that rely on the market for funding. company’s level 2A liquid assets and evaluation of relevant supervisory Consistent with the Basel III Revised level 2B liquid assets are subject to information, these net outflow Liquidity Framework, the final rule is haircuts of 15 percent and 50 percent components of the final rule take into effective as of January 1, 2015, subject respectively. The amount of level 2 account the potential impact of to the transition periods in the final liquid assets (that is, level 2A and level idiosyncratic and market-wide shocks, rule. Under the final rule, covered 2B liquid assets) may not comprise more including those that would result in: (1) companies will be required to maintain than 40 percent of the covered A partial loss of unsecured wholesale a minimum LCR of 80 percent beginning company’s HQLA amount. The amount funding capacity; (2) a partial loss of January 1, 2015. From January 1, 2016, of level 2B liquid assets may not secured, short-term financing with through December 31, 2016, the comprise more than 15 percent of the certain collateral and counterparties; (3) minimum LCR would be 90 percent. covered company’s HQLA amount. losses from derivative positions and the Beginning on January 1, 2017, and Certain adjustments have been made collateral supporting those positions; (4) thereafter, all covered companies would to the final rule to address concerns unscheduled draws on committed credit be required to maintain an LCR of 100 raised by a number of commenters with and liquidity facilities that a covered percent. Transition periods are respect to assets that would have company has provided to its customers; described fully in section IV of this qualified as HQLA. With respect to the (5) the potential need for a covered Supplementary Information section. inclusion of corporate debt securities as company to buy back debt or to honor The agencies made changes to the HQLA, the agencies have removed the non-contractual obligations in order to final rule’s transition periods to address requirement that corporate debt mitigate reputational and other risks; (6) commenters’ concerns that the proposed securities have to be publicly traded on a partial loss of retail deposits and transition periods would not have a national securities exchange in order brokered deposits from retail customers; provided covered companies enough to qualify for inclusion as HQLA. and (7) other shocks that affect outflows time to establish the required Additionally, in response to requests by linked to structured financing infrastructure to ensure compliance several commenters, the agencies have transactions, mortgages, central bank with the proposed rule’s requirements, expanded the pool of publicly traded borrowings, and customer short including the proposed daily common equity shares that may be positions. calculation requirement. These changes included as HQLA. Consistent with the The agencies revised certain elements reflect commenters’ concern regarding proposed rule, the final rule does not of the calculation of net cash outflows the operational challenges of include state and municipal securities in the final rule, which are also implementing the daily calculation as HQLA. As discussed fully in section described in section II.C below. The requirement, while still requiring firms II.B.2 of this Supplementary Information methodology for determining the peak to maintain sufficient HQLA to comply section, the liquidity characteristics of cumulative net outflow has been with the rule. Although the agencies municipal securities range significantly amended to address certain comments will still require compliance with the and many of these assets do not exhibit relating to the treatment in the proposed final rule starting January 1, 2015, the the characteristics for inclusion as rule of non-maturity outflows. The agencies have delayed implementation HQLA. With respect to the calculation revised methodology focuses more of the daily calculation requirement. of the HQLA amount and in response to explicitly on the maturity mismatch of With respect to the daily calculation comments received, the agencies are contractual outflows and inflows as well requirements, covered companies that removing collateralized deposits, as as overnight funding from financial are depository institution holding defined in the final rule, from the institutions. companies with $700 billion or more in calculation of amounts exceeding the The agencies have also changed the total consolidated assets or $10 trillion composition caps, as described in definition of operational services and or more in assets under custody, and section II.B.5, below. the list of operational requirements. In any depository institution that is a A covered company’s total net cash making these changes, the agencies have consolidated subsidiary of such outflow amount is determined under the addressed certain issues raised by depository institution holding

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companies that has total consolidated disclosure of the final rule’s LCR in a quantitative minimum liquidity assets equal to $10 billion or more, are subsequent notice under the Paperwork standard to an inappropriate set of required to calculate their LCR on the Reduction Act. companies. Several commenters argued last business day of the calendar month The final rule is consistent with the that the internationally active from January 1, 2015, to June 30, 2015, Basel III Revised Liquidity Framework, thresholds would capture several large and beginning on July 1, 2015, must with some modifications to reflect the banking organizations even though the calculate their LCR on each business unique characteristics and risks of the business models, operations, and day. All other covered companies are U.S. market and U.S. regulatory funding profiles of these organizations required to calculate the LCR on the last frameworks. The agencies believe that have some characteristics that are business day of the calendar month these modifications support the goal of similar to those bank holding companies from January 1, 2015, to June 30, 2016, enhancing the short-term liquidity that would be subject to the modified and beginning on July 1, 2016, and resiliency of covered companies and do LCR proposed by the Board. thereafter, must calculate their LCR each not unduly diminish the consistency of Commenters stated that it would be business day. the LCR on an international basis. more appropriate for all ‘‘regional As detailed in section V of this The agencies note that the BCBS is in banks’’ to be subject to the modified Supplementary Information section, in the process of reviewing the Net Stable LCR as described under section V of the response to comments, the Board is also Funding Ratio (NSFR) that was included Supplementary Information section to adjusting the transition periods and in the Basel III Liquidity Framework the proposed rule. One commenter calculation frequency requirements for when it was first published in 2010. The requested that the agencies not apply the modified LCR in the final rule. NSFR is a standard focused on a longer the standard based on the foreign Modified LCR holding companies will time horizon that is intended to limit exposure threshold, but use a threshold not be subject to the final rule in 2015 overreliance on short-term wholesale that takes into account changes in and will calculate their LCR monthly funding, to encourage better assessment industry structure, considerations of starting January 1, 2016. Furthermore, of funding risks across all on- and off- competitive equality across the Board is increasing the stress period balance sheet items, and to promote jurisdictions, and differences in capital over which modified LCR net cash funding stability. The agencies and liquidity regulation. outflows are to be calculated from 21 anticipate a separate rulemaking The Board also proposed to apply the calendar days to 30 calendar days and regarding the NSFR once the BCBS proposed rule to covered nonbank is amending the methodology required adopts a final international version of companies as an enhanced liquidity to calculate total net cash outflows the NSFR. standard pursuant to its authority under under the modified LCR. D. Scope of Application of the Final section 165 of the Dodd-Frank Act. The The Basel III Revised Liquidity Rule Board believed those organizations Framework also establishes liquidity should maintain appropriate liquidity risk monitoring mechanisms to 1. Covered Companies commensurate with their contribution strengthen and promote global Consistent with the Basel III Revised to overall systemic risk in the United consistency in liquidity risk Liquidity Framework, the proposed rule States and believed the proposal supervision. These mechanisms include would have established a minimum LCR properly reflected such firms’ funding information on contractual maturity applicable to all U.S. internationally profiles. One commenter stated that the mismatch, concentration of funding, active banking organizations, and their proposed rule would adversely impact available unencumbered assets, LCR consolidated subsidiary depository covered nonbank companies that own reporting by significant currency, and institutions with total consolidated banks to facilitate customer market-related monitoring tools. At this assets of $10 billion or more. In transactions, and would create a time, the agencies are not implementing implementing internationally agreed mismatch of regulations that will these monitoring mechanisms as upon standards in the United States, hamper the ability of such businesses to regulatory standards or requirements. such as the capital framework operate. This commenter further noted However, the agencies intend to obtain developed by the BCBS, the agencies that because of their different business information from covered companies to have historically applied a consistent models, covered nonbank companies are enable the monitoring of liquidity risk threshold for determining whether a likely to engage in significantly less exposure through reporting forms and U.S. banking organization should be deposit-taking than large bank holding information the agencies collect through subject to such standards. The companies, which generally translates other supervisory processes. threshold, generally banking into less access to one of a few sources The final rule will provide enhanced organizations with $250 billion or more of level 1 liquid assets, Federal Reserve information about the short-term in total consolidated assets or $10 Bank balances. The commenter liquidity profile of a covered company billion or more in total on-balance sheet requested specific tailoring of the LCR to managers, supervisors, and market foreign exposure, is based on the size, or a delay in the implementation of the participants. With this information, the complexity, risk profile, and final rule for covered nonbank covered company’s management and interconnectedness of such companies. supervisors should be better able to organizations.14 One commenter noted that although assess the company’s ability to meet its A number of commenters asserted the proposed rule would have exempted projected liquidity needs during periods that the agencies’ definition of depository institution holding of liquidity stress; take appropriate internationally active would apply the companies with substantial insurance actions to address liquidity needs; and, operations and savings and loan holding in situations of failure, implement an 14 See e.g., OCC, Board, and FDIC, ‘‘Regulatory companies with substantial commercial orderly resolution of the covered Capital Rules: Regulatory Capital, Implementation operations, it would not have exempted company. The agencies anticipate that of Basel III, Capital Adequacy, Transition depository holding companies with they will separately seek comment upon Provisions, Prompt Corrective Action, Standardized significant retail securities brokerage Approach for Risk-weighted Assets, Market proposed regulatory reporting Discipline and Disclosure Requirements, Advanced operations, which the commenter requirements and instructions Approaches Risk-Based Capital Rule, and Market argued also have liquidity risk profiles pertaining to a covered company’s Risk Capital Rule,’’ 78 FR 62018 (October 11, 2013). that should not be covered by the

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liquidity requirements. Another thresholds were properly calibrated to through this rulemaking. Instead, commenter suggested that the agencies capture companies with the most following designation of a nonbank consider waiving the LCR requirement significant liquidity risk profiles. The financial company for supervision by for certain covered companies, subject agencies believe that covered depository the Board, the Board intends to assess to satisfactory compliance with other institution holding companies with total the business model, capital structure, metrics such as capital ratios, stress consolidated assets of $250 billion or and risk profile of the designated tests, or the NSFR. more have a riskier liquidity profile company to determine how the The final rule seeks to calibrate the relative to smaller firms based on their proposed enhanced prudential net cash outflow requirement for a breadth of activities and standards should apply, and if covered company based on the interconnectedness with the financial appropriate, would tailor application of composition of the organization’s sector. Likewise, the foreign exposure the LCR by order or rule to that nonbank balance sheet, off-balance sheet threshold identifies firms with a financial company or to a category of commitments, business activities, and significant international presence, nonbank financial companies. The funding profile. Sources of funding that which may also be subject to greater Board will ensure that nonbank are considered less likely to be affected liquidity risks for the same reasons. In financial companies receive notice and at a time of a liquidity stress are finalizing this rule, the agencies are opportunity to comment prior to assigned significantly lower 30 promoting the short-term liquidity determination of the applicability of any calendar-day outflow rates. Conversely, resiliency of institutions engaged in a LCR requirement. the types of funding that are historically broad variety of activities, transactions, Upon the issuance of an order or rule vulnerable to liquidity stress events are and forms of financial that causes a nonbank financial assigned higher outflow rates. interconnectedness. For the reasons company to become a covered nonbank Consistent with the Basel III Revised discussed above, the agencies believe company subject to the LCR Liquidity Framework, in the proposed that the consistent scope of application requirement, any state nonmember bank rule, the agencies expected that covered used across several regulations is or state savings association with $10 companies with less complex balance appropriate for the final rule.15 billion or more in total consolidated sheets and less risky funding profiles The agencies believe that providing a assets that is a consolidated subsidiary would have lower net cash outflows and waiver to covered companies that meet of such covered nonbank company also would therefore require a lower amount alternate metrics would be contrary to would be subject to the final rule. When of HQLA to meet the proposed rule’s the express purpose of the proposed a nonbank financial company parent of minimum liquidity standard. For rule to provide a standardized a national bank or Federal savings example, under the proposed rule, quantitative liquidity metric for covered association becomes subject to the LCR covered companies that rely to a greater companies. Moreover, with respect to requirement by order or rule, the OCC extent on retail deposits that are fully commenters’ requests to exclude certain will apply its reservation of authority covered by deposit insurance and less covered companies with large retail under § __.1(b)(1)(iv) of the final rule, on short-term unsecured wholesale securities brokerage and other non- including applying the notice and funding would have had a lower total depository operations from the scope of response procedures described in § __ net cash outflow amount when the final rule, the agencies believe that .1(b)(5) of the final rule, to determine if compared to a banking organization that such companies have heightened application of the LCR requirement is was heavily reliant on wholesale liquidity risk profiles due to the range appropriate for the national bank or funding. and volume of financial transactions Federal savings association in light of its Furthermore, systemic risks that entered into by such organizations and asset size, level of complexity, risk could impair the safety of covered that the LCR is appropriately calibrated profile, scope of operations, affiliation companies were also reflected in the to reflect those business models. with foreign or domestic covered minimum requirement, including The proposed rule exempted entities, or risk to the financial system. provisions to address wrong-way risk, depository institution holdings As in the proposed rule, the final rule shocks to asset prices, and other companies and nonbank financial does not apply to a bridge financial industry-wide risks that materialized in companies designated by the Council company or a subsidiary of a bridge the 2007–2009 financial crisis. Under for Board supervision with large financial company, a new depository the proposed rule, covered companies insurance operations or savings and institution or a bridge depository that have greater interconnectedness to loan holding companies with large institution, as those terms are used in financial counterparties and have commercial operations, because their the resolution context.16 The agencies liquidity risks related to risky capital business models differ significantly believe that requiring the FDIC to market instruments may have larger net from covered companies. The Board maintain a minimum LCR at these cash outflows when compared to recognizes that the companies entities would inappropriately constrain covered companies that do not have designated by the Council may have a the FDIC’s ability to resolve a depository such dependencies. Large consolidated range of businesses, structures, and institution or its affiliated companies in banking organizations engage in a activities, that the types of risks to an orderly manner.17 diverse range of business activities and financial stability posed by nonbank have a liquidity risk profile financial companies will likely vary, 16 See 12 U.S.C. 1813(i); 5381(a)(3). commensurate with the breadth of these and that the enhanced prudential 17 Pursuant to the International Banking Act activities. The scope and volume of standards applicable to bank holding (IBA), 12 U.S.C. 3102(b), and OCC regulation, 12 these organizations’ financial companies may not be appropriate, in CFR 28.13(a)(1), the operations of a Federal branch or agency regulated and supervised by the OCC are transactions lead to interconnectedness whole or in part, for all nonbank subject to the same rights and responsibilities as a between banking organizations and financial companies. Accordingly, the national bank operating at the same location. Thus, between the banking sector and other Board is not applying the LCR as a general matter, Federal branches and agencies financial and non-financial market requirement to nonbank financial are subject to the same laws and regulations as national banks. The IBA and the OCC regulation participants. companies supervised by the Board state, however, that this general standard does not The agencies believe that the apply when the IBA or other applicable law or proposed scope of application 15 Id. regulations provide other specific standards for

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A company will remain subject to this the entire organization, for any U.S. company and on the broader financial final rule until its appropriate Federal intermediate holding company that the system in a manner that does not rely banking agency determines in writing foreign banking organization would be on potential government support. Large that application of the rule to the required to form under the Board’s depository institution subsidiaries play company is not appropriate. Moreover, Regulation YY, and for depository a significant role in a covered nothing in the final rule limits the institution subsidiaries that would be company’s funding structure, and in the authority of the agencies under any subject to the proposed rule, which, the operation of the payments system. other provision of law or regulation to commenter asserted, could result in These large subsidiaries generally also take supervisory or enforcement actions, unnecessarily duplicative holdings of have access to deposit insurance including actions to address unsafe or liquid assets within the organization. In coverage. Accordingly, the agencies unsound practices or conditions, addition, several commenters argued believe that the application of the LCR deficient liquidity levels, or violations that the separate LCR requirement for requirement to these large depository of law. depository institution subsidiaries institution subsidiaries is appropriate. As proposed, the agencies are would result in excess liquidity being To reduce the potential systemic reserving the authority to apply the final trapped at the covered subsidiaries, impact of a liquidity stress event at such rule to a bank holding company, savings especially if the final rule capped the large depository institution subsidiaries, and loan holding company, or inflows from affiliated entities at 75 the agencies believe that such entities depository institution that does not percent of their outflows. To alleviate should have a sufficient amount of meet the asset thresholds described this burden, one commenter requested HQLA to meet their own net cash above if it is determined that the that the final rule permit greater reliance outflows and should not be overly application of the LCR would be on support by the top-tier holding reliant on inflows from their parents or appropriate in light of a company’s asset company. affiliates. Accordingly, the agencies do size, level of complexity, risk profile, One commenter argued that excess not believe that the separate LCR scope of operations, affiliation with liquidity at the holding company should requirement for certain depository foreign or domestic covered companies, be considered when calculating the LCR institution subsidiaries is duplicative of or risk to the financial system. The for the subsidiary in order to recognize the requirement at the consolidated agencies also are reserving the authority the requirement that a bank holding holding company level, and the to require a covered company to hold an company serve as a source of strength agencies have adopted this provision of amount of HQLA greater than otherwise for its subsidiary depository the final rule as proposed. required under the final rule, or to take institutions. The commenter also argued The Board is not applying the any other measure to improve the that requiring subsidiary depository requirements of the final rule to foreign covered company’s liquidity risk institutions to calculate the LCR does banking organizations and intermediate profile, if the appropriate Federal not recognize the relationship between holding companies required to be banking agency determines that the consolidated depository institutions that formed under the Board’s Regulation YY covered company’s liquidity are subsidiaries of the same holding that are not otherwise covered requirements as calculated under the company and requested that the rule companies at this time. The Board final rule are not commensurate with its permit a depository institution to count anticipates implementing an LCR-based liquidity risks. In making such any excess HQLA held by an affiliated standard through a future separate determinations, the agencies will apply depository institution, consistent with rulemaking for the U.S. operations of the notice and response procedures as the sister bank exemption in section some or all foreign banking 18 set forth in their respective regulations. 23A of the Federal Reserve Act. organizations with $50 billion or more One commenter argued that the rule in combined U.S. assets. 2. Covered Depository Institution should not require less complex banking 3. Companies That Become Subject to Subsidiaries organizations to calculate the LCR for the LCR Requirements The proposed rule would have consolidated subsidiary depository applied the LCR requirements to institutions with total consolidated The agencies have added § l.1(b)(2) depository institutions that are the assets of $10 billion or more. Another to address the final rule’s applicability consolidated subsidiaries of covered commenter expressed concern that to companies that become subject to the companies and have $10 billion or more although subsidiary depository LCR requirements before and after in total consolidated assets. Several institutions with total consolidated September 30, 2014. Companies that are commenters argued that the agencies assets between $1 billion and $10 subject to the minimum liquidity should not apply a separate LCR billion would not be required to comply standard under § l.1(b)(1) as of requirement to subsidiary depository with the requirements of the proposed September 30, 2014 must comply with institutions of covered companies. rule, agency examination staff would the rule beginning January 1, 2015, Another commenter noted that foreign pressure such subsidiary depository subject to the transition periods banking organizations would be subject institutions to conform to the provided in subpart F of the final rule. to separate liquidity requirements for requirements of the final rule. A few A company that meets the thresholds for commenters requested that the agencies applicability after September 30, 2014, Federal branches or agencies, or when the OCC clarify that these subsidiary depository based on an applicable regulatory year- determines that the general standard should not institutions would not be required by end report under § l.1(b)(1)(i) through apply. This final rule would not apply to Federal agency examination staff to conform to (b)(1)(iii) must comply with the final branches and agencies of foreign banks operating in the rule. rule beginning on April 1 of the the United States. At this time, these entities have assets that are substantially below the proposed In promoting short-term, asset-based following year. $250 billion asset threshold for applying the liquidity resiliency at covered The final rule provides newly covered proposed liquidity standard to an internationally companies, the agencies are seeking to companies with a transition period for active banking organization. As part of its limit the consequences of a potential the daily calculation requirement, supervisory program for Federal branches and agencies of foreign banks, the OCC reviews liquidity liquidity stress event on the covered recognizing that a daily calculation risks and takes appropriate action to limit such requirement could impose significant risks in those entities. 18 12 U.S.C. 371c. operational and technology demands.

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Specifically, a newly covered company substantial wholesale market funding comparisons across covered companies must calculate its LCR monthly from risks, as well as contingent liquidity and to provide consistent information April 1 to December 1 of its first year risks, that were not well mitigated by about historical trends. The agencies are of compliance. Beginning on January 1 the then-prevailing liquidity risk retaining the prospective 30 calendar- of the following year, the covered management practices and liquidity day period because a calendar month company must calculate its LCR daily. portfolio compositions. For a number of stress period is not compatible with the For example, a company that meets large financial institutions, this led to daily calculation requirement, which the thresholds for applicability under failure, bankruptcy, restructuring, requires a forward-looking calculation § l.1(b)(1)(i) through (b)(1)(iii) based on merger, or only maintaining operations of liquidity stress for the 30 calendar its regulatory report filed for fiscal year with financial support from the Federal days following the calculation date, and 2017 must comply with the final rule government. The agencies believe that a 30 calendar-day stress period would requirements beginning on April 1, covered companies should not overly provide for an accurate historical 2018. From April 1, 2018 to December rely on wholesale market funding that comparison. Furthermore, while the 31, 2018, the final rule requires the may be elusive in a time of stress, not LCR would establish one scenario for covered company to calculate its LCR rely on expectations of government stress testing, the agencies expect monthly. Beginning January 1, 2019, support, and not rely on asset classes companies subject to the final rule to and thereafter, the covered company that have a significant liquidity discount maintain robust stress testing must calculate its LCR daily. if sold during a period of stress. The frameworks that incorporate additional When a covered company becomes agencies do not believe that the final scenarios that are more tailored to the subject to the final rule after September rule’s minimum standard will constrain risks within their companies.19 The 30, 2014, as a result of an agency the diversity of a covered company’s agencies also expect covered companies determination under § l.1(b)(1)(iv) that funding sources or unduly restrict the to appropriately monitor and manage the LCR requirement is appropriate in types of assets that a covered company liquidity risk both within and beyond light of the covered company’s asset may hold for general liquidity risk the 30-day stress period. Accordingly, size, level of complexity, risk profile, purposes. Covered companies are the agencies are adopting this aspect of scope of operations, affiliation with expected to maintain appropriate levels the final rule as proposed. foreign or domestic covered entities, or of liquidity without reliance on central 3. The Calculation Date, Daily risk to the financial system, the banks acting in the capacity of lenders Calculation Requirement, and company must comply with the final of last resort. With respect to the NSFR, Comments on LCR Reporting rule requirements according to a the agencies continue to engage in and transition period specified by the support the ongoing development of the Under the proposed rule, a covered agency. ratio as an international standard, and company would have been required to anticipate the standard will be calculate its LCR on each business day II. Minimum Liquidity Coverage Ratio implemented in the United States at the as of that date (the calculation date), A. The LCR Calculation and appropriate time. In the meantime, the with the horizon for each calculation Maintenance Requirement agencies expect covered companies to ending 30 days from the calculation maintain appropriate stable structural date. The proposed rule would have As described above, under the funding profiles. proposed rule, a covered company required a covered company to calculate For these reasons, the overall its LCR on each business day as of a set would have been required to maintain structure of the LCR requirement is an HQLA amount that was no less than time selected by the covered company being adopted as proposed. Under the prior to the effective date of the rule and 100 percent of its total net cash final rule, a covered company is outflows. communicated in writing to its required to maintain an HQLA amount appropriate Federal banking agency. 1. A Liquidity Coverage Requirement that is no less than 100 percent of its The proposed rule did not include a total net cash outflows over a proposal to establish a reporting One commenter argued that the prospective 30 calendar-day period, in proposed rule’s requirements would requirement for the LCR. The agencies accordance with the calculation anticipate separately seeking comment reduce incentives to maintain requirements for the HQLA amount and diversified liquid asset portfolios and on proposed regulatory reporting total net cash outflows, as discussed requirements and instructions other funding sources, which would below. result in the loss of diversification in pertaining to a covered company’s banking organizations’ sources of 2. The Liquidity Coverage Ratio Stress disclosure of the final rule’s LCR in a funding and liquid asset composition. Period subsequent notice under the Paperwork Another commenter asserted that The proposed rule would have Reduction Act. restoring and strengthening the required covered companies to calculate A number of commenters stated that authorities of the Federal Reserve as the the LCR based on a 30 calendar-day the daily calculation requirement lender of last resort would be a more stress period. Some commenters imposes significant operational burdens effective and efficient alternative to requested that the liquidity coverage on covered companies. These include bolstering a covered company’s ratio calculation instead be based on a costs associated with building and liquidity reserves. One commenter calendar-month stress period. Another testing new information technology stated that the LCR requirement would commenter noted that supervisors systems, developing governance and introduce additional system should be attentive to the possibility 19 Covered companies that are subject to the complexities without taking into that excess liquidity demands can build Board’s Regulation YY are required to conduct account the benefits of long-term up just outside the 30 calendar-day internal liquidity stress tests that include a funding stability afforded by the NSFR. window. minimum of four periods over which the relevant The agencies believe that the most Consistent with the Basel III Revised stressed projections extend: Overnight, 30-day, 90- day, and one-year time horizons, and additional recent financial crisis demonstrated that Liquidity Framework, the final rule uses time horizons as appropriate. 12 CFR 253.35 large, internationally active banking a standardized 30 calendar-day stress (domestic bank holding companies); (12 CFR organizations were exposed to period. The LCR is intended to facilitate 235.175 (foreign banking organizations).

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internal control frameworks for the LCR, concern over developing the necessary total consolidated assets or $10 billion and collecting and reviewing the internal controls to ensure that the data or more in total on-balance sheet foreign requisite data to comply with the is sufficiently accurate. Several exposures are large, complex requirements of the proposed rule. commenters requested that the agencies organizations with significant trading Commenters argued that developing require certain ‘‘regional’’ banking and other activities. Moreover, systems is challenging, expensive, and organizations that met the proposed idiosyncratic or market driven liquidity time consuming for those organizations rule’s scope of applicability threshold, stress events have the potential to that do not currently have such but have not been identified as Global become significant in a short period of reporting capabilities in place. For Systemically Important Banks (G–SIBs) time even for covered companies that example, one commenter said that by the Financial Stability Board, to have not been designated as G–SIBs by capturing the data to perform the LCR calculate the LCR on a monthly, rather the Financial Stability Board and that calculation on a daily basis would than daily, basis. Commenters argued have relatively less complex balance require banking organizations to that the daily calculation for such sheets and more consistent funding implement entirely new and custom organizations is unnecessary and that profiles than G–SIBs in the normal data systems and mechanics. Several the monitoring of daily liquidity risk course of business. In contrast to the commenters expressed concerns management should be established entities that would be subject to the generally that the additional system through the supervisory process. One Board’s modified LCR requirement development costs would outweigh the commenter argued that it may not be discussed in section V of this benefits from the LCR to supervisors. necessary to perform detailed Supplementary Information section, In addition to the costs of developing calculations every business day during such organizations tend to have more new systems, commenters also raised periods of ample liquidity and significant trading activities, concerns about the time frame between suggested that the agencies impose the interconnectedness in the financial the adoption of the final rule and the daily requirement only during periods system, and are a significant source of effective date of the proposed rule and of stress. credit to the areas of the United States indicated that there would be Covered companies that would not be in which they operate. Supervisors insufficient time in which to develop subject to supervisory daily liquidity expect an organization that is a covered operational capabilities to comply with reporting requirements under the company under this rule to have robust, the proposed rule. For instance, one Board’s information collection and forward-looking liquidity risk commenter argued that because the rule Complex Institution Liquidity monitoring tools that enable the was not yet final, there would not be Monitoring Report (FR 2052a) liquidity organization to be responsive to enough time to implement systems reporting program 20 raised concerns changing liquidity risks. These tools are before the January 1, 2015 compliance about the time needed to develop expected to be in place even during date. Several commenters echoed a systems to comply with a daily LCR periods when the organization considers similar concern and contended that the requirement. Those companies asserted that it has ample liquidity, so that burden associated with implementing they should not be subject to a daily emerging risks may be identified and and testing systems for the daily calculation or, in the alternative, that mitigated. The agencies also note that calculation is heightened by a short time they should be provided with additional during periods of stress, it may be frame. Some of these commenters time to develop operational capabilities difficult for companies to implement a requested a delay in the implementation relative to those institutions submitting daily reporting requirement if the of the final rule to better develop the FR 2052a report. A commenter necessary technological systems have operational capabilities for compliance. suggested that covered companies that not previously been established. Several commenters argued that the have not previously been subject to requirement to calculate the LCR daily Therefore, the agencies continue to bank or bank holding company liquidity would require large changes to data believe the daily calculation reporting requirements should be given systems, processes, reporting, and requirement is appropriate for covered additional time to develop the necessary governance and were concerned that companies under the final rule. systems. Another commenter requested their institutions would not have the However, the agencies recognize that that the agencies clarify the mechanics capability to perform accurately the the calculation requirements under this for calculating the LCR and reporting it required calculations. In particular, the rule, including the daily calculation to regulators. Several commenters commenters expressed concern with the requirement, may necessitate certain level of certainty required for such requested that, if the final rule would enhancements to a covered company’s calculation and its relation to their require daily calculation of the LCR, the liquidity risk data collection and disclosure obligations under securities agencies establish a transition period for monitoring infrastructure. Accordingly, laws. Other commenters observed that firms to implement this calculation the agencies have changed the proposed there are limits to the number of large methodology. rule to include certain transition periods The agencies recognize that a daily scale projects that covered companies as described fully in section IV of this calculation requirement for a new can implement at one time, and Supplementary Information section. building LCR reporting systems would regulatory requirement imposes With these revisions, the agencies require significant resources. significant operational and technology believe that the final rule achieves its Other commenters preferred a demands upon covered companies. overall objective of promoting better monthly calculation given the However, the agencies continue to liquidity management and reducing significant information technology costs believe the daily calculation liquidity risk. To that end, the agencies and short time frame until requirement is appropriate for covered have sought to achieve a balance implementation. Further, several companies under the final rule. Covered between operational concerns and the commenters stated that much of the data companies with $250 billion or more in overall objectives of the LCR by necessary to calculate a daily LCR providing covered companies with 20 Board, ‘‘Agency Information Collection currently is available only on systems Activities: Announcement of Board Approval additional time to implement the daily that report monthly, rather than daily. Under Delegated Authority and Submission to calculation requirement. Likewise, with These commenters also expressed OMB,’’ 79 FR 48158 (August 15, 2014). respect to the level of precision

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required, the agencies believe that the suggested that the agencies designate securities issued or guaranteed by many transition period should provide certain additional assets as HQLA and companies in the financial sector have covered companies with an appropriate change the categorization of certain been more prone to lose value when the time frame to upgrade systems, develop assets as level 1, level 2A, or level 2B banking sector is experiencing stress controls, train employees, and enhance liquid assets. A commenter cautioned and become less liquid due to the high other operational capabilities so that that the proposed rule’s stricter correlation between the health of these covered companies will have the definition of HQLA compared to the companies and the health of the requisite operational tools to effectively Basel III Revised Liquidity Framework financial sector generally. This implement a daily calculation could lead to distortions in the market, correlation was evident during the requirement. such as dramatically increased demand recent financial crisis as most debt With respect to reporting frequencies, for limited supplies of asset classes and issued by such companies traded at the agencies continue to anticipate that hoarding of HQLA by financial significant discounts for a prolonged they will separately seek comment on institutions. period. Because of this high potential proposed regulatory reporting The final rule adopts the proposed for wrong-way risk, and consistent with requirements and instructions for the rule’s overall structure for the the Basel III Revised Liquidity LCR in a subsequent notice. classification of assets as HQLA and the Framework, the final rule excludes from compositional limitations for certain B. High-Quality Liquid Assets HQLA assets that are issued by classes of HQLA in the HQLA amount. companies that are primary actors in the The agencies received a number of As discussed more fully below, the financial sector. Identification of these comments on the criteria for HQLA and agencies considered the issues raised by companies is discussed in section II.B.2, the designation of the liquidity level for commenters and incorporated a number below. various assets. Under the proposed rule, of modifications in the final rule to the numerator of the LCR would have address commenters’ concerns. b. Market-Based Characteristics been a covered company’s HQLA The agencies also have found that amount, which would have been the 1. Liquidity Characteristics of HQLA assets appropriate to be included as HQLA held by the covered company Assets that qualify as HQLA should HQLA generally exhibit certain market- subject to the qualifying operational be easily and immediately convertible based characteristics. First, these assets control criteria and compositional into cash with little or no expected loss tend to have active outright sale or limitations. These proposed criteria and of value during a period of liquidity repurchase markets at all times with limitations were meant to ensure that a stress. In identifying the types of assets significant diversity in market covered company’s HQLA amount that would qualify as HQLA in the participants, as well as high trading would include only assets with a high proposed and final rules, the agencies volume. This market-based liquidity potential to generate liquidity through considered the following categories of characteristic may be demonstrated by monetization (sale or secured liquidity characteristics, which are historical evidence, including evidence borrowing) during a stress scenario. generally consistent with those of the observed during recent periods of Consistent with the Basel III Revised Basel III Revised Liquidity Framework: market liquidity stress. Such assets Liquidity Framework, the agencies (a) Risk profile; (b) market-based should demonstrate: Low bid-ask proposed classifying HQLA into three characteristics; and (c) central bank spreads, high trading volumes, a large categories of assets: Level 1, level 2A, eligibility. and diverse number of market and level 2B liquid assets. Specifically, participants, and other appropriate a. Risk Profile the agencies proposed that level 1 liquid factors. Diversity of market participants, assets, which are the highest quality and Assets that are appropriate for on both the buying and selling sides of most liquid assets, would have been consideration as HQLA tend to have transactions, is particularly important included in a covered company’s HQLA lower risk. There are various forms of because it tends to reduce market amount without a limit and without risk that can be associated with an asset, concentration and is a key indicator that haircuts. Level 2A and 2B liquid assets including liquidity risk, market risk, a market will remain liquid during have characteristics that are associated credit risk, inflation risk, foreign periods of stress. The presence of with being relatively stable and exchange risk, and the risk of multiple committed market makers is significant sources of liquidity, but not subordination in a bankruptcy or another sign that a market is liquid. to the same degree as level 1 liquid insolvency. Assets appropriate for Second, assets that are appropriate for assets. Accordingly, the proposed rule consideration as HQLA would be consideration as HQLA generally tend would have subjected level 2A liquid expected to remain liquid across various to have prices that do not incur sharp assets to a 15 percent haircut and, when stress scenarios and should not declines, even during times of stress. combined with level 2B liquid assets, suddenly lose their liquidity upon the Volatility of traded prices and bid-ask they could not have exceeded 40 occurrence of a certain type of risk. spreads during normal times are simple percent of the total HQLA amount. Another characteristic of these assets is proxy measures of market volatility; Level 2B liquid assets, which are that they generally experience ‘‘flight to however, there should be historical associated with a lesser degree of quality’’ during a crisis, which is where evidence of relative stability of market liquidity and more volatility than level investors sell their other holdings to buy terms (such as prices and haircuts) as 2A liquid assets, would have been more of these assets in order to reduce well as trading volumes during stressed subject to a 50 percent haircut and the risk of loss and thereby increase periods. To the extent that an asset could not have exceeded 15 percent of their ability to monetize assets as exhibits price or volume fluctuation the total HQLA amount. All other necessary to meet their own obligations. during times of stress, assets appropriate classes of assets would not qualify as Assets that may be highly liquid for consideration as HQLA tend to HQLA. under normal conditions but experience increase in value and experience a flight Commenters expressed concerns wrong-way risk and that could become to quality during these periods of stress about several proposed criteria for less liquid during a period of stress because historically market participants identifying the types of assets that would not be appropriate for move into more liquid assets in times of qualify as HQLA. Commenters also consideration as HQLA. For example, systemic crisis.

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Third, assets that can serve as HQLA In response to the commenter’s that the agencies proposed to include as tend to be easily and readily valued. concerns, the agencies agree that trading HQLA, the proposed rule would have The agencies generally have found that volume is an important characteristic of set forth a number of qualifying criteria an asset’s liquidity is typically higher if an asset’s liquidity. The agencies believe and specific requirements for a market participants can readily agree on that high trading volume across particular asset to qualify as HQLA. its valuation. Assets with more dynamic market environments is one of With certain modifications to address standardized, homogenous, and simple several factors that evidences market- commenters’ concerns regarding certain structures tend to be more fungible, based characteristics of HQLA. The final classes of assets, discussed below, the thereby promoting liquidity. The pricing rule continues to consider trading agencies are adopting these criteria and formula of more liquid assets generally volume to assess the liquidity of an requirements generally as proposed. is easy to calculate when it is based asset. a. The Liquid and Readily-Marketable upon sound assumptions and publicly In response to the commenter’s Standard available inputs. Whether an asset is suggestion for the final rule to include listed on an active and developed factors such as credit ratings and Most of the assets in the HQLA exchange can serve as a key indicator of average credit spreads, the agencies categories would have been required to an asset’s price transparency and recognize that indicators of credit risk meet the proposed rule’s definition of liquidity. include credit ratings and average credit ‘‘liquid and readily-marketable’’ in order to be included as HQLA. Under c. Central Bank Eligibility spreads. The risk profile of an asset also includes many other types of risks. The the proposed rule, an asset would have Assets that a covered company can agencies note that the final rule been liquid and readily-marketable if it pledge at a central bank as collateral for incorporates assessments of credit risk is traded in an active secondary market intraday liquidity needs and overnight in certain level 1 and level 2A liquid with more than two committed market liquidity facilities in a jurisdiction and assets criteria by referring to the risk makers, a large number of committed in a currency where the bank has access weights assigned to securities under the non-market maker participants on both to the central bank generally tend to be agencies’ risk-based capital rules. The the buying and selling sides of liquid and, as such, are appropriate for agencies are not including the transactions, timely and observable consideration as HQLA. In the past, additional factors suggested by the market prices, and high trading central banks have provided a backstop commenter because in some cases, it volumes. The agencies proposed this to the supply of banking system would be legally impermissible, and ‘‘liquid and readily-marketable’’ liquidity under conditions of severe requirement to ensure that assets additionally, the agencies believe the stress. Central bank eligibility should, included as HQLA would exhibit a level link to risk weights in the risk-based therefore, provide additional assurance of liquidity that would allow a covered capital rules for level 1 and level 2A that assets could be used in acute company to convert them into cash qualifying criteria sufficiently captures liquidity stress events without adversely during times of stress and, therefore, to credit risk factors for purposes of the affecting the broader financial system meet its obligations when other sources LCR.21 and economy. However, central bank of funding may be reduced or Finally, in response to one eligibility is not itself sufficient to unavailable. commenter’s request that the agencies categorize an asset as HQLA; all of the Commenters raised several concerns incorporate objective criteria in the final rule’s requirements for HQLA must with the proposed rule’s definition of be met if central bank eligible assets are liquidity characteristics of the final rule, ‘‘liquid and readily-marketable.’’ to qualify as HQLA. the agencies highlight that certain Several commenters urged the agencies objective criteria relating to price to provide more detail on the liquid and d. Comments About Liquidity decline scenarios are included as readily-marketable standard. One of Characteristics qualifying criteria for level 2A and level these commenters highlighted that the In their proposal, the agencies 2B liquid assets, as discussed in section definition included undefined terms requested comments on whether the II.B.2. The agencies believe that the and suggested that the agencies either agencies should consider other liquidity characteristics in the final rule, provide specific securities or asset characteristics in analyzing the liquidity combined with certain objective criteria classes or refer to instrument of an asset. Although several for specific categories of HQLA, provide characteristics similar to those listed in commenters expressed concerns about an appropriate basis for evaluating a the Board’s Regulation YY. One the agencies’ evaluation of the proposed variety of asset classes for inclusion as commenter urged the agencies to pursue liquidity characteristics to designate HQLA. a more quantitative approach to certain assets as HQLA, the agencies 2. Qualifying Criteria for Categories of identifying securities that would meet received only a few comments on the set HQLA the standard. Another commenter noted of liquidity characteristics. One that the agencies did not provide commenter suggested that the agencies Based on the analysis of the liquidity guidance on how to document that evaluate secondary trading levels over characteristics above, the proposed rule HQLA meets the market-based time, specifically for level 1 liquid would have included a number of characteristics or the liquid and readily- assets. The commenter also classes of assets meeting these marketable standard. Separately, recommended that the agencies characteristics as HQLA. However, another commenter suggested that the consider various factors to assess within certain of the classes of assets liquid and readily-marketable standard security issuances, including the should account for indicators of 21 A credit rating is one potential perspective on absolute size of parent issuer holdings, credit risk that may be used by a covered company liquidity other than those related to the credit ratings, and average credit in its assessment of the risk profile of a security. secondary market. In particular, the spreads. Another commenter expressed However, covered companies should avoid over commenter highlighted that covered its belief that the inclusion of an asset reliance upon credit ratings in isolation. In companies can monetize securities addition, the Dodd-Frank Act prohibits the as HQLA should be determined based reference to or reliance on credit ratings in an outside of the outright sales market on objective criteria for market liquidity agency’s regulations. Public Law 111–203, section through repurchase transactions and and creditworthiness. 939A, 124 Stat 1376 (2010). through posting securities as collateral

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securing over-the-counter or exchange- securities or instrument characteristics HQLA. Thus, the agencies decline to traded derivative transactions. Another to further define ‘‘liquid and readily- remove the liquid and readily- commenter interpreted the liquid and marketable,’’ the agencies believe that marketable standard for all level 1 and readily-marketable standard to require a the specific types of securities set forth level 2A liquid assets, as requested by security-by-security analysis in the categories of level 1, level 2A, and one commenter. incorporating data on market makers level 2B liquid assets provide sufficient Furthermore, in response to requests and market participants and trading detail of the types of securities and that the agencies clarify any volumes to determine eligibility under instruments that may be liquid and documentation requirements in the criteria. The commenter contended readily-marketable and may be determining whether an asset is liquid that such analysis could be burdensome considered HQLA. In addition, the final and readily-marketable, the agencies on covered companies with significant rule retains from the proposed rule expect that a covered company should trading operations. One commenter certain price decline scenarios to be able to demonstrate to its appropriate requested that the agencies remove this identify certain level 2A and level 2B Federal banking agency its security-by- standard for all level 1 and level 2A liquid assets.22 The agencies believe that security analysis (which may include liquid assets. Another stated that there price decline scenarios are appropriate time-series analyses about the specific was a difference between the regulatory for certain types of assets included in security or comparative analysis of text of the proposed rule and the level 2A and 2B liquid assets to evaluate similar securities from the same issuer) discussion in the Supplementary the liquidity and market-based that HQLA held by the covered Information section to the proposed characteristics of those assets. As the company meets the liquid and readily- rule, which indicated that HQLA would criteria for these categories of HQLA marketable standard. need to exhibit certain market-based incorporate price decline scenarios, the characteristics, such as no sharp price agencies do not believe it is necessary b. Financial Sector Entities declines, and standardized, to separately include price decline Consistent with the Basel III Revised homogeneous, and simple securities scenarios as part of the liquid and Liquidity Framework, the proposed rule structures. The commenter stated that readily-marketable standard. would have provided that assets that are these characteristics were not included One commenter requested that the included as HQLA could not be issued in the liquid and readily-marketable agencies clarify the Supplementary by a financial sector entity, because standard and requested clarification on Information section discussion in the these assets could exhibit similar risks how much the structure of a security proposed rule indicating that HQLA and correlation with covered companies would be questioned by the supervisors should exhibit standardized, (wrong-way risk) during a liquidity of a covered company. homogeneous, and simple security stress period. In the proposed rule, After reviewing the comments, the structures. The agencies believe that the __ financial sector entities would have agencies have determined to retain the criteria for HQLA set forth in § .20 of included regulated financial companies, proposed definition of ‘‘liquid and the final rule includes assets that meet investment companies, non-regulated readily-marketable’’ in the final rule. these criteria. The final rule continues funds, pension funds, investment The agencies believe that defining an to require that certain HQLA categories advisers, or a consolidated subsidiary of asset as liquid and readily-marketable if meet the final rule’s definition of liquid any of the foregoing. In addition, under it is traded in an active secondary and readily-marketable. The agencies the proposed rule, securities issued by market with more than two committed emphasize that securities with unique, any company (or any of its consolidated market makers, a large number of bespoke, or complex structures which subsidiaries) that an agency has committed non-market maker are difficult to value on a routine basis, determined should, for the purposes of participants on both the buying and regardless of issuer or capital risk the proposed rule, be treated the same selling sides of transactions, timely and weight, may not meet the liquid and as a regulated financial company, observable market prices, and high readily-marketable standard. investment company, non-regulated trading volumes provides an In response to a commenter’s concern fund, pension fund, or investment appropriate standard for determining about the burden of a security-by- adviser, based on its engagement in whether an asset can be readily sold in security analysis to demonstrate that a activities similar in scope, nature, or times of stress. These elements of the security qualifies as liquid and readily- operations to those entities (identified requirement are meant to ensure that marketable, the agencies recognize that company) would not have been assets included as HQLA are traded in certain companies may trade or hold a included as HQLA. deep, active markets to allow a covered significant number of different company to convert them into cash by securities. Although the exercise of The term regulated financial company sale or repurchase transactions during assessing unique securities for the under the proposed rule would have times of stress. In particular, the purpose of determining whether they included bank holding companies and agencies believe that an active are liquid and readily-marketable may savings and loan holding companies secondary market for an asset is an involve operational burden, the agencies (depository institution holding indicator of the ease with which a believe this analysis and determination companies); nonbank financial covered company may monetize that is critical to ensuring that only companies supervised by the Board; asset. In response to a commenter’s securities that will serve as a reliable depository institutions; foreign banks; concern that a covered company may source of liquidity during times of stress credit unions; industrial loan only monetize securities through are included in a company’s HQLA. A companies, industrial banks, or other outright sales to meet the liquid and covered company may choose not to similar institutions described in section readily-marketable standard, the determine whether a security is liquid 2 of the Bank Holding Company Act agencies are clarifying that a covered and readily-marketable for LCR (BHC Act); national banks, state member company may monetize assets through purposes if it determines that the cost of banks, and state nonmember banks repurchase transactions in addition to performing the analysis exceeds the (including those that are not depository outright sales. benefit of including the security as institutions); insurance companies; Although one commenter requested securities holding companies (as that the final rule include specific 22 See § __.20(b) and (c). defined in section 618 of the Dodd-

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Frank Act); 23 broker-dealers or dealers holding company must report on the regarding the specific inclusion of registered with the Securities and form. The agencies proposed this certain entities. Exchange Commission (SEC); futures method for identifying these companies i. Companies Listed on a Covered commission merchants and swap in order to reduce burden associated Company’s FR Y–6 dealers, each as defined in the with obtaining the FR Y–6 Commodity Exchange Act; 24 or organizational charts for all depository Commenters expressed concern about security-based swap dealers defined in institution holding companies subject to the definition’s inclusion of any section 3 of the Securities Exchange the proposed rule, because the charts company that is included in the Act.25 It would also have included any are not uniformly available by electronic organizational chart of a covered designated financial market utility, as means. company as reported on the Form FR Y– defined in section 803 of the Dodd- Commenters suggested that the 6 and reflected on the NIC Web site 26 within the definition of regulated Frank Act. The proposed definition proposed definition of ‘‘regulated financial company. These commenters would have also included foreign financial company’’ was overly broad. contended that the FR Y–6 is an companies that are supervised and For example, one commenter stated that expansive form that captures a regulated in a manner similar to the for the purposes of deposit substantial range of activities and institutions listed above.27 classification, the definition of investments of depository institution In addition, the proposed definition of ‘‘financial institution’’ needs to be holding companies, including regulated financial company would limited to those entities that contribute companies in which the covered have included a company that is to the risk of interconnectedness to company has a minority, non- included in the organization chart of a ensure the accurate capture of the controlling interest, as well as merchant depository institution holding company underlying risk of the depositor, noting on the Form FR Y–6, as listed in the banking investments. Commenters that the NAICS codes for ‘‘Finance and reasoned that merchant banking hierarchy report of the depository Insurance’’ and ‘‘Commercial Banking’’ institution holding company produced investments may be non-financial include over 816,000 and 79,000 enterprises and may not contribute to by the National Information Center business, respectively. The commenter (NIC) Web site, provided that the top- the ‘‘wrong-way risk’’ contemplated by stated that, depending on the definition, the agencies in defining regulated tier depository institution holding certain financial institutions may have company was subject to the proposed financial company. The commenters operational needs and transactional believed that such entities should not be rule (FR Y–6 companies).28 FR Y–6 deposits that are more similar to a non- included as regulated financial companies are typically controlled by 29 financial institution. companies and requested that the final the filing depository institution holding Overall, the agencies believe that the rule’s definition of regulated financial company under the BHC Act. Although overall scope of the proposed definition company not include all companies many of these companies may not be of ‘‘regulated financial company’’ reported by a covered company on the consolidated on the financial statements appropriately captured the types of the Form FR Y–6. of a depository institution holding companies whose assets could exhibit The agencies recognize that there are company, the links between the similar risks and correlation with certain shortcomings in the scope of the companies are sufficiently significant covered companies during a liquidity entities that are listed on a covered that the agencies believed that it would stress period. Although the number of company’s FR Y–6, including the have been appropriate to exclude financial entities are large, due to the potential capture of non-financial, securities issued by FR Y–6 companies prominence of the financial services passive merchant banking subsidiaries. (and their consolidated subsidiaries) industry to the economy of the United The Board is actively considering from HQLA, for the same policy reasons States, the agencies continue to believe options to adjust the reporting that other regulated financial that the liquidity risks presented by mechanism which may be used in companies’ securities would have been securities and obligations of such determining the population of regulated excluded from HQLA under the companies would be difficult to financial companies. Moreover, because proposal. The organizational hierarchy monetize during a period of significant entities listed on a covered company’s chart produced by the NIC Web site financial distress, as shown in the FR Y–6 that are non-financial, merchant reflects (as updated regularly) the FR Y– recent financial crisis. Accordingly, banking investments or that do not meet 6 companies a depository institution similar to the proposed rule, the final the definition of control under the BHC rule will exclude the securities and Act are not currently separated from 23 12 U.S.C. 1850a(a)(4). other entities controlled by a covered 24 obligations of financial sector entities 7 U.S.C. 1a(28) and (49). company, the agencies do not believe it 25 15 U.S.C. 78c(a)(71). from being HQLA. 26 12 U.S.C. 5462(4). In addition to comments regarding the would be appropriate at this time to 27 Under paragraph (8) of the proposed rule’s scope of the entities that would have provide a blanket exemption for definition of ‘‘regulated financial company,’’ the been included under the proposed rule, merchant banking or non-control following would not be considered regulated several commenters expressed concerns investments. The Board anticipates that financial companies: U.S. government-sponsored it will revise the reporting requirements enterprises; small business investment companies, as defined in section 102 of the Small Business 29 The agencies note that the proposed rule would used for this purpose in the near future. Investment Act of 1958 (15 U.S.C. 661 et seq.); have recognized that financial sector entities have However, because any revisions to entities designated as Community Development operational needs and deposits that are similar to reporting requirements would be subject Financial Institutions (CDFIs) under 12 U.S.C. 4701 non-financial entities by treating the deposits of to public comment, for purposes of the et seq. and 12 CFR part 1805; and central banks, the financial sector entities that meet the operational Bank for International Settlements, the International deposit criteria as operational deposits. The non- final rule, the agencies are finalizing the Monetary Fund, or a multilateral development operational deposits of a financial would have been definition of regulated financial bank. subject to a higher outflow rate than a non-financial company as proposed. The agencies do 28 See National Information Center, A repository wholesale counterparty due to correlation of not believe that any change to the of financial data and institution characteristics liquidity risks between financial sector entities and collected by the Federal Reserve System, available covered companies. The final rule retains each of definition of regulated financial at http://www.ffiec.gov/nicpubweb/nicweb/ these provisions as discussed below under section company would be appropriate without nichome.aspx. II.C.3.h. subjecting such a revision to public

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comment, together with other revisions sector entities. The commenter argued related assets. The commenter suggested to the reporting requirements that that if an investment company does not that the definition exclude any fund that would be used to identify regulated invest in financial sector entities, the does not issue redeemable securities financial companies. value of its shares would not correlate that provide investors with redemption with covered companies. The rights in the ordinary course and should ii. Foreign Regulated Financial Entities commenter recommended that an also exclude closed-end funds. The The definition of regulated financial investment company’s HQLA eligibility commenter also stated that although the company under the proposed rule should be based on the investment definition requires a banking would have included a non-U.S.- company’s investment policies, such organization to determine whether the domiciled company that is supervised that if an investment company has a investment adviser of a fund is required and regulated in a manner similar to the policy of investing 80 percent of its to file Form PF, this information on other entities described in the assets in HQLA or in securities and whether a particular fund is the subject definition, including bank holding obligations of non-financial sector of a Form PF is not publicly available. companies. One commenter requested entities, its securities would be treated Generally, a manager of a ‘‘private that the agencies clarify that the as HQLA of the same level as the lowest fund’’ that is required to register with definition of regulated financial level HQLA permitted under the policy. the SEC as an investment adviser and company would not include non-U.S. After considering the commenter’s manages more than $150 million in government-sponsored entities and concerns, the agencies decline to adopt private fund assets is required to file public sector entities. The commenter the commenter’s recommendation in the SEC Form PF. Although the final rule argued that certain public sector entities final rule. Similar to other entities in the does not define hedge funds or private are not engaged in a full range of financial sector, investment companies equity funds, the agencies believe that banking activities, but are, however, have been more prone to lose value and, such terms are commonly understood in typically subject to prudential as a result, become less liquid in times the financial services industry and note regulation. Two commenters also of liquidity stress regardless of the that the instructions to the SEC’s Form requested that the preamble to the final investment company’s investment PF provide a definition for private rule explain how the ‘‘supervised and policies or portfolio composition, due to equity funds and hedge funds that are regulated in a similar manner’’ standard the potentially higher correlation captured under the form.33 Therefore should be construed. between the health of these companies the agencies believe that defining ‘‘non- The final rule adopts this provision of and the health of the financial markets regulated fund’’ by referencing the the rule as proposed. The agencies are generally. The agencies believe that a private equity and hedge funds whose clarifying that, for purposes of the final covered company can be exposed to the investment advisers are required to file rule, a foreign company, including a interconnectedness of financial markets SEC Form PF adequately defines the non-U.S. public sector entity, that is through its investment in investment universe of hedge funds and private similar in structure to a U.S. regulated companies. Thus, consistent with the equity funds captured under the final financial company (e.g., a foreign bank Basel III Revised Liquidity Framework, rule. or foreign insurance company) and that the final rule would exclude assets In response to commenter concerns is subject to prudential supervision and issued by companies that are primary that the definition of ‘‘non-regulated regulation in a manner that is similar to actors in the financial sector from fund’’ includes portfolio companies that a U.S. regulated financial company HQLA, including investment company are consolidated subsidiaries of private would be considered a regulated shares. funds, the agencies have modified the definition of ‘‘non-regulated fund.’’ The financial company under the final rule. iv. Non-Regulated Funds In considering the similarity of the agencies recognize that consolidated supervision and regulation of a foreign Under the proposed rule, non- subsidiaries of private funds may not company, a covered company can regulated funds would have included conduct financial activities, but would consider whether the non-U.S. activities hedge funds or private equity funds have received treatment as financial and operations of the company would whose investment advisers are required sector entities under the proposed rule. be subject to supervision and regulation to file SEC Form PF (Reporting Form for Accordingly, the final rule’s definition in the United States and whether such Investment Advisers to Private Funds of ‘‘non-regulated fund’’ no longer activities are subject to supervision and and Certain Commodity Pool Operators includes consolidated subsidiaries of regulation abroad. and Commodity Trading Advisors), and hedge funds and private equity funds any consolidated subsidiary of such whose investment adviser is required to iii. Investment Companies and fund, other than a small business file SEC Form PF. Investment Advisers investment company, as defined in With respect to the commenter’s Under the proposed rule, investment section 102 of the Small Business request to exclude any fund that does companies would have included Investment Act of 1958.32 not issue redeemable securities and companies registered with the SEC Commenters expressed concerns closed-end funds from the definition of under the Investment Company Act of about the proposed definition of ‘‘non- non-regulated fund, although investors 1940 30 and investment advisers would regulated fund.’’ One of these in these funds are unable to redeem have included companies registered commenters stated that the proposed securities and may not appear to present with the SEC as investment advisers definition would have included the liquidity risk, the agencies believe these under the Investment Advisers Act of undefined terms ‘‘hedge fund’’ and obligations and securities do pose 1940,31 as well as the foreign equivalent ‘‘private equity fund.’’ The commenter similar liquidity risks and will behave of such companies. also argued that the definition should similarly to those of other financial One commenter expressed concern not include portfolio companies that are entities. with the proposed rule’s treatment of consolidated subsidiaries of non- investment companies as financial regulated funds and those funds that 33 See Reporting Form for Investment Advisers to Private Funds and Certain Commodity Pool invest primarily in real estate and Operations and Commodity Trading Advisors 30 15 U.S.C. 80a–1 et seq. (Form PF), available at http://www.sec.gov/rules/ 31 15 U.S.C. 80b–1 et seq. 32 15 U.S.C. 661 et seq. final/2011/ia-3308-formpf.pdf.

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Finally, the agencies recognize that i. Reserve Bank Balances term or automatically-renewing Form PF filings are not publicly Under the Basel III Revised Liquidity overnight advances from a Federal disclosed. However, the agencies expect Framework, ‘‘central bank reserves’’ are Reserve Bank. Regarding the first point, that a covered company should included as HQLA. In the United States, term deposits offered under the Federal understand whether its customer is a Federal Reserve Banks are generally Reserve’s Term Deposit Facility that private equity fund or a hedge fund. The authorized under the Federal Reserve include an early withdrawal feature that agencies further expect that when Act to maintain balances only for allows a depository institution to obtain identifying HQLA a covered company ‘‘depository institutions’’ and for other a return of funds prior to the deposit should undertake the necessary limited types of organizations.35 maturity date, subject to an early diligence to confirm whether an Pursuant to the Federal Reserve Act, withdrawal penalty, would be included investment adviser to such fund, which there are different kinds of balances that in ‘‘Reserve Bank balances’’ because is typically the manager of the fund, is depository institutions may maintain at such term deposits would be explicitly required to file Form PF and meets the Federal Reserve Banks, and they are and contractually repayable on notice. final rule’s definition of ‘‘non-regulated maintained in different kinds of Federal The amount associated with a term fund.’’ Reserve Bank accounts. Balances that deposit that would be included as depository institutions must maintain to ‘‘Reserve Bank balances’’ is equal to the c. Level 1 Liquid Assets satisfy a reserve balance requirement amount that would be received upon withdrawal of such a term deposit. Under the proposed rule, a covered must be maintained in the depository institution’s ‘‘master account’’ at a Those term deposits that do not include company could have included the full this feature would not be included in fair value of level 1 liquid assets in its Federal Reserve Bank or, if the institution has designated a pass- ‘‘Reserve Bank balances.’’ The terms and HQLA amount.34 The proposed rule through correspondent, in the conditions for each term deposit would have recognized that these assets correspondent’s master account. A offering specify whether the term have the highest potential to generate ‘‘reserve balance requirement’’ is the deposits being offered include an early liquidity for a covered company during amount that a depository institution withdrawal feature. Regarding the periods of severe liquidity stress and must maintain in an account at a second point, although term deposits thus would have been includable in a Federal Reserve Bank in order to satisfy may be pledged as collateral for covered company’s HQLA amount that portion of the institution’s reserve discount window borrowing, the without limit. The proposed rule would requirement that is not met with vault Federal Reserve’s current discount have included the following assets as cash. Balances in excess of those window lending programs do not level 1 liquid assets: (1) Federal Reserve required to be maintained to satisfy a generally provide term or automatically- Bank balances; (2) foreign withdrawable reserve balance requirement, known as renewing overnight advances. reserves; (3) securities issued or ‘‘excess balances,’’ may be maintained Commenters suggested various assets unconditionally guaranteed as to the in a master account or in an ‘‘excess related to Reserve Bank balances to timely payment of principal and interest balance account.’’ Finally, balances include as level 1 liquid assets or to be by the U.S. Department of the Treasury; maintained for a specified period of reflected in the level 1 liquid asset (4) liquid and readily-marketable time, known as ‘‘term deposits,’’ are amount. One commenter recommended securities issued or unconditionally maintained in a term deposit account that the final rule include required guaranteed as to the timely payment of offered by the Federal Reserve Banks. reserves in the level 1 liquid asset principal and interest by any other U.S. The proposed rule used the term amount, alleging that the proposed rule government agency (provided that its ‘‘Reserve Bank balances’’ as the relevant circumvented Regulation D, which obligations are fully and explicitly term to capture central bank reserves in allows covered companies to manage guaranteed by the full faith and credit the United States. their reserves over a 14-day period.36 A of the United States government); (5) Under the proposed rule, all balances few commenters argued that the final certain liquid and readily-marketable a depository institution maintains at a rule should include vault cash, whether securities that are claims on, or claims Federal Reserve Bank (other than held in branches or ATMs, as a level 1 guaranteed by, a sovereign entity, a balances that an institution maintains liquid asset. The commenter argued that central bank, the Bank for International on behalf of another institution, such as the final rule should be consistent with Settlements, the International Monetary balances it maintains on behalf of a the Basel III Revised Liquidity Fund, the European Central Bank and respondent or on behalf of an excess Framework, which recognizes the European Community, or a multilateral balance account participant) would intrinsic liquidity value of cash and development bank; and (6) certain debt have been considered level 1 liquid includes coins and banknotes as level 1 securities issued by sovereign entities. assets, except for certain term deposits liquid assets. Commenters further as explained below. contended that vault cash, which can be As discussed in more detail below, a Consistent with the concept of used to satisfy the bank’s reserve number of commenters suggested ‘‘central bank reserves’’ in the Basel III requirement under Regulation D, is a including additional assets in the level Revised Liquidity Framework, the fundamental feature of daily liquidity 1 liquid asset category. After proposed rule included in its definition management for banks and should be considering the comments received, the of ‘‘Reserve Bank balances’’ only those included as level 1 liquid assets.37 One final rule includes the criteria for the term deposits offered and maintained commenter requested confirmation level 1 liquid asset category pursuant to terms and conditions that: whether gold bullion meets the substantially as proposed. (1) Explicitly and contractually permit definition of level 1 liquid assets, such term deposits to be withdrawn arguing that it is low risk, highly liquid, 34 Assets that meet the criteria of eligible HQLA upon demand prior to the expiration of has an active outright sale market, high may be held by a covered company designated as the term; or that (2) permit such term trading volumes, a diverse number of either ‘‘available-for-sale’’ or ‘‘held-to-maturity,’’ but must be included in the HQLA amount deposits to be pledged as collateral for calculation at fair value (as determined under 36 12 CFR part 204. GAAP). 35 See 12 U.S.C. 342. 37 12 CFR 204.5(a)(1).

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market participants, and has historically Similar to Reserve Bank balances, include U.S. government securities as been a flight-to-quality asset. foreign withdrawable reserves should be level 1 liquid assets. After considering the comments, the able to serve as a medium of exchange iv. Certain Sovereign and Multilateral agencies are adopting the proposed in the currency of the country where Organization Securities criteria in the final rule with respect to they are held. The agencies received no central bank reserves. The agencies are comments on the definition of foreign The proposed rule would have not adopting a commenter’s suggestion withdrawable reserves. The final rule included as level 1 liquid assets to include required reserves in the level includes foreign withdrawable reserves securities that are a claim on, or a claim 1 liquid asset amount because the assets as level 1 liquid assets as proposed. unconditionally guaranteed by, a held to satisfy required reserves, sovereign entity, a central bank, the whether vault cash or balances iii. United States Government Securities Bank for International Settlements, the maintained at a Federal Reserve Bank, The proposed rule would have International Monetary Fund, the are required for the covered company to included as level 1 liquid assets European Central Bank and European manage reserves over the maintenance securities issued by, or unconditionally Community, or a multilateral period pursuant to Regulation D and the guaranteed as to the timely payment of development bank, provided that such agencies do not believe that the assets principal and interest by, the U.S. securities met the following four held to satisfy a covered company’s Department of the Treasury. Generally, requirements. required reserves would entirely be these types of securities exhibited high First, these securities must have been available for use during a liquidity levels of liquidity even in times of assigned a zero percent risk weight stress event due to the reserve extreme stress to the financial system, under the standardized approach for requirements.38 and typically are the securities that risk-weighted assets of the agencies’ The final rule does not include cash, experience the most flight to quality risk-based capital rules.39 Generally, whether held in branches or ATMs, in when investors adjust their holdings. securities issued by sovereigns that are level 1 liquid assets, as such cash may Level 1 liquid assets would have also assigned a zero percent risk weight have be necessary to meet daily business included securities issued by any other shown resilient liquidity characteristics. transactions and due to logistical U.S. government agency whose Second, the proposed rule would have concerns associated with ensuring that obligations are fully and explicitly required these securities to be liquid the cash can be immediately used to guaranteed by the full faith and credit and readily-marketable, as discussed meet the covered company’s outflows. of the U.S. government, provided that above. Third, these securities would However, as noted in section II.B.5 of they are liquid and readily-marketable. have been required to have been issued this Supplementary Information section, One commenter suggested that the by an entity whose obligations have a the final rule does modify the agencies’ inclusion in level 1 liquid proven record as a reliable source of calculation of the HQLA amount. Under assets of only agency securities that are liquidity in the repurchase or sales the proposed rule, the level 1 liquid fully and explicitly guaranteed by the markets during stressed market asset amount would have equaled the full faith and credit of the U.S. conditions. A covered company could fair value of all level 1 liquid assets held government was too narrow and this have demonstrated a historical record by the covered company as of the would increase the demand for that met this criterion through reference calculation date, less required reserves Government National Mortgage to historical market prices during times under section 204.4 of Regulation D (12 Association (GNMA) securities by large of stress, such as the period of financial CFR 204.4). Under the final rule, banking organizations, resulting in market stress experienced from 2007 to agencies have clarified that the amount increased market pricing for such 2009. Covered companies should also to be deducted from the fair value of securities that would impact the have looked to other periods of systemic eligible level 1 assets is the covered profitability of investments at smaller and idiosyncratic stress to see if the company’s reserve balance requirement banking organizations. The agencies asset under consideration has proven to under section 204.5 of Regulation D (12 believe that securities that are issued by, be a reliable source of liquidity. Fourth, CFR 204.5). A reserve balance or unconditionally guaranteed as to the these securities could not be an requirement is the amount that a timely payment of principal and interest obligation of a regulated financial depository institution must maintain in by, a U.S. government agency whose company, non-regulated fund, pension an account at a Federal Reserve Bank in obligations are fully and explicitly fund, investment adviser, or identified order to satisfy that portion of the guaranteed by the full faith and credit company or any consolidated subsidiary institution’s reserve requirement that is of the U.S. government have credit and of such entities. not met with vault cash. liquidity risk that is comparable to One commenter expressed concern The agencies also decline to adopt a securities issued by the U.S. Treasury. about the inclusion of all sovereign commenter’s suggestion to include gold Thus, due to the inherent low risk of obligations that qualify for a zero bullion as a level 1 liquid asset given such securities and obligations, the percent risk weight as level 1 liquid the concerns about the volatility in agencies believe that it is appropriate to assets. The commenter argued that a market value of the asset and the classify such securities as level 1 liquid broad range of sovereign debt may logistical factors associated with assets. The agencies believe that any receive a zero percent risk weight under holding and liquidating the asset. increased holdings of such securities by the Basel III capital accord and may covered companies should not result in ii. Foreign Withdrawable Reserves include sovereign entities whose significant price increases for the commitments pose credit, liquidity, or The agencies proposed that reserves securities due to the requirement of the exchange rate risk, and suggested that held by a covered company in a foreign final rule that each covered company the agencies include a minimum central bank that are not subject to ensure that it maintains policies and sovereign rating classification. restrictions on use (foreign procedures that ensure the appropriate The agencies considered the withdrawable reserves) would have diversification of its HQLA by asset commenter’s concerns, but are adopting been included as level 1 liquid assets. type, counterparty, issuer, and other factors. The final rule adopts this 39 See 12 CFR part 3 (OCC), 12 CFR part 217 38 12 CFR 204.5(b)(1). provision as proposed and continues to (Federal Reserve), and 12 CFR part 324 (FDIC).

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the criteria for sovereign obligations to to be included as level 1 liquid assets committed liquidity facilities of central be included as level 1 liquid assets as under the laws of that country as level banks as HQLA. One commenter stated proposed. The agencies believe that 1 liquid assets for purposes of the final that any concerns expressed by the sovereign obligations that continue to rule. After considering the commenters’ banking industry regarding the qualify for a zero percent risk weight request, the agencies decline to adopt availability of liquid assets could be have shown resilient liquidity the commenter’s request. The agencies addressed by permitting financial characteristics. The agencies believe believe that assets should exhibit the institutions to pay the Federal Reserve that the risk weight assigned to liquidity characteristics required in the an up-front fee for a committed liquidity sovereign obligations under the final rule, which have been calibrated line. agencies’ risk-based capital rules is an for the outflows of U.S. covered The agencies are considering the appropriate standard and decline to companies, to be included as level 1 merits of including central bank require a minimum sovereign rating liquid assets for purposes of the U.S. restricted committed facility capacity as classification. The agencies continue to LCR requirement. The agencies intend HQLA for purposes of the U.S. LCR retain the proposed criteria for to ensure that the requirements for level requirement and may propose at a determining whether sovereign and 1 liquid assets are consistent for all future date to include such capacity as multilateral organization securities covered companies, regardless of the HQLA. qualify as level 1 liquid assets under the ownership of an individual covered d. Level 2A Liquid Assets final rule such as requiring them to be company. As noted above, the agencies liquid and readily-marketable.40 The have included certain foreign sovereign Under the proposed rule, level 2A agencies believe that these criteria limit obligations as level 1 liquid assets and liquid assets would have included the concerns raised by the commenter believe that these asset classes certain obligations issued or guaranteed that capital risk weight alone is appropriately reflect the outflows of by a U.S. government sponsored 41 insufficient to preclude all illiquid U.S. covered companies. enterprise (GSE) and certain obligations issued or guaranteed by a foreign debt issuances. Consistent with vii. Deposits by Covered Nonbank the inclusion of level 1 liquid assets as sovereign entity or a multilateral Companies in Third-Party Commercial development bank. Assets in these HQLA, the agencies believe that Banks qualifying sovereign securities should categories would have been required to continue to be includable in a covered One commenter requested that the be liquid and readily-marketable, as company’s HQLA amount without limit. agencies permit covered nonbank described above, to be considered level companies to include as level 1 liquid 2A liquid assets. The agencies received v. Certain Foreign Sovereign Debt assets, subject to a haircut, overnight a number of comments on the treatment Securities deposits in third-party commercial of GSE securities under the proposed Under the proposed rule, debt banks or holding companies that are rule. After reviewing the comments securities issued by a foreign sovereign subject to the final rule or a foreign received, for the reasons discussed entity that are not assigned a zero equivalent standard, so long as the below, the agencies are adopting the percent risk weight under the deposits are not concentrated in any one proposed criteria for level 2A liquid standardized approach for risk-weighted affiliated group of banks. After assets in the final rule. assets of the agencies’ risk-based capital considering the commenter’s request, i. U.S. GSE Securities rules could have served as level 1 liquid the agencies have decided not to adopt assets if they were liquid and readily- the suggestion and believe all covered Commenters suggested a variety of approaches to change the final rule’s marketable, the sovereign entity issued companies have several investment treatment of U.S. GSE securities. Under such debt securities in its own currency, options to fulfill their HQLA the proposed rule, U.S. GSE securities and a covered company held the debt requirement. The agencies recognize are classified as level 2A liquid assets, securities to meet its cash outflows in that covered nonbank companies do not which are subject to a 15 percent haircut the jurisdiction of the sovereign entity, have access to certain services available and, when combined with level 2B as calculated in the outflow section of to banking entities and may place liquid assets, have a 40 percent the proposed rule. These assets would significant deposits with third-party maximum composition limit in the have been appropriately included as banking organizations. Such deposits do HQLA amount, as discussed in section level 1 liquid assets despite having a not meet the agencies’ criteria for level II.B.5 of this Supplementary Information risk weight greater than zero because a 1 liquid assets because during a liquidity stress event many commercial section. sovereign often is able to meet Several commenters requested that obligations in its own currency through banks may exhibit the same liquidity stress correlation and wrong-way risk the agencies designate debt securities control of its monetary system, even issued and guaranteed by a U.S. GSEs as during fiscal challenges. The agencies discussed above in relation to excluded financial sector entity securities. level 1 liquid assets in the final rule. received no significant comments on Commenters also stated that the 15 this section of the proposed rule and so However, the agencies note that amounts in these deposits may qualify percent haircut for such obligations was the final rule adopts this standard as too high. A few commenters proposed. as an inflow, with a 100 percent inflow rate, to offset outflows, depending upon recommended that the agencies remove vi. Level 1 Liquid Assets at a Foreign their operational nature. the 40 percent composition cap on level Parent 2 liquid assets for U.S. GSE securities if viii. Liquidity Up-Front Fee Several commenters requested that the final rule does not include U.S. GSE the agencies permit a covered company The proposed rule briefly noted there securities as level 1 liquid assets. Other that is a U.S. subsidiary of a foreign has been ongoing work on the Basel III commenters suggested that the agencies company subject to the LCR in another LCR and central bank operations. The BCBS announced on January 12, 2014, 41 GSEs currently include the Federal Home Loan country to treat assets that are permitted Mortgage Corporation (FHLMC), the Federal an amendment to the Basel III Revised National Mortgage Association (FNMA), the Farm 40 The agencies note that an asset’s ability to Liquidity Framework that included Credit System, and the Federal Home Loan Bank qualify under this criterion may change over time. allowing capacity from restricted (FHLB) System.

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remove the ‘‘liquid and readily- imply that U.S. GSE securities are and credit of the United States. Under marketable’’ requirement for the highly liquid. For example, one the agencies’ risk-based capital rules, inclusion of U.S. GSE securities as level commenter stated that the agencies have the obligations and guarantees of U.S. 2A liquid assets because the securities provided previous guidance GSEs—including those operating under clearly meet these requirements. One encouraging institutions to hold an conservatorship of FHFA—continue to commenter suggested a graduated cap amount of high-quality liquid assets and be assigned a 20 percent risk weight, approach, whereby U.S. GSE securities cited securities issued by U.S. GSEs as rather than the zero percent risk weight in excess of the 40 percent composition an example of such assets and urged the assigned to securities explicitly limit in the HQLA amount would be agencies to explain any deviation from guaranteed by the full faith and credit subject to a haircut that would increase this guidance.42 Another commenter of the United States. The agencies have as the proportion of U.S. GSE securities raised the issue that the Board’s then- long held the view that obligations of to total HQLA increases. proposed enhanced liquidity standards U.S. GSEs should not be accorded the To support their request, commenters under section 165 of the Dodd-Frank same treatment as obligations that carry made various observations about the Act classified U.S. GSE securities as the explicit, unconditional guarantee of liquidity characteristics of U.S. GSE ‘‘fully liquid.’’ 43 the U.S. government and that are securities. Many commenters Commenters also urged the agencies assigned a zero percent risk weight. highlighted that the market for U.S. GSE to consider the fact that certain U.S. Moreover, the agencies feel that the securities is one of the deepest and most GSEs currently operate under the events related to the 2007–2009 liquid in the world, with over $4 trillion conservatorship of the Federal Housing financial stress that required these in GSE mortgage backed securities Finance Agency (FHFA) and receive entities to be placed under (MBS) outstanding and a daily trading capital support from the U.S. Treasury. conservatorship do not support volume in GSE MBS that averages These commenters argued that GSE temporarily improving GSE securities’ almost $230 billion. In particular, some securities should receive level 1 liquid HQLA status. commenters argued that MBS issued by asset designation while the U.S. GSEs Consistent with the agencies’ risk- FNMA and FHLMC are among the receive support from the U.S. based capital rules, the agencies are not highest quality and most liquid assets. government because the obligations are assigning the most favorable regulatory A number of commenters mentioned effectively guaranteed by the full faith treatment to securities issued and that U.S. GSE securities comprise a and credit of the U.S. government. One guaranteed by U.S. GSEs under the final significant amount of the liquidity commenter suggested that, while the rule, even while certain GSEs portfolios of banking organizations U.S. GSEs are in conservatorship, the temporarily operate under the because they are recognized by the agencies permit these securities to conservatorship of FHFA. The final rule market as trading in deep and liquid receive a 10 percent risk weight under assigns GSE securities to the level 2A markets. Commenters also contended the capital rules and permit them to be liquid asset category, as long as they are that GSE securities, like U.S. Treasury in level 1 liquid assets. investment grade consistent with the securities, have the highest potential to Finally, commenters compared the OCC’s investment securities regulation generate liquidity for a covered treatment of U.S. GSE securities as level (12 CFR part 1) as of the calculation date company during periods of severe 2A liquid assets under the proposed and are liquid and readily-marketable. liquidity stress. For example, one rule to the classification of securities Additionally, consistent with the commenter pointed out that during the issued by certain multilateral agencies’ risk-based capital rules’ higher 2007–2009 financial crisis, demand for development banks, such as the risk weight for the preferred stock of FHLB consolidated obligations International Bank for Reconstruction U.S. GSEs, the final rule excludes such increased during the dramatic flight-to- and Development, the Inter-American preferred stock from HQLA. quality event. Development Bank, the International The agencies are aware that certain Commenters also urged the agencies Finance Corporation, the German previous agency guidance and rules to consider the potential adverse impact Development Bank, the European recognize the liquid nature of U.S. GSE of classifying GSE securities as level 2A Investment Bank, the German securities; 44 however, the guidance and liquid assets. These commenters argued Agriculture Bank, and the Asian rules do not specifically address the that the level 2A liquid asset Development Bank as level 1 liquid types of diversification requirements designation would discourage banking assets. Commenters argued that the size that are being required by the final organizations from investing in the and liquidity of the markets for these rule’s inclusion of different levels of securities and would therefore decrease securities is much less than the size and HQLA. The final rule continues to liquidity in the secondary mortgage liquidity of the market for U.S. GSE recognize U.S. GSE securities as highly market. A commenter asserted that the securities. liquid instruments that trade in deep 40 percent cap on level 2A and level 2B The agencies recognize that some and active markets by including them as liquid assets would result in U.S. securities issued and guaranteed by U.S. a level 2A liquid asset. banking industry positions being GSEs consistently trade in very large In response to commenters’ concentrated in the U.S. Treasury and volumes and generally have been highly suggestions to remove the 40 percent U.S. agency markets, rather than being liquid, including during times of stress, composition cap, or apply a graduated more broadly diversified across those as indicated by commenters. The cap to U.S. GSE securities included as markets and the GSE market. Another agencies also recognize that certain U.S. level 2A liquid assets, the agencies commenter suggested that the agencies GSEs currently operate under the believe that the proposed 40 percent cap assess the impact to the value of U.S. conservatorship of FHFA and receive (when combined with level 2B liquid GSE securities should banking capital support from the U.S. Treasury. assets) should continue to apply to all organizations liquidate their holdings, However, the obligations of the U.S. level 2A liquid assets, including U.S. which could in turn increase mortgage GSEs are currently effectively, but not GSE securities. In this regard, funding costs and decrease the explicitly, guaranteed by the full faith commenters also expressed concerns availability of credit for mortgages. Some commenters argued that other 42 See Interagency Liquidity Policy Statement. 44 See, e.g., Interagency Liquidity Policy agency guidance and rules consider or 43 See 12 CFR 252.35(b)(3). Statement.

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that the cap on level 2A liquid assets have a proven record as a reliable source discussed above, is fundamental to the would result in concentrated positions of liquidity in repurchase or sales liquidity of an asset. in U.S. Treasury and agency markets. markets during stressed market The agencies received comments The agencies continue to believe that conditions; and (4) not an obligation of requesting clarification on the types of the 40 percent composition cap is a regulated financial company, publicly traded corporate debt securities appropriate to ensure that level 2 liquid investment company, non-regulated that may be included in level 2B liquid assets comprise a smaller portion of a fund, pension fund, investment adviser, assets. Several commenters also covered company’s total HQLA amount, identified company, or any consolidated suggested that the agencies broaden the such that the majority of the HQLA subsidiary of the foregoing. A covered scope of publicly traded corporate debt amount is comprised of level 1 liquid company would have been required to securities and publicly traded shares of assets, which are the assets that have demonstrate that a claim on or claims common stock to be included in level consistently demonstrated the most guaranteed by a sovereign entity or a 2B liquid assets. After considering liquidity during periods of market multilateral development bank had a commenters’ concerns, the agencies distress. The designation of certain proven record as a reliable source of adopted several modifications to the assets as level 2A liquid assets indicates liquidity in repurchase or sales markets final rule’s criteria for level 2B liquid that the assets have characteristics that during stressed market conditions assets, as discussed below. are associated with being relatively through reference to historical market i. Corporate Debt Securities stable and significant sources of prices during times of stress.46 Covered liquidity, but not to the same degree as companies should have looked to Publicly traded corporate debt level 1 liquid assets. The agencies multiple periods of systemic and securities would have been considered believe that the level 2 liquid asset cap idiosyncratic liquidity stress in level 2B liquid assets under the proposed rule if they met three appropriately prevents concentrations of compiling such records. The agencies requirements (in addition to being less liquid assets and ensures a did not receive any comments on the liquid and readily-marketable). First, the sufficient stock of the most liquid assets proposed treatment of sovereign and securities would have been required to to meet stressed outflows during a multilateral organization securities that meet the definition of ‘‘investment period of significant market distress. As would have qualified as level 2A liquid grade’’ under 12 CFR part 1 as of the a result, level 2A liquid assets, when assets under the proposed criteria. Thus, calculation date.47 This standard would combined with level 2B liquid assets, the final rule classifies them as level 2A ensure that assets that did not meet the cannot exceed 40 percent of the HQLA liquid assets as proposed. amount under the final rule. required credit quality standard for bank Commenters expressed concerns that e. Level 2B Liquid Assets investment would not have been the proposed designation of U.S. GSE Under the proposed rule, level 2B included in HQLA. The agencies believed that meeting this standard is securities as level 2A liquid assets liquid assets would have included indicative of lower overall risk and, would result in broad market certain publicly traded corporate debt therefore, higher liquidity for a consequences, including decreased securities and publicly traded shares of corporate debt security. Second, the liquidity in the secondary mortgage common stock that are liquid and securities would have been required to market, increased mortgage funding readily-marketable. The limitation of be issued by an entity whose obligations costs, and impact to the fair value of level 2B liquid assets to those that are have a proven record as a reliable source U.S. GSE securities. The agencies do not publicly traded was meant to ensure a of liquidity in repurchase or sales believe the treatment of U.S. GSE minimum level of liquidity, as privately markets during stressed market securities will have broad market traded assets are typically less liquid. consequences as the largest market conditions. A covered company could Under the proposed rule, the definition have demonstrated this record of participants generally have already of ‘‘publicly traded’’ would have been adjusted their funding profile and assets liquidity reliability and lower volatility consistent with the definition used in during times of stress by showing that in anticipation of the LCR requirement the agencies’ regulatory capital rules with little impact on the overall market. the market price of the publicly traded and would identify securities traded on debt securities or equivalent securities Furthermore, the agencies highlight that registered exchanges with liquid two- the final rule does not prohibit covered of the issuer declined by no more than way markets. A two-way market would 20 percent during a 30 calendar-day companies from investing in U.S. GSE have been defined as a market where securities and instead continues to period of significant stress, or that the there are independent bona fide offers to market haircut demanded by allow covered companies to participate buy and sell, so that a price reasonably fully in U.S. GSE securities markets. counterparties to secured lending and related to the last sales price or current secured funding transactions that were ii. Certain Sovereign and Multilateral bona fide competitive bid and offer collateralized by such debt securities or Organization Securities quotations can be determined within equivalent securities of the issuer one day and settled at that price within increased by no more than 20 The proposed rule also would have a relatively short time frame, included as a level 2A liquid asset a percentage points during a 30 calendar- conforming to trade custom. This day period of significant stress. As claim on, or a claim guaranteed by, a definition was designed to identify sovereign entity or a multilateral discussed above, a covered company markets with transparent and readily could demonstrate a historical record development bank that was: (1) Not available pricing, which, for the reasons included in level 1 liquid assets; (2) that meets this criterion through reference to historical market prices and assigned no higher than a 20 percent 46 This would be demonstrated if the market price risk weight under the standardized of the security or equivalent securities of the issuer available funding haircuts of the debt approach for risk-weighted assets of the declined by no more than 10 percent or the market security during times of stress. Third, agencies’ risk-based capital rules; 45 (3) haircut demanded by counterparties to secured the proposed rule also provided that the funding or lending transactions that are debt securities could not be obligations issued by an entity whose obligations collateralized by such security or equivalent securities of the issuer increased by no more than of a regulated financial company, 45 See 12 CFR part 3 (OCC), 12 CFR part 217 10 percentage points during a 30 calendar-day (Board), and 12 CFR part 324 (FDIC). period of significant stress. 47 12 CFR 1.2(d).

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investment company, non-regulated whose obligations have a proven record The agencies identified the S&P 500 as fund, pension fund, investment adviser, as a reliable source of liquidity in being appropriate for this purpose given identified company, or any consolidated repurchase or sales markets during that it is considered a major index in the subsidiary of the foregoing. stressed market conditions. The covered United States and generally includes the The proposed rule would have company must demonstrate that the most liquid and actively traded stocks. defined ‘‘publicly traded’’ consistent market price of the securities or Second, to be considered a level 2B with the definition used in the agencies’ equivalent securities of the issuer liquid asset, the publicly traded regulatory capital rules and would have declined by no more than 20 percent or common stock would have been identified securities traded on registered the market haircut demanded by required to have been issued in: (1) U.S. exchanges with liquid two-way markets. counterparties to secured lending and dollars; or (2) the currency of a Commenters stated that the proposed secured funding transactions that were jurisdiction where the covered company rule’s definition of ‘‘publicly traded’’ collateralized by such debt securities or operated and the stock offset its net cash would exclude a substantial portion of equivalent securities of the issuer outflows in that jurisdiction. This corporate debt securities because they increased by no more than 20 requirement was meant to ensure that, were not traded on a public market or percentage points during a 30 calendar- upon liquidation of the stock, the exchange. Commenters pointed out that day period of significant stress, or that currency received from the sale would unlike equity securities, corporate debt the market haircut demanded by match the outflow currency. securities are not generally listed on a counterparties to secured lending and Third, the common stock would have national securities exchange. Instead, secured funding transactions that were been required to have been issued by an corporate debt securities are generally collateralized by such debt securities or entity whose common stock has a traded in active, liquid secondary equivalent securities of the issuer proven record as a reliable source of markets. Commenters argued that increased by no more than 20 liquidity in the repurchase or sales applying the ‘‘publicly traded’’ percentage points during a 30 calendar- markets during stressed market requirement to corporate debt securities day period of significant stress. Lastly, conditions. Under the proposed rule, a would severely limit the universe of the final rule provides that the debt covered company could have corporate debt securities that could be securities may not be obligations of a demonstrated this record of reliable included as level 2B liquid assets. regulated financial company, liquidity by showing that the market To address concerns that the investment company, non-regulated price of the common stock or equivalent ‘‘publicly traded’’ requirement is overly fund, pension fund, investment adviser, securities of the issuer declined by no restrictive for corporate debt securities, identified company, or any consolidated more than 40 percent during a 30 some commenters suggested that the subsidiary of the foregoing. calendar-day period of significant stress, final rule include non-publicly traded or that the market haircut, as evidenced debt if the issuer’s equity is publicly ii. Publicly Traded Shares of Common by observable market prices, of secured traded. These commenters noted that Stock funding or lending transactions unlisted debt securities of public Under the proposed rule, publicly collateralized by such common stock or companies are actively traded in liquid traded shares of common stock could equivalent securities of the issuer markets. have been included as level 2B liquid increased by no more than 40 After considering the comments assets if the shares met the five percentage points during a 30 calendar- received, the agencies have decided to requirements set forth below (in day period of significant stress. This remove the ‘‘publicly traded’’ addition to being liquid and readily- requirement was intended to exclude requirement for corporate debt marketable). volatile equities from inclusion as level securities to be included as level 2B First, to be considered a level 2B 2B liquid assets, which is a risk to the liquid assets. The agencies acknowledge liquid asset under the proposed rule, preservation of liquidity value. As that corporate debt securities are publicly traded common stock would discussed above, a covered company frequently traded in over-the-counter have been required to be included in: (1) could have demonstrated this historical secondary markets and are less The Standard & Poor’s 500 Index (S&P record through reference to the frequently listed and regularly traded on 500); (2) if the stock is held in a non- historical market prices of the common national securities exchanges, as U.S. jurisdiction to meet liquidity risks stock during times of stress. required by the ‘‘publicly traded’’ in that jurisdiction, an index that the Fourth, as with the other asset definition. Thus, the ‘‘publicly traded’’ covered company’s supervisor in that categories of HQLA and for the same requirement would have unduly jurisdiction recognizes for purposes of reasons, common stock included in narrowed the scope of corporate debt including the equities as level 2B liquid level 2B liquid assets may not have been securities that can be designated as level assets under applicable regulatory issued by a regulated financial 2B liquid assets. policy; or (3) any other index for which company, investment company, non- The final rule continues to impose the covered company can demonstrate regulated fund, pension fund, certain other requirements that the to the satisfaction of its appropriate investment adviser, identified company, agencies proposed on level 2B corporate Federal banking agency that the equity or any consolidated subsidiary of the debt securities. First, the final rule in such index is as liquid and readily- foregoing. During the recent financial continues to require that the securities marketable as equities traded on the crisis, the common stock of such meet the liquid and readily-marketable S&P 500. companies experienced significant standard to be included in level 2B As discussed in the Supplementary declines in value correlated to other assets. Second, the final rule also Information section to the proposed financial institutions and the agencies continues to require that the securities rule, the agencies believed that listing of believe that such declines indicate those meet the definition of ‘‘investment a common stock in a major stock index assets would be less likely to provide grade’’ under 12 CFR part 1 as of a is an important indicator of the liquidity substantial liquidity during future calculation date.48 Third, the securities of the stock, because such stock tends to periods of stress in the banking system are required to be issued by an entity have higher trading volumes and lower and, therefore, are not appropriate for bid-ask spreads during stressed market inclusion in a covered company’s 48 12 CFR 1.2(d). conditions than those that are not listed. HQLA.

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Fifth, if held by a depository small group of equity issuers included Moreover, stocks that are included in institution, the publicly traded common in the S&P 500, which could lead to the Russell 1000 index are selected stock could not have been acquired in market distortions and unforeseeable based on predetermined criteria, satisfaction of a debt previously consequences. Several commenters whereas a committee evaluates and contracted (DPC). Because of general suggested that the agencies consider selects stocks for inclusion in the S&P statutory prohibitions on holding equity other major stock indices for the level 500. The agencies believe that the investments for their own account,49 2B liquid asset criteria. For U.S. systematic selection of stocks for depository institutions subject to the equities, a few commenters inclusion in the Russell 1000 index, proposed rule would not be able to recommended that the final rule include combined with the liquidity include common stock as level 2B equities that comprise the Russell 3000 characteristics of stocks included in the liquid assets. In general, publicly traded index. Another commenter suggested index, support replacing the S&P 500 common stock may be acquired by a the Russell 1000 index. These index with the Russell 1000 index in the depository institution to prevent a loss commenters provided analysis of the criteria for level 2B liquid assets. from a DPC. However, in order for a volatility and trading volumes of stocks As mentioned above, some depository institution to avail itself of within these indices showing the commenters recommended including the authority to hold DPC assets, such comparability of the most and least equities in the Russell 3000 index in as by holding publicly traded common liquid securities in these indices with level 2B liquid assets. The agencies stock, such assets typically must be the S&P 500. evaluated the Russell 3000 index and divested in a timely manner.50 The In addition, although the proposed were concerned that it includes a wider agencies believe that depository rule would have provided that common universe of stocks and captures the institutions should make a good faith equities in any other index for which equities of certain smaller U.S. effort to dispose of DPC publicly traded the covered company can demonstrate companies by market capitalization. As common stock as soon as commercially to the satisfaction of the agencies that a result, equities in the Russell 3000 reasonable, subject to the applicable the index is as liquid and readily- index exhibit a greater range of liquidity legal time limits for disposition. The marketable as the S&P 500 may be characteristics and include equities that agencies are concerned that permitting included in level 2B liquid assets, demonstrate less favorable trading depository institutions to include DPC commenters argued that identifying volumes, volatilities, and price changes. publicly traded common stock in level specific indices in the final rule would Thus, the agencies believe that the 2B liquid assets may provide an allow covered companies to avoid Russell 1000 index, which includes a inappropriate incentive for depository waiting for agency approval of indices broader set of stocks than the S&P 500, institutions to hold such assets beyond and promote certainty for banking provides an appropriate universe of a commercially reasonable period for organizations structuring secured stocks that may be eligible as level 2B disposition. Therefore, the proposal financing transactions. Accordingly, liquid assets. would have prohibited depository some commenters suggested that the The agencies emphasize, however, institutions from including DPC final rule designate all equities included that equities included in the Russell publicly traded common stock as level in major equity indices in G–20 1000 index must also meet certain other 2B liquid assets. jurisdictions as level 2B liquid assets requirements to be level 2B liquid Finally, under the proposed rule, a under the final rule. Finally, other assets, which the final rule adopts as depository institution could have commenters argued that exchange proposed. Thus, to be considered a level eligible publicly traded common stock traded funds (ETFs) based on the 2B liquid asset, an equity included in permissibly held by a consolidated indices included as HQLA should be the Russell 1000 index must meet other subsidiary as level 2B liquid assets if the included, because the ETFs add requirements provided in the final rule, assets were held to cover the net cash incremental liquidity on top of that seen such as meeting the liquid and readily- outflows for the consolidated in the market for the underlying marketable standard and being issued subsidiary. For example, if Subsidiary A equities. by an entity whose shares have a proven holds level 2B publicly traded common After considering commenters’ record as a reliable source of liquidity stock of $200 in a legally permissible concerns and the liquidity in the sales or repurchase market during manner and has net outflows of $80, the characteristics of the indices a stressed scenario. parent depository institution could not commenters proposed to be included as In response to commenters’ requests count more than $80 of Subsidiary A’s HQLA, the agencies have determined to for the final rule to identify other level 2B publicly traded common stock adjust the scope of U.S. equities that indices that include equities that may be in the parent depository institution’s may be included as level 2B liquid designated as level 2B liquid assets, the consolidated level 2B liquid assets after assets. Specifically, the final rule agencies have determined that the final the 50 percent haircut discussed below. includes common equity securities of rule should no longer include the The agencies received several companies included in the Russell 1000 provision to allow a covered company comments on the criteria for publicly index in the criteria for level 2B liquid to demonstrate that the equity securities traded equity securities to be included assets in place of the companies included in another index should be in level 2B liquid assets. Some included in the S&P 500. The proposed eligible for level 2B liquid assets commenters suggested that the agencies rule identified the S&P 500 as being because the final rule includes the broaden the scope of eligible equity appropriate for this purpose, given that significantly broader Russell 1000 securities beyond those included in the it is considered a major index in the index. In addition, the agencies are S&P 500. One of these commenters United States and generally includes the unaware of another existing index the stated that the proposed rule favors a most liquid and actively traded stocks. components of which would be The agencies have determined that the appropriate for inclusion as level 2B 49 12 U.S.C. 24 (Seventh) (national banks); 12 Russell 1000 index would be a more liquid assets. U.S.C. 1464(c) (federal savings associations); 12 appropriate index after considering The final rule does not include ETFs U.S.C. 1831a (state banks); 12 U.S.C. 1831e (state savings associations). comments evidencing the similarities in that are based on the indices as level 2B 50 See generally 12 CFR 1.7 (OCC); 12 U.S.C. trading volumes, volatilities, and price liquid assets. The agencies believe that 1843(c)(2) (Board); 12 CFR 362.1(b)(3) (FDIC). movements of the two indices. the liquidity characteristics of ETFs are

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not identical to the liquidity f. Assets Recommended for HQLA as HQLA while excluding obligations of characteristics of the underlying index Designation U.S. states and local governments. Some or the individual components of the A number of commenters requested of these commenters argued that the fund. Rather, ETFs have their own risk that the agencies consider designating credit ratings of certain states compare profiles, trading volumes, and market- additional assets as HQLA. In particular, favorably with those of countries whose based characteristics separate from the commenters suggested including as obligations could be included as level 1 underlying index. Accordingly, the final HQLA municipal securities, asset- or level 2A liquid assets. Commenters rule does not include ETFs as level 2B backed securities (ABS), state and local also contended that municipal securities liquid assets. authority housing bonds backed by perform well and experience increased demand during times of stress. Several The proposed rule would have Federal Housing Association and commenters asserted that banking required publicly traded common stocks Department of Veterans Affairs organizations could liquidate large guarantees, covered bonds, private label to have been issued in: (1) U.S. dollars; holdings of municipal securities with MBS, and investment company shares. or (2) the currency of a jurisdiction minimal market or price disruption Several commenters also argued that where the covered company operated during a crisis scenario. and the stock offset its net cash outflows permissible collateral pledged to FHLBs, Many commenters asserted that in that jurisdiction in order to be FHLB letters of credit, and unused municipal securities have active considered a level 2B liquid asset. The borrowing commitments from FHLBs markets with high trading volumes, a final rule adopts the provision as should be considered as HQLA. The large number of registered broker- proposed. The agencies clarify that the agencies considered commenters’ dealers who make markets in the provision’s second requirement limits a requests and have declined to designate municipal securities, and significant covered company to including as level additional assets as HQLA for the diversity in market participants. These 2B liquid assets equities issued in the reasons discussed below. commenters maintained that certain currency of a jurisdiction where the i. Municipal Securities large issuers of municipal securities covered company operates. For markets have regular and active trading. example, a covered company may hold Many commenters urged the agencies In particular, commenters argued that a stock issued in Japanese yen as a level to include municipal securities as municipal securities are actively traded 2B liquid asset only if: (1) The covered HQLA, noting that the Basel III Revised by a number of nonbank financial sector company operates in Japan, and (2) the Liquidity Framework would include entities and retail customers and have a stock is available to support the covered them in its definition of HQLA. low degree of interconnectedness with company’s yen denominated net cash Commenters raised a number of policy banking organizations. A few outflows in Japan. justifications to support the inclusion of commenters acknowledged that the investment grade municipal securities municipal bond market includes iii. Assets Securing a Transaction as HQLA, either as level 2A or level 2B numerous, diverse issuers and that liquid assets, including assertions that certain individual municipal securities Lastly, one commenter suggested that municipal securities exhibit liquidity there are narrow situations where the may have low trading volumes. characteristics consistent with HQLA However, these commenters argued that agencies should expand level 2B liquid status and that the exclusion of asset recognition for purposes of the the securities typically trade on a per municipal securities from HQLA could issuer basis rather than a per security LCR denominator, even when those lead to higher funding costs for assets are not recognized as HQLA in basis and urged the agencies to evaluate municipalities, which could affect local the municipal security market as a the LCR numerator. Specifically, the economies and infrastructure. whole when assessing their liquidity commenter requested that the agencies Several commenters contended that characteristics for HQLA status. include additional classes of assets as U.S. municipal securities should satisfy Several commenters asserted that level 2B liquid assets solely for the the proposed rule’s qualifying criteria many municipal securities exhibit the purposes of determining the applicable for HQLA. Many of these commenters HQLA characteristics of being easily outflow and inflow rates for transactions argued that municipal bonds meet the and readily valued. Some of these secured by the asset. The commenter liquid and readily-marketable commenters highlighted that although argued that failure to do so would result requirement of HQLA because they municipal securities are not traded on in anomalous LCR results even with exhibited limited price volatility an exchange, most of them can be otherwise reliable secured lending particularly during the recent financial readily valued on a daily basis from a transactions. After considering the crisis, high trading volumes, and deep variety of pricing services. Certain commenters’ suggestion, the agencies and stable secured funding markets. commenters highlighted that municipal believe that assets should be designated Commenters also focused on the high securities are eligible collateral for loans consistently as HQLA for purposes of credit quality and low historical default at the Federal Reserve discount calculating both the LCR numerator and rates of these securities. Furthermore, window. denominator. In determining HQLA commenters asserted that the risk and Many commenters focused on the designation, the agencies considered the liquidity profiles of municipal securities potential consequences of excluding liquidity characteristics of assets to were comparable, if not superior, to the municipal securities from HQLA. ensure that a covered company’s HQLA profiles of other types of assets the Commenters asserted that their amount only includes assets with a high agencies proposed for inclusion as exclusion would discourage banking potential to generate liquidity during a HQLA, such as corporate bonds, organizations from purchasing the stress scenario. The agencies believe equities, certain foreign sovereign securities. Consequently, state and local that such an approach is appropriate for obligations, and certain securities of entities would face increased funding determining the designation of assets as GSEs. A number of commenters costs for infrastructure and essential HQLA for all aspects of the LCR expressed concerns that the proposed public services. Commenters stated that calculation, including the determination rule would have included certain municipal securities are a vital source of of outflow and inflow rates for sovereign securities for countries that credit for local communities, and the transactions secured by the asset. have smaller GDPs than some U.S. states proposed rule’s exclusion of the

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securities from HQLA would have covered companies are able to meet difficulties. The agencies note that limited a source of funding for local their short-term liquidity needs during although the credit risk of a security economies. Some commenters stated times of stress. Inability to meet those may be an important aspect for that the proposed rule’s treatment of liquidity needs proved to be a determining the liquidity of a class of municipal securities would have led significant cause of the failure or near assets, the agencies also believe that states and municipalities to pass on failure of several large financial firms trading volumes and the presence of increased funding costs for during the recent financial crisis. To deep, active sale or repurchase markets infrastructure and essential public ensure adequate liquidity, the final rule for an asset class are important aspects services to local businesses and the only includes as HQLA securities that of any potential class of HQLA. As general public in the form of increased can be easily and immediately discussed above, the agencies have taxes. convertible into cash with little or no determined that the liquidity Several commenters asserted that loss of value during a period of stress, characteristics of other assets, such as although municipal securities are not either by sale or through a repurchase corporate bonds, equities, and certain typically used as collateral for transaction. sovereign securities, meet the repurchase agreements, they are With respect to municipal securities, requirements for HQLA eligibility rehypothecated by tender options the agencies have observed that the because of their trading volumes and the bonds, which did not see significant liquidity characteristics of municipal presence of deep, active sale or haircuts or price changes during the securities range significantly, and repurchase markets for those assets. For recent financial crisis. overall, many municipal securities are many municipal securities, the agencies Commenters also compared the not ‘‘liquid and readily-marketable’’ in have not found that the markets and proposed rule’s treatment of municipal U.S. markets as defined in § __.3 of the trading volume is as deep and active on securities to the standards of other final rule. For instance, many securities an ongoing basis such that there is a jurisdictions. A few of these issued by public sector entities exhibit high level of confidence that a banking commenters noted that the proposed low average daily trading volumes and organization could quickly convert rule’s exclusion of municipal securities have generally demonstrated less these municipal securities into cash was inconsistent with the Basel III favorable price changes and volatility during a severe liquidity stress event. Revised Liquidity Framework, which characteristics. In addition, the agencies The agencies observe that the final potentially recognizes securities issued have found that the funding of many rule’s treatment of municipal securities by state and municipal governments municipal securities is very limited in is consistent with the treatment of other that qualify for 20 percent risk the repurchase market, which indicates assets that also, as a class, significantly weighting under the Basel capital that the securities may not be able to be vary in trading volume and lack access standards as level 2A assets. One quickly converted into cash during a to deep and active repurchase markets commenter noted that the European period of stress. Generally, the agencies and therefore do not qualify as HQLA, Bank Authority has recommended believe that covered companies would such as covered bonds and ABS. including certain bonds issued by be limited in their ability to rapidly Commenters also compared the European local government institutions monetize many municipal securities in proposed rule’s treatment of municipal as HQLA. the event of a severe systemic liquidity securities to the potential standards of Some commenters noted that stress scenario. other jurisdictions and the Basel III encouraging covered companies to Several commenters pointed to other Revised Liquidity Framework, which invest in municipal securities would characteristics, such as credit quality, contemplate that certain securities compel covered companies to diversify default rates, and central bank issued by public sector entities such as their holdings of HQLA with securities eligibility, in urging the agencies to states and municipalities may be that have a varied investor base. include municipal securities as HQLA. included as HQLA. However, for the Commenters pointed out that the As discussed, the final rule considers reasons discussed above, the agencies financial sector is underexposed to the certain liquidity characteristics, believe that many municipal securities municipal securities market and including risk profile, market-based are not liquid and readily-marketable in asserted that this diversification would characteristics, and central bank U.S. markets and thus do not exhibit the improve the liquidity risk profiles of eligibility to identify types of assets that liquidity characteristics necessary to be banking organizations. would qualify as HQLA. Although the included as HQLA under the final rule. Finally, several commenters argued agencies consider the credit risk and In response to commenters’ suggested that the agencies could limit municipal central bank eligibility associated with criteria for including certain municipal securities included as HQLA through a an asset in determining HQLA securities as HQLA, although some number of criteria including: (1) Only eligibility, the agencies also consider commenters noted that pricing services those securities that would be other characteristics, such as trading can offer daily values for certain ‘‘investment grade’’ under 12 CFR part volumes, price characteristics, and the municipal securities, the agencies 1 as of a calculation date; (2) only those presence of active sales or repurchase recognize that financial data from securities that have a 20 percent risk- markets for the securities at all times. municipal issuers can be inconsistent weighting under the agencies risk-based After considering the relevant and vary in timing. The agencies believe capital rules; or (3) a separate 25 percent characteristics taken together, the that challenges in data availability can composition cap on municipal agencies believe that many municipal impact the ability of covered companies securities included in a covered securities do not demonstrate the and supervisors to determine the company’s HQLA amount. requisite liquidity characteristics to eligibility of certain municipal Under the final rule, securities issued qualify as HQLA under the final rule. securities based on suggested sets of by public sector entities, such as a state, Some commenters questioned the criteria. Furthermore, generally, the local authority, or other government basis for excluding municipal securities agencies have concluded that the subdivision below the level of a from HQLA when the agencies proposed criteria suggested by commenters would sovereign (including U.S. states and to include corporate bonds, equities, lead to inclusion of municipal securities municipalities) do not qualify as HQLA. and securities of sovereign countries that exhibit a range of liquidity The goal of the LCR is to ensure that that have recently experienced financial characteristics, including those with

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less favorable characteristics that are not characteristics similar to those of level 2B liquid assets. A few compatible with HQLA eligibility and corporate debt securities that are commenters argued that the proposed that would not be a sufficiently reliable included as level 2B liquid assets, so rule’s exclusion of private label MBS source of liquidity for a banking that the ABS meeting those criteria from HQLA deviated from the Basel III organization during a period of stress. could also be included as level 2B Revised Liquidity Framework, which Finally, as discussed above, liquid assets. In support of that includes certain high credit quality commenters expressed concerns about recommendation, some commenters private label residential MBS (RMBS) as the market impact of excluding asserted that certain publicly traded level 2B liquid assets with a 25 percent municipal securities from HQLA. A few ABS exhibited similar historical haircut, and suggested that the agencies commenters also stated that encouraging performance to investment grade follow the Basel standard. One of these covered companies to invest in publicly traded corporate debt commenters suggested that the agencies municipal securities would help securities, even during the recent adopt a set of criteria to identify high diversify the covered companies’ financial crisis. Some commenters credit quality RMBS that could be holdings. The agencies highlight that asserted that excluding ABS from HQLA considered level 2B liquid assets that is the final rule does not prohibit covered could undermine investment in the ABS similar to the criteria the agencies companies from investing in municipal market and increase the cost of proposed to adopt for corporate debt securities and diversifying their securitization financing available to securities that would have been level 2B investment portfolios. The agencies are customers of banking organizations. A liquid assets under the proposed rule. aware that covered companies continue commenter requested that the final rule The commenter recommended that the to actively invest in municipal include investment grade senior eligible RMBS would qualify for level securities, evidenced by covered unsubordinated ABS collateralized or 2B treatment to the extent that the companies’ increased holdings of otherwise backed solely by loans RMBS could be shown to have a proven municipal securities since the financial originated under the Federal Family track record as a reliable source of crisis, for reasons unrelated to liquidity Education Loan Program as level 2A liquidity during stressed market risk management practices. Under the liquid assets. environments as demonstrated by: (i) final rule, covered companies may Some commenters recommended that The market price of the RMBS or continue to participate fully in the agencies include covered bonds as equivalent securities of the sponsor municipal security markets. The level 2B liquid assets. Commenters declining by no more than 20 percent agencies continue to believe that argued that the proposed rule’s during a 30 calendar-day period of municipal securities can be appropriate exclusion of covered bonds from HQLA significant stress, or (ii) the market investments for covered companies and deviated from the Basel III Revised haircut demanded by counterparties to expect the banking sector to continue to Liquidity Framework’s designation of secured lending and secured funding participate in this market. Many covered certain high credit quality covered transactions that are collateralized by companies did not include municipal bonds as level 2A liquid assets with a the RMBS or equivalent securities of the securities in their holdings of liquid 15 percent haircut. One commenter sponsor declining no more than 20 assets for contingent liquidity stress suggested a set of criteria to identify percentage points during a 30-calendar purposes prior to the LCR, yet high credit quality covered bonds that day period of significant stress. continued to invest in municipal could be included as level 2B liquid A few commenters stated that in the 51 securities for yield, credit quality, and assets. The commenter suggested that agencies’ proposed rule on credit risk other factors; therefore, the agencies do the agencies consider including covered retention, the agencies have proposed to not believe the final rule will have a bonds that meet the criteria and have a exempt from risk retention certain significant impact on overall demand proven track record as a reliable source RMBS backed by ‘‘qualified mortgages’’ for municipal securities. of liquidity in a stressed market as defined under the Truth in Lending environment as level 2B liquid assets. ii. ABS, Covered Bonds, Private Label Act in part because of their credit Another commenter noted that the risk MBS, and Mortgage Loans characteristics and requested that the characteristics of covered bonds are agencies consider including RMBS A number of commenters fundamentally different from other recommended that the agencies backed by ‘‘qualified mortgages’’ as securitizations and highlighted that the 52 designate certain securitization HQLA. Some commenters asserted liquidity of covered bonds in Europe that failing to include RMBS as HQLA exposures, specifically certain high during recent crises was not credit quality ABS, covered bonds, and could negatively impact the residential significantly impaired. One commenter mortgage market by impeding the return private label MBS (commercial, acknowledged that the U.S. covered multifamily, and residential real estate), of private capital. Commenters also bond market is not highly developed, requested that mortgage loans be as level 2B liquid assets. Commenters but supported including covered bonds asserted that banking organizations are included as HQLA, arguing that the as HQLA to encourage development of failure to do so could have unintended key investors in these securitization the market. products that serve as important long- consequences for the mortgage market. Some commenters suggested that the After considering the comments, the term financing instruments supporting final rule include private label MBS as the economy. These commenters agencies have determined not to include ABS, covered bonds, private label MBS warned that failure to include these 51 Specifically, the commenter suggested that a and mortgage loans as level 2B liquid securities as HQLA could adversely covered bond should qualify as a level 2B liquid impact the private U.S. mortgage asset if the security: (1) Is registered under the assets. The agencies are aware that market. Securities Act of 1933 or exempt under the SEC’s specific issuances of ABS, RMBS, or Rule 144A; (2) is senior debt that is issued by a covered bonds may exhibit some Some commenters suggested that the regulated, unaffiliated financial institution located final rule include ‘‘high-quality’’ ABS as in an Organization for Economic Co-Operation and liquidity characteristics that are similar level 2B liquid assets. For example, one Development country; (3) grants the holders the right to sell the covered asset pool upon default and 52 See OCC, Board, FDIC, FHFA, SEC, U.S. commenter suggested that the final rule that the sale could not be stayed or delayed due to Department of Housing and Urban Development, include a set of criteria to identify high- the insolvency of the issuer; and (4) meets the other ‘‘Credit Risk Retention,’’ 78 FR 57989 (September quality ABS having liquidity criteria required for a level 2B liquid asset. 20, 2013).

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to those of assets included as HQLA. should represent the sole method of the underlying assets are zero percent However, the agencies continue to rapid monetization for any class of risk weighted GNMA securities. believe that ABS, covered bonds, private assets included as HQLA, as discussed Specifically for MMFs, one label MBS, and mortgage loans do not further below. commenter highlighted that the SEC meet the liquid and readily-marketable As one commenter mentioned, the introduced enhanced liquidity standard in U.S. markets, and thus do U.S. market for covered bonds is not requirements for MMFs in 2010. The not exhibit the liquidity characteristics highly developed, with few issuances. commenter contended that the new necessary to be included as HQLA The agencies do not believe that it is regulations have sufficiently improved under the final rule. Evidence from the appropriate for the agencies to use the the stability of MMFs to justify their 2007–2009 financial crisis and the LCR as the mechanism for encouraging inclusion in HQLA. The commenter also period following indicates that the or developing the liquidity of an asset suggested that the agencies include market demand for a variety of class. Rather, the LCR is designed to certain high-quality MMFs, such as securitization issuances can decline ensure that covered institutions have government MMFs and tax-exempt rapidly during a period of stress, and sufficient liquid assets that already have funds, as HQLA. that such demand may not rapidly been proven sources of liquidity in the After considering these comments, the recover. ABS may be dependent on a event of a liquidity crisis. Furthermore, agencies have determined not to include diverse range of underlying asset the agencies observe that covered bonds, shares of investment companies, classes, each of which may be impacted which are typically issued by including mutual funds and MMFs, as in a period of significant stress. companies in the financial sector, HQLA. The agencies recognize that Furthermore, the bespoke characteristics exhibit significant risks regarding certain underlying investments of the of securitization structures may be interconnectedness and wrong-way risk investment companies may include tailored to a limited range of investors. among companies in the financial high-quality assets. However, similar to The ability to monetize securitization sector. securities issued by many companies in issuances and whole loans through or in Several commenters highlighted that the financial sector, shares of the repurchase market may be limited in excluding RMBS and covered bonds investment companies have been prone a period of stress. from HQLA could cause a detrimental to lose value and become less liquid Moreover, although certain ABS impact on the U.S. residential mortgage during periods of severe market stress or issuances, such as ABS backed by loans market. The agencies recognize the an idiosyncratic event involving the under the Federal Family Education importance of capital funding to the fund’s sponsor. As recognized by some Loan Program and RMBS backed solely U.S. residential mortgage markets and commenters, certain shares in MMFs by securitized ‘‘qualified mortgages’’ or highlight that the final rule does not exhibited liquidity stress during the mortgages guaranteed by the Federal prohibit covered companies from recent financial crisis. Further, the Housing Authority or the Department of continuing to invest in ABS, covered recently finalized SEC rules regarding Veterans Affairs, may have lower credit bonds, and private label MBS, and does money markets may impose some risk, the liquidity risk profile of such not restrict a covered company from barriers on investors’ ability to securities, including the inability to making mortgage loans or loans withdraw all of their funds during a monetize the issuance during a period underlying ABS and covered bonds. As stress.53 Therefore, the agencies do not of stress, would not warrant treatment discussed above, the agencies do not believe that shares of investment as HQLA. The agencies note that ABS expect, and have not observed, that companies demonstrate the liquidity and RMBS issuances have substantially banking organizations base their characteristics necessary to be included lower trading volumes than MBS that investment decisions solely on as HQLA. are guaranteed by U.S. GSEs and regulatory considerations and do not demand for such securities has anticipate that exclusion of these assets iv. FHLB Collateral and Commitments decreased, as shown by the substantial from HQLA will significantly deter Certain commenters urged the decline in the number of issuances since investment in these assets. agencies to consider including collateral the recent financial crisis. The agencies iii. Investment Company Shares pledged to FHLBs and unused note that the inclusion of RMBS under borrowing capacity from FHLBs as the Basel III Revised Liquidity A few commenters requested that the HQLA. One commenter supported the Framework was limited to those agencies consider including certain agencies’ proposal to treat as investment company shares, such as securitizations where the underlying unencumbered those HQLA currently shares of mutual funds and money mortgages were full recourse loans, pledged to a U.S. GSE that are subject market funds (MMFs), as HQLA. which is not permissible in a number of to a blanket, but not asset-specific, lien, Commenters argued that investment states, and therefore would complicate where potential credit secured by the companies should not be treated as any inclusion of RMBS as HQLA in the HQLA is not currently extended. financial sector entities for purposes of United States. However, the commenter requested that determining whether shares of the Likewise, with respect to mortgage the agencies also consider including any investment company may be included loans, including qualified mortgage assets that are pledged to FHLBs in as HQLA. As discussed above, the loans or those guaranteed by the Federal support of FHLB advance availability as proposed rule would have excluded Housing Authority or the Department of HQLA, rather than only those assets that securities issued by a financial sector Veterans Affairs, the agencies note that are currently specified as level 1, level entity from HQLA to avoid the potential due to legal requirements for transfer 2A, and level 2B liquid assets. The for wrong-way risk. Commenters and the lack of use of mortgages as commenter contended that FHLB- suggested that the agencies look through collateral for repurchase agreements, eligible collateral is highly liquid to the investments of the fund to such loans cannot typically be rapidly because it can be readily converted into determine HQLA eligibility. In monetized during a period of financial cash advances from a FHLB. Separately, stress, prohibiting their classification as particular, a commenter requested HQLA. Moreover, although such assets clarification that mutual funds such as 53 See SEC, ‘‘Money Market Fund Reform; can be pledged to the FHLB, the open-end GNMA funds should be Amendments to Form PF,’’ 79 FR 47736 (August 14, agencies do not believe that the FHLB considered level 1 liquid assets, because 2014).

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a few commenters recommended that provisions from the Board’s Regulation assets may have met the high-quality the agencies include FHLB YY’s liquidity risk-management liquid asset criteria set forth in § l collateralized advance availability, requirements that permit covered .20(a)–(c) of the proposed rule, but may FHLB letters of credit, or FHLB institutions to hold certain ‘‘highly not have met the operational or borrowing capacity as HQLA. The liquid assets’’ for purposes of its generally applicable criteria commenters emphasized that depository liquidity stress tests under that rule. requirements (and thus not be eligible to institutions have the ability to access Unlike the proposed rule, the Board’s be included in the calculation of the liquidity from FHLBs even during times Regulation YY includes certain HQLA amount), the agencies are adding of stress and therefore argued that FHLB government securities, cash, and any a new construct in the final rule capacity would be a reliable source of other assets that the bank holding (eligible HQLA). The purpose of this liquidity during a crisis. company demonstrates to the Board are addition is to more clearly draw a The agencies have considered the highly liquid. Specifically, the distinction between those assets that are commenters’ suggestions and have commenter requested that the agencies HQLA under § l.20 (a)–(c) of the final determined not to include as HQLA incorporate each of the criteria set forth rule and eligible HQLA which also meet collateral pledged to FHLBs that are not in Regulation YY for assets that are the operational, generally applicable otherwise HQLA under the proposed demonstrated to be ‘‘highly liquid’’ and criteria, and maintenance of U.S. rule, FHLB letters of credit, or FHLB to also permit assets that meet such eligible requirements which have been collateralized advance availability. In criteria to qualify as HQLA in the final adopted in § l.22 of the final rule. In determining the types of assets that rule. other words, only eligible HQLA would qualify as HQLA, the agencies The proposed rule and Regulation YY meeting all the necessary requirements considered certain liquidity were designed to complement one set forth in § l.22 are to be included in characteristics that are reflected in the another. Whereas the Regulation YY’s the calculation steps to determine the criteria in § __.20 of the final rule, as internal liquidity stress-test HQLA amount. For the purpose of discussed above. The agencies have requirements provide a view of an consistency and ease of reference, this determined that assets, including those individual firm under multiple Supplementary Information section also that are considered permissible scenarios, and include assumptions uses this distinction between HQLA and collateral for FHLB advances, must meet tailored to the idiosyncratic aspects of eligible HQLA when referring to the the criteria set forth in § __.20 of the the company’s liquidity profile, the requirements that the proposed rule final rule to qualify as HQLA, including standardized measure of liquidity would have implemented. low bid-ask spreads, high trading adequacy under the proposed rule The final rule continues to permit a volumes, a large and diverse number of would have facilitated a transparent covered company to include assets in market participants, and other assessment of covered companies’ each HQLA category as of a calculation appropriate factors. As discussed above, liquidity positions under a standard date without regard to the asset’s although certain collateral, such as stress scenario and comparison across residual maturity. For all HQLA, the mortgages, may be accepted by the covered companies. Due to the tailoring residual maturity of the asset will be FHLB, a covered company may not be of the liquidity stress assumptions reflected in the asset’s fair value and able to rapidly liquidate a portfolio of under Regulation YY to the risk profile should not have an effect on the covered such assets other than as collateral for of the company, Regulation YY company’s ability to monetize the asset. the extension of credit by the FHLB. The provided companies discretion to a. Operational Requirements agencies do not believe that it would be determine whether an asset would be appropriate to rely on the extension of liquid under a particular scenario. Under the proposed rule, an asset that credit by the FHLB as the sole method Although the criteria set forth in a covered company could have included of monetization during a period of Regulation YY share broad themes with in its HQLA amount would have needed market distress. the final rule’s requirements for to meet a set of operational Separately, the agencies believe that determining HQLA, the agencies believe requirements. These operational FHLB collateralized advance availability that the final rule’s standardized asset requirements were intended to better and FHLB letters of credit should not be requirements are appropriate for ensure that a covered company’s eligible included as HQLA. The LCR is designed determining the assets that would be HQLA can be liquidated in times of to encourage the holding of liquid assets easily and immediately convertible to stress. Several of these requirements that may be immediately and reliably cash with little or no loss of value related to the monetization of an asset, converted to cash in times of liquidity during a period of liquidity stress and meaning the receipt of funds from the stress as borrowing capacity may be are designed to provide for outright sale of an asset or from the constrained, particularly borrowing comparability across covered companies transfer of an asset pursuant to a capacity tied to lower quality assets. due to the standardized outflow repurchase agreement. A number of The agencies observe that reliance on assumptions. Thus, the final rule does commenters requested clarification on market borrowing capacity has proved not incorporate specific criteria from the operational requirements. The final problematic in the past for many Regulation YY. rule retains the proposed operational covered companies during periods of requirements and clarifies certain 3. Requirements for Inclusion as Eligible severe market stress. Accordingly, the aspects of the requirements as discussed HQLA LCR is designed to ensure that below. companies hold sufficient assets to For HQLA to be eligible to be i. Operational Capability To Monetize cover outflows during a period of included in the HQLA amount (LCR HQLA market distress. Thus the final rule numerator), the proposed rule would would not include such borrowing have required level 1 liquid assets, level The proposed rule would have capacity as HQLA. 2A liquid assets and level 2B liquid required a covered company to have the assets to meet all the operational operational capability to monetize the v. Including Other Securities requirements and generally applicable HQLA held as eligible HQLA. This One commenter requested that the criteria set forth in § l.20(d) and (e) of capability would have been agencies adopt in the final rule the proposed rule. Because certain demonstrated by: (1) Implementing and

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maintaining appropriate procedures and that monetization includes receiving statement in the 2010 Interagency systems to monetize the asset at any funds pursuant to a repurchase Liquidity Policy Statement referred to a time in accordance with relevant agreement. To the extent that a covered banking organization’s required standard settlement periods and company monetizes certain assets, such contingency funding plan (CFP) that set procedures; and (2) periodically as U.S. Treasury securities, on a regular, forth strategies for addressing liquidity monetizing a sample of eligible HQLA frequent basis through business-as-usual shortfalls in emergency scenarios. The that reasonably reflects the composition activities, the company may rely on policy statement acknowledged that of the covered company’s total eligible evidence of sales during the ordinary while affirmative testing of certain HQLA portfolio, including with respect course of business and repurchase components of the CFP may be to asset type, maturity, and counterparty transactions of those assets to impractical, ‘‘institutions should be sure characteristics. This requirement was demonstrate its operational capability to to test operational components of the designed to ensure a covered company’s monetize them. However, the agencies CFP.’’ Therefore, the proposed rule’s access to the market, the effectiveness of are aware that a company may monetize requirement that a covered company its processes for monetization, the certain assets on a sporadic or less demonstrate its operational capability to availability of the assets for frequent basis due to the nature of the monetize assets did not conflict with the monetization, and to minimize the risk assets or business. The agencies expect previous interagency policy statement. of negative signaling during a period of that in order to meet the operational ii. HQLA Under the Control of the actual stress. The agencies would have capability requirement for eligible Liquidity Management Function monitored such procedures, systems, HQLA, the covered company monetize and periodic sample liquidations those types of assets through specific Under the proposed rule, a covered through their supervisory process. steps that go beyond ordinary business company would have been required to One commenter requested that the activities. In particular, to meet the implement policies that required all agencies clarify that a covered company requirement, the agencies expect a eligible HQLA to be under the control may demonstrate its operational covered company to more thoroughly of the management function of the capacity to monetize HQLA through its demonstrate the periodic monetization covered company that is charged with ordinary business activities. The of assets that exhibit less favorable managing liquidity risk. To do so, a commenter claimed that requiring liquidity characteristics than other covered company would have been monetization solely to demonstrate HQLA. required either to segregate the HQLA access to the market for purposes of the Under the proposed and final rules, from other assets, with the sole intent to rule could lead the covered company to reverse repurchase agreements subject use them as a source of liquidity, or to incur a profit and loss for a transaction to a legally binding agreement at the demonstrate its ability to monetize the that lacks a business purpose. A calculation date are secured lending HQLA and have the resulting funds separate commenter questioned whether transactions and these transactions do available to the risk management actual sales of assets were required to not count as HQLA. The assets that are function, without conflicting with meet the requirement that a covered provided to the covered company by another business or risk management company have the operational capacity some overnight reverse repurchase strategy. Thus, if an HQLA had been to monetize HQLA. agreements may potentially meet the used to hedge a specific transaction, Commenters requested that the operational requirements for eligible such as holding an asset to hedge a call agencies include additional methods of HQLA described in the rule. The option that the covered company had monetization. One commenter argued agencies do not believe that the written, it could not have been included that monetization of an asset should presence of the overnight reverse in the covered company’s eligible HQLA include transfer of the asset in exchange repurchase agreement and the if the sale of the asset or its use in a for cash in the settlement of an anticipated exchange of the assets for repurchase transaction would have overnight reverse repurchase agreement. cash is sufficient in itself to meet the conflicted with another business or risk The commenter clarified that the monetization standard, as for management strategy. If the use of the counterparty of the overnight reverse operational or business reasons such asset in the repurchase transaction repurchase agreement could be a transactions may be required to be would not have conflicted with the Federal Reserve Bank or another entity rolled over on an ongoing basis. The hedge, the HQLA may have been that provides the reliable monetization agencies are clarifying that in order to eligible under the proposed rule. If of assets held under the reverse meet this monetization standard, HQLA had been used as a general macro repurchase agreement. The commenter covered companies must show that they hedge, such as interest rate risk of the contended that such assets should be are not rolling over the overnight covered company’s portfolio, it could eligible HQLA even when they do not reverse repurchase agreement still have been included as eligible meet all other requirements related to indefinitely and must hold or use the HQLA. This requirement was intended the monetization of the asset. cash received from the maturing to ensure that a central function of a After considering commenters’ transaction for a sustained period; or the covered company had the authority and concerns, the agencies are retaining the covered company must periodically capability to liquidate eligible HQLA to proposed requirement that a covered monetize the underlying asset through meet its obligations in times of stress company demonstrate its operational outright sale or transfer pursuant to a without exposing the covered company capacity to monetize HQLA by repurchase agreement. to risks associated with specific periodically monetizing a sample of the Another commenter expressed transactions and structures that had assets either through an outright sale or concern that the requirement to been hedged. There were instances pursuant to a repurchase agreement. periodically monetize HQLA conflicted during the recent financial crisis where The agencies expect actual sales or with a previous interagency policy unencumbered assets of some firms repurchase agreements to occur for a statement on liquidity risk management were not available to meet liquidity covered company to demonstrate that provided that ‘‘affirmative testing demands because the firms’ treasuries periodic monetization. Furthermore, as . . . may be impractical.’’ 54 This did not have access to such assets. requested by commenters and as A few commenters requested that the discussed above, the agencies clarify 54 See Interagency Liquidity Policy Statement. agencies clarify the requirement for

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segregating assets. One commenter iv. Policies and Procedures To Commenters did not express questioned whether an electronic flag Determine Eligible HQLA Composition significant concerns about the was adequate to demonstrate requirement to implement and maintain segregation or whether separate Under the proposed rule, a covered policies and procedures to determine accounts are required. Another company would have been required to the composition of the assets in eligible commenter requested clarification on implement and maintain policies and HQLA. procedures that determined the whether segregated assets could be The agencies incorporated two composition of the assets held as placed in multiple consolidated clarifying changes in the final rule. eligible HQLA on a daily basis by: (1) Although the proposed rule would have subsidiaries. The agencies continue to Identifying where its eligible HQLA required a covered company to have believe that a covered company may were held by legal entity, geographical policies and procedures to determine its demonstrate that the eligible HQLA is location, currency, custodial or bank eligible HQLA composition on a daily under the control of the liquidity risk account, and other relevant identifying basis, the final rule clarifies that the management function by segregating the factors; (2) determining that the assets requirement applies on each calculation HQLA with the sole intent to use the included as eligible HQLA continued to date. The agencies incorporated the HQLA as a source of liquidity. Although qualify as eligible HQLA; and (3) modification to clarify that the the agencies have not adopted a ensuring that the HQLA held by a requirement applies on each date a preferred method of showing such covered company as eligible HQLA are covered company calculates its LCR, segregations, a covered company should appropriately diversified by asset type, subject to the transition provisions in be able to demonstrate that the counterparty, issuer, currency, subpart F of the final rule. The agencies segregated assets are under the control borrowing capacity or other factors also emphasized in § l.22(a)(5) of the of the management function charged associated with the liquidity risk of the final rule that the methodology a with managing liquidity risk at the assets. covered company uses to determine the eligibility of its HQLA must be covered company. The agencies expect The agencies also recognized that documented and must be applied a covered company to be able to significant international banking consistently. For example, a covered demonstrate that the chosen form of activity occurs through non-U.S. company cannot make inconsistent segregation facilitates the liquidity branches of legal entities organized in determinations in terms of eligible management function’s use of the assets the United States and that a foreign for liquidity purposes. HQLA requirements for HQLA with the branch’s activities may give rise to the same operational characteristics, either need to hold eligible HQLA in the iii. Termination of Transaction Hedging across different assets or across time. jurisdiction where it is located. While HQLA Additionally, a covered company the agencies believed that holding cannot treat the same asset as eligible The proposed rule would have HQLA in a geographic location where it HQLA for one part of the final rule, required a covered company to have is needed to meet liquidity needs such while not treating it as eligible HQLA included in its total net cash outflow as those envisioned by the LCR was for another part of the final rule. amount the amount of cash outflow that appropriate, they were concerned that 4. Generally Applicable Criteria for would have resulted from the other factors such as taxes, Eligible HQLA termination of any specific transaction rehypothecation rights, and legal and regulatory restrictions may encourage hedging eligible HQLA. The proposal Under the proposed rule, assets certain companies to hold a would have required a covered would have been required to meet the disproportionate amount of their company to include the impact of the following generally applicable criteria to eligible HQLA in locations outside the be considered as eligible HQLA. hedge in the outflow because if the United States where unforeseen covered company were to liquidate the impediments may prevent timely a. Unencumbered asset, it would be required to close out repatriation of HQLA during a liquidity The proposed rule required that an the hedge to avoid creating a risk crisis. Nonetheless, establishing asset be unencumbered in order for it to exposure. This requirement was not quantitative limits on the amount of be included as eligible HQLA. First, the intended to apply to general macro eligible HQLA that can be held abroad asset would have been required to be hedges such as holding interest rate and still count towards a U.S. domiciled free of legal, regulatory, contractual, or derivatives to adjust internal duration or legal entity’s LCR requirement is other restrictions on the ability of a interest rate risk measurements, but was complex and may be overly restrictive covered company to monetize the asset. intended to cover specific hedges that in some cases. Therefore, the agencies The agencies believed that, as a general would become risk exposures if the proposed to require a covered company matter, eligible HQLA should only asset were sold. The agencies did not to establish policies to ensure that include assets that could be converted receive comments on this operational eligible HQLA maintained in foreign easily into cash. Second, the asset could requirement. However, the agencies are locations was appropriate with respect not have been pledged, explicitly or clarifying that, consistent with the Basel to where the net cash outflows could implicitly, to secure or provide credit- III Revised Liquidity Framework, the arise. By requiring that there be a enhancement to any transaction, except amount of the outflow resulting from correlation between the eligible HQLA that the asset could be pledged to a the termination of the hedging held outside of the United States and central bank or a U.S. GSE to secure transaction should be deducted from the the net cash outflows attributable to potential borrowings if credit secured by fair value of the applicable eligible non-U.S. operations, the agencies the asset has not been extended to the HQLA instead of being included as an intended to increase the likelihood that covered company or its consolidated outflow in the LCR denominator. eligible HQLA would be available to a subsidiaries. This exception was meant covered company in the United States to account for the ability of central Section l.22(a)(3) of the final rule has and to avoid repatriation concerns from banks and U.S. GSEs to lend against the been amended to clarify this eligible HQLA held in another posted HQLA or to return the posted requirement. jurisdiction. HQLA, in which case a covered

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company could sell or engage in a including treatment of an inflow requirements set forth in § l.22 of the repurchase agreement with the assets to amount with respect to certain amounts final rule to qualify as eligible HQLA. receive cash. This exception was also related to broker-dealer segregated b. Segregated Client Pool Securities meant to permit collateral that is accounts as detailed in § l.33(g) of the covered by a blanket (rather than asset- final rule. Under the proposed rule, an asset specific) lien from a U.S. GSE to be Some commenters noted that the included as eligible HQLA could not included as eligible HQLA. subsidiaries of some covered companies have been a client pool security held in The final rule includes a clarifying are subject to the SEC’s proposed rules a segregated account or cash received change to the proposed requirement. to implement liquidity requirements on from a repurchase agreement on client The final rule adopts the proposed broker-dealers and security-based swap pool securities held in a segregated exception that an asset may be dealers that use the alternative net account. The proposed rule defined a considered unencumbered if the asset is capital computation methodology. The client pool security as one that is owned pledged to a central bank or a U.S. GSE SEC’s proposed rule would be a by a customer of a covered company to secure potential borrowings and potential regulatory restriction on the and is not an asset of the organization, credit secured by the asset has not been transfer of HQLA and the commenter regardless of the organization’s extended to the covered company or its expressed concern that the proposed hypothecation rights to the security. consolidated subsidiaries. Under the rule would lead to broad Because client pool securities held in a final rule, the agencies clarify that the disqualification of the HQLA of SEC- segregated account are not freely assets may also be considered regulated entities. The agencies believe available to meet all possible liquidity unencumbered if the pledge of these it is appropriate that in cases where needs of the covered company, they assets is not required to support access legal restrictions exist that do not allow should not count as a source of to the payment services of a central the transfer of HQLA between entities, liquidity. bank. In certain circumstances, a central that only HQLA that is equal to the Commenters did not raise significant bank may have the ability to encumber amount of the net outflows of that legal concerns on the exclusion of assets in the pledged assets to avoid losses that entity should be included in the client pool securities from HQLA. The may occur when a troubled institution consolidated LCR, as discussed further agencies have therefore largely adopted fails to fulfill its payments. The agencies below in section II.B.4.c and II.B.4.d. the proposed requirement in the final are concerned that such a scenario is However, the agencies clarify that in rule. more likely to occur during a period of cases where such restrictions would market stress. Thus, the agencies believe result in an amount of HQLA subject to c. Treatment of HQLA Held by U.S. that assets pledged by a covered restrictions on transfer that is less than Consolidated Subsidiaries company to access a central bank’s the amount of net outflows as calculated Under the proposal, HQLA held in a payment services are considered under the final rule for the legal entity, legal entity that is a U.S. consolidated encumbered. This provision of the final the covered company may include all of subsidiary of a covered company would rule would apply only to assets that a the HQLA of the legal entity subject to have been included as eligible HQLA covered company is required to pledge the restriction in its consolidated LCR subject to specific limitations depending to receive access to the payment HQLA amount, assuming that the HQLA on whether the subsidiary was subject services of a central bank, and would meets the operational requirements to the proposed rule and was therefore not encompass assets that are specified above, as well as other voluntarily pledged by a covered requirements in the final rule. required to calculate a LCR under the company to support additional services One commenter requested that the proposed rule. that may be offered by the central bank, agencies clarify that securities acquired If the consolidated subsidiary was such as overdraft capability. through reverse repurchase agreements subject to a minimum LCR under the One commenter expressed concerns that have not been rehypothecated and proposed rule, then a covered company that segregated funds held by a covered are legally and contractually available could have included eligible HQLA held company pursuant to SEC’s customer for a covered company’s use are in the consolidated subsidiary in an protection rule 15c3–3 (Rule 15c3–3) unencumbered for purposes of the rule. amount up to the consolidated would be considered encumbered Two commenters requested that the subsidiary’s net cash outflows, as assets. The commenter noted that Rule agencies clarify that all borrowed assets calculated to meet its LCR requirement. 15c3–3 is an SEC rule requiring the are legally and contractually available The covered company could also have segregation of customer assets and for the covered company’s use. The included in its HQLA amount any places limits on the broker-dealer’s use agencies clarify that borrowed additional amount of HQLA if the of customer funds. After reviewing the securities, including those that are monetized proceeds from that HQLA commenter’s concerns, the agencies acquired through reverse repurchase would be available for transfer to the believe that funds held in a Rule 15c3– agreements, that have not been top-tier covered company during times 3 segregated account should be rehypothecated may be considered of stress without statutory, regulatory, considered encumbered assets. Rule unencumbered if the covered company contractual, or supervisory restrictions. 15c3–3 requires a covered company to has rehypothecation rights with respect Regulatory restrictions would include, set aside assets in a segregated account to the securities and the securities are for example, sections 23A and 23B of to ensure that broker-dealers have free of legal, regulatory, contractual, or the Federal Reserve Act 55 and sufficient assets to meet the needs of other restrictions on the ability of the Regulation W.56 Supervisory restrictions their customers. Accordingly, the assets covered company to monetize them and may include, but would not be limited in Rule 15c3–3 segregated accounts are have not been pledged to secure or to, enforcement actions, written not freely available to the covered provide credit-enhancement to any agreements, supervisory directives or company to meet its liquidity needs and transaction, with certain exceptions. requests to a particular subsidiary that are not considered unencumbered for The agencies highlight that HQLA, would directly or indirectly restrict the purposes of the final rule. However, including assets received through while these accounts are excluded from reverse repurchase agreements and 55 12 U.S.C. 371c, 371c–1. eligible HQLA, the agencies are other borrowed assets, must meet all 56 12 CFR part 223.

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subsidiary’s ability to transfer the HQLA limits, and any other regulatory, there is less, rather than more, explicit to the parent covered company. statutory, or supervisory limitations. prudential regulation. If the consolidated subsidiary was not One commenter supported the subject to a minimum LCR under § l.10 proposed rule’s approach to permitting e. Maintenance of Eligible HQLA in the of the proposed rule, a covered a covered company to include as United States company could have included the eligible HQLA a certain level of HQLA The agencies believe it is appropriate HQLA held in the consolidated of its non-U.S. consolidated subsidiary. for a covered company to hold eligible subsidiary in an amount up to the net One commenter argued that the final HQLA in a particular geographic cash outflows of the consolidated rule should permit a covered company location in order to meet local liquidity subsidiary that would have been to include as eligible HQLA assets held needs there. However, they do not included in the covered company’s in a non-U.S. consolidated subsidiary believe it is appropriate for a covered calculation of its LCR, plus any that qualify as HQLA in the host company to hold a disproportionate additional amount of HQLA held by the jurisdiction of that subsidiary. The amount of eligible HQLA in locations consolidated subsidiary the monetized commenter contended that jurisdictions outside the United States, given that proceeds from which would be available adopting the Basel III Revised Liquidity unforeseen impediments may prevent for transfer to the top-tier covered Framework would consider certain timely repatriation of liquidity during a company during times of stress without assets as HQLA depending on the crisis. Therefore, under the proposal, a statutory, regulatory, contractual, or liquidity characteristics of the assets in covered company would have been supervisory restrictions. the market of the relevant jurisdiction. generally expected to maintain in the Section l.22(b)(3) of the final rule This approach, the commenter noted, is United States an amount and type of adopts the treatment of HQLA held by also consistent with the eligible HQLA that is sufficient to meet U.S. consolidated subsidiaries as recommendation of the European its total net cash outflow amount in the proposed. This treatment is consistent Banking Authority for the treatment of United States. with the Basel III Revised Liquidity HQLA in jurisdictions outside of the A commenter requested that the Framework and ensures that assets in Eurozone. agencies confirm that that the general the pool of eligible HQLA can be freely Another commenter requested that expectation that a covered company monetized and the proceeds can be the agencies acknowledge that HQLA maintain in the United States an amount freely transferred to a covered company held in foreign entities that are not and type of HQLA that is sufficient to in times of a liquidity stress. In response subject to prudential regulation or meet its total net cash outflow amount to a commenter’s request for capital requirements are less likely to in the United States would be clarification, the agencies clarify that a present repatriation issues. monitored through a supervisory covered company is required only to After reviewing commenters’ approach. apply the statutory, regulatory, concerns, the agencies have determined The final rule maintains the contractual, or supervisory restrictions to adopt the proposed liquidity requirement that a covered company is that are in effect as of the calculation requirements for non-U.S. consolidated generally expected to maintain as date. subsidiaries without change. The eligible HQLA an amount and type of agencies have declined to adopt a eligible HQLA in the United States that d. Treatment of HQLA Held by Non-U.S. commenter’s suggestion that the final is sufficient to meet its total net cash Consolidated Subsidiaries rule permit a covered company’s outflow amount in the United States. In Consistent with the Basel III Revised eligible HQLA to include the HQLA of response to the commenter’s request for Liquidity Framework, the proposed rule its non-U.S. consolidated subsidiaries as clarification, the agencies expect to provided that a covered company could defined in the host jurisdiction of the monitor this requirement through the have included eligible HQLA held by a subsidiary. The agencies recognize that supervisory process. non-U.S. legal entity that is a jurisdictions will likely vary in their consolidated subsidiary of the covered adoption of the Basel III Revised f. Exclusion of Certain Rehypothecated company in an amount up to: (1) The Liquidity Framework. However, the Assets net cash outflows of the non-U.S. final rule was designed to implement Under the proposed rule, assets that a consolidated subsidiary that are the LCR standard as appropriate for the covered company received under a included in the covered company’s net United States and its markets, and, for rehypothecation right where the cash outflows, plus (2) any additional the purposes of the LCR in the United beneficial owner has a contractual right amount of HQLA held by the non-U.S. States, only those assets that meet the to withdraw the asset without consolidated subsidiary that is available liquidity characteristics and criteria of remuneration at any time during a 30 for transfer to the top-tier covered the final rule can be included as HQLA. calendar-day stress period would not company during times of stress without The agencies decline to differentiate have been included in HQLA. This statutory, regulatory, contractual, or between foreign entities that are subject exclusion extended to assets generated supervisory restrictions. The proposed to prudential regulation or capital from another asset that was received rule would have required covered requirements and those that are not for under such a rehypothecation right. If companies with foreign operations to purposes of determining whether HQLA the beneficial owner had such a right identify the location of HQLA and net is more or less subject to risk of and were to exercise it within a 30 cash outflows in foreign jurisdictions restriction on transfer from those calendar-day stress period, the asset and exclude any HQLA above the jurisdictions. The agencies believe that would not be available to support the amount of net cash outflows for those generally HQLA held in foreign entities covered company’s liquidity position. jurisdictions that is not freely available may encounter challenges during a The agencies have included a for transfer due to statutory, regulatory, severe period of stress that prevent the clarifying change to the proposed contractual or supervisory restrictions. timely repatriation of assets. requirement in the final rule. The final Such transfer restrictions would have Furthermore, the agencies do not rule provides that any asset which a included LCR requirements greater than believe it would be appropriate to covered company received with those that would be established by the provide favorable regulatory treatment rehypothecation rights would not be proposed rule, counterparty exposure for assets held in a jurisdiction where considered eligible HQLA if the

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counterparty that provided the asset, or haircut factor prescribed for each level the HQLA amount. Specifically, level 2 the beneficial owner, has a contractual of HQLA. liquid assets could account for no more right to withdraw the asset without Under the proposed rule, the level 1 than 40 percent of the HQLA amount paying non-de minimis remuneration at liquid asset amount would have equaled and level 2B liquid assets could account any time during the 30 calendar days the fair value of all level 1 liquid assets for no more than 15 percent of the following the calculation date. held by the covered company as of the HQLA amount. Under § l.21 of the calculation date, less required reserves proposed rule, if the amounts of level 2 g. Exclusion of Assets Designated To under section 204.4 of Regulation D (12 Cover Operational Costs liquid assets or level 2B liquid assets CFR 204.4). Consistent with the Basel III had exceeded their respective caps, the In the proposed rule, assets Revised Liquidity Framework, and as excess amounts as calculated under the specifically designated to cover discussed in section II.B.2 of this proposed rule would have been operational costs could not be included Supplementary Information section, the deducted from the sum of the level 1 as eligible HQLA. The agencies believe proposed rule would have applied a 15 liquid asset, level 2A liquid asset, and that assets specifically designated to percent haircut to level 2A liquid assets level 2B liquid asset amounts. The level cover costs such as wages or facility and a 50 percent haircut to level 2B 2 caps were meant to ensure that level maintenance generally would not be liquid assets. These haircuts were meant 2 liquid assets, which may provide less available to cover liquidity needs that to recognize that level 2 liquid assets liquidity as compared to level 1 liquid arise during stressed market conditions. generally are less liquid, have larger assets, comprise a smaller portion of a The agencies did not receive comment haircuts in the repurchase markets, and covered company’s total HQLA amount on this provision and are adopting the may have more volatile prices in the such that the majority of the HQLA proposed requirement in § l.22(b)(6) of outright sales markets, particularly in amount is composed of level 1 liquid the final rule without change. The times of stress. Thus, the level 2A liquid assets. treatment of outflows for operational asset amount would have equaled 85 The unadjusted excess HQLA amount, costs are discussed in section II.C.3.l of percent of the fair value of the level 2A under the proposed rule, equaled the this Supplementary Information section. liquid assets held by the covered sum of the level 2 cap excess amount company as eligible HQLA, and the 5. Calculation of the HQLA Amount and the level 2B cap excess amount. The level 2B liquid asset amount would calculation of the unadjusted excess Instructions for calculating the HQLA have equaled 50 percent of the fair value amount, including the calculation of the HQLA amount applied the 40 percent of the level 2B liquid assets held by the level 2 liquid asset cap and the 15 required haircuts and caps for level 2 covered company as eligible HQLA. percent level 2B liquid asset cap at the liquid assets, were set forth in § __.21 of The agencies are adopting under calculation date by subtracting from the the proposed rule. The agencies § l.21(b) of the final rule the received several comments relating to calculation of the level 1, level 2A and sum of the level 1, level 2A and level the calculation of the HQLA amount, level 2B liquid asset amounts largely as 2B liquid asset amounts, the amount of particularly relating to the calculations proposed, with one clarification. In the level 2 liquid assets that is in excess of of the adjusted level 1, adjusted level calculation of the level 1 liquid asset the limits. The unadjusted HQLA excess 2A, and adjusted level 2B liquid asset amount, the agencies have clarified that amount would have enforced the cap amounts that are used to calculate the the amount to be deducted from the fair limits at the calculation date without adjusted excess HQLA amount and that value of all eligible level 1 liquid assets unwinding any transactions. incorporate the unwind of certain is the covered company’s reserve The methods of calculating the level secured transactions as described below. balance requirement under section 2 cap excess amount and level 2B cap After considering the comments, the 204.5 of Regulation D (12 CFR 204.5), excess amounts were set forth in agencies adopted the HQLA amount not its entire reserve requirement. § l.21(d) and (e) of the proposed rule, calculation instructions largely as Therefore, under the final rule, the level respectively. Under those provisions, proposed, with two modifications to the 1 liquid asset amount equals the fair the level 2 cap excess amount would treatment of collateralized deposits and value of all level 1 liquid assets that are have been calculated by taking the reserve balance requirements. The final in the covered company’s eligible HQLA greater of: (1) The level 2A liquid asset rule sets forth instructions for as of the calculation date, less the amount plus the level 2B liquid asset calculating the HQLA amount in § l.21. covered company’s reserve balance amount that exceeds 0.6667 (or 40/60, Under the final rule, the HQLA requirement under section 204.5 of which is the ratio of the maximum amount equals the sum of the level 1, Regulation D (12 CFR 204.5). Similarly, allowable level 2 liquid assets to the level 2A and level 2B liquid asset the level 2A liquid asset amount equals level 1 liquid assets) times the level 1 amounts, less the greater of the 85 percent of the fair value of all level liquid asset amount; or (2) zero. The unadjusted excess HQLA amount or the 2A liquid assets, and the level 2B liquid calculation of the level 2B cap excess adjusted excess HQLA amount, as asset amount equals 50 percent of the amount would have been calculated by described below. fair value of all level 2B liquid assets, taking the greater of: (1) The level 2B that are held by the covered company as liquid asset amount less the level 2 cap a. Calculation of Liquid Asset Amounts of the calculation date that are eligible excess amount and less 0.1765 (or For the purposes of calculating a HQLA. All assets that are eligible HQLA 15/85, which is the maximum ratio of covered company’s HQLA amount at the calculation date are therefore to allowable level 2B liquid assets to the under the proposed rule, each of the be included in these three liquid asset sum of level 1 and level 2A liquid level 1 liquid asset amount, the level 2A amounts. assets) times the sum of the level 1 and liquid asset amount, and the level 2B level 2A liquid asset amount; or (2) zero. liquid asset amount would have been b. Calculation of Unadjusted Excess Subtracting the level 2 cap excess calculated using the fair value of the HQLA Amount amount from the level 2B liquid asset eligible level 1 liquid assets, level 2A Consistent with the Basel III Revised amount when applying the 15 percent liquid assets, or level 2B liquid assets, Liquidity Framework, the proposed rule level 2B cap is appropriate because the respectively, as determined under would have capped the amount of level level 2B liquid assets should be GAAP, multiplied by the appropriate 2 liquid assets that could be included in excluded before the level 2A liquid

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assets when applying the 40 percent the caps and haircuts, would be included the unwinding of those level 2 cap. calculated both before and after transactions involving an exchange of Several commenters requested that unwinding those transactions. eligible HQLA or cash. After unwinding the agencies modify the level 2 and Under the proposed rule, to determine all the appropriate transactions, the level 2B liquid assets caps, arguing that its adjusted HQLA excess amount, a asset haircuts of 15 percent and 50 the agencies have not provided any covered company would have been percent would have been applied to the analysis on the appropriateness of the required to unwind all secured funding level 2A and 2B liquid assets, caps. In particular, these commenters transactions, secured lending respectively. argued that the caps could cause transactions, asset exchanges, and The adjusted excess HQLA amount banking organizations to ‘‘hoard’’ level collateralized derivatives transactions, calculated pursuant to § l.21(g) of the 1 liquid assets, reducing the liquidity as defined by the proposed rule, in proposed rule would have been and volume of level 2A and level 2B which eligible HQLA, including cash, comprised of the adjusted level 2 cap liquid assets. were exchanged and that would have excess amount and adjusted level 2B The agencies continue to believe that matured within 30 calendar days of the cap excess amount calculated pursuant the majority of a covered company’s calculation date. The unwinding of to § l.21(h) and § l.21(i) of the HQLA amount should consist of the these transactions and the calculation of proposed rule, respectively. highest quality liquid assets, namely, the adjusted excess HQLA amount was The adjusted level 2 cap excess level 1 liquid assets. In establishing the intended to prevent a covered company amount would have been calculated by requirement that the level 1 liquid asset from having a substantial amount of taking the greater of: (1) The adjusted amount should represent at least 60 transactions that would have created the level 2A liquid asset amount plus the percent of the HQLA amount, the appearance of a significant level 1 liquid adjusted level 2B liquid asset amount agencies are seeking to ensure that a asset amount at the beginning of a 30 minus 0.6667 (or 40/60, which is the covered company will be able to rapidly calendar-day stress period, but that maximum ratio of allowable level 2 meet its liquidity needs in a period of would have matured by the end of the liquid assets to level 1 liquid assets) stress. The agencies recognize that 30 calendar-day stress period. For times the adjusted level 1 liquid asset covered companies may make example, absent the unwinding of these amount; or (2) zero. The adjusted level investment decisions pertaining to transactions, a covered company that 2B cap excess amount would be individual assets within HQLA held only level 2 liquid assets could calculated by taking the greater of: (1) categories and the agencies believe that have appeared to be compliant with the The adjusted level 2B liquid asset there is adequate availability of level 1 level 2 liquid asset composition cap at amount less the adjusted level 2 cap liquid assets. In choosing the assets that the calculation date by borrowing on an excess amount less 0.1765 (or 15/85, would have qualified as level 1 liquid overnight term a level 1 liquid asset which is the maximum ratio of assets under the proposed rule, the (such as cash or U.S. Treasuries) allowable level 2B liquid assets to the agencies considered whether there secured by level 2 liquid assets. While sum of level 1 liquid assets and level 2A would be adequate availability of such doing so would have lowered the liquid assets) times the sum of the assets during a stress period, to ensure covered company’s amount of level 2 adjusted level 1 liquid asset amount and the appropriateness of the asset’s liquid assets and increased its amount the adjusted level 2A liquid asset designation as the highest quality asset of level 1 liquid assets, the covered amount; or (2) zero. The adjusted excess under the proposed rule. Further, given company would have had a HQLA amount would have been the the liquidity characteristics of the asset concentration of level 2 liquid assets sum of the adjusted level 2 cap excess classes included in level 2B liquid above the 40 percent cap after the amount and the adjusted level 2B cap assets, the agencies continue to believe transaction was unwound. Therefore, excess amount. that these assets should constitute no the calculation of the adjusted excess One commenter requested that the more than 15 percent of a covered HQLA amount and, if greater than agencies remove the unwind company’s HQLA amount. Therefore the unadjusted excess HQLA amount, its requirement from the rule because of the final rule adopts the unadjusted subtraction from the sum of the level 1, operational complexity required to calculations as proposed in level 2A, and level 2B liquid asset calculate the covered institution’s § l.21(c)–(e). amounts, would have prevented a HQLA both before and after the unwind. covered company from avoiding the Another commenter asked whether the c. Calculation of Adjusted Excess HQLA agencies have considered permitting Amount level 2 liquid asset cap limitations. In order to calculate the adjusted covered companies to calculate the The agencies believed that the excess HQLA amount, the proposed rule value of their HQLA under the proposed level 2 caps and haircuts would have required a covered International Financial Reporting should apply to the covered company’s company, for this purpose only, to Standards method of accounting rather HQLA amount both before and after the calculate adjusted level 1, level 2A, and than GAAP. unwinding of certain types of secured level 2B liquid asset amounts. The The agencies believe that it is crucial transactions where eligible HQLA is adjusted level 1 liquid asset amount for a covered company to assess the exchanged for eligible HQLA in the next would have been the fair value, as composition of its HQLA amount both 30 calendar days, in order to ensure that determined under GAAP, of the level 1 on an unadjusted basis and on a basis the HQLA amount is appropriately liquid assets that are held by a covered adjusted for certain transactions that diversified and not the subject of company upon the unwinding of any directly impact the composition of manipulation. The proposed calculation secured funding transaction, secured eligible HQLA. The agencies believe of the adjusted excess HQLA amount on lending transaction, asset exchanges, or that these calculations are justified in this basis sought to prevent a covered collateralized derivatives transaction order to ensure an HQLA amount of company from being able to manipulate that matures within a 30 calendar-day adequate quality of composition and its eligible HQLA by engaging in period and that involves an exchange of diversification and to ensure that transactions such as certain repurchase eligible HQLA, or cash. Similarly, the covered companies actually have the or reverse repurchase transactions adjusted level 2A and adjusted level 2B ability to monetize such assets during a because the HQLA amount, including liquid asset amounts would only have stress period. The agencies do not

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believe that it would be appropriate to relationships when determining the that banking organizations likely would use alternative methods of accounting adjusted excess HQLA amount. have to limit the amount of preferred beyond GAAP in determining the HQLA Commenters argued that the unwind deposits and collateralized corporate amount. The agencies note that for treatment effectively leads covered trust deposits they accept, further regulatory reporting purposes, generally, companies to exclude from their HQLA reducing the interest paid on preferred a covered company must report data amounts both the cash from the deposits and corporate trust deposits, or using GAAP. It would likely increase deposits, which would be eligible eliminating earnings credits extended to burden on covered companies that HQLA, and also any collateral pledged state and municipal depositors. typically apply GAAP, which includes to secure the deposit. Furthermore, as preferred deposits may the vast majority of covered companies, Several commenters pointed out that be collateralized with municipal to use another method of accounting to the agencies proposed the unwind securities, commenters contended that calculate HQLA. In addition, to permit treatment of secured transactions to banks’ decreased appetite for accepting certain covered companies to use an ensure that banking organizations do municipal fund deposits would also alternate method of accounting would not manipulate their HQLA amounts lead to reduced investments in reduce the comparability of the through repurchase and reverse municipal securities. information across covered companies. repurchase transactions. These Finally, several commenters requested As noted above, the LCR is intended to commenters contended that covered that, if the agencies do not exclude be a standardized liquidity metric, companies would not use preferred collateralized deposits from the secured designed to promote a consistent and deposits and collateralized corporate transaction unwind, that the agencies comparable view of the liquidity of trust deposits to inflate their HQLA should apply a maximum outflow for covered companies. The agencies are amounts because of the long-term nature such deposits that (for example, 15 or 25 finalizing the adjusted excess HQLA of the banking relationships. percent), irrespective of the collateral amount calculation with two Commenters expressed the opinion that being used to secure the deposit. collateralized deposits represent stable, amendments to the proposed rule. First, In response to commenters’ concerns, relationship-based deposits and are the agencies are clarifying that, in a the final rule does not require a covered generally placed in connection with manner similar to the calculation of the company to unwind certain secured certain operational services provided by level 1 liquid asset amount, the adjusted funding transactions that are the bank. These commenters maintained level 1 liquid asset amount (used solely collateralized deposits. As several for the purpose of calculating the that collateralized deposits are very different in nature from other secured commenters noted, the proposed adjusted excess HQLA amount) must unwind methodology was intended to include the deduction of the covered funding transactions, such as repurchase agreements where prevent a covered company from company’s reserve balance requirement manipulating the composition of its under section 204.5 of Regulation D (12 collateralization is a function of the transaction between counterparties, HQLA amount by engaging in CFR 204.5). Second, the agencies are transactions such as repurchase or exempting certain secured funding rather than imposed by a third party, and should not raise the concerns the reverse repurchase agreements that transactions from inclusion in the could ultimately unwind within the 30 unwind as described below. agencies were seeking to address with the unwind calculation relating to the calendar-day stress period. The agencies d. Unwind Treatment of Collateralized manipulation of the HQLA amount. are aware that certain preferred deposits Deposits Commenters urged the agencies to and corporate trust deposits are required exclude collateralized deposits from the to be collateralized under applicable A number of commenters pointed out law and agree with commenters that the that certain deposits are legally required requirement to unwind secured funding transactions for the purposes of longer-term, deposit banking to be collateralized. For instance, determining a covered company’s relationships associated with preferred deposits placed by states and adjusted excess HQLA amount. These deposits and collateralized corporate municipalities, known as preferred commenters contended that the trust deposits can be different in nature deposits, are often required to be proposed unwind treatment of from shorter-term repurchase and collateralized under state law. municipal fund deposits would have a reverse repurchase agreements. After Commenters further pointed out that in major impact, limiting the choice of considering commenters’ concerns, the some instances, deposits are required to banks from which state and municipal agencies believe that certain be collateralized by specific collateral treasurers could obtain treasury collateralized deposits do not raise the which would not have been HQLA management and other banking services. concerns the agencies were seeking to under the proposed rule. Additionally, Certain commenters asserted that the address with the unwind calculation. federal law requires certain corporate The agencies believe that a covered 57 proposed rule would lead banks to trust deposits to be collateralized. accept limited municipal fund deposits, company would be unlikely to pursue Several commenters highlighted that thereby increasing the costs to these collateralized deposit these types of collateralized deposits municipalities who rely on earning relationships for the purposes of would have been treated as secured credits generated by deposits to pay for manipulating the composition of their funding transactions under the banking services. Commenters also were HQLA amounts. Therefore, the final rule proposed rule, requiring a covered concerned that applying the unwind does not require a covered company to company to unwind these deposit mechanism to preferred public sector unwind secured funding transactions deposits would discourage banks from that are collateralized deposits as 57 Pursuant to OCC regulations, a national bank or federal savings association may place funds for accepting these deposits because of the defined in the final rule when which the bank is a fiduciary on deposit in the bank potential negative impact on their LCR determining its adjusted excess HQLA (such deposits are often referred to as ‘‘self- calculations. This in turn could raise the amount. The agencies highlight that deposits’’). The regulations require that the bank set cost of capital for municipalities and these deposits continue to be subject to aside collateral to secure self-deposits to the extent they are not insured by the FDIC. See 12 CFR undermine public policy goals of an outflow assumption, as addressed in 9.10(b) (national banks); 12 CFR 150.300–50.320 infrastructure maintenance and section II.C.3.j.(ii) of this Supplementary (federal savings associations). development. These commenters stated Information section.

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In the final rule, the agencies a covered company should apply the assets that the covered company must included a definition for collateralized unwind treatment to secured funding post to the counterparty are either: (a) deposits in order to implement the transactions (other than secured funding eligible HQLA at the calculation date, or exclusion of these specific types of transactions that are collateralized (b) would be eligible HQLA at the transactions from the unwind deposits), secured lending transactions, calculation date if they were not already calculation and to identify the asset exchanges and collateralized securing a secured funding transaction, transactions as potentially eligible for derivatives where the maturity of the or delivered in an asset exchange, that certain outflow rates. The final rule transaction within 30 calendar days of will mature within 30 calendar days of defines collateralized deposits as either: the calculation date will involve the the calculation date and which is also (1) A deposit of a public sector entity covered company providing an asset being unwound in determining the held at the covered company that is that is eligible HQLA or cash and the adjusted level 1, adjusted level 2A, and secured under applicable law by a lien counterparty providing an asset that adjusted level 2B liquid asset amounts. on assets owned by the covered will be eligible HQLA or cash. Eligible company and that gives the depositor, HQLA meet the operational f. Example HQLA Calculation as holder of the lien, priority over the requirements set forth in § l.22 of the The following is an example assets in the event the covered company final rule, including the requirement calculation of the HQLA amount that enters into receivership, bankruptcy, that the eligible HQLA are under the would be required under the final rule. insolvency, liquidation, resolution, or control of the liquidity management Note that the given liquid asset amounts similar proceeding, or (2) a deposit of a function. Consistent with the Basel III and adjusted liquid asset amounts fiduciary account held at the covered Revised Liquidity Framework, the already reflect the level 2A and 2B company for which the covered agencies believe that a covered company haircuts. company is a fiduciary and sets aside should not be required to unwind (a) Calculate the liquid asset amounts (§ l assets owned by the covered company transactions involving assets that do not .21(b)) as security under 12 CFR 9.10 (national meet or will not meet these operational The following values are given: banks) or 12 CFR 150.300 through requirements when calculating its Fair value of all level 1 liquid assets that are 150.320 (Federal savings associations) adjusted excess HQLA amount. A eligible HQLA: 17 and that gives the depositor priority covered company should, however, Covered company’s reserve balance over the assets in the event the covered consider all such transactions in requirement: 2 company enters into receivership, determining its net cash outflow amount Level 1 liquid asset amount (§ l.21(b)(1)): 15 bankruptcy, insolvency, liquidation, under the final rule. Level 2A liquid asset amount: 25 Consistent with the Basel III Revised Level 2B liquid asset amount: 140 resolution, or similar proceeding. Sum of level 1, level 2A, and level 2B liquid Liquidity Framework and § l.32(j)(1) of asset amounts: 180 e. Unwind Treatment of Transactions the final rule, secured funding Involving Eligible HQLA (b) Calculate unadjusted excess HQLA transactions maturing within 30 amount (§ l.21(c)) One commenter requested that the calendar days of the calculation date Step 1: Calculate the level 2 cap excess agencies clarify that only transactions that involve the exchange of eligible amount (§ l.21(d)): that are conducted by or for the benefit HQLA are those where the HQLA Level 2 cap excess amount = Max (level 2A of the liquidity management function securing the secured funding liquid asset amount + level 2B liquid asset receive unwind treatment when a transaction would otherwise qualify as amount—0.6667*level 1 liquid asset covered company calculates its adjusted eligible HQLA if they were not already amount, 0) excess HQLA amount. The commenter securing the particular transaction in = Max (25 + 140¥0.6667*15, 0) expressed the view that the proposed question. = Max (165—10.00, 0) rule did not limit the unwind Similarly, and consistent with § l = Max (155.00, 0) methodology to only transactions .33(f)(1) of the final rule, secured = 155.00 involving the eligible HQLA that were lending transactions that involve the Step 2: Calculate the level 2B cap excess l under the control of the liquidity exchange of eligible HQLA are those amount (§ .21(e)). management function for purposes of where the assets securing the secured Level 2B cap excess amount = Max (level 2B § l.20(d)(2) in the proposed rule. This lending transaction are: (1) Eligible liquid asset amount—level 2 cap excess amount—0.1765*(level 1 liquid asset commenter urged that transactions HQLA at the calculation date, or (2) amount + level 2A liquid asset amount), 0) undertaken outside of the liquidity would be eligible HQLA at the = Max (140¥155.00—0.1765*(15+25), 0) management function would be calculation date if they had not been = Max (¥15—7.06, 0) reflected in the calculation of net cash reused to secure a secured funding = Max (¥22.06, 0) outflows and should not be transaction, or delivered in an asset = 0 incorporated in the HQLA amount exchange, maturing within 30 calendar Step 3: Calculate the unadjusted excess calculation. Moreover, the commenter days of the calculation date and which HQLA amount (§ l.21(c)). contended that excluding secured is also being unwound in determining Unadjusted excess HQLA amount = Level 2 funding transactions that are not under the adjusted level 1, adjusted level 2A, cap excess amount + Level 2B cap excess the liquidity management function is and adjusted level 2B liquid asset amount consistent with the agencies’ intent to amounts. = 155.00 + 0 capture only those transactions that a Consistent with § l.32(j)(3) and § l = 155 .33(f)(2) of the final rule, asset exchange (c) Calculate the adjusted liquid asset covered company may use to amounts, based upon the unwind of certain manipulate its HQLA amount. Lastly, transactions involving the exchange of transactions involving the exchange of the commenter noted that the Basel III eligible HQLA are those where the eligible HQLA or cash (§ l.21(f)). Revised Liquidity Framework only covered company will, at the maturity The following values are given: applied the unwind methodology to of the asset exchange transaction within Adjusted level 1 liquid asset amount: 120 transactions that met operational 30 calendar days of the calculation date: Adjusted level 2A liquid asset amount: 50 requirements. (1) Receive assets from the asset Adjusted level 2B liquid asset amount: 10 In response to the commenter’s exchange counterparty that will be (d) Calculate adjusted excess HQLA request, the agencies are clarifying that eligible HQLA upon receipt, and (2) the amount (§ l.21(g)).

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Step 1: Calculate the adjusted level 2 cap amounts over a period of 30 calendar daily net cumulative cash outflow excess amount (§ l.21(h)). days following a calculation date (the amount within the following 30 Adjusted level 2 cap excess amount = Max peak day approach) to arrive at its total calendar-day period rather than using (adjusted level 2A liquid asset amount + net cash outflows. total net cash outflows over a 30 adjusted level 2B liquid asset amount— The agencies received comments calendar-day period, which is the 0.6667*adjusted level 1 liquid asset requesting modification to the method employed by the Basel III amount, 0) calculation of net cash outflows and to Revised Liquidity Framework. The = Max (50 + 10—0.6667*120, 0) = Max (60—80.00, 0) the maturity assumptions set forth in agencies elected to employ this peak = Max (¥20.00, 0) the proposed rule. In addition, day approach to take into account = 0 commenters argued that some of the potential maturity mismatches between Step 2: Calculate the adjusted level 2B cap proposed outflow and inflow rates a covered company’s outflows and excess amount (§ l.21(i)). should be adjusted. To address inflows during the 30 calendar-day Adjusted level 2B cap excess amount = Max commenters’ concerns, the agencies are period; that is, the risk that a covered (adjusted level 2B liquid asset amount— modifying the net outflow calculation company could have a substantial adjusted level 2 cap excess amount— by including an add-on, as well as amount of contractual inflows that 0.1765*(adjusted level 1 liquid asset modifying the provisions on occur late in a 30 calendar-day period amount + adjusted level 2A liquid asset determining maturity. With respect to while also having substantial outflows amount, 0) outflow and inflow rates, the agencies that occur early in the same period. = Max (10—0—0.1765*(120+50), 0) are generally finalizing the rule as Such mismatches have the potential to = Max (10—30.00, 0) proposed with few changes. ¥ threaten the liquidity position of the = Max ( 20.00, 0) organization during a time of stress and = 0 1. The Total Net Cash Outflow Amount would not be apparent under the Basel Step 3: Calculate the adjusted excess Under the proposed rule, the total net III Revised Liquidity Framework HQLA amount (§ l.21(g)). cash outflow amount would have denominator calculation. By requiring Adjusted excess HQLA amount = adjusted equaled the largest daily difference the recognition of the largest net level 2 cap excess amount + adjusted level between cumulative inflow and cumulative outflow day within the 30 2B cap excess amount cumulative outflow amounts, as calendar-day period, the proposed rule = 0 + 0 calculated over the 30 calendar days = 0 aimed to more effectively capture a following a calculation date. For covered company’s liquidity risk and (e) Determine the HQLA amount (§ l purposes of this calculation, outflows .21(a)). foster more sound liquidity addressed in § l.32(a) through § l HQLA Amount = Level 1 liquid asset amount management. .32(g)(2) of the proposed rule that did As noted above, cumulative cash + level 2A liquid asset amount + level 2B not have a contractual maturity date liquid asset amount—Max (unadjusted inflows would have been capped at 75 excess HQLA amount, adjusted excess would have been assumed to occur on percent of aggregate cash outflows in the HQLA amount) the first day of the 30 calendar-day calculation of total net cash outflows. = 15 + 25 + 140—Max (155, 0) period. These outflow amounts This limit would have prevented a = 180—155 included those for unsecured retail covered company from relying = 25 funding, structured transactions, net exclusively on cash inflows, which may derivatives, mortgage commitments, C. Net Cash Outflows not materialize in a period of stress, to commitments, collateral, and certain cover its liquidity needs and ensure that Subpart D of the proposed rule brokered deposits. Also, the proposed covered companies maintain a established the total net cash outflows rule treated transactions in § l.32(g)(3) minimum HQLA amount to meet (the denominator of the LCR), which through § l.32(l) as maturing on their unexpected liquidity demands during sets the minimum dollar amount that is contractual maturity date or on the first the 30 calendar-day period. required to be offset by a covered day of the 30 calendar-day period, if Comments related to the method of company’s HQLA amount. As set forth such transaction did not have a calculation of the total net cash outflow in the proposed rule, a covered contractual maturity date. These amount in § l.30 of the proposed rule company would have first determined transactions included certain brokered focused around two general concerns: outflow and inflow amounts by deposits, unsecured wholesale funding, the peak day approach calculation and applying a standardized set of outflow debt securities, secured funding and the 75 percent inflow cap. and inflow rates to various asset and asset exchanges, foreign central bank liability balances, together with off- borrowings, and other contractual and a. Peak Day Approach balance-sheet commitments, as excluded transactions. Inflows, which Commenters expressed mixed views specified in §§ l.32 and 33 of the would have been netted against on the requirement to calculate the total proposed rule. These outflow and outflows on a daily basis, included net cash outflow amount using the inflow rates reflected key aspects of derivatives, retail cash, unsecured largest daily difference between liquidity stress events including those wholesale funding, securities, secured cumulative cash outflows and inflows. experienced during the most recent lending and asset exchanges, and other Some commenters recognized the financial crises. To identify when inflows. Inflows from transactions concerns of the agencies in addressing outflow and inflow amounts occur without a stated maturity date would the risk that a banking organization may within the 30 calendar-day period have been excluded under the proposed not have sufficient liquidity to meet all following the calculation date, a covered rule based on the assumption that the its obligations throughout the 30 company would have been required to inflows from such non-maturity calendar-day period. One commenter employ a set of maturity assumptions, transactions would occur after the 30 supported the approach, noting the as set forth in § l.31 of the proposed calendar-day period. Allowable inflow importance of measuring a covered rule. A covered company would have amounts were capped at 75 percent of company’s ability to withstand the then calculated the largest daily aggregate cash outflows. largest liquidity demands within a 30 difference between cumulative inflow The proposed rule set the calendar-day period. However, several amounts and cumulative outflow denominator of the LCR as the largest commenters expressed concern that the

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approach deviated too far from the Basel early portion of a 30 calendar-day between that peak day amount and the III Revised Liquidity Framework and period. Another commenter stated that net cumulative outflow amount on the was unrealistic or impractical in the largest U.S. banking organizations last day of the 30 calendar-day period assuming that cash flows without did not experience a 100 percent runoff for those same outflow and inflow contractual maturity dates would occur on any single day for any class of categories that have maturity dates on the first day of a 30 calendar-day deposits during the most recent within the 30 calendar-day period. This period, thereby effectively rendering a financial crisis and that such a runoff difference equals the add-on. 30-day liquidity standard a one-day would be impossible because In calculating the add-on, both the net standard. Some of these commenters withdrawals of that magnitude could cumulative peak day amount and the suggested that the agencies adopt a not be processed by the U.S. Automated net cumulative outflow amount on the different treatment for non-maturity Clearing House system. Commenters last day of the 30 calendar-day period outflows, such as assuming that the further argued that certain assumptions cannot be less than zero. The categories outflows occur consistently throughout were unrealistic by stating that no of inflows and outflows included in the the month, i.e., a straight-line approach, market would even be deep enough to add-on calculation comprise those or more rapidly at the beginning of the absorb the volume of HQLA monetized categories that are the most likely to month, i.e., a front-loaded approach. to meet the assumed outflows. Another expose covered companies to maturity Further, a number of commenters commenter argued that the proposed mismatches within the 30 calendar-day asserted that the peak day approach rule could reduce banking period, such as repurchase agreements created operational complexities and organizations’ provision of non-deposit, and reverse repurchase agreements with requested that the agencies perform non-maturity funding, such as floating financial sector entities, whereas additional diligence before rate demand notes, due to the higher outflows such as non-maturity retail implementing this requirement in the outflow assumption and the accelerated deposits are not a part of the add-on final rule. maturity assumption. calculation. The final rule clarifies that Many commenters argued that the The agencies are addressing the only non-maturity outflows peak day approach was a significant commenters’ concerns by modifying the included in the calculation of the add- departure from the Basel III Revised proposed net cumulative peak day on are those that are determined to have Liquidity Framework that could have approach. First, as in the proposed rule, a maturity date of the day after the international competitive repercussions, a covered company would calculate its calculation date, pursuant to § l as U.S. covered companies could be outflow and inflow amounts by .31(a)(4) as described below. required to hold more HQLA than their applying the final rule’s standardized The amounts calculated in steps one foreign counterparts. Several set of outflow and inflow rates to and two are then added together to commenters indicated that requirements various asset and liability balances, determine the total net cash outflow. to determine net cash outflows using the together with off-balance-sheet This approach ensures that the final rule ‘‘worst day’’ over the 30 calendar-day commitments. However, unlike the avoids potential unintended period was not contemplated in the proposed rule and in response to consequences by eliminating the Basel III Revised Liquidity Framework, commenters’ concerns, the modified proposed rule’s assumption that all non- and thus should not be incorporated calculation does not assume that all maturity outflows occur on the first day into the final rule. Other commenters transactions and instruments that do not of a 30 calendar-day period while still were concerned about the international have a contractual maturity date have an achieving the underlying goal of challenges that could result from a outflow amount on the first day of the recognizing maturity mismatches. The divergence and argued that the peak day 30 calendar-day period. Instead, the agencies recognize that the revised approach should first be implemented calculation would use an add-on approach involves calculations and internationally to provide a greater approach that would substantively operational complexity not acceptance and understanding of the achieve the proposal’s goal of contemplated by the Basel III Revised requirement. A few commenters addressing potential maturity Liquidity Framework and could requested that the agencies conduct a mismatches between a covered potentially require some covered quantitative study and analysis to form company’s outflows and inflows. companies to hold more HQLA than the basis of any net cash outflow The add-on approach involves two under the Basel III Revised Liquidity calculation that addresses maturity steps. First, cash outflows and inflows Framework. However, the agencies have mismatches. over the 30 calendar-day period are concluded that the liquidity risks posed Commenters indicated that aggregated and netted against one by maturity mismatches are significant assumptions underlying the net another, with the aggregated inflows and must be addressed to ensure that cumulative peak day approach were capped at 75 percent of the aggregated the LCR in the U.S. will be a sufficiently unrealistic, involved significant outflows. This first step is similar to the rigorous measure of a covered operational challenges, and could cause method for calculating net cash company’s liquidity resiliency. unintended consequences. Commenters outflows in the Basel III Revised Table 1 illustrates the final rule’s argued that deposits with indeterminate Liquidity Framework. The second step determination of the total net cash maturities, including operational calculates the add-on, which requires a outflow amount using the add-on deposits, could not all be drawn on the covered company to identify the largest approach. Using Table 1, which is first day of a stress scenario because a single-day maturity mismatch within populated with similar values as the banking organization does not have the the 30 calendar-day period by corresponding table in the proposed necessary operational capability to calculating the daily difference in rule, a covered company would fulfill such outflow requests. Several cumulative outflows and inflows that implement the first step of the add-on commenters had specific concerns have set maturity dates, as specified by approach by aggregating the cash relating to retail deposits being drawn § l.31 of the final rule, within the 30 outflow amounts in columns (A) and on the first day of a 30 calendar-day calendar-day period. The day with the (B), as calculated under § l.32, and period, arguing that such an assumption largest difference reflects the net subtract from that aggregated amount materially overstates a banking cumulative peak day. The covered the lesser of 75 percent of that organization’s liquidity needs in the company then calculates the difference aggregated amount and the aggregated

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cash inflow amounts in columns (D) and (f) (column F) that have maturity dates value and zero less the greater of the day (E), as calculated under § l.33. The pursuant to § l.31 for each day within 30 value of column (G) and zero is the second step of the add-on approach the 30 calendar-day period. The covered add-on. To determine the total net cash calculates the add-on. The covered company would then determine (G), the outflow amount, the covered company company would cumulate the cash net cumulative cash outflows, by would add the aggregated net cash outflows determined under § l.32(g), subtracting column (F) from column (C) outflow amount calculated in the first (h)(1), (h)(2), (h)(5), (j), (k), and (l) for each day. The net cumulative peak step and the add-on. (column C) and cash inflows day amount would be the largest value determined under § l.33(c), (d), (e), and of column (G). The greater of that peak TABLE 1—DETERMINATION OF TOTAL NET CASH OUTFLOW USING THE ADD-ON APPROACH

Non-maturity Cumulative outflows and Outflows outflows Inflows Cumulative inflows outflows that have determined determined Inflows that have determined determined a maturity date under sections under sections a maturity date under sections pursuant to pursuant to 32(g), (h)(1), 32(g), (h)(1), pursuant to 33(c), (d), (e), and sections 33(c), Net cumulative section 31, but (h)(2), (h)(5), (j), (h)(2), (h)(5), (j), section 31, but not (f) that have a (d), (e), and (f) maturity not under sections (k), and (l) that (k), and (l) that under sections maturity date that have a outflows 32(g), (h)(1), have a maturity have a maturity 33(c), (d), (e), pursuant to maturity date (h)(2), (h)(5), (j), date pursuant to date pursuant to and (f) section 31 pursuant to (k), (l) section 31 section 31 section 31

A B C D E F G

Day 1 ...... 100 100 ...... 90 90 10 Day 2 ...... 20 120 ...... 5 95 25 Day 3 ...... 10 130 ...... 5 100 30 Day 4 ...... 15 145 ...... 20 120 25 Day 5 ...... 20 165 ...... 15 135 30 Day 6 ...... 0 165 ...... 0 135 30 Day 7 ...... 0 165 ...... 0 135 30 Day 8 ...... 10 175 ...... 8 143 32 Day 9 ...... 15 190 ...... 7 150 40 Day 10 ...... 25 215 ...... 20 170 45 Day 11 ...... 35 250 ...... 5 175 75 Day 12 ...... 10 260 ...... 15 190 70 Day 13 ...... 0 260 ...... 0 190 70 Day 14 ...... 0 260 ...... 0 190 70 Day 15 ...... 5 265 ...... 5 195 70 Day 16 ...... 15 280 ...... 5 200 80 Day 17 ...... 5 285 ...... 5 205 80 Day 18 ...... 10 295 ...... 5 210 85 Day 19 ...... 15 310 ...... 20 230 80 Day 20 ...... 0 310 ...... 0 230 80 Day 21 ...... 0 310 ...... 0 230 80 Day 22 ...... 20 330 ...... 45 275 55 Day 23 ...... 20 350 ...... 40 315 35 Day 24 ...... 5 355 ...... 20 335 20 Day 25 ...... 40 395 ...... 5 340 55 Day 26 ...... 8 403 ...... 125 465 ¥62 Day 27 ...... 0 403 ...... 0 465 ¥62 Day 28 ...... 0 403 ...... 0 465 ¥62 Day 29 ...... 5 408 ...... 10 475 ¥67 Day 30 ...... 2 410 ...... 5 480 ¥70

Total ...... 300 410 ...... 100 480 ......

Total Net Cash Outflows = Aggregated Outflows ¥ MIN (.75*Aggregated Outflows,Aggregated Inflows) + Add-On. = 300 + 410¥MIN (100 + 480, .75 * (300 + 410)) + (MAX (0,85) ¥ MAX(0,¥70)). = 710 ¥ 532.5 + (85 ¥ 0). = 262.5.

b. Inflow Cap the rule largely as proposed, except for that the agencies make a distinction a modification relating to the netting of between contractual and contingent Under the proposed rule, a covered certain foreign currency derivative inflows, and only apply the inflow cap company’s total cash inflow amount transactions. to the latter category. The commenter would have been capped at 75 percent also noted that the application of the of its total cash outflows. This was One commenter noted that while cap could cause asymmetric treatment designed to ensure that covered there is a recognizable policy rationale companies would hold a minimum for the 75 percent inflow cap, of certain categories of transactions that HQLA amount equal to at least 25 application of the rule in all may be perceived as being linked in the percent of total cash outflows. The circumstances may result in normal course of business. For example, agencies received a number of unwarranted or unintended outcomes. the commenter suggested that the inflow comments on this provision of the Some commenters suggested application leg of a foreign exchange swap proposed rule, including requests for of the inflow cap to individual types of transaction should not be subject to the modifications to the cap. However, for inflows rather than as a restriction on 75 percent inflow cap. Rather, the full the reasons discussed below, the the entire LCR denominator. For amount of the inflow leg should be agencies are adopting this provision of instance, one commenter recommended counted and netted against the

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corresponding outflow leg in the net inflows are from other financial to adjust the maturity date of an derivative outflow amount (under institutions. Consequently, the agencies instrument is subject to a notice period, § l.32(c) of the proposed rule). Other are retaining the limitation of inflows at a covered company would have been commenters requested that loans of 75 percent of total cash outflows in the required to either disregard or take into securities to cover customer short final rule. No inflow cap will apply to account the notice period, depending positions be exempt from the 75 percent the calculation of the maturity upon whether the instrument was an inflow cap in the final rule where the mismatch add-on. outflow or inflow instrument and covered company obtains the security Notwithstanding the agencies’ general whether the notice requirement through a repurchase agreement because view regarding the inflow cap, the belonged to the covered company or its all related transactions would unwind agencies have made a change to the counterparty. simultaneously and net out. proposed rule in response to the Many commenters expressed concern Commenters opined that the application comments received. Certain foreign that the proposed requirements for of the proposed rule’s inflow cap would currency exchange derivative cash flows determining maturity with respect to result in a net liquidity outflow across are to be treated on a net basis and have options may conflict with the legal the secured transactions despite the therefore effectively been removed from agreements underlying those transactions’ symmetry and result in an the gross inflow cap calculation. This transactions. One commenter argued overestimation of net outflows, instead change is described in more detail in that the proposed rule would have of full recognition of secured lending section II.C.3.c of this Supplementary assumed that covered companies would inflows where the banking organization Information section. disregard customer contractual 30-day notice periods. The commenter has the contractual right and practical 2. Determining Maturity ability to terminate the loan and receive requested that commitment outflows cash back from a counterparty in Section l.31 of the proposed rule that are subject to a mandatory notice response to a change in offsetting would have required a covered period of more than 30 days not be customer positions. company to identify the maturity date or subject to an outflow amount because Other commenters indicated that the date of occurrence of a transaction that the notice period practically prevents an release of previously segregated funds is the most conservative when outflow and therefore the notice period held to comply with Rule 15c3–3 calculating inflow and outflow amounts; should be recognized. Other should not be subject to the 75 percent that is, the earliest possible date for commenters requested clarification as to inflow cap, but should be given full outflows and the latest possible date for whether an acceleration provision that inflow credit.58 Another commenter inflows. In addition, under § l.30 of the may be exercised in the event of a noted that certain covered nonbank proposed rule, a covered company’s default or other remote contingencies, companies cannot deposit excess cash total net outflow amount as of a such as the right to call certain funding in Federal Reserve Banks, and instead calculation date would have included facilities, would count as an option for tend to deposit such funds in third- outflow amounts for certain instruments the purposes of determining maturity. party commercial banks. This that do not have contractual maturity Another commenter argued that the commenter recommended that the dates and outflows and inflows that proposed requirements for determining inflows from such deposits should not mature prior to or on a day 30 calendar maturity should have taken into account be subject to the 75 percent cap. Several days or less after the calculation date. the timing of a redemption period and commenters requested that the agencies Section l.33 of the proposed rule whether or not the period had lapsed. eliminate the application of inflow caps would have expressly excluded Commenters also objected to the for covered subsidiaries of covered instruments with no maturity date from application of the ‘‘nearest possible companies in the calculation of the a covered company’s total inflow date’’ assumption to commitment subsidiaries’ own LCR. amount. outflows supporting debt maturing The agencies continue to believe the The proposed rule described how within a 30 calendar-day period because total inflow cap is a key requirement of covered companies would have it would assume that such commitment the LCR calculation because it ensures determined whether certain instruments outflows would occur on the first day of covered companies hold a minimum mature or transactions occur within the a 30 calendar-day period rather than the HQLA amount equal to 25 percent of 30 calendar-day period when debt instrument’s actual maturity date. total cash outflows that will be available calculating outflows and inflows. The Several commenters indicated that the during a stress period. The agencies proposed rule also would have required assumptions underlying the believe it is critical for firms to maintain covered companies to take the most requirements in § l.31 of the proposed on-balance sheet assets to meet outflows conservative approach when rule were counterintuitive and not and not be overly reliant on inflows that determining maturity with respect to consistent with economic behavior. For may not materialize in a stress scenario. any options, either explicit or instance, one commenter argued that The agencies decline to significantly embedded, that would have modified requiring a covered company to assume modify this provision to relax the cap maturity dates and with respect to any that options are always exercised would on inflows because, without it, a notice periods. If such an option existed imply that the covered company must covered company may be holding an for an outflow instrument or always disadvantage itself in a stress amount of HQLA that is not transaction, the proposed rule would scenario. Another commenter observed commensurate with the risks of its have directed a covered company to that no market expectation exists for a funding structure under stress assume that the option would be covered company to exercise a call conditions. Reducing the inflow cap and exercised at the earliest possible date. If option on long-term debt in a stressed allowing covered companies to rely such an option existed for an inflow environment and such behavior was not more heavily on inflows to offset instrument or transaction, the proposed evident in the recent financial crisis, outflows likely would increase the rule would have required covered and therefore should not be an interconnectedness of the financial companies to assume that the option assumption of the final rule. system, as a substantial amount of would be exercised at the latest possible Several commenters requested that date. In addition, the proposed rule the agencies clarify the treatment of 58 17 CFR 240.15c3–3. would have provided that if an option legal notice periods for obligations such

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as wholesale deposit agreements or holding an option to reduce the deposits, subject to § l.32(h)(2), (h)(5), revolving credit facilities. Another maturity of a transaction subject to (j), or (k), or § l.33(d) or (f) that do not commenter argued that in times of § l.32, assume the option will be have maturity dates will be considered stress, certain customers with non- exercised; (d) for a covered company to have a maturity date on the first maturity obligations, including retail or holding an option to extend the calendar day after the calculation date. operational deposits, engage in ‘‘flight to maturity of a transaction subject to This change will primarily affect certain quality behavior,’’ making it unlikely § l.32, assume the option will not be transactions with financial sector that all such customers would liquidate exercised; (e) for a borrower holding an entities. The maturity of these their positions simultaneously. Other option to extend the maturity of a transactions is often referred to as commenters recognized that while transaction subject to § l.33, assume ‘‘open.’’ The agencies believe these covered companies might make certain the option will be exercised; (f) for a transactions are similar to overnight disadvantageous decisions to benefit borrower holding an option to reduce deposits from financial institutions and retail customer relations, they and their the maturity of a transaction subject to for purposes of the LCR, are treating wholesale counterparties should be § l.33, assume the option will not be them the same. Therefore, for these assumed to act rationally with respect to exercised; (g) for a covered company types of ‘‘open’’ transactions with exercising options, and should be holding an option to reduce the financial sector entities and other assumed to abide by their contractual maturity of a transaction subject to transactions subject to § l.32(h)(2), obligations. § l.33, assume the option will not be (h)(5), (j), or (k), or § l.33(d) or (f) that Commenters expressed concern that exercised; and (h) for a covered do not have maturity dates and are not the maturity assumptions employed in company holding an option to extend operational deposits, the final rule the proposed rule overstated near-term the maturity of a transaction subject to provides that for purposes of the LCR, liquidity risk. Several commenters § l.33, assume the option will be the maturity date will be the first argued that the maturity assumptions of exercised. calendar day after the calculation date. the proposed rule would require that The final rule makes an exception for An additional change in the final rule certain maturity deposits, including longer-term callable bonds and treats for determining maturity pertains to brokered time deposits, be treated as the original maturity of the instrument matched secured lending transactions or non-maturity deposits because the as the maturity for purposes of the LCR. asset exchanges with a contractual customer was provided an The final rule provides that when a maturity of 30 days or less that generate accommodation to allow for early bond issued by a covered company has an inflow to the covered company in the withdrawal. These commenters an original maturity greater than one form of collateral (inflow-generating requested that the agencies undertake an year and the call option held by the asset exchange) and the company then empirical analysis of the maturity covered company does not go into effect uses the received collateral in a secured assumptions for such instruments. until at least six months after the funding transaction or asset exchange Another commenter argued that the issuance, the original maturity of the with a contractual maturity of 30 days combination of a peak cumulative net bond will determine the maturity for or less that results in an outflow from cash outflow or ‘‘worst day’’ purposes of the LCR. The agencies have the covered company in the form of denominator requirement with the adjusted this provision in the final rule collateral (outflow-generating asset maturity assumptions were unrealistic because they have concluded that exchange) (see section II.C.4.f below). In and would have overstated a banking covered companies would not likely be the final rule, the maturity date of organization’s liquidity risk. Several susceptible during a period of liquidity secured lending transactions or inflow- commenters requested clarification that stress to significant market pressure to generating asset exchanges will be the a covered company would not be exercise these call options. Similarly, later of the contractual maturity date of required to assume to have exercised the agencies are amending the maturity the secured lending transaction or call options or rights to redeem its own provisions of the final rule so that a inflow-generating asset exchange and debt on wholesale funding instruments covered company does not have to the maturity date of the secured funding and long-term debt issued by the presume acceleration of the maturity of transaction or outflow-generating asset covered company. its obligation where the covered exchange for which the received The agencies have considered the company holds an option permitting it collateral was used. This treatment is a comments and have modified the to repurchase its obligation from a clarifying change consistent with the provisions on determining maturity in sovereign entity, U.S. GSE, or public intent of the proposed rule, which was the final rule to ensure that all option sector entity. In those circumstances, to prevent a covered company from types are addressed. The modifications the maturity of the obligation under the recognizing inflows resulting from result in a more accurate reflection of final rule will be the original maturity secured lending transactions or asset likely market behavior during a time of of the obligation. This change reflects exchanges earlier in the 30 calendar-day liquidity stress, based on comments and the fact that, for example, the agencies period than outflows resulting from the agencies’ observations. The believe there is less reputational secured funding transactions or asset provisions in the final rule for pressure to exercise an option to redeem exchanges, even though the collateral determining maturity remain FHLB advances early. needed to cover the maturing secured conservative. The final rule contains the Another of the final rule’s lending transaction or asset exchange following maturity assumptions for modifications of the proposed maturity will not be available until the related options: (a) For an investor or funds determination requirements clarifies outflow occurs. provider holding an option to reduce how a covered company should address The final rule also adds to the the maturity of a transaction subject to certain outflows and inflows that do not maturity provisions of the proposed rule § __.32, assume the option will be have maturity dates, as these were not a clarification that any inflow amount exercised; (b) for an investor or funds explicitly addressed in the proposed available under § l.33(g) will be provider holding an option to extend rule. Under the proposed rule, all non- deemed to occur on the day on which the maturity of a transaction subject to maturity inflows would have been the covered company or its consolidated § l.32, assume the option will not be excluded from the LCR. Under the final subsidiary calculates the release of exercised; (c) for a covered company rule, transactions, except for operational assets under statutory or regulatory

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requirements for the protection of not occur for all institutions, so the managed by a covered company in a customer trading assets, such as Rule conservative assumptions in the manner comparable to the management 15c3–3, consistent with the covered proposed and final rule with respect to of transactions of individuals. In company’s or consolidated subsidiary’s maturity are appropriate. The agencies addition, to qualify as a small business, past practice with respect to such understand that the requirements for the proposed rule would have required calculation. Under the final rule, this determining maturity may not comport that the total aggregate funding raised inflow will be assumed to occur on the with the stated requirements for call from the small business be less than date of the next regular calculation. options in some legal agreements, but $1.5 million. If an entity provides $1.5 Therefore if, for example, a broker- believe that the conservative million or more in total funding, has dealer performs this calculation on a assumptions in the final rule ensure a liquidity risks that are not similar to daily basis, the inflow would occur on more accurate assessment of a covered individuals, or the covered company the first day of the 30 calendar-day company’s liquidity resiliency through manages the customer like a corporate period, but if a broker-dealer typically the LCR. Similarly, the agencies believe customer rather than an individual performs the calculation on a weekly that taking a more conservative view of customer, the entity would have been a basis, the inflow would occur on the likely behavior during a liquidity stress wholesale customer under the proposed date of the next regularly scheduled event is critical to achieving this goal. rule. calculation. This maturity With respect to commenters’ request determination provision is necessary that the agencies provide data for the The proposed rule included in the because of the inclusion of the related maturity assumptions in the final rule, category of unsecured retail funding inflow under § l.33(g) of the final rule, the agencies note that during the recent retail deposits (other than brokered which was added in response to financial crisis, many options were deposits) that are not secured under comments received by the agencies, as exercised in a manner that was applicable law by a lien on specifically discussed below in section II.C.4.g. disadvantageous to the banking designated assets owned by the covered Several commenters requested that organization or financial institution to company and that are provided by a the agencies clarify that time deposits protect its market reputation. retail customer or counterparty. The that can be withdrawn at any time proposed rule divided unsecured retail (subject to the forfeiture of interest) 3. Outflow Amounts funding into subcategories of: (i) Stable would be subject to the earliest possible The proposed rule set forth outflow retail deposits, (ii) other retail deposits, maturity date assumption under the categories for calculating cash outflows and (iii) funding from a retail customer proposal, while deposits that cannot be and their respective outflow rates, each or counterparty that is not a retail withdrawn (but for death or as described below. The outflow rates deposit or a brokered deposit provided incompetence) would be assumed to were designed to reflect the 30 calendar- by a retail customer or counterparty, mature on the applicable maturity date. day stress scenario that formed the basis each of which would have been subject The agencies are clarifying that, for of the proposed rule, and included to the outflow rates set forth in § l purposes of the final rule, deposits that outflow assumptions for the following .32(a) of the proposed rule, as explained can only be withdrawn in the event of categories: (a) Unsecured retail funding; below. Outflow rates would have been death or incompetence are assumed to (b) structured transactions; (c) net applied to the balance of each mature on the applicable maturity date, derivatives; (d) mortgage commitments; unsecured retail funding outflow and deposits that can be withdrawn (e) commitments; (f) collateral; (g) category regardless of maturity date. brokered deposits for retail customers or following notice or the forfeiture of i. Stable Retail Deposits interest are subject to the rule’s counterparties; (h) unsecured wholesale assumptions for non-maturity funding; (i) debt securities; (j) secured The proposed rule defined a stable transactions. funding; (k) foreign central bank retail deposit as a retail deposit, the Though not resulting in a change in borrowing; (l) other contractual entire amount of which is covered by the final rule, the agencies are clarifying outflows; and (m) excluded amounts for deposit insurance, and either: (1) Held that remote contingencies in funding intragroup transactions. The agencies in a transactional account by the contracts that allow acceleration, such proposed outflow rates for each depositor, or (2) where the depositor has as withdrawal rights arising solely upon category, ranging from zero percent to another established relationship with a death or incompetence or material 100 percent, in a manner generally covered company, such that withdrawal adverse condition clauses, are not consistent with the Basel III Revised of the deposit would be unlikely.59 considered options for determining Liquidity Framework. Under the Under the proposed rule, the maturity. The agencies did not change proposed rule, the outstanding balance established relationship could have the treatment of notice periods in the of each category of funding or obligation been another deposit account, a loan, final rule as commenters requested that matured within 30 calendar days of bill payment services, or any other because reputational considerations the calculation date (under the maturity service or product provided to the may drive a covered company’s assumptions described above in section depositor, provided that the banking behavior with regard to notice periods. II.C.2) would have been multiplied by organization demonstrates to the Further, these reputational these outflow rates to arrive at the satisfaction of its appropriate Federal considerations exist for all types of applicable outflow amount. banking agency that the relationship counterparties, including wholesale and a. Retail Funding Outflow Amount would make withdrawal of the deposit not just retail, and regardless of whether highly unlikely during a liquidity stress The proposed rule defined retail there are contractual provisions favoring event. The proposed rule assigned stable the covered company. Regarding customers or counterparties to include retail deposit balances an outflow rate of commenters’ arguments that the individuals and certain small 3 percent. proposed requirements for determining businesses. Under the proposal, a small maturity do not reflect a likely flight to business would have qualified as a retail 59 For purposes of the proposed rule, ‘‘deposit quality during a period of liquidity customer or counterparty if its insurance’’ was defined to mean deposit insurance stress, the agencies believe that such transactions had liquidity risks similar provided by the FDIC and did not include other behavior cannot be relied upon and may to those of individuals and were deposit insurance schemes.

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ii. Other Retail Deposits control of the assets and has the option to believe that the outflow rates The proposed rule categorized all to terminate the trust at any point in the applicable to stable deposits and other deposits from retail customers that are future. retail deposits, 3 percent and 10 One commenter stated that a 3 not stable retail deposits, as described percent, respectively, are appropriate percent outflow rate in cases where the above, as other retail deposits. based on supervisory data and for the entire deposit is covered by deposit reasons outlined in the proposed rule Supervisory data supported a higher insurance was appropriately low, but and, accordingly, have retained those outflow rate for deposits that are that a 10 percent outflow rate did not outflow rates in the final rule.60 The partially FDIC-insured as compared to sufficiently reflect the stability of agencies used substantial supervisory entirely FDIC-insured. The agencies deposits partially covered by deposit data, including data reflecting the recent proposed an outflow rate of 10 percent insurance. Another commenter financial crisis, to inform the outflow for those retail deposits that are not requested zero outflows relating to rates. This data indicated that entirely covered by deposit insurance or prepaid cards issued by nonbank money depositors withdrawing funds usually that otherwise do not meet the proposed transmitter subsidiaries because they are withdraw the entire amount, and not criteria for a stable retail deposit. functionally regulated by individual just the amount that is not covered by iii. Other Unsecured Retail Funding states and are subject to collateral FDIC insurance. As a result, the requirements similar to those for agencies are retaining the treatment of Under the proposed rule, the other secured transactions. This commenter partially insured retail deposits. unsecured retail funding category indicated that certain non-deposit, In response to comments received included funding provided by retail prepaid retail products covered by FDIC about other retail funding, the agencies customers or counterparties that is not insurance that is deemed to ‘‘pass- have reconsidered the 100 percent a retail deposit or a retail brokered through’’ the holder of the account to outflow rate in § l.32(a)(3) of the deposit and received an outflow rate of the owner of the funds should merit an proposed rule. In the final rule, the 100 percent. This outflow category was outflow rate significantly less than 100 agencies have lowered the outflow rate intended to capture all other types of percent, as these products are similar to to 20 percent for deposits placed at the retail funding that were not stable retail retail deposits and have exhibited covered company by a third party on deposits or other retail deposits, as stability throughout economic cycles, behalf of a retail customer or defined by the proposal. including during the recent financial counterparty that are not brokered iv. Comments on Retail Funding crisis. deposits, where the retail customer or Outflows Some commenters also requested that counterparty owns the account and the definition of deposit insurance be where the entire amount is covered by Comments related to the unsecured expanded beyond FDIC insurance to deposit insurance. In addition, partially retail funding outflow category include foreign deposit insurance insured deposits placed at the covered addressed applicable definitions, the programs where (i) insurance is company by a third party on behalf of types of transactions that would qualify prefunded by levies on the institutions a retail customer or counterparty that as retail funding, the treatment of retail that hold insured deposits; (ii) the are not brokered deposits and where the maturities, requirements related to insurance is backed by the full faith and retail customer or counterparty owns deposit insurance, applicable outflow credit of the national government; (iii) the account receive a 40 percent outflow rates, and requests for additional the obligations of the national rate under the final rule. The 20 percent information from the agencies. government are assigned a zero percent and 40 percent outflow rates are Several commenters requested a risk weight under the agencies’ risk- designed to be consistent with the final broadening of the definition of retail based capital rules; and (iv) depositors rule’s treatment of wholesale deposits, customer or counterparty to include have access to their funds within a which the agencies believe have similar additional entities and to exclude reasonable time frame. The commenters liquidity risk as deposits placed on certain transactions from the other also requested that the outflow rate behalf of a retail customer or unsecured retail funding category. For assigned to partially-insured deposits counterparty. Finally, all other funding example, two commenters argued that reflect the benefit of partial insurance, from a retail customer or counterparty the proposed $1.5 million limit on rather than treating the entire deposit as that is not a retail deposit, a brokered aggregate funding, which would apply uninsured. This would lead to treatment deposit provided by a retail customer or to small businesses in the retail of the portion of a deposit that is below counterparty, or a debt instrument customer or counterparty definition, the $250,000 FDIC insurance limit as a issued by the covered company that is should be raised to $5 million, which stable retail deposit subject to a 3 owned by a retail customer or would be consistent with annual percent outflow, and any excess balance counterparty, which includes items receipts criteria used by the U.S. Small as a less stable retail deposit subject to such as unsecured prepaid cards, Business Administration’s definition for the 10 percent outflow rate. receives a 40 percent outflow rate. The small business. Other commenters Finally, some commenters requested agencies believe these changes better requested a broadening of the retail the agencies share the empirical data reflect the liquidity risks of categories of funding category to include certain that was the basis for the proposed unsecured retail funding that have trusts and other personal fiduciary rule’s retail funding outflow liquidity characteristics that more accounts, such as personal and requirements. Specifically, commenters closely align with certain types of third- charitable trusts, estates, certain requested information regarding the party funding in § l.32(g) of the payments to minors, and guardianships stability of insured deposits, partially proposed rule. formed by retail customers, because insured deposits, term deposits, and Additionally, the final rule clarifies they exhibit characteristics of retail deposits without a contractual term that the outflow rates for retail funding funding. Another commenter argued during the recent financial crisis. apply to all retail funding, regardless of that revocable trusts should qualify as whether that funding is unsecured or retail funding because such trusts have v. Final Rule secured. This reflects the nature of retail risk characteristics similar to that of In considering the comments on retail individuals, in that the grantor keeps funding outflows, the agencies continue 60 78 FR 71835–71836.

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funding, which is less likely to involve b. Structured Transaction Outflow cash outflow of a covered company can a secured transaction, and the relatively Amount be offset with cash flows from the assets low outflow rates already assigned to The proposed rule’s structured in the SPE even if they are not the funding. transaction outflow amount, set forth in consolidated on the covered bank’s The agencies decline to revise most of § l.32(b) of the proposed rule, would balance sheet. the definitions and key terms employed have captured obligations and Some commenters also indicated that in the retail funding section of the exposures associated with structured those securitizations that meet the proposed rule. With respect to the transactions sponsored by a covered definition of ‘‘traditional securitization’’ commenters’ request to raise the limit company, without regard to whether the in the agencies’ regulatory capital rules, on aggregate funding that applies to structured transaction vehicle that is the where the sponsor securitizes its own assets, should be exempt from the small businesses, the annual receipts issuing entity is consolidated on the criteria within the U.S. Small Business outflow amount in § l.32(b), so long as covered company’s balance sheet. The Administration’s definition for small the covered company does not extend proposed rule assigned as an outflow business would include businesses that credit or liquidity support. These rate for each structured transaction are large and sophisticated and should commenters relied on the fact that the sponsored by the covered company the not be treated similarly to retail issuing entity would have no legal greater of: (1) 100 Percent of the amount customers or counterparties in terms of obligation to make a payment on a of all debt obligations of the issuing liquidity risks. The agencies therefore security as a result of a shortfall of cash entity that mature 30 days or less from continue to believe that $1.5 million is from underlying assets, irrespective of a calculation date and all commitments the appropriate limit. The agencies whether the covered company is made by the issuing entity to purchase considered whether foreign deposit required to consolidate the issuing insurance systems should be given the assets within 30 calendar days or less entity onto its balance sheet to justify same treatment as FDIC deposit from the calculation date, and (2) the the exemption request. insurance in the final rule. The agencies maximum contractual amount of Several commenters also expressed believe there would be operational funding the covered company may be concern regarding the proposed rule’s difficulties in evaluating a foreign required to provide to the issuing entity assumption of a significant cash outflow deposit insurance system for the 30 calendar days or less from such on the first day of the 30 calendar-day purposes of a U.S. regulatory calculation date through a liquidity period (without a corresponding inflow requirement. For the reasons discussed facility, a return or repurchase of assets that would be assumed to occur at a in the preamble to the proposed rule, from the issuing entity, or other funding later date) and that the proposed rule the agencies are recognizing only FDIC agreement. The agencies proposed the did not include a clear explanation for deposit insurance in defining stable 100 percent outflow rate because such this assumption. Commenters requested retail deposits.61 transactions, including potential that the outflow be deemed to occur on However, the agencies have obligations arising out of commitments the scheduled maturity date of the debt. concluded that certain trusts pose to an issuing entity, whether issued Several commenters also expressed liquidity risks substantially similar to directly or sponsored by covered concern that potential double counting those posed by individuals, and the companies, caused severe liquidity of outflow amounts could occur in that agencies are modifying the final rule to demands at covered companies during transactions captured under clarify that living or testamentary trusts times of stress as observed during the § l.32(e)(1)(vi) of the proposed rule that have been established for the recent financial crisis. could also be subject to § l.32(b) benefit of natural persons, that do not Comments regarding § l.32(b) of the without further clarification. have a corporate trustee, and that proposed rule focused on specific The agencies continue to believe the terminate within 21 years and 10 structured transactions (such as bank 100 percent outflow rate applicable to months after the death of grantors or customer securitization credit facilities structured transactions sponsored by a beneficiaries of the trust living on the and those vehicles where a banking covered company is generally reflective effective date of the trust or within 25 organization securitizes its own assets) of the liquidity risks of such years (in states that have a rule against and requested clarification around transactions. Structured transactions perpetuities) can be treated as retail which types of transactions should be can be a source of unexpected funding customers or counterparties. The treated as a structured transaction under requirements during a liquidity crisis, as agencies believe that these trusts are § l.32(b) and which transactions demonstrated by the experience of ‘‘alter egos’’ of the grantor and thus should be treated as facilities under various financial firms during the recent should be treated the same as an § l.32(e)(1)(vi) of the proposed rule. A financial crisis. This outflow rate is also individual for purposes of the LCR. If commenter noted that the agencies did generally consistent with the outflow for the trustee is a corporate trustee that is not draw a distinction between a commitments made to financial an investment adviser, whether or not structured transaction vehicle that is counterparties and SPEs that issue required to register as an investment consolidated on the covered company’s commercial paper and other securities, adviser under the Investment Advisers balance sheet and transactions that are as provided in § l.32(e) of the final rule Act of 1940 (15 U.S.C. 80b–1, et seq.), sponsored, but not owned by the and discussed below. however, the trust will be treated as a covered company. The commenter The agencies recognize that banking financial sector entity. argued that the proposed rule would regulations may prohibit some covered Apart from the changes to the final impact all private label MBS that are companies from providing certain forms rule discussed above, the agencies have sponsored by a covered company by of support to funds that are sponsored finalized the rule as proposed with assigning a 100 percent outflow rate to by covered companies.62 However, the regard to retail funding and believe that the obligations of the issuing entity that the changes incorporated appropriately mature in 30 calendar days or less. 62 See, e.g., OCC, Board, FDIC, and SEC, capture the key liquidity characteristics Moreover, the commenter also requested ‘‘Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Certain of the retail funding market. clarification as to whether variable Relationships With, Hedge Funds and Private interest entity (VIE) liabilities relating to Equity Funds,’’ 79 FR 5536, 5790 (January 31, 61 78 FR 71836. SPEs that are to be included in the net 2014); OCC, Board, and FDIC, ‘‘Interagency Policy

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100 percent outflow rate recognizes that not be appropriate. The changes to the offsetting inflows where a covered covered companies may still provide peak day approach described above in company is already including assets in significant support to structured section II.C.1 of this Supplementary its HQLA that the counterparty has transactions that they sponsor while Information section would result in posted to support those inflows. If the complying with regulatory requirements structured transaction payments not derivative transactions were not subject that prohibit certain forms of support. being assumed to occur on the first day to a qualifying master netting To address the commenters’ concern of a 30 calendar-day window because agreement, then the derivative cash regarding potential double counting of they are not included in the calculation outflows for that counterparty would be outflow amounts, the final rule excludes of the add-on. Instead, these included in the net derivative cash from the outflows in § l.32(e)(1)(vii) commitments would be assumed to outflow amount and the derivative cash through (viii) those commitments occur on the transaction’s scheduled inflows for that counterparty would be described in the structured transaction maturity date. Finally, the agencies included in the net derivative cash outflow amount section. Although the believe that the definitions and key inflow amount, without any netting and structured transaction outflow amount terms employed in this section of the subject to the proposed rule’s cap on and the commitment outflow amount proposed rule accurately capture the total inflows. Under the proposed rule, sections (§ l.32(b) and § l.32(e), key characteristics related to structured the net derivative cash outflow amount respectively) are similar in that both transactions sponsored by a covered would have been calculated in apply outflow rates to commitments company and decline to provide a accordance with existing valuation made to an SPE, the structured different treatment for the funding of methodologies and expected contractual transaction outflow amount also VIE liabilities that are part of a derivatives cash flows. In the event that includes outflows beyond contractual structured securitization, structured the net derivative cash outflow for a commitments because a sponsor may securitizations involving SPEs, particular counterparty was less than provide support despite the absence of structured securitization credit facilities zero, such amount would have been such a commitment. to finance the receivables owned by a required to be included in a covered The agencies are making a clarifying corporate entity, or where the sponsor company’s net derivative cash inflow change in the final rule by applying the securitizes its own assets. Likewise, amount for that counterparty. structured transaction outflow amount private label MBS that meet the A covered company’s net derivative provision only to issuing entities that definition of a structured transaction cash outflow amount would not have are not consolidated with the covered will be subject to this provision because included amounts arising in connection company. If the issuing entity is of the liquidity risks incumbent in such with forward sales of mortgage loans or consolidated with the covered company, transactions. Accordingly, the agencies any derivatives that are mortgage then the commitments from the covered are adopting as final this provision of commitments subject to § l.32(d) of the company to that entity would be the rule as proposed with the clarifying proposed rule. However, net derivative excluded under § l.32(m) as intragroup change regarding consolidated issuing cash outflows would have included transactions. However, even though the entities. outflows related to derivatives that commitments would be excluded, any hedge interest rate risk associated with outflows and inflows of the issuing c. Net Derivative Outflow Amount mortgage loans and commitments. entity would be included in the covered The proposed rule would have Many commenters were concerned company’s outflow and inflows because defined a covered company’s net that the treatment of derivative they are consolidated. derivative cash outflow amount as the transactions created an asymmetric The agencies did not define the term sum of the payments and collateral that treatment for certain offsetting ‘‘sponsor’’ in the proposed rule and are a covered company would make or derivative transactions (such as foreign not defining it in the final rule because deliver to each counterparty under exchange swaps) because covered the agencies believe that the term is derivative transactions, less the sum of companies would be required to generally understood within the payments and collateral due from each compute the cash flows on a gross basis marketplace. Furthermore, the agencies counterparty, if subject to a valid with a cash outflow and a cash inflow intend § l.32(b) to apply to all covered qualifying master netting agreement.63 subject to the 75 percent inflow cap as companies that would have explicit or This calculation would have described above, even if in practice the implicit obligations to support a incorporated the amounts due to and settlement occurred on a net basis. structured transaction of an issuing from counterparties under the Accordingly, these commenters entity that is not consolidated by the applicable transactions within 30 proposed that foreign exchange covered company during a period of calendar days of a calculation date. transactions that are part of the same liquidity stress. Generally, the agencies Netting would have been permissible at swap should be treated as a single consider covered companies to be the highest level permitted by a covered transaction on a net basis. sponsors when they have significant company’s contracts with a For the reasons discussed in the control or influence over the counterparty and could not include proposal, the agencies continue to structuring, organization, or operation of believe the 100 percent outflow rate a structured transaction. 63 Under the proposal, a ‘‘qualifying master applicable to net derivative outflows is The agencies agree with commenters’ netting agreement’’ was defined as a legally binding reflective of the liquidity risks of these concern that the maturity assumptions agreement that gives the covered company contractual rights to terminate, accelerate, and close transactions and therefore are retaining in the proposed rule would cause out transactions upon the event of default and this outflow rate in the final rule. The structured transaction payments to fall liquidate collateral or use it to set off its obligation. agencies are, however, making a on the first day of the 30 calendar-day The agreement also could not be subject to a stay under bankruptcy or similar proceeding and the significant change to how this outflow period and that this treatment would covered company would be required to meet certain rate is applied to foreign currency operational requirements with respect to the exchange derivative transactions to on Banks/Thrifts Providing Financial Support to agreement, as set forth in section 4 of the proposed address concerns raised by commenters. Funds Advised by the Banking Organization or its rule. This is the same definition as under the Specifically, foreign currency Affiliates,’’ OCC Bulletin 2004–2, Federal Reserve agencies’ regulatory capital rules. See 12 CFR part Supervisory Letter 04–1, FDIC FIL–1–2004 (January 3 (OCC); 12 CFR part 217 (Board); 12 CFR part 324 exchange derivative transactions that 5, 2004). (FDIC). meet certain criteria can be netted under

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the provisions of § l.32(c)(2) of the netting of mortgage commitment binding agreement to extend funds upon final rule. Cash flows arising from amounts against certain transactions, request at a future date, including a foreign currency exchange derivative such as VIE liabilities, the forward sale general working capital facility such as transactions that involve a full exchange of projected to-be-announced mortgage a revolving credit facility for general of contractual cash principal amounts in inflows, and GSE standby facilities, the corporate or working capital purposes. different currencies between a covered agencies are clarifying that such inflows Under the proposed rule, a credit company and a counterparty within the may not be netted against the overall facility would not have included a same business day may be reflected in mortgage commitment amount. The facility extended expressly for the the net derivative cash outflow amount agencies believe that in a crisis, such purpose of refinancing the debt of a for that counterparty as a net amount, inflows may not fully materialize, and counterparty that is otherwise unable to regardless of whether those transactions thus do not believe that such inflows meet its obligations in the ordinary are covered by a qualifying master should be allowed under the final rule course of business. Under the proposed netting agreement. Thus, the inflow leg or netted against the mortgage rule, a liquidity or credit facility would of a foreign currency exchange commitment outflow amount. have been considered committed when derivative transaction in effect is not Also, the agencies are confirming that the terms governing the facility subject to the 75 percent inflow cap as the outflow amount for mortgage prohibited a covered company from long as it settles on the same date as the commitments is based upon the amount refusing to extend credit or funding corresponding outflow payment of that the covered company has contractually under the facility, except where certain derivative transaction.64 committed for its own originations of conditions specified by the terms of the retail mortgages that can be drawn upon facility—other than customary notice, d. Mortgage Commitment 30 calendar days or less from the administrative conditions, or changes in The proposed rule would have calculation date and not the entire financial condition of the borrower— required a covered company to apply an unfunded amount of commitments that had been met. The undrawn amount for outflow rate of 10 percent for all cannot be drawn within 30 calendar a committed credit or liquidity facility commitments for mortgages primarily days. would have been the entire undrawn secured by a first or subsequent lien on e. Commitments Outflow Amount amount of the facility that could have a one-to-four family property that can be been drawn upon within 30 calendar drawn upon within 30 calendar days of The commitment category of outflows days of the calculation date under the a calculation date. under the proposed rule would have governing agreement, less the fair value One commenter was concerned about included the undrawn portion of of level 1 liquid assets or 85 percent of the treatment of VIE liabilities (and committed credit and liquidity facilities the fair value of level 2A liquid assets, particularly non-consolidated VIEs). provided by a covered company to its if any, that secured the facility. In the Specifically, this commenter requested customers and counterparties that could case of a liquidity facility, the undrawn that MBS VIE liabilities be excluded have been drawn down within 30 amount would not have included the from the outflow calculation or if calendar days of the calculation date. portion of the facility that supports included, that these outflow amounts be The proposed rule would have defined customer obligations that mature more netted against the estimated cash a liquidity facility as a legally binding than 30 calendar days after the inflows from linked assets in the agreement to extend funds at a future calculation date. A covered company’s securitization trust, even if those assets date to a counterparty that is made proportionate ownership share of a are not on the company’s balance sheet. expressly for the purpose of refinancing syndicated credit facility would have Additionally, the commenter requested the debt of the counterparty when it is been included in the appropriate that mortgage commitment outflows be unable to obtain a primary or category of wholesale credit netted against sales from projected to- anticipated source of funding. A commitments. be-announced inflows. Further, the liquidity facility also would have Section __.32(e) of the proposed rule commenter requested clarification included an agreement to provide would have assigned various outflow regarding cash outflows for commercial liquidity support to asset-backed amounts to commitments that are based and multifamily loans and whether commercial paper by lending to, or on the counterparty type and facility outflows for partially funded loans purchasing assets from, any structure, type. First, in contrast to the outflow would be limited to the amount of the program, or conduit in the event that rates applied to other commitments, loan that is scheduled to be funded funds are required to repay maturing those commitments between affiliated during the 30 calendar-day period or the asset-backed commercial paper. depository institutions that are subject entire unfunded amount of the loan. Liquidity facilities would have excluded to the proposed rule would have The agencies are adopting the general working capital facilities, such received an outflow rate of zero percent mortgage commitment outflow rates of as revolving credit facilities for general because the agencies expect that such the proposed rule, with the following corporate or working capital purposes. institutions would hold sufficient clarifications that address concerns Facilities that have aspects of both liquidity to meet their obligations and raised by commenters. For the reasons credit and liquidity facilities would would not need to rely on committed discussed in the proposal, the agencies have been deemed to be liquidity facilities. In all other cases, the outflow continue to believe that the 10 percent facilities for the purposes of the rates assigned to committed facilities outflow rate applicable to mortgage proposed rule. An SPE would have been were meant to reflect the characteristics commitments reflects the liquidity risks defined as a company organized for a of each class of customers or of these transactions and have adopted specific purpose, the activities of which counterparties under a stress scenario, this outflow rate in the final rule. In are significantly limited to those as well as the reputational and legal response to the comment regarding the appropriate to accomplish a specific risks that covered companies face if they purpose, and the structure of which is were to try to restructure a commitment 64 This treatment is consistent with the intended to isolate the credit risk of the during a crisis to avoid drawdowns by Frequently Asked Questions on Basel III’s January 2013 Liquidity Coverage Ratio framework (April SPE. customers. 2014), available at http://www.bis.org/publ/ The proposed rule would have An outflow rate of 5 percent was bcbs284.htm. defined a credit facility as a legally proposed for retail facilities because

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individuals and small businesses would harsh, that the approach for financing Other commenters requested that the likely have a lesser need for committed vehicles that employed both credit and look-through approach be applied to the credit and liquidity facilities in a stress liquidity facilities should conform to the undrawn amount of credit commitments scenario when compared to institutional Basel III Revised Liquidity Framework, of any bank customer securitization or wholesale customers (that is, the and that a host of specific entities, such credit facility irrespective of whether it correlation between draws on such as central counterparties (CCPs) and is funded by the bank or through an facilities and the stress scenario of the financial market utilities, deserved asset-backed commercial paper conduit LCR is considered to be lower). An unique treatments. facility that is set up by the sponsoring outflow rate of 10 percent was proposed i. Special Purpose Entities Comments borrower for the sole purpose of for credit facilities and 30 percent for purchasing and holding financial assets, liquidity facilities to entities that are not Overall, commenters asserted that the because these facilities function as a financial sector entities based on their agencies had defined SPEs too broadly substitute or complement to traditional __ typically longer-term funding structures for purposes of § .32(e) of the revolving credit facilities. These and lower correlation of drawing down proposed rule, and argued that a 100 commenters argued that such the commitment during times of stress. percent outflow rate was too high, securitizations act as a ‘‘credit The proposed rule would have assigned recommending instead a ‘‘look-through’’ enhancement’’ by allowing the borrower a 50 percent outflow rate to credit and approach depending on the type of to borrow against a pool of bankruptcy liquidity facilities committed to counterparty that sponsors or owns the remote assets. Further, these depository institutions, depository SPE; for example, whether the commenters argued that such borrowing institution holding companies, and counterparty is an operating company structures left lenders less exposed to foreign banks (other than commitments that develops or manages real estate, a counterparty credit risk than a between affiliated depository securitization facility that functions as a traditional revolving facility because the institutions). Commitments to all other financing vehicle, a CCP, a Tender amount drawn on such facilities in a regulated financial companies, Option Bond (TOB) issuer, a fund stressed environment would be wholly investment companies, non-regulated subject to the Investment Company Act limited by a borrowing base derived funds, pension funds, investment of 1940 (40 Act Fund), or a commercial from the underlying eligible financial advisers, or identified companies (or to paper facility. Commenters argued that assets. a consolidated subsidiary of any of the funding provided through an SPE Commenters argued that certain SPEs, foregoing) would have been assigned a should receive the outflow specified in such as SPEs established to hold 40 percent outflow rate for credit § __.32(e) for the ‘‘underlying’’ specific real estate assets, have a similar facilities and 100 percent for liquidity counterparty rather than the 100 percent risk profile to conventional commercial facilities. The agencies proposed a 100 outflow rate applied to SPEs. A few real estate borrowers and therefore percent outflow rate for a covered commenters also requested that the should receive a lower outflow rate. company’s credit and liquidity facility agencies distinguish between those Commenters argued that these SPE commitments to SPEs given SPEs’ SPEs intended to be captured by § __ structures are passive, with all decisions sensitivity to emergency cash and .32(e)(vi) of the proposed rule that were backstop needs in a short-term stress a source of liquidity stress in the last made by the operating company parent, environment, such as those experienced financial crisis and those SPEs that a rather than the SPE itself. They further during the recent financial crisis. borrower uses to finance, through a argued that this structure enhances the The agencies also proposed that the securitization credit facility, the ability to finance a real estate project amount of level 1 or level 2A liquid receivables owned by a corporate entity because the lender receives greater assets securing the undrawn portion of (a so-called ‘‘bank customer comfort that the primary asset will be a commitment would have reduced the securitization credit facility’’). These shielded from many events that might outflow associated with the commenters proposed the agencies look prevent the lender from foreclosing on commitment if certain conditions were through to the sponsor or owner of the its loan and that the punitive treatment met. The amount of level 1 or level 2A SPE and set the outflow rates for the in the proposed rule will hamper this liquid assets securing a committed undrawn amounts based on the sponsor type of financing. Some commenters credit or liquidity facility would have at: 50 percent for depository requested that SPEs that own and been the fair value (as determined under institutions, depository institution operate commercial and multi-family GAAP) of all level 1 liquid assets and 85 holding companies, or foreign banks; 40 real estate be assigned a much lower percent of the fair value (as determined percent for regulated financial outflow rate or no outflow rate. under GAAP) of level 2A liquid assets companies, investment companies, non- Moreover, commenters further argued posted or required to be posted upon regulated funds, pension funds, that commitments to SPEs established to funding of the commitment as collateral investment advisers, or identified ring-fence the liabilities of a real estate to secure the facility, provided that: (1) companies; and 10 percent for other development project do not merit a 100 The pledged assets had met the criteria wholesale customers. Commenters percent outflow rate because in practice, for HQLA as set forth in § __.20 of the proposed specific criteria to define bank the drawdowns (in crises and in normal proposed rule during the applicable 30 customer securitization credit facilities, times) could only amount to a modest calendar-day period; and (2) the covered which provided guidelines related to portion of the overall unfunded company had not included the assets in the sponsor, financing, customers, commitment over a 30 calendar-day its HQLA amount as calculated under underlying exposures, and other period due to contractual milestones subpart C of the proposed rule during particular aspects of this type of SPE. reflected in the loan documentation the applicable 30 calendar-day period. These commenters also stated that (e.g., obtaining permits, completing a The comments on § __.32(e) were failure to implement their suggestion certain percentage of the project, selling generally focused on: (i) SPEs; (ii) dual and retention of the proposed rule’s or renting a certain percentage of units, use facilities; and (iii) other concerns treatment of SPEs would reduce the or that a certain stage of the real estate such as calibration of the outflow rates. provision of credit in the U.S. economy development project has been At a high level, commenters asserted by restricting access to securitized lines completed). These commenters that the treatment for SPEs was overly of credit, a major source of funding. requested that the agencies limit the

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undrawn amount of such facilities to the iii. Other Commitment Outflows an outflow rate below the proposed rate amount that could legally be withdrawn Comments of 100 percent due to their low during the next 30 calendar days. Commenters also expressed concern historical drawdown rates and the Another commenter expressed that the treatment of commitment Dodd-Frank Act’s express clearing outflows in the proposed rule could mandate, requiring that certain concern over the outflow rate applied to 66 TOBs, stating that TOBs did not draw have adverse effects on the U.S. transactions be cleared through a CCP. One commenter noted that the Basel III on liquidity facilities during the recent economy by reducing the provision of leverage ratio provides a specific crisis because they rely on the credit to businesses. In particular, delineation of commitments to CCPs remarketing process for the liquidity commenters stated that the proposed rule’s 10 percent outflow rate for and credit conversion factors and needed to satisfy TOB holders indicated that these reflect the exercising the tender option. The undrawn, committed credit facilities, regardless of borrower rating, was far operational realities of these commenter argued that the outflow rate commitments and requested the should be lower for TOBs because such higher than necessary and would negatively impact a covered company’s agencies to make a similar delineation programs are significantly over- in the LCR. This commenter also collateralized, and a liquidation of LCR due to the underlying size of the commitments. According to these proposed to define credit facility as ‘‘a underlying bonds would cover liquidity legally binding agreement to extend needed to satisfy TOB investors, even in commenters, this outflow rate could have a ‘‘far-reaching’’ impact on a funds if requested at a future date, an environment when bond prices are covered company’s ability to lend to including a general working capital falling. The commenter requested that small and medium enterprises. facility such as a revolving credit the outflow rate be set at a maximum of Accordingly, the commenters requested facility for general corporate or working 30 percent. Another commenter a zero percent outflow assumption for capital purposes and a qualified central expressed concern that the proposed commitments to highly rated counterparty facility for general rule assigned unduly high outflow rates companies. operational purposes such as managing to mutual funds and their foreign Some commenters requested that a a clearing member unwind or disruption equivalents, which are subject to number of other specific commitment of services by a depository or payment statutory limitations on borrowed funds, facilities receive a lower outflow rate system. Credit facilities do not include and suggested that the outflow rate for than provided in § __.32(e) of the facilities extended expressly for the non-financial sector companies (10 proposed rule. For instance, one purpose of refinancing the debt of a percent and 30 percent for committed commenter noted that 40 Act Funds and counterparty that is otherwise unable to credit and liquidity facilities, their foreign equivalents have aspects meet its obligations in the ordinary respectively) would be more appropriate that limit liquidity risks such as tenor, course of business (including through for such funds. asset quality, diversification minimums its usual sources of funding or other and repayment provisions. Accordingly, anticipated sources of funding).’’ ii. Dual Use Facilities Comments the commenter argued, such One commenter requested that the commitments should be assigned a 10 agencies conduct an empirical analysis Some commenters were concerned of historic drawdown rates to calibrate about key terms and definitions percent outflow rate. One commenter __ requested that the outflow rate assigned drawdown assumptions. Another referenced in § .32(e) of the proposed commenter requested that the agencies, rule. For example, one commenter to commitments used for the issuance of commercial paper be raised in light of at a minimum, clarify that commitments requested clarity regarding how to treat to financial market utilities that have certain commercial paper backup the fact that commercial paper was a significant liquidity strain during the not been designated by the Council as facilities arguing that it was unclear systemically important ‘‘be treated no how the proposed rule should be most recent crisis. The same commenter suggested that the outflow rate for worse than commitments to ‘regulated applied because most commercial paper liquidity facilities used to support the financial companies’ for purposes of backup facilities (that is, liquidity issuance of certain types of securities, LCR outflow assumptions.’’ facilities) can also serve other general such as auction rate securities, should In addition, one commenter claimed corporate purposes (akin to credit be raised to 100 percent due to the that bonds backed by letters of credit facilities). Commenters requested that drawdown rates of such facilities cannot be properly valued for purposes multipurpose commitment facilities observed during the crisis. of the 30 calendar-day period because (which have aspects of both liquidity A few commenters requested that the process of drawing upon such a and credit facilities) should not commitments provided to CCPs should letter of credit usually requires notice of automatically default to a liquidity be treated in the same manner as 30 days or more. The commenter facility and argued for employing the commitments to regulated financial requested that only the value of the debt treatment of the Basel III Revised companies due to the requirement that maturing within the 30-day window be Liquidity Framework, which sets a CCPs comply with the principles for included in the outflow estimate. portion of the undrawn amount of a financial market infrastructures, which v. Final Rule commitment as a committed credit require CCPs to establish and maintain The agencies are clarifying the facility. Another commenter requested 65 sufficient liquidity resources. Two definition of liquidity facility in the that the outflow rate for commitment commenters requested that committed outflows be applied to the borrowing final rule by eliminating the facilities offered by covered companies requirement that the liquidity facility be base (rather than the commitment to CCPs be separately categorized with amount) where a covered company made ‘‘expressly’’ for the purpose of refinancing debt. The definition in the would not as a practical matter fund the 65 See Committee on Payment and Settlement final rule is intended to include full amount of the commitment beyond Systems and Technical Committee of the the amount of collateral that is available International Organization of Securities Commissions, Principles for financial market 66 Pursuant to sections 723(a)(3) and 763(a) of the in the LCR’s 30-day measurement infrastructures (April 2012), available at http:// Dodd-Frank Act, certain swaps must be cleared period. www.bis.org/publ/cpss101a.pdf. through a CCP. 7 U.S.C. 2(h), 15 U.S.C. 78c-3.

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commitments that are being used to the covered company to such SPE that following the calculation date. In refinance debt, regardless of whether is a consolidated subsidiary of a addition, if the underlying there is an express contractual clause. wholesale customer or counterparty that commitment’s contractual terms do not This change captures the intent of the is not a financial sector entity is 10 permit withdrawal but for the proposed rule by focusing on the percent of the undrawn amount; occurrence of a contractual milestone function of the commitment. Æ The outflow amount for a that cannot occur within 30-calendar The agencies are clarifying the committed liquidity facility extended by days, such amounts would not be treatment of letters of credit issued by the covered company to such SPE that included in the undrawn amount of the a covered company. To the extent a is a consolidated subsidiary of a facility. Thus, with respect to undrawn letter of credit meets the definition of wholesale customer or counterparty that amounts for all facilities, the agencies credit facility or liquidity facility, it will is not a financial sector entity is 30 are clarifying in the final rule that the be treated as such. Thus, a covered percent of the undrawn amount; undrawn amount would only include company will have to review letters of Æ The outflow amount for a the portion of the facility that a credit to determine whether they should committed credit facility extended by counterparty could contractually be treated as commitments in the LCR. the covered company to such SPE that withdraw within the 30 calendar-day The agencies are also clarifying the is a consolidated subsidiary of a period following the calculation date. differences among the types of financial sector entity is 40 percent of The agencies have not included commitments that are covered by § __ the undrawn amount; and § __.32(e)(2)(ii)(B) of the proposed rule .32(b), (d), and (e) of the proposed rule, Æ The outflow amount for a in the final rule. This provision that the which are consistent with the final rule. committed liquidity facility extended by undrawn amount of a committed facility Section __.32(b) relates to a covered the covered company to an SPE that is is less that portion of the facility that company’s commitments to structured a consolidated subsidiary of a financial supports obligations of a covered transactions that the covered company sector entity is 100 percent of the company’s customer that do not mature itself has sponsored. These undrawn amount. 30 calendar days or less from such commitments may take the form of • The outflow amount for either a calculation date, and further provided committed liquidity facilities, but may committed credit or liquidity facility that if facilities have aspects of both also take the form of less formal extended by the covered company to an credit and liquidity facilities, the facility support. In the final rule, § __.32(b) SPE that issues or has issued must be classified as a liquidity facility. commitments have been expressly commercial paper or securities, other First, the principle in the first clause of carved out of § __.32(e)(vii) and (viii). than equity securities issued to a the deleted language is duplicative of Section __.32(d) relates only to a company of which the SPE is a the rule text set forth in § __.32(e)(2)(ii) covered company’s commitments to consolidated subsidiary, to finance its of the final rule and therefore not only originate retail mortgage loans. All other purchases or operations is 100 percent unnecessary but potentially confusing. outflow amounts related to committed of the undrawn amount. Second, the second sentence of the credit and liquidity facilities are subject The agencies agree with commenters deleted language has been included in to the provisions in § __.32(e) of the that SPEs that are formed to manage and the final rule’s definition of liquidity final rule. invest in real estate should not all be facility, rather than in the section on In response to the aforementioned treated with a 100 percent outflow rate, outflows, where the agencies think it is comments about commitment outflows provided that such SPEs do not issue more appropriate and will be easier for amounts, the agencies have adopted securities or commercial paper. Instead, readers to find. Accordingly, the changes in the final rule to the outflow the agencies are employing the ‘‘look agencies have streamlined the text in amounts for commitments to SPEs through’’ approach as described above. the final rule. (§ __.32(e)(1)) and the treatment for For example, under the final rule, The agencies are retaining the assessing the undrawn amount of a funding provided to a non-financial approach for those financing vehicles credit or liquidity facility (§ __.32(e)(2)). sector entity for real estate activities via that employ both credit and liquidity The agencies agree with commenters a committed credit facility to an SPE facilities and treating those entities as that not all SPEs are exposed to the would receive a 10 percent outflow rate, liquidity facilities. The agencies believe highest degree of liquidity risk. To that and funding provided to a financial it would be problematic to assess which end, the agencies are clarifying that sector entity for real estate activities via portion of the assets securing the facility certain SPEs can be treated with an a committed liquidity facility to an SPE are meant to serve the liquidity facility approach similar to the treatment for the would receive a 100 percent outflow and which portion of the assets are other referenced commitments in § __ rate. meant to serve the credit facility. At the .32(e)(1). Under the final rule, the The agencies also agree that the same time, this treatment provides the agencies have limited the application of assessment of the undrawn amount for agencies with a conservative approach the 100 percent outflow rate to committed liquidity facilities should be for assessing dual purpose facilities. The committed credit and liquidity facilities narrowed to only include commitments agencies are also clarifying that facilities to SPEs that issue or have issued that support obligations that mature in that may provide liquidity support to securities or commercial paper to the 30 calendar-day period following asset-backed commercial paper by finance their purchases or operations. the calculation date; however, pursuant lending to, or purchasing assets from, These SPEs are highly susceptible to to § __.31, notice periods for draws on any structure, program, or conduit stressed market conditions during commitments are not recognized. The should be treated as a liquidity facility which they may be unable to refinance agencies are thus clarifying that, if the and not be treated as a credit facility. their maturing securities and underlying commitment’s contractual The agencies disagree with commercial paper. As such, under the terms are so limiting, the amount commenters’ recommendation that 40 final rule: supporting obligations with maturities Act Funds and their foreign equivalents • For SPEs that do not issue securities greater than 30 days would not be be treated with an outflow rate or commercial paper: considered undrawn because they equivalent to unsecured retail funding Æ The outflow amount for a would not be available to be drawn because the nature of the counterparty committed credit facility extended by within the 30 calendar-day period and the corresponding liquidity risks

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are more akin to the liquidity risks of i. Changes in Financial Condition clarifying that covered companies financial sector entities. Thus, the The proposed rule would have should count all amounts of collateral in agencies decline to apply a unique rate required a covered company to include the collateral outflow amount that could for this category of commitments. The in its collateral outflow amount 100 be posted in accordance with the terms agencies also decline to create special percent of all additional amounts that and conditions of the downgrade trigger exceptions for commitments related to the covered company would have clauses found in all applicable legal TOBs, mutual funds, and other needed to post or fund as additional agreements. Covered companies should commitments to investment companies, collateral under a contract as a result of not look solely to credit ratings to because similar to other SPEs that issue, a change in its own financial condition. determine collateral outflows from or have issued, securities or commercial A covered company would have changes in financial condition, but the paper, such entities have liquidity risks calculated this outflow amount by agencies note that collateral that are commensurate with a financial evaluating the terms of such contracts requirements based on credit rating changes constitute collateral sector entity and their draws on and calculating any incremental requirements based on changes in commitments likely will be highly additional collateral or higher quality financial condition under the final rule. correlated with stress in the financial collateral that would have been required The final rule continues to allow a sector. to be posted as a result of triggering covered company to choose the method The agencies are not providing special clauses tied to a change in the covered for posting collateral that results in the treatment for CCPs or certain financial company’s financial condition. If lowest outflow amount, as the agencies market utilities. The agencies believe it multiple methods of meeting the believe a covered company will likely is critical for covered companies to requirement for additional collateral post collateral in the most economically maintain appropriate HQLA to support were available (for example, providing advantageous way that it can. The commitments that may necessitate the more collateral of the same type or provision of liquidity in a crisis and agencies are finalizing the provision replacing existing collateral with higher addressing changes in financial believe that to be the case with respect quality collateral) the covered company to commitments to CCPs and certain condition collateral outflow as was permitted to use the lower proposed. financial market utilities. Further, the calculated outflow amount in its agencies understand that commitments calculation. ii. Derivative Collateral Potential to these entities generally require HQLA Some commenters requested Valuation Changes to be posted and because the additional clarification regarding the The proposed rule would have __ commitment outflow amount is reduced requirements of § .32(f)(1) of the applied a 20 percent outflow rate to the by the amount of Level 1 and 2A HQLA proposed rule. One commenter fair value of any assets posted as required to support the commitment, requested that the agencies clarify that collateral that were not level 1 liquid the agencies have determined that they do not view the existence of a assets, in recognition that a covered special treatment for CCPs or certain material adverse change (MAC) clause company could be required to post financial market utilities is not in a contract as a provision that would additional collateral as the market price necessary. be expected to impact the calculation of of the posted collateral fell. The f. Collateral Outflow Amount collateral outflows because these agencies did not propose to apply clauses by themselves do not outflow rates to level 1 liquid assets that The proposed rule would have necessarily trigger additional collateral, are posted as collateral, as these are not required a covered company to but require subjective analysis to expected to face substantial mark-to- recognize outflows related to changes in determine whether they have been market losses in times of stress. collateral positions that could arise triggered. Another commenter noted Commenters requested that the during a period of financial stress. Such that the Basel III Revised Liquidity agencies change and clarify certain changes could include being required to Framework provides for credit ratings requirements in § l.32(f)(2) of the post additional or higher quality downgrades of up to three notches and proposed rule. For instance, one collateral as a result of a change in requested clarity as to how to calculate commenter requested that the agencies derivative collateral values or in the collateral outflow amount given the revise § l.32(f)(2) to base outflow rates underlying derivative values, having to absence of an explicit downgrade on a net calculation on a security-by- return excess collateral, or accepting threshold in the proposed rule. The security basis (for non-level 1 liquid lower quality collateral as a substitute same commenter urged the agencies to assets) and only to include collateral for already-posted collateral, all of employ a standard approach (as posted on a net basis, not the pre-netting which could have a significant impact opposed to allowing banking gross amount. Commenters also upon a covered company’s liquidity organizations to choose the lower requested that, consistent with the Basel profile. outflow amount) in cases where III Revised Liquidity Framework, the Various requirements of proposed multiple methods are available. agencies clarify that § l.32(f)(2) only § l.32(f) were of concern to certain The agencies are clarifying in the final applies to collateral securing derivative commenters who generally believed that rule that when calculating the collateral transactions and not to collateral the provisions relating to changes in outflow amount, a covered company pledged for the secured funding financial condition, potential collateral should review all contract clauses transactions contemplated in § l.32(j) valuation changes, collateral related to transactions that could of the proposed rule. Another substitution, and derivative collateral contractually require the posting or commenter requested that the agencies change required clarification or did not funding of collateral as a result of a impose a 20 percent outflow rate for accurately reflect liquidity risks around change in the covered company’s collateral value changes due to market the posting of collateral for derivative financial condition, including stress. transactions. The following describes downgrade triggers, but not including The agencies have reviewed the subcategories of collateral outflows general MAC clauses, which is comments about potential valuation discussed in the preamble to the consistent with the intent of the changes in § l.32(f)(2) of the proposed proposed rule. proposed rule. The agencies also are rule and are generally finalizing this

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section of the rule as proposed. proposed rule, the agencies are proposed. The agencies recognize that However, the agencies are clarifying in finalizing the contractually-required collateral related to transactions is the final rule that, when determining collateral outflow requirements subject to market haircuts. However, the the outflow amount for the potential substantially as proposed. standardized haircuts provided in the valuation change of collateral, only proposed rule permit the agencies to v. Collateral Substitution collateral securing derivative design a generally consistent standard transactions should be assessed, and not The proposed rule’s collateral that addresses certain potential risks collateral supporting other transactions, substitution outflow amount would that covered companies may face under such as that securing secured funding have equaled the difference between the a stressed environment. The agencies transactions under § l.32(j) of the post-haircut fair value of eligible HQLA are clarifying that § l.32(f)(5) only proposed rule. Also, consistent with collateral posted by a counterparty to a applies to collateral that a counterparty other derivative netting provisions covered company and the post-haircut has posted to the covered company as employed in the proposal, the agencies fair value of lower quality eligible of the calculation date, and does not are clarifying that covered companies HQLA collateral, or non-HQLA apply to collateral a covered company can apply the rate to netted collateral, collateral, a counterparty could has posted to a counterparty, nor to any not the pre-netted gross amount, but substitute under an applicable contract. collateral that the covered company only if the collateral can be netted under Thus, if a covered company had could repost to a counterparty after a the same qualifying master netting received as collateral a level 1 liquid collateral substitution has taken place. agreement. asset that counted towards its level 1 liquid asset amount, and the vi. Potential Derivative Valuation iii. Excess Collateral Outflow Amount counterparty could have substituted it Change The proposed rule would have with an eligible level 2A liquid asset The proposed rule would have applied an outflow rate of 100 percent collateral, the proposed rule imposed an required a covered company to use a to the fair value of collateral posted by outflow rate of 15 percent, which two-year look-back approach in counterparties that exceeds the current resulted from applying the standardized calculating its market valuation change collateral requirement in a governing haircut value of the level 2A liquid outflow amounts for derivative contract. Under the proposed rule, this assets. Similarly, if a covered company positions. Under the proposed rule, the category would have included had received as collateral a level 1 derivative collateral outflow amount unsegregated excess collateral that a liquid asset that counted towards its would have equaled the absolute value covered company may have been level 1 liquid asset amount and under of the largest consecutive 30 calendar- required to return to a counterparty an agreement the collateral could have day cumulative net mark-to-market based on the terms of a derivative or been substituted with assets that are not collateral outflow or inflow resulting other financial agreement and which is HQLA, a covered company would have from derivative transactions realized not already excluded from the covered been required to include in its outflow during the preceding 24 months. company’s eligible HQLA. amount 100 percent of the collateral’s One commenter indicated that the There were no substantive comments market value. The proposed rule two-year look-back approach of received by the agencies regarding provided outflow rates for all .32(f)(6) of the proposed rule was not a § l.32(f)(3) of the proposed rule. For permutations of collateral substitution. forward-looking estimate of potential the same reasons outlined in the One commenter stated that § l collateral flows in a period of market proposed rule, the agencies are .32(f)(5) of the proposed rule was stress, and that historic collateral finalizing the excess collateral outflow excessively conservative because it did outflows may be more indicative of requirements substantially as proposed. not take into account that a closing out positions rather than counterparty’s right to substitute non- liquidity strains. The same commenter iv. Contractually-Required Collateral HQLA collateral is generally subject to requested that the agencies provide an Outflow an increase in a market haircut designed alternative forward-looking approach The proposed rule would have to mitigate the liquidity risk associated that would replace the requirement of imposed a 100 percent outflow rate with the substitution. The commenter the proposed rule. Another commenter upon the fair value of collateral that a further stated that such substitutions are expressed concern that § l.32(f)(6) did covered company was contractually infrequent, and the requirement not take into account current obligated to post, but had not yet introduces an asymmetry by ignoring conventions regarding margin posted. Where a covered company has the reuse of the substituted collateral requirements that greatly reduce a not yet posted such collateral, the which could be posted to another covered company’s exposure to agencies believe that, in stressed market counterparty. Accordingly, the derivative valuation changes, thereby conditions, a covered company’s commenter argued that collateral making the proposed rule an onerous counterparties may demand all substitution outflows occur infrequently data exercise without an obvious contractually required collateral. and do not warrant inclusion in the benefit. Further, according to this There were no substantive comments proposed rule. commenter, there would be operational about § l.32(f)(4) of the proposed rule. The agencies are finalizing this challenges as banking organizations For the same reasons outlined in the section of the rule substantially as have not previously retained this data.

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While the agencies recognize the derivative portfolio at the time of the close out of derivative transactions operational challenges raised by calculation date, but the historical (generally referred to as initial margin). commenters, the agencies are finalizing experience of the covered company with Table 2 below illustrates how a this section of the rule largely as its derivatives portfolio should be a covered company should calculate this proposed because of the important reasonable proxy for potential derivative collateral outflow amount. Note that liquidity risk it addresses. When a valuation changes. Additionally, while Table 2 only presents a single 30-day covered company becomes subject to the margin requirements in recent period within a prior two-year the LCR, it should have relevant records regulatory proposals may provide calculation window. A covered related to derivatives to compute this certain protections in derivatives company is required to repeat this amount. To the extent that the covered transactions, this rule specifically calculation for each calendar day within company’s data is not complete, it addresses the risk of the potential future every two-year calculation window, and should be able to closely estimate its liquidity stress from derivative then determine the maximum absolute potential derivative valuation change. valuation changes. One clarifying value of the net cumulative collateral Once subject to the LCR, the agencies change has been made to highlight that change, which would be equal to the expect that a covered company will the look-back should only include largest 30-consecutive calendar day collect data to make a precise collateral that is exchanged based on the cumulative net mark-to-market calculation in the future. The agencies actual valuation changes of derivative collateral outflow or inflow realized recognize that the calculation is not transactions (generally referred to as during the preceding 24 months forward-looking and may not be entirely variation margin), and not collateral resulting from derivative transactions indicative of the covered company’s exchanged based on the initiation or valuation changes.

TABLE 2—POTENTIAL DERIVATIVE VALUATION CHANGE OUTFLOW AMOUNT

Net mark-to- Cumulative net Mark-to- Mark-to- market mark-to- Absolute value market market collateral market of cumulative collateral collateral change due collateral net collateral inflows due to outflows due to derivative change due to change due to derivative to derivative transaction derivative derivative transaction transaction valuation transaction transaction valuation valuation changes (A)– valuation valuation changes changes (B) changes changes

A B C D E

Day 1 ...... 72 78 ¥6 ¥6 6 Day 2 ...... 78 0 78 72 72 Day 3 ...... 35 85 ¥50 22 22 Day 4 ...... 18 30 ¥12 10 10 Day 5 ...... 77 59 18 28 28 Day 6 ...... 9 53 ¥44 ¥16 16 Day 7 ...... 53 24 29 13 13 Day 8 ...... 81 92 ¥11 2 2 Day 9 ...... 66 2 64 66 66 Day 10 ...... 56 58 ¥2 64 64 Day 11 ...... 7 32 ¥25 39 39 Day 12 ...... 62 10 52 91 91 Day 13 ...... 96 90 6 97 97 Day 14 ...... 54 83 ¥29 68 68 Day 15 ...... 73 45 28 96 96 Day 16 ...... 11 62 ¥51 45 45 Day 17 ...... 65 55 10 55 55 Day 18 ...... 87 55 32 87 87 Day 19 ...... 1 43 ¥42 45 45 Day 20 ...... 96 99 ¥3 42 42 Day 21 ...... 3 89 ¥86 ¥44 44 Day 22 ...... 95 49 46 2 2 Day 23 ...... 18 90 ¥72 ¥70 70 Day 24 ...... 48 54 ¥6 ¥76 76 Day 25 ...... 18 100 ¥82 ¥158 158 Day 26 ...... 86 74 12 ¥146 146 Day 27 ...... 51 65 ¥14 ¥160 160 Day 28 ...... 48 19 29 ¥131 131 Day 29 ...... 40 74 ¥34 ¥165 165 Day 30 ...... 52 32 20 ¥145 145

g. Brokered Deposit Outflow Amount for deposit as any deposit held at the Act (FDI Act).67 The agencies’ proposed Retail Customers and Counterparties covered company that is obtained, outflow rates for brokered deposits from The proposed rule provided several directly or indirectly, from or through retail customers or counterparties was outflow rates for retail brokered deposits the mediation or assistance of a deposit based on the type of account, whether held by covered companies. The broker, as that term is defined in section proposed rule defined a brokered 29(g) of the Federal Deposit Insurance 67 12 U.S.C. 1831f(g).

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deposit insurance was in place, and the the potential instability of such deposits as traditional retail deposits and should maturity date of the deposit agreement. during a liquidity stress event. The not be subject to the proposed rule’s 100 Outflow rates for retail brokered agencies also are concerned that percent outflow rate. According to the deposits were further subdivided into statutory restrictions on certain commenters, in many instances these reciprocal brokered deposits, brokered brokered deposits make this form of deposits involve direct relationships sweep deposits, and all other brokered funding less stable than other deposit between the banking organization and deposits. The agencies received several types under certain stress scenarios. the retail customer with little continued comments arguing that: (i) The proposed Specifically, a covered company that involvement of the deposit broker. outflow rates for each category of becomes less than ‘‘well capitalized’’ is Likewise, commenters stressed that the brokered deposits were too high; (ii) the subject to restrictions on accepting LCR generally provides for lower applicable definitions and key terms deposits through a deposit broker. treatment of retail-related outflows, and lacked clarity and precision; and (iii) Additionally, the agencies disagree with argued that this 100 percent outflow the proposed rule would have a number commenters’ views that brokered assumption is higher than the 40 of unintended consequences, including deposits are as low risk as other percent outflow assumption for potentially disrupting an important, unsecured retail deposits. During the wholesale brokered deposits. stable funding source for many banking recent crisis, the FDIC found that: (i) To address these commenters’ organizations. Failed and failing banking organizations concerns about the outflow rate applied The agencies are adopting many were more likely to have brokered to such deposits, the agencies are aspects of the proposed rule, with deposits than other banking providing separate outflow rates for revisions to certain elements in organizations; (ii) replacing core non-maturity brokered deposits in response to commenters and to better deposits with brokered deposit funding transactional accounts. Under the final reflect the liquidity risks of brokered tended to raise a banking organization’s rule, retail brokered deposits held in a funding, as described in this section. default probability, and (iii) banking transactional account with no The agencies continue to believe that organizations relying on brokered contractual maturity date receive a 20 brokered deposits have the potential to deposits were more costly to resolve.68 percent outflow rate if the entire amount exhibit greater volatility than funding Because banking organizations that rely is covered by deposit insurance and a 40 from stable retail deposits, even in cases heavily on brokered deposits have been percent outflow rate if less than the where the deposits are fully or partially shown to engage in relatively higher- entire amount is covered by deposit insured, and thus believe that higher risk lending than institutions with more insurance. This outflow rate covers outflow rates, relative to some other core deposits, banking organizations brokered deposits that are in traditional retail funding, are appropriate. Brokered that rely heavily on brokered deposits retail banking accounts and are used by deposits are more easily moved from are more likely to experience significant the customers for their transactional one institution to another, as customers losses during stress conditions, which, needs, and would include non-maturity search for higher interest rates. in turn, may cause these banking affinity group referral deposits and Additionally, brokered deposits can be organizations’ capital levels to fall and, third-party marketer deposits where the subject to both regulatory limitations in turn, restrict their ability to replace deposit is held in a transactional and limitations imposed by the brokered deposits that run off or mature. account with the bank. The agencies facilitating deposit broker when an The agencies continue to have the believe these deposits have lower institution’s financial condition concerns noted above and are finalizing liquidity risk than other types of deteriorates, and these limitations can the treatment of retail brokered deposits brokered deposits, but nevertheless become especially problematic during largely as proposed. However, in warrant higher outflow treatment than periods of economic stress when a response to commenters, the final rule the unsecured retail deposits in § l banking organization may be unable to modifies the treatment of certain non- .32(a) due to the presence of third-party renew such deposits. maturity brokered deposits in retail intermediation by the deposit broker, which may result in higher outflows i. Retail Brokered Deposit Outflow Rates transactional accounts to provide for a lower outflow rate, as described below. during periods of stress. The outflow Several commenters contended that rates under the final rule are intended the outflow rates for all categories of (a). Non-Maturity Brokered Deposits in to be consistent with the outflow rates retail brokered deposits were too high, Transactional Accounts for unaffiliated brokered sweep that they were inconsistent with the Under the proposed rule, brokered deposits, discussed below, and the liquidity risks posed by these deposits that mature within 30 calendar agencies’ treatment of professionally transactions, and that they should be days of a calculation date that are not managed deposits that do not qualify as lowered. Commenters argued that the reciprocal deposits or brokered sweep brokered deposits, discussed above liquidity characteristics of most deposits would have been subject to a under section II.C.3.a. brokered deposits warranted outflow 100 percent outflow rate. Several (b). Other Brokered Deposits rates consistent with the unsecured commenters argued this outflow rate retail outflow rates specified in was unrealistic and would disrupt a As noted above, under the proposed § l.32(a) of the proposed rule (for valuable source of funding. In rule, all other brokered deposits would example, 3 percent for fully insured particular, commenters argued that have been defined to include those retail deposits and 10 percent for all certain non-maturity brokered checking brokered deposits that are not reciprocal other retail deposits). and transactional account deposits, such brokered deposits or are not part of a As noted in the preamble to the as affinity group deposits, are as stable brokered sweep arrangement. These proposed rule, the agencies consider deposits were subject to an outflow rate brokered deposits for retail customers or 68 See Federal Deposit Insurance Corporation, of 10 percent for deposits maturing counterparties to be a more volatile form ‘‘Study on Core Deposits and Brokered Deposits,’’ more than 30 calendar days from the of funding than stable retail deposits, Submitted to Congress pursuant to the Dodd-Frank calculation date or 100 percent for Wall Street Reform and Consumer Protection Act even if deposit insurance coverage is (FDIC Brokered Deposit Study), at pages 34–45 deposits maturing within 30 calendar present, because of the structure of the (2011), available at http://www.fdic.gov/regulations/ days of the calculation date. With attendant third-party relationship and reform/coredeposit-study.pdf. respect to other brokered deposits

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maturing within 30 calendar days of the provide a rationale for diverging from same top-tier company of a covered calculation date, commenters argued the Basel III Revised Liquidity company (unaffiliated brokered sweep that the 100 percent outflow rate for Framework, which applies a zero deposits), would have been assigned a such deposits was unnecessarily high percent outflow rate to deposits that 25 percent outflow rate. All brokered due to the rollover rates banking have a stated contractual maturity date sweep deposits that are not entirely organizations observed for such longer than 30 days. Although many covered by deposit insurance, regardless deposits. In addition, one commenter agreements for brokered deposits with of the affiliation between the bank and argued that the agencies’ treatment of contractual maturity provide for limited the broker, would have been assigned a deposits entirely covered by deposit contractual withdrawal rights, as with 40 percent outflow rate because they insurance was inconsistent because a non-brokered term retail deposits, the have been observed to be more volatile brokered sweep deposit that is not agencies believe that covered companies during stressful periods, as customers entirely insured is subject to a 40 may agree to waive such contractual seek alternative investment vehicles or percent outflow rate while an entirely maturity dates for retail deposits. The use those funds for other purposes. The insured brokered time deposit is subject agencies believe a brokered deposit agencies received a number of to a 100 percent outflow rate if it should not obtain more favorable comments on the outflow rates for matures within the 30-day period. The treatment than a non-brokered deposit brokered sweep deposits. However, for commenter suggested that all deposits because the relationship between the the reasons discussed below and in the that are fully insured (retail or brokered deposit customer and the proposal, other than changing the level wholesale) should receive the same covered company is not as strong as the of affiliation required for the 10 percent treatment for the purposes of the LCR. relationship between a direct retail Several commenters requested customer and the covered company, as affiliated brokered sweep deposit clarification regarding the treatment of a brokered deposit interposes a third outflow rate to apply, the agencies are retail brokered deposits that allow for party. Accordingly, the agencies are adopting in the final rule the proposed early withdrawal upon the payment of adopting this provision of the rule as rule’s treatment of brokered sweep a financial penalty, such as a certain proposed. deposits with respect to outflow amount of accrued interest. amounts. (c). Brokered Sweep Deposits As discussed in the proposal, the Several commenters maintained that agencies believe the 100 percent outflow Brokered sweep deposits involve the outflow rates applied to fully- rate is appropriate for other brokered securities firms or investment insured brokered deposits (10 percent deposits maturing within the 30 companies that ‘‘sweep’’ or transfer idle for reciprocal and affiliated brokered calendar-day period because under customer funds into deposit accounts at sweep deposits, and 25 percent for non- stress, there is a greater probability that one or more depository institutions. affiliated brokered sweep deposits) counterparties will not renew and that Under the proposed rule, such deposits should be lowered to be more consistent covered companies will not be able to would have been defined as those that with the fully insured rate of 3 percent renew brokered deposits due to are held at the covered company by a to unsecured stable retail deposits. associated regulatory restrictions. customer or counterparty through a Similarly, commenters asserted that the Therefore, the agencies believe covered contractual feature that automatically outflow rates applicable to partially companies should not rely on the transfers funds to the covered company insured brokered deposits (25 percent renewal or rollover of such funding as from another regulated financial for reciprocal brokered deposits and 40 company at the close of each business a source of liquidity during a stress percent for brokered sweep deposits) day. The definition of ‘‘brokered sweep period. Accordingly, other than the were too high and should be lowered to deposit’’ under the proposed rule would changes for non-maturity brokered be more closely aligned with the have covered all deposits under such deposits in transactional accounts corresponding outflow rate for less- arrangements, regardless of whether the discussed above, the agencies are stable unsecured retail deposits (10 adopting this provision of the rule as deposit qualified as a brokered deposit percent). The agencies believe that the proposed. The agencies are clarifying under the FDI Act. outflow rates for brokered sweep that, under the final rule, all retail The proposed rule would have deposits as set forth in the proposed brokered deposits, regardless of assigned these deposits progressively rule are appropriate in light of the contractual provisions for withdrawal, higher outflow rates depending on are subject to the outflow rates provided deposit insurance coverage and the additional liquidity risk arising as a in the proposed rule, including the 10 affiliation between the bank and the result of deposit intermediation. In percent outflow rate for brokered broker sweeping the deposits. Under the addition, in contrast to retail deposit deposits maturing more than 30 proposed rule, brokered sweep deposits accounts which are typically composed calendar-days after the calculation date. that are entirely covered by deposit of funds used by the depositor for In addition, several commenters insurance, and that are deposited in transactional purposes (for example, suggested that the 10 percent outflow accordance with a contract between a checking accounts), brokered sweep rate for other brokered deposits retail customer or counterparty and a accounts are composed of deposits that maturing outside the 30 calendar-day covered company, a covered company’s are used for the purchase or sale of period was unnecessarily conservative, consolidated subsidiary, or a company securities. During a period of significant and urged the agencies to recognize the that is a consolidated subsidiary of the market volatility and distress, customers contractual terms in retail brokered same top-tier company (affiliated may be more likely to purchase or sell deposit agreements that restrict early brokered sweep deposits), would have securities and withdraw funds from withdrawal. Several commenters been assigned a 10 percent outflow rate. such accounts. Moreover, the agencies requested clarification regarding the Brokered sweep deposits that are believe that customers would be more treatment of retail brokered deposits entirely covered by deposit insurance likely to withdraw funds from their that allow for early withdrawal upon the but that do not originate with a covered ancillary accounts, such as the brokered payment of a financial penalty, such as company, a covered company’s sweep accounts, prior to depleting a certain amount of accrued interest. A consolidated subsidiary, or a company resources in accounts used for day-to- commenter requested that the agencies that is a consolidated subsidiary of the day transactions. Accordingly, the

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agencies are adopting in the final rule non-affiliated sweep deposits are more (d). Reciprocal Brokered Deposits the relevant outflow rates as proposed. reflective of a relationship associated The proposed rule would have Several commenters requested that with wholesale operational deposits. applied a 10 percent outflow rate to all the agencies not distinguish between Affiliated brokered sweep deposits reciprocal brokered deposits at a affiliate and non-affiliate relationships generally exhibit a stability profile covered company that are entirely in applying outflow rates to brokered associated with retail customers, covered by deposit insurance. Any sweep deposits. In particular, because the affiliated sweep providers reciprocal brokered deposits not entirely commenters argued that unaffiliated generally have established relationships covered by deposit insurance received sweep arrangements operated by a with the retail customer that in many an outflow rate of 25 percent. A program operator, where the customer circumstances include multiple reciprocal brokered deposit was defined controls the selection of the banking products with both the covered in the proposed rule as a brokered organizations in which deposits may be company and the affiliated broker- deposit that a covered company receives placed, have far lower outflow rates due dealer. Affiliated brokered sweep through a deposit placement network on to the limited intermediation of the deposit relationships are usually a reciprocal basis such that for any program operator. According to these developed over time. Additionally, the deposit received, the covered company commenters, the program operator is agencies believe that because such (as agent for the depositor) places the required to place deposits in accordance deposits are swept by an affiliated same amount with other depository with levels set forth in the contractual company, the affiliated company would institutions through the network and agreements with the banking be incented to minimize harm to any each member of the network sets the organizations and broker-dealers, and in affiliated depository institution. many cases, is required to reduce In contrast, depository institutions in interest rate to be paid on the entire overall volatility in the deposits to unaffiliated brokered sweep deposit amount of funds it places with other amounts below the outflow rates in the programs have relationships only with a network members. Reciprocal brokered proposed rule. Commenters requested a third-party intermediary, rather than deposits generally have been observed lower outflow rate for unaffiliated with retail customers. Balances in an to be more stable than certain other brokered sweep deposits that are subject unaffiliated brokered sweep accounts brokered deposits because each to a contractual non-volatility are purchased and can fluctuate institution within the deposit placement requirement or a contractual significantly depending on the type of network typically has an established arrangement that obligates a deposit contractual relationship the banking relationship with the retail customer or broker to maintain a minimum amount organization has with the unaffiliated counterparty that is making the initial with the depository institution. In broker. Additionally, the introduction of over-the-insurance-limit deposit that addition, these commenters requested the third-party intermediary adds necessitates distributing the deposit that the agencies recognize the impact of volatility to the deposit relationship in through the network. a depository institution’s contracts with times of stress, as it is possible the third- Several commenters contended that broker-dealers and treat outflows more party intermediary will move entire the outflow rate applied to fully-insured favorably if that depository institution balances away from the bank. With reciprocal deposits (10 percent) should would contractually receive funds respect to contractual requirements for be lowered to be more consistent with ahead of other institutions. One the amount to be swept, although such the fully insured rate of 3 percent to commenter requested that the agencies requirements may add additional unsecured stable retail deposits, and require that affiliated brokered sweep stability during normal market that the rate for partially insured deposits be subject to agreements conditions, the agencies believe that reciprocal deposits (25 percent) should providing for substantial termination during a period of significant market be lowered to more closely align with and withdrawal penalties to minimize distress and volatility, deposit brokers the outflow rate for less-stable accelerated client-driven withdrawal. may be unable to abide by such unsecured retail deposits (10 percent). Finally, one commenter stated that data commitments as market transaction The agencies continue to believe that from its own proprietary program shows volumes rise. reciprocal deposits, like other brokered that fully insured, unaffiliated brokered One commenter requested deposits, present elevated liquidity sweep deposits and fully insured, clarification regarding the treatment of risks. During periods of material reciprocal brokered deposits are stickier the agreement between the bank and a financial distress or an idiosyncratic than would be implied by the outflow deposit broker relating to minimum event involving a particular institution, rates assigned in the proposed rule. The balances over a period longer than 30 depositors or program operators may commenter argued that customers could days, and whether such agreements terminate their relationships with a be deprived access to these insured cause brokered sweep deposits to be banking organization, resulting in a sweep deposit programs if banking treated as deposits maturing greater than significant loss of funding. Accordingly, organizations reduce or eliminate their 30 days because of the aggregate balance the agencies have adopted in the final use of these deposits as a funding source requirement. The agencies are clarifying rule the proposed definition and because of application of a higher that such provisions do not alter the outflow rates for reciprocal brokered outflow rate to them. The commenter contractual maturity of the underlying deposits. further stated that a substantial portion deposit, which are typically non- (e). Empirical Data of these funds, which currently flow to maturity or overnight deposits, and do these banking organizations, would be not cause such deposits to become Several commenters requested that diverted to money market mutual funds deposits that mature more than 30 the agencies provide data or an or other investments outside the calendar days from a calculation date. empirical analysis to support the banking system were they subject to a Accordingly, other than the change to proposed outflow rates for reciprocal higher outflow rate. the level of affiliation required under and other brokered deposits. Many The agencies believe that affiliated the affiliated sweep deposit outflow commenters concurred with the FDIC brokered sweep deposits are more rate, discussed below, the agencies are Brokered Deposit Study’s conclusion reflective of an overall relationship with adopting this provision of the final rule that comprehensive, industry-wide data the underlying retail customer, while as proposed. for different types of brokered deposits

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is not available. As one commenter ii. Definitions and Key Terms intermediation by nonbank employees, noted, while banking organizations are In connection with the treatment of like intermediation by third-parties, required to report their total brokered brokered deposits, several commenters could result in greater liquidity risks. In response to the comment about deposits on the Consolidated Report of requested that key definitions and terms what types of transactions would be Condition and Income (Call Report), in the proposed rule be modified or captured under § __.32(g)(1) and there is no breakdown by type of updated to reflect a number of key § __.32(g)(2) of the proposed rule, the deposit account, specific maturity of characteristics. Specifically, agencies are clarifying that these CDs, or interest rates. Thus, the commenters requested that the agencies provisions include all brokered deposits commenter stated that banking modify the definitions of brokered that are not reciprocal brokered organizations currently do not report the deposit and consolidated subsidiary and deposits, brokered sweep deposits, or, information necessary for a requested that the agencies clarify the comprehensive examination of the under the new provision included in the meaning of fully insured deposits, pass- final rule as discussed above, non- brokered deposit market and its through insurance, penalties for component parts. Some commenters maturity brokered deposits that are in withdrawal, and a number of other transaction accounts, which would submitted data to show that the terms. proposed brokered deposit outflow rates include transactional accounts with no were too conservative. (a). Definition of Brokered Deposit maturity date that are placed through certain marketers, affinity groups, and The agencies believe a conservative A commenter expressed concern that approach to setting brokered deposit Internet deposit broker entities. the proposed rule incorporated the Finally, the agencies are clarifying outflow rates for the purposes of the definition of brokered deposit from the LCR is appropriate in light of limited that the FDIC’s longstanding guidance FDI Act and the FDIC’s regulations, and interpretations will remain in effect. available data, the findings of the FDIC which the commenter stated were The FDIC will remain the Federal Brokered Deposit Study showing that developed many years ago for a different banking agency primarily responsible increased reliance on brokered deposit purpose and at a time when views of for matters of interpretation relating to rates is correlated with higher overall liquidity risks were different. Another section 29(g) of the FDI Act, and will risk, and the strong incentives third- commenter requested clarification continue to work closely with the Board party brokers have to provide the whether the Board and the OCC would and OCC to ensure consistent highest possible returns for their clients be interpreting the FDI Act’s brokered application of the LCR to covered by seeking accounts paying the highest deposit definitions for purposes of the companies. interest rates. Moreover, the agencies LCR and whether the FDIC’s prior believe the assumptions and provisions interpretations remained binding. Two (b). Definition of ‘‘Consolidated of § __.32(g) are consistent with the commenters stated that the FDI Act’s Subsidiary’’ available sources of information, definition of brokered deposit and the One commenter requested that the including the FDIC Brokered Deposit FDIC’s interpretations would cover agencies change the definition of Study, guidelines provided in the Basel arrangements that would generally be ‘‘consolidated subsidiary’’ for purposes III Revised Liquidity Framework, and considered retail stable deposits such as of the affiliated brokered sweep deposit supervisory information reviewed by deposits placed by employees of outflow rate so that subsidiaries that are the agencies. Based on the information affiliates of a bank. Finally, one controlled under the BHC Act or available to the agencies, the agencies commenter requested additional clarity affiliates that are under common control continue to believe that brokered regarding what type of deposits (those under the BHC Act are subject to the deposits represent a more volatile from affinity groups, affiliates or third lower outflow rate rather than solely source of funding than typical retail parties) would count as other brokered subsidiaries and affiliates that are deposits, thus warranting the outflow deposits for purposes of § __.32(g)(1) consolidated under GAAP. This rates that were proposed. and § __.32(g)(2) of the proposed rule. commenter argued that the BHC Act (f). Other Comments The definition of brokered deposit is affiliate relationship is well recognized adopted as proposed because it in the U.S. bank regulatory scheme, One commenter suggested that the continues to sufficiently capture the notably Federal Reserve Act sections agencies allow covered companies to types of funding with increased 23A and 23B, as implemented by the use internal models to determine liquidity risk that the LCR is designed Board’s Regulation W, and further noted outflow rates instead of using the to capture, including deposits provided that the commenter had structured its proposed rule’s standardized outflow by: (a) Persons engaged in the business brokered sweep deposit arrangement rates. While the internal stress-testing of placing deposits, or facilitating the with its affiliate to comply with these requirements of certain covered placement of deposits, of third parties regulatory restrictions. companies under the Board’s Regulation with insured depository institutions or The agencies have concluded that it YY 69 permit firms to use internally- the business of placing deposits with would be consistent with the purposes developed models for liquidity stress insured depository institutions for the of the LCR to extend the scope of testing, the LCR is a standardized metric purpose of selling interests in those affiliated brokered sweep arrangements that provides for comparability across deposits to third parties; and (b) an under the final rule to include all institutions subject to the rule. agent or trustee who establishes a relationships between affiliates that are Accordingly, the agencies are not deposit account to facilitate a business ‘‘controlled’’ under the BHC Act. Such adopting provisions in the final rule that arrangement with an insured depository affiliates would be subject to all the would allow covered companies to institution to use the proceeds of the requirements of the BHC Act, sections determine outflow rates using their account to fund a prearranged loan. As 23A and 23B of the Federal Reserve Act, internal models as an alternative to the noted by a commenter, this would and the Board’s Regulation W, and thus standardized outflow rates outlined in include the placement or facilitation of such deposits are indistinguishable from the final rule. the placement of deposits by an those where the subsidiary or affiliated employee of an affiliate of a bank. The is consolidated. Accordingly, the 69 See 12 CFR part 252. agencies believe that such agencies have modified the provision of

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the rule relating to affiliated sweep The agencies are clarifying that the right exists to withdraw the deposit or arrangements such that any fully final rule does not alter the treatment of such rights are strictly limited. insured brokered sweep deposits that pass-through insurance for deposits, As noted above, the agencies have are deposited in accordance with a such that deposits owned by a principal clarified for purposes of the final rule contract between the retail customer or or principals and deposited into one or that deposits that can only be counterparty and the bank, a controlled more deposit accounts in the name of an withdrawn in the event of death or subsidiary of the bank, or a company agent, custodian or nominee, shall be incompetence are assumed to mature on that is a controlled subsidiary of the insured to the same extent as if the applicable maturity date, and same top-tier company of which the deposited in the name of the deposits that can be withdrawn bank is a controlled subsidiary are principal(s) if certain requirements are following notice or the forfeiture of subject to a 10 percent outflow rate, satisfied.70 Under FDIC regulations, to interest are subject to the rule’s while brokered sweep deposits not qualify for pass-through insurance, the assumptions for non-maturity subject to such an agreement are subject account records of a covered company transactions. The agencies decline to to a 25 percent outflow rate. must disclose the agency relationship treat the assessment of deposit penalties the same as contractual prohibitions to (c). ‘‘Fully Covered by Insurance’’ among the parties. Second, the identities and interests of the actual withdrawal, but for the occurrence of a One commenter raised the concern owners must be ascertainable either remote contingency, because the that it would be difficult to distinguish from the account records of the covered assessment of the liquidity between fully insured and partially company or records maintained by the characteristics of such fees, and whether insured or uninsured deposits because, agent or other party. Third, the agency they deter withdrawal, would be in the case of brokered sweep deposits, or custodial relationship must be difficult to undertake and could have the covered company would not genuine.71 unintended consequences for retail necessarily know the identity of the With respect to brokered deposits customers. Additionally, while typical depositor and because recordkeeping held by a fiduciary or an agent on behalf agreements for brokered deposits that would be done by the deposit provider of a retail customer or counterparty, the mature in more than 30 calendar days and would be provided to the covered agencies are clarifying that under the provide for more limited contractual company only in the event of a bank final rule, such deposits would be withdrawal rights, the agencies decline failure. Another commenter requested subject, as applicable, to the outflow to provide more favorable treatment for that the agencies assess the cost for rate of non-maturity brokered deposits these deposits relative to similar retail determining whether deposits are fully deposits. Therefore, the agencies are insured, particularly those deposits that in a transactional account, reciprocal deposits, brokered sweep deposits, or adopting this provision of the rule as receive pass-through insurance, and proposed. requested that the agencies clarify the any other type of brokered deposits. level of certainty a covered company is With respect to deposits that are held (f). Additional Brokered Deposit required to have prior have in by a fiduciary, but do not qualify as Categories determining whether a deposit is below brokered deposits under certain One commenter requested that the the deposit insurance threshold. exceptions to the FDIC’s brokered agencies establish categories for The agencies believe that a covered deposit regulations, the agencies have additional types of brokered deposits, __ __ company should be able to identify the added § .32(a)(3) and § .32(a)(4) to namely brokered checking accounts, applicable treatment for all of its reflect that a trustee or similar third brokered savings accounts, and deposits deposits under the proposed rule by party may deposit funds at a covered referred by affinity groups, affiliates, or obtaining the applicable information company as trustee for the benefit of third party marketers. through the deposit provider, retail customers or counterparties. The agencies did not attempt to irrespective of a bank failure. The These provisions complement the newly specifically identify every type of retail agencies note that banking organizations added provisions for non-maturity brokered deposit in the proposed rule. are expected to have adequate policies brokered deposits in a transactional As discussed above, the agencies have and procedures in place for determining account. In those cases, where the included an additional category of whether deposits are above the criteria of § __.32(a)(3) and § __.32(a)(4) outflows for non-maturity brokered applicable FDIC-insurance limits. are satisfied, a covered company may deposits in transactional accounts. The Therefore, the agencies are adopting this look through to the retail customer or agencies believe that all other types of provision as proposed. counterparty and apply the 20 percent brokered deposits are appropriately outflow rate to deposits that are fully captured in § __.32(g)(1) of the final (d). Pass-Through Insurance covered by deposit insurance and the 40 rule. Commenters raised the issue of the percent outflow rate where less than the proposed rule’s treatment of brokered entire amount of the deposit is covered iii. Deposit Market Consequences deposits that are held in custody for a by deposit insurance. Several commenters asserted that the depositor by a conduit financial entity, proposed requirements of § __.32(g) (e). Penalties Versus Contractual such as a trust corporation, where the could adversely impact the brokered Restrictions for Withdrawal depositor, but not the custodial entity, deposit markets, preclude covered is eligible for deposit insurance on a Similar to the Basel III Revised companies from obtaining key sources pass-through basis. Commenters noted Liquidity Framework, commenters of funding, affect investor perceptions that the proposed rule only looks to the requested that the agencies differentiate about the risks of brokered deposits, and identity of the custodial entity, but between brokered deposits that are allocate funds away from the banking ignores the pass-through insurance to subject to withdrawal penalties (such as system as a result of elevated brokered which such deposit accounts are the loss of accrued interest), and those deposit outflow rates, among other subject. These commenters asserted that brokered deposits where no contractual unintended consequences. One such brokered deposits should be commenter suggested that the proposed treated as fully-insured retail deposits 70 12 CFR 330.7. rule would harm retail investing by under the LCR. 71 Id. broker-dealer clients, who would be

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faced with elevated costs without any one institution to another, and can be the covered company, be subject to an additional consumer protection benefit, risky to rely upon as a source of outflow rate of 100 percent. This higher and requested that the final rule exempt liquidity on account of regulatory outflow rate is associated with the depository institution holding limitations. In sum, the agencies believe elevated refinancing or roll-over risk in companies with substantial retail that the standard set forth in § __.32(g) a stressed situation and the agencies’ brokerage activities. Another commenter will serve to strengthen the overall concerns regarding the suggested that the proposed treatment financial system as well as the retail interconnectedness of financial for reciprocal deposits could impact brokered deposit market. institutions. community banks not subject to the LCR Two commenters suggested that by distorting the market standards and h. Unsecured Wholesale Funding wholesale reciprocal brokered deposits pricing for these types of deposits. One Outflow Amount are as stable as retail reciprocal brokered commenter suggested that the proposal’s The proposed rule included three deposits, and should be subject to the treatment of brokered sweep deposits general categories of unsecured same outflow rates. These commenters would cause the cost of such products wholesale funding: (i) Unsecured stated that the impact of insurance to increase, leading investors to seek wholesale funding transactions; (ii) coverage should be reflected in the case products outside of the banking sector, operational deposits; and (iii) other of wholesale brokered deposits such as money market mutual funds, at unsecured wholesale funding which (including wholesale reciprocal a greater cost to financial stability. would, among other things, encompass deposits) by assigning such deposits the Another commenter suggested that funding from a financial company. The same outflow rates that apply to non- applying the existing definition of proposed rule defined each of these brokered deposits; that is, 20 percent if brokered deposit in FDIC regulations categories of funding instruments as fully-insured and 40 percent if not fully- would have unintended consequences, being unsecured under applicable law insured. such as having employees who are by a lien on specifically designated One commenter argued that the primarily compensated by commissions assets. Under the proposed rule, proposed rule defines the term versus salary being considered deposit unsecured wholesale funding wholesale deposits broadly and brokers. One commenter stated that the instruments typically would have improperly categorizes deposits placed FDI Act’s treatment of brokered deposits included: Wholesale deposits; 73 federal by pension funds on behalf of a retail at well-capitalized institutions, which funds purchased; unsecured advances counterparty as wholesale deposits allows for those institutions to accept from a public sector entity, sovereign placed by a financial sector entity. The brokered deposits without limit, entity, or U.S. GSE; unsecured notes; commenter argued that under FDIC warrants the same outflow rate as bonds, or other unsecured debt regulations, deposit accounts held by applicable to stable retail deposits. The securities issued by a covered company employee benefit plans are insured on a commenter stated that the proposed rule (unless sold exclusively in retail pass-through basis to the benefit of plan appears to stigmatize brokered deposits markets to retail customers or beneficiaries and in many plans, a and requested that the FDIC clarify its counterparties), brokered deposits from beneficiary can direct the investment of liquidity guidance. One commenter non-retail customers, and any other the funds, which merits retail treatment argued that the uniqueness of deposit transactions where an on-balance sheet for such funds rather than wholesale insurance (for example, the relatively unsecured credit obligation has been treatment. high insurance coverage, pass-through contracted. In addition, several commenters insurance, quick and orderly resolution disagreed with the agencies’ proposed of failed banks) should result in lower i. Non-Financial Wholesale outflow rate for unsecured wholesale outflow rates for insured brokered Counterparties and Financial Sector funding provided by financial sector deposits. This commenter stated that Entities entities. One commenter recognized the brokered deposits qualifying for full The agencies proposed to assign three agencies’ concern regarding the pass-through insurance should be separate outflow rates to non- interconnectivity of financial subject to the same outflow rate as fully operational unsecured wholesale institutions, but cautioned against insured stable retail deposits. Finally, funding, reflecting the stability of these potential increased costs for one commenter stated that the obligations based on deposit insurance correspondent banking and other distinction between affiliated and and the nature of the counterparty. services and for holding financial unaffiliated brokered sweep deposits Under the proposed rule, unsecured institution deposits for banks required would create an unfair disadvantage for wholesale funding provided by an entity to comply with the LCR. A commenter small broker-dealers and commercial that is not a financial sector entity argued that the proposed rule’s 100 banks without affiliated broker-dealers, generally would have been subject to an percent outflow rate for wholesale which will face relatively higher pricing outflow rate of 20 percent where the deposits by financial sector entities to place their swept deposits. entire amount is covered by deposit effectively eliminates any incentive for Despite the changes that the retail insurance. Deposits that are less than a banking organization to take such brokered deposit market will likely need fully covered by deposit insurance, or deposits and that they would therefore to undertake in response to the where the funding is a brokered deposit cease doing so. The commenter further application of the LCR, the agencies from a non-retail customer, would have argued that this would severely disrupt the availability of correspondent deposit believe that the provisions and been assigned a 40 percent outflow rate. __ options for depository institutions. assumptions underlying § .32(g) of the However, the proposed rule would have Another commenter suggested the proposed rule are consistent with the required all unsecured wholesale agencies reconsider the 100 percent potential risks posed by retail brokered funding provided by financial sector 72 outflow rate that would apply to deposits. As noted above, the agencies entities, including funding provided by correspondent banking deposits in continue to believe that brokered a consolidated subsidiary or affiliate of deposits have the potential to exhibit excess of amounts required for volatility, are more easily moved from 73 Certain small business deposits are included operational services, suggesting that the within unsecured retail funding. See section 40 percent outflow rate applicable to 72 78 FR 71840. II.C.3.a. supra. non-financial unsecured wholesale

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corporate deposits would be more deposits where the beneficiary can the covered company. These services appropriate. Another commenter direct the investment of the funds. Such would have been defined in the suggested treating correspondent non-brokered deposits placed by a third proposed rule as operational services banking relationships as operational and party on behalf of a retail customer or and a deposit required for each of their argued that assigning a 25 percent counterparty may be treated as retail provision was termed an operational outflow rate to such deposits would funding, as discussed above. In deposit. The proposed rule would have help support the provision of addition, as discussed above, to the applied a 5 percent outflow rate to an correspondent banking services to client extent such deposits placed by a operational deposit fully covered by banks, thereby ensuring the ability of pension fund meet the definition of deposit insurance (other than an escrow client banks to continue to service the retail brokered deposit, such deposits deposit) and a 25 percent outflow rate cash management needs of would be eligible for the retail brokered to an operational deposit not fully organizations that drive the real deposit outflow rates under § __.32(g) of covered by deposit insurance. economy. The commenter asked that the the final rule. The agencies received a number of agencies take an activity-based approach With respect to funding provided by comments regarding: (1) The proposed to the classification of correspondent an affiliate of a covered company, to rule’s definition of operational deposit banking outflows, such that outflows address commenters’ concerns, the and operational services; (2) the generated by correspondent transactions agencies are clarifying in the final rule operational criteria required to be met with underlying commercial operations that the 100 percent outflow rate for for a covered company to treat a relating to banks and their customers unsecured wholesale funding applies particular deposit as an operational would be classified as operational only to funding from a company that is deposit; and (3) the proposed rule’s because they behave in a similar fashion a consolidated subsidiary of the same outflow rates for operational deposits. In to those of corporate operational top-tier company of which the covered response to the comments received, the relationship accounts. One commenter company is a consolidated subsidiary. agencies have made certain requested that all corporate trust This outflow rate does not apply to modifications to these requirements, as deposits receive a 25 percent outflow funding from a consolidated subsidiary discussed below. rate regardless of whether the deposit of the covered company, which is Although many commenters qualified as an operational deposit. entirely excluded from the LCR appreciated the agencies’ recognition of Another commenter requested that calculation in the final rule under the provision of key services by many the agencies re-examine the treatment of § __.32(m), as discussed below. The covered companies in the form of lower funding provided by a subsidiary of a agencies also have added paragraph outflow rates for operational deposits, covered company and: (i) Not treat as an (h)(2)(ii) to the final rule to clarify that two commenters suggested that a model outflow funding provided by a debt instruments issued by a covered that segregates operational deposits subsidiary of the covered company; (ii) company that mature within a 30 from other deposits is inconsistent with not treat as an inflow amounts owed to calendar-day period, whether owned by how covered companies and their the covered company by a subsidiary; a wholesale or retail customer or customers structure their banking and (iii) not treat as an outflow or an counterparty, will receive a 100 percent operations. One commenter suggested inflow funding provided by one outflow rate. that application of this model could consolidated subsidiary of the covered The final rule is adopting the 100 lead to unnecessary confusion and company to another consolidated percent outflow rate for unsecured could push excess depository balances subsidiary. wholesale funding provided by financial into shadow banking. Another For the reasons discussed in the sector entities as proposed. The agencies commenter argued that the proposed proposal, the agencies continue to continue to believe that the liquidity rule’s broad definition of operational believe the proposed outflow rates risk profile of financial sector entities deposit could result in a lack of assigned to unsecured wholesale are significantly different from that of consistent application among covered funding are appropriate. As evidenced traditional corporate entities. Based on companies, as they would reflect their in the recent financial crisis, funding the agencies’ supervisory experience, own clients and product mixes in from wholesale counterparties, which during a period of material financial applying the definition. One commenter are generally more sophisticated than distress, financial sector entities tend to called for a simplified definition that retail counterparties, presents far greater withdraw large amounts of funding from could be applied uniformly across the liquidity risk to covered companies the financial system to meet their industry, stating that it would be during a stress period. With respect to obligations. The agencies believe the preferable to have a slightly higher wholesale brokered deposits (including outflow rates properly reflect the outflow rate in exchange for such wholesale reciprocal brokered deposits), liquidity risk present in the types of simplicity. the agencies continue to believe that the products offered to financial sector For the reasons discussed in the 40 percent outflow rate for all such entities. The agencies also are adopting proposal and below, the agencies deposits (regardless of insurance) is in the final rule the 20 percent and 40 continue to believe that the underlying appropriate given the intermediation or percent outflow rates for non-financial structure of the proposal’s approach to matchmaking by the deposit broker. The sector unsecured wholesale funding, as defining an operational deposit, which 100 percent outflow rate applicable to proposed. is consistent with the Basel III Revised other unsecured wholesale funding Liquidity Framework, is appropriate. As provided by financial sector entities ii. Operational Services and Operational noted by commenters, many customers mirrors the treatment for unsecured Deposit place deposits with covered companies wholesale cash inflows contractually The proposed rule would have as a result of their provision of key payable to the covered company from recognized that some covered services, such as payroll processing and financial sector entities. The agencies companies provide services, such as cash management. Because such note, however, that § __.32(a)(3) and those related to clearing, custody, and deposits are tied to the provision of § __.32(a)(4) have been added to the cash management, that increase the specific services to the customer, these final rule to address the commenter’s likelihood that their customers will deposits present less liquidity risk concern regarding pension fund maintain certain deposit balances with during a stress period. The agencies

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have made some changes to the merely as an independent third-party Framework to avoid excluding a definition of operational deposit, but intermediary. Finally, the agencies have substantial amount of deposits that are have retained the definition’s structure clarified in the final rule that secured truly operational in nature. as proposed because it unambiguously funding transactions that are After consideration, to address aligns a particular operational deposit collateralized deposits, as defined under commenters’ requests that services with an operational service, thereby the final rule, are eligible for the relating to the business of custody banks providing a standardized method for operational deposit outflow rates if the be included, the agencies have added a identifying operational deposits. deposits otherwise meet the final rule’s new subparagraph 2 to the definition of Accordingly, the agencies are adopting criteria. However, as discussed in operational services to include the in the final rule the structure for section II.C.3.j. below, such deposits administration of payments and cash defining operational deposit as would still be considered secured flows related to the safekeeping of proposed with the modifications funding transactions and could be investment assets, not including the discussed below. subject to lower outflow rates if the purchase or sale of assets. This is deposits are secured by level 1 liquid intended to encompass certain collateral (a). Definition of ‘‘Operational Deposit’’ assets or level 2A liquid assets. management payment processing The proposed rule would have provided by covered companies. Such defined an operational deposit as (b). Definition of ‘‘Operational Services’’ operational services solely involve the unsecured wholesale funding that is The proposed rule would have movement of money, and not the required to be in place for a covered included eleven categories of transfer of collateral, and are limited to company to provide operational services operational services provided by cash flows, and not the investment, as an independent third-party covered companies that would purchase, or sale of assets. Moreover, intermediary to the wholesale customer correspond to an operational deposit. the agencies wish to make clear that this or counterparty providing the unsecured Consistent with the Basel III Revised prong of the operational services wholesale funding. Liquidity Framework, the operational definition does not encompass any Many commenters indicated that an services would have included: (1) activity that would constitute prime operational deposit should be one that Payment remittance; (2) payroll brokerage services, as any deposit is ‘‘necessary’’ rather than ‘‘required’’ administration and control over the provided in connection with the for the banking organization to provide disbursement of funds; (3) transmission, provision of prime brokerage services by in light of the operational services reconciliation, and confirmation of a covered company could not be treated enumerated in the proposed rule, which payment orders; (4) daylight overdraft; as an operational deposit, as discussed would better align with industry (5) determination of intra-day and final in more detail below. practice. The commenters stated that settlement positions; (6) settlement of The agencies also have added ‘‘capital using ‘‘necessary’’ would make clear securities transactions; (7) transfer of distributions’’ to the now renumbered that such deposits are functionally recurring contractual payments; (8) subparagraph 8 of the operational necessary as opposed to contractually client subscriptions and redemptions; services definition. This addition was required. Commenters also requested (9) scheduled distribution of client necessary to clarify the intention of the that the agencies recognize that certain funds; (10) escrow, funds transfer, stock agencies to include such payments as an operational services may be provided by transfer, and agency services, including operational service along with recurring a covered company not only as an payment and settlement services, contractual payments when performed independent third-party intermediary, payment of fees, taxes, and other as part of cash management, clearing, or but also as an agent or administrator. expenses; and (11) collection and custody services. Finally, several commenters requested aggregation of funds. The agencies believe the final rule that certain collateralized deposits that Several commenters argued that the appropriately addresses the concerns of otherwise meet the eligibility criteria for list of operational services should be commenters while also treating as treatment as an operational deposit, expanded to include trustee services, operational services those services that such as preferred public sector deposits the administration of investment assets, are truly operational in nature. Defining or corporate trust deposits, be subject to collateral management services, operational services as the customary the outflow rates applicable to settlement of foreign exchange operational services performed by a operational deposits. transactions, and corporate trust covered company, as suggested by one In response to commenters’ concerns, services. Other commenters requested commenter, would have been overly the agencies have revised the definition that the agencies specifically include a broad and could have led to wide of operational deposit to state that the number of operational services that are variations in the treatment of deposit is ‘‘necessary’’ for the provision specific to the business of custody operational services across covered of operational services rather than banks. One commenter requested that companies. Moreover, it is not necessary ‘‘required.’’ The term ‘‘required’’ the final rule recognize that a covered to add the entire suite of corporate trust implied that the deposit was a company may provide these services as services to the list of enumerated contractual requirement as opposed to a trustee. One commenter suggested that defined operational services in order to incidental to the provision of the the rule define operational services as include those aspects of such business operational services, and may have those normal and customary operational lines that have the inherent or essential inadvertently limited the definition’s services performed by a covered qualities of operational services. The application. The agencies also have company, and use the rule’s enumerated existing twelve categories of services, added ‘‘agent’’ and ‘‘administrator’’ as services as illustrative examples. when performed as part of cash capacities in which a covered company Commenters also recommended that management, clearing, or custody may provide operational services that operational deposits include all deposits services, will adequately capture those give rise to a need for an operational obtained under correspondent banking corporate trust services that should be deposit, as there are circumstances, relationships. Another commenter captured by the operational service such as the provision of custody requested that the final rule better align definition. With respect to services, where a covered company acts the criteria for operational services with correspondent banking and foreign as an agent or administrator, rather than the Basel III Revised Liquidity exchange settlement activity, neither of

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those services in isolation enhance the written agreement. Additionally, the companies are still expected to assess stability of the funding to warrant a agencies have revised § l.4(b)(1) to whether there are operational reasons lower outflow rate; however, to the reflect that, in addition to or in lieu of for any notable shifts in the average extent that operational services are termination costs set forth in the written balances that occur over time. utilized by customers engaged in those agreement covering the operational (f). Deposit Must Be Held in Operational activities, associated deposits may be services, the final rule’s criterion would Account included as operational deposits. With be satisfied if a customer bears respect to the remaining operational significant switching costs to obtain In § __.4(b)(3) of the proposed rule, services identified in the proposed rule, operational services from another the agencies proposed that an the agencies have adopted the final rule provider. Switching costs include costs operational deposit be held in an as proposed. external to the contract for operational account designated as an operational services, such as the significant account. Two commenters expressed the (c). Operational Requirements for information technology, administrative, view that this provision was too Recognition of Operational Deposits and legal service costs that would be restrictive because cash management In addition to stipulating that the incurred in connection with the transfer practices allow customers to transfer deposit be required for the provision of of operational services to a new service funds across their entire banking operational service by the covered provider. Switching costs, however, relationship between sweep accounts, company to the customer, the proposed would not include the routine costs of interest bearing accounts, investment rule would have required that an moving an account from one financial accounts, and zero balance accounts. operational deposit meet eight institution to another, such as notifying These commenters argued that a qualifying criteria, each described counterparties of new account numbers customer’s funds need not be below. The agencies received a number or setting up recurring transactions. maintained in a transactional account of comments on these operational Rather, the favorable treatment for specified as an operational account so criteria, and have made certain operational deposits under the final rule long as the funds are liquid and modifications to these criteria in their is premised on strong incentives for a available for operational use without adoption of the final rule. customer to keep its deposits with the penalty when needed. covered company. After consideration of the comments, (d). Deposit Held Pursuant to Agreement the agencies have retained the and Subject to Termination or (e). Lack of Significant Volatility in requirement in the final rule. The Switching Costs Average Deposit Balance agencies believe this requirement allows Section l.4(b)(1) of the proposed rule Section l.4(b)(2) of the proposed rule covered companies to clearly identify would have required that an operational would have required that an operational the deposits that are eligible for deposit be held pursuant to a legally deposit not have significant volatility in operational deposit’s lower outflow rate, binding written agreement, the its average balance. The agencies and to prevent the intermingling of termination of which was subject to a proposed this requirement with the operational deposits with other minimum 30 calendar-day notice period intent to exclude surges in balances in deposits. Accordingly, under the final or significant termination costs to have excess of levels that customers have rule, an operational deposit must be been borne by the customer providing historically held to facilitate operational held in an account designated as an the deposit if a majority of the deposit services. operational account, which can be one balance was withdrawn from the Commenters found the proposed or more linked accounts. Such an operational deposit prior to the end of requirement in § __.4(b)(2) confusing. account need not take a specific form, a 30 calendar-day notice period. One commenter questioned how the but must be designated as an Many commenters stated that concept of ‘‘average balance’’ could be operational account for a specific operational deposits are typically held reconciled with ‘‘significant volatility,’’ customer so that it can be considered in in demand deposit accounts with no as averaging would in practice subsume identifying excess balances required notice or termination restrictions. the variability. Several commenters under § __.4(b)(5) of the final rule and Instead, the associated operational observed that an operational deposit discussed further below. services are provided pursuant to a account, by definition, would written contract that contains the experience volatility, as cash flows into (g). Primary Purpose of Obtaining relevant termination and notice and out of such an account over the Operational Services provisions. Commenters requested that course of a 30 calendar-day period. Section __.4(b)(4) of the proposed rule the final rule require that the Commenters expressed concern that the would have required that an operational operational services, not the operational ‘‘significant volatility’’ language could deposit be held by a customer at a deposits, be subject to a legally binding disqualify deposits based on these covered company for the primary written agreement. In addition, several normal variations in deposit balances. purpose of obtaining operational commenters suggested that the agencies Commenters suggested that the services from the covered company. recognize, in addition to termination agencies’ concerns regarding excess Commenters suggested that the best way costs such as fees or withdrawal funds would be better addressed to address the relationship between the penalties, switching costs that would be through the provisions of § __.4(b)(6), operational deposits and operational borne by a customer transitioning and that § __.4(b)(2) should be deleted. services would be to disqualify deposit operational services from one covered To address these concerns, the balances that are in excess of amounts company to another and could inhibit agencies have eliminated significant necessary to perform operational the transfer of operational services to volatility as a standalone criterion for services; that is, through § __.4(b)(6) of another provider. qualification as an operational deposit the proposed rule. Accordingly, these In response to the comments, the in the final rule, but have incorporated commenters requested the deletion of agencies have revised § l.4(b)(1) of the consideration of volatility into the this requirement from the final rule. final rule to require that the operational methodology that a covered company Alternatively, one commenter suggested services, rather than the operational must adopt for identifying excess that the agencies use the language from deposit, be provided pursuant to a balances, as discussed below. Covered paragraph 94 of the Basel III Revised

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Liquidity Framework and allow a incentive causes a customer to maintain deposits are not necessary for the deposit to be treated only as an deposit balances in excess of the provision of operational services and operational deposit to the extent that the amount necessary to serve the therefore do not exhibit these customer depends on the covered customer’s operational needs, then characteristics. company to perform the associated those excess balances would not qualify The agencies are of the view that there operational services. as operational deposits. is no single methodology for identifying After considering the comments, the excess deposits that will work for every agencies have adopted this requirement (i). Exclusion of ‘‘Excess’’ Amounts covered company, as there is a range of of the proposed rule without change. Section l.4(b)(6) of the proposed rule operational deposit products offered Based on their supervisory experience, would have required that a covered and covered company data systems the agencies understand that covered company demonstrate that an processing those products. Aggregation companies already review various operational deposit is empirically may be undertaken on a customer basis, characteristics, such as customer type, linked to an operational service and that a service basis, or both, but in all business line, product, and service, the covered company has a instances, a covered company’s analysis when classifying deposits as methodology for identifying any of operational deposits must be operational. The agencies expect that deposits in excess of the amount conducted at a sufficiently granular covered companies would review these necessary to provide the operational level to adequately assess the risk of same characteristics to categorize the services, the amount of which would be withdrawal in an idiosyncratic stress. primary purpose of the deposit in order excluded from the operational deposit The agencies expect covered companies to satisfy this provision of the rule. amount. Commenters generally to be able to provide supporting supported this criterion but requested documentation that justifies the (h). Prohibition of Economic Incentives clarification as to whether covered assumptions behind any aggregated To Maintain Excess Funds companies would be allowed to calculations of excess deposits and Section l.4(b)(5) of the proposed rule calculate excess balances on an expect that the higher (that is, the would have required that an operational aggregate basis rather than on a deposit- further from the individual account or deposit account not be designed to by-deposit or account-by-account basis. customer) the level of aggregation, the incent customers to maintain excess Commenters argued that absent such more conservative the assumptions funds therein through increased clarification, assessing operational related to excess deposit amounts will revenue, reduction in fees, or other deposits at an unnecessarily granular be. A covered company’s methodology economic incentives. Commenters level would be overly burdensome for must also take into account the remarked that a common feature of most covered companies and supervisors. volatility of the average deposit balance operational deposit accounts, the One commenter expressed concern that to ensure the proper identification of earnings credit rate (ECR), would seem the proposed rule would have required excess balances. Moreover, the agencies to violate this criterion and, therefore, covered companies to develop models believe that it is inappropriate to disqualify many deposits from being for determining the excess amount and exempt deposits received in connection treated as operational.74 Commenters requested that the agencies provide with particular operational services suggested that the ECR increases the clear criteria for determining excess from the requirement to identify excess strength of the relationship between a deposits. One commenter suggested, balances because all excess balances covered company and a customer, as it however, that allowing each banking may exhibit greater volatility than those encourages the customer to continue to organization to have its own that are necessary for the provision of obtain operational services from the methodology could lead to protracted operational services by a covered covered company. This, in turn, results negotiation with local supervisors and company. Accordingly, the agencies are in more stable operational deposit inconsistent implementation. adopting this provision of the rule as levels. Several commenters requested Commenters also expressed concerns proposed, with a modification to that the agencies remove this proposed regarding the identification of excess explicitly require a covered company to criterion on the grounds that it deposits in connection with particular take into account the volatility of the essentially aims to limit excess operational services, such as cash average operational deposit balance balances, and this is already addressed management and corporate trust when designing its methodology for in the proposed rule’s § l.4(b)(6). services and argued that the agencies identifying excess deposit amounts. The agencies believe this criterion should exempt such deposits from the better ensures that a deposit is truly excess operational deposit methodology. (j). Exclusion of Deposits Relating to necessary for an operational service, and The agencies believe it would be Prime Brokerage Services is not the result of an ancillary inappropriate to give excess operational Section l.4(b)(7) of the proposed rule economic incentive. For that reason, the deposit amounts the same favorable would have excluded deposits provided agencies are retaining this criterion in treatment as deposits that are truly in connection with the covered the final rule. However, the agencies are necessary for operational purposes, as company’s provision of prime brokerage clarifying that some economic doing so could lead to regulatory services from the operational deposit incentives, such as an ECR to offset arbitrage or distort the amount of outflow rates.75 The agencies defined expenses related to operational services, unsecured wholesale cash outflows in prime brokerage services as the are acceptable, so long as they do not the LCR calculation. Further, provision of operational services to an incent the maintenance of excess operational deposits are afforded a investment company, non-regulated deposits. If an ECR or other economic lower outflow rate due to their fund, or investment adviser. The perceived stability arising from the agencies defined prime brokerage in this 74 An ECR is a rate used by certain banking nature of the relationship between a manner to cover the primary recipients organizations in noninterest bearing accounts to customer and covered company and the of prime brokerage services. reduce the amount of fees a customer would be operational services provided, as well as Many commenters disagreed with the required to pay for bank services. The ECR would be applied to the entire balance of the account, and factors, such as the switching costs agencies’ approach in the proposed rule, thus, a larger balance would provide for a greater associated with moving such deposits, reduction in fees. as discussed above. In contrast, excess 75 Basel III Revised Liquidity Framework at ¶ 99.

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stating that defining prime brokerage as U.S. mutual funds and their foreign definition of operational deposits a services in terms of customer type equivalents, should not be included in subset of correspondent banking resulted in an operational deposit this category because they do not use arrangements pursuant to which a exclusion that was too broad, and prime brokerage services in their covered company (as correspondent) several argued that it would likely ordinary business operations. holds deposits owned by another exclude a broad range of operational The agencies have concluded that the depository institution (as respondent) deposits from custody banks, which proposed rule’s approach of defining and the respondent temporarily places provide safekeeping and asset prime brokerage services by excess funds in an overnight deposit administration services to investment counterparty could have been overly with the covered company. The companies that are wholly unrelated to broad in application, potentially agencies specifically excluded these prime brokerage services, as well as excluding many types of truly deposits from treatment as an clearly operational services such as operational services from the proposed operational deposit under the proposed employee compensation payroll services rule’s preferential treatment of rule because, although they may meet for a mutual fund complex. Several operational deposits. Therefore, in some of the requirements applicable to commenters suggested that rather than response to concerns raised by operational deposits, they historically focus on the type of client, the final rule commenters, the agencies have defined have exhibited instability during should focus on the specific prime prime brokerage services in the final stressed liquidity events. In doing so, brokerage services to be excluded from rule using the key aspects of the prime the agencies did not intend to exclude the definition of operational services. brokerage relationship. In addition to all banking arrangements with One commenter argued that this the execution, clearing and settling of correspondents, only those specifically transactions, the agencies believe it is proposed alternative treatment would be described in § l.4(b)(8) of the proposed the financing services and the retention beneficial in that, consistent with the rule. Basel III Revised Liquidity Framework, of rehypothecation rights by the prime it would not exclude stable deposits broker that distinguish prime brokerage Several commenters argued that the related to operational servicing from other operational services. This agencies’ proposed exclusion is broader relationships with mutual funds and financing and rehypothecation aspect of than that in the Basel III Revised their foreign equivalents. Commenters prime brokerage services merits Liquidity Framework and requested that noted that while many prime brokerage exclusion from operational services, as the agencies clarify that the exclusion services overlap with core operational highly-levered customers and the reuse for deposits provided in connection services such as cash management, of assets can expose covered companies with correspondent banking services is clearing, or custody, prime brokerage to significant liquidity risk. Under the limited to the settlement of foreign services differ from those services in final rule, prime brokerage services are currency transactions. In addition, that a prime broker generally facilitates those services offered by a covered several commenters argued that this the clearing, settling, and carrying of company whereby the covered company exclusion would exclude all deposits client trades that are executed by an executes, clears, settles, and finances under correspondent banking executing broker. A second transactions entered into by a customer relationships from application of the distinguishing feature of prime with the covered company or a third- operational deposit outflow rate. brokerage services identified by these party entity on behalf of the customer The agencies continue to believe that commenters is the provision of (such as an executing broker). The excess funds from a depository financing (for example, margin lending) covered company must also have a right institution placed in an overnight by the prime broker to facilitate the to use or rehypothecate assets provided deposit account are not stable, and have investment strategies of the client. to the covered company by the retained the exclusion of them from According to commenters, these customer, including in connection with operational deposits. However, the financing agreements require the client the extension of margin lending or other agencies have modified the final rule to to authorize the prime broker to financing to the customer. The final rule remove the phrase ‘‘correspondent rehypothecate client assets pledged to clarifies that prime brokerage services banking’’ from the proposed provision secure margin lending, as contrasted would include operational services in § l.4(b)(8) to address commenters’ with investment company assets held by provided to a non-regulated fund. The concerns that the exclusion applies to a custodian for safe-keeping, which by final rule explicitly states that prime all correspondent banking law must be segregated.76 brokerage services include those arrangements. With respect to the exclusion of non- provided to non-regulated funds because of the higher liquidity risks The proposed rule would have regulated funds, one commenter allowed correspondent banking deposits requested that the rule be revised to posed by the provision of these services to hedge and private equity funds. The that meet all operational requirements instead apply a higher outflow rate to to be included as operational deposits; the types of non-regulated funds that are agencies believe these changes capture the intent of the proposed rule, in that however, deposits arising from likely to withdraw deposits in a period correspondent banking relationships of stress. The commenter further deposits that are less stable do not qualify as operational deposits under that were not operational in nature suggested that closed-end funds that do would not have been categorized as not issue redeemable securities be the final rule. Accordingly, all deposits of a non-regulated fund will not be operational. The proposal would not excluded from the definition of non- have excluded from operational regulated funds, as well as a eligible for treatment as an operational deposit, regardless of the provision of deposits those correspondent banking consolidated subsidiary of a non- arrangements under which a regulated fund.77 Another commenter operational services by the covered company. correspondent bank held deposits argued that investment companies, such owned by respondent banks and (k). Exclusion of Certain Correspondent provided payment and other services in 76 15 U.S.C. 80a–17(f). Banking Activities 77 With respect to commenters’ requests regarding order to settle foreign currency non-regulated funds, the agencies have addressed Section l.4(b)(8) of the proposed rule transactions. The final rule provides for these comments in section II.B.2.b.iv above. would have excluded from the the same treatment.

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(l). Operational Deposit Outflow Rates thereby reducing their operational debt security-related outflow amounts As noted above, the proposed rule deposit balances as their business slows. maturing within a 30 calendar-day would have applied a 5 percent outflow While operational deposits are more period that must have been included in rate to operational deposits fully stable than non-operational funding, the net cash outflows. Based on historical covered by deposit insurance (other agencies believe that in the event of experience, including the recent than escrow deposits) and a 25 percent idiosyncratic stress, counterparties financial crisis during which outflow rate to operational deposits not likely would reduce the amount of their institutions went to significant lengths fully covered by deposit insurance and operational deposits. Accordingly, all to ensure the liquidity of their debt all escrow deposits. One commenter other unsecured operational deposits securities, the agencies proposed what argued that operational deposits are are assigned a 25 percent outflow rate in they considered to be relatively low unlikely to run off during a 30 calendar- the final rule, as in the proposed rule. outflow rates for a covered company’s One commenter criticized the own debt securities. The proposed rule day period because customers likely agencies’ decision not to assign fully differentiated between structured and would not terminate the attendant insured escrow deposits a 5 percent non-structured debt on the basis of data operational services, which are outflow rate that other fully insured from stressed institutions indicating the provided via legal contracts with notice operational deposits would have likelihood that structured debt requires and termination provisions, and thus received, arguing that deposits in more liquidity support. In such cases, a requested that the agencies adopt lower mortgage escrow accounts are no more covered company may be called upon to outflow rates for such deposits. The likely to be withdrawn in a period of provide liquidity to the market by commenter further argued that certain financial stress than any other purchasing its debt securities without operational services, such as investment operational deposits at the same bank having an offsetting sale through which company custody services, are from the same depositor. it can readily recoup the cash outflow. mandated by law, and providers of The agencies believe that, although A few commenters suggested that operational services generally have a escrow deposits are operational, it is these proposed outflow rates were too diverse customer base. Other their nature that there will be outflows high, arguing that the actual volume of commenters argued that operational based on the occurrence of a specified any repurchases made by a banking deposits should be subject to lower event, regardless of the amount of organization may be lower than the outflow rates on the basis of evidence deposit insurance coverage. Thus, proposed outflow rates because indicating that such deposit amounts during a period of overall investors may not be willing to have the tend to increase during times of stress. macroeconomic distress, the amount of banking organization repurchase the A commenter provided data to justify operational escrow deposits would debt securities during a stress scenario lowering the 25 percent outflow rate for shrink as business slowed, regardless of at a price which would result in the operational deposits where less than the deposit insurance. Further, the agencies investor recognizing a significant loss. A entire amount of the deposit is covered believe that given the general volatility commenter suggested that covered by deposit insurance, requesting that the of escrow deposits, affording them a 3 companies be allowed to set their own treatment of operational deposits be or 10 percent outflow rate would not outflow rates, reflecting the fact that consistent with the Basel III Revised properly reflect the lack of funding different covered companies might take Liquidity Framework. Commenters also stability in these deposits. The 25 different approaches to addressing argued for the inclusion of both fully percent outflow rate appropriately franchise or reputational risk. This insured accounts and the insured reflects the outflow risk of escrow commenter argued that, in any event, portions of accounts that are over the deposits, and has therefore been while outflow rates of 3 and 5 percent FDIC insurance limits in the 5 percent adopted in the final rule as proposed. seem low, once one takes into account outflow category of operational the amount of securities that a covered deposits. Throughout the final rule, the iii. Other Unsecured Wholesale Funding company may have outstanding, a agencies are drawing a distinction The proposed rule would have materially significant outflow amount is between fully insured deposits on the assigned an outflow rate of 100 percent possible, which the commenter found one hand and less than fully insured to all other unsecured wholesale unreasonable. Two other commenters deposits on the other, because, as funding. This category was designed to requested clarification regarding how discussed above, based on the agencies’ capture all other funding not given a the debt security outflow amount would supervisory experience, the entire specific outflow rate elsewhere in the work in practice. A commenter argued balance of partially insured deposits proposed rule, including funding that the scope of debt securities subject behave more like uninsured deposits, provided to a financial sector entity as to this section should be modified to with customers withdrawing the entire described above. The agencies have apply an outflow rate only to the senior deposit amount, including amounts adopted this category in the final rule as unsecured debt of the covered company below the deposit insurance limit. Thus, proposed. in which it is the primary market maker. the agencies have adopted this The commenter also argued that to the i. Debt Security Outflow Amount provision of the rule as proposed. extent that a covered company’s offering The agencies recognize the stable The agencies proposed that where a documents disclose that it is not nature of operational deposits, which is covered company is the primary market obligated to provide liquidity for such reflected in the proposed and final maker for its own debt securities, the securities, the securities should not be rule’s 5 percent outflow rate for fully outflow rate for such funding would subject to a predetermined outflow rate. insured operational deposits. However, equal 3 percent for all debt securities Another commenter argued that the the agencies continue to believe that that are not structured securities that proposed rule’s provision of cash deposits that are not fully covered by mature outside of a 30 calendar-day outflow rates for primary market makers insurance will experience higher period and 5 percent for all debt would likely discourage covered outflow rates in a macroeconomic stress securities that are structured debt companies from supporting their own or scenario as covered companies’ securities that mature outside of a 30 other covered companies’ debt counterparties will likely find calendar-day period. This outflow securities and asked that the agencies themselves subject to the same stress, amount was proposed in addition to any clarify the definition and the intent of

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this provision. After considering the expect that if a covered company or its funding outflow rates would have comments received on this section of consolidated subsidiary routinely stands progressively increased depending upon the proposed rule, the agencies are ready to purchase and sell its debt whether the secured funding transaction finalizing § l.32(i) as proposed with securities and is willing and available to was secured by level 1 liquid assets, one minor change. Recognizing that a quote, purchase and sell, or otherwise to level 2A liquid assets, level 2B liquid limited number of covered companies enter into long and short positions in its assets, or by assets that were not HQLA. are primary market makers for their own debt securities, in commercially These outflow rates were proposed as debt securities, the agencies have reasonable amounts and throughout zero percent, 15 percent, 50 percent and clarified that the debt security buyback market cycles on a basis appropriate for 100 percent, respectively. Additionally, outflow will be triggered when either a the liquidity, maturity, and depth of the the proposed rule would have applied a covered company or its consolidated market for such debt securities, that it 25 percent outflow rate to secured subsidiary is the primary market maker is a market maker for those debt funding transactions with sovereigns, for debt securities issued by the covered securities. The market will know who multilateral development banks, or U.S. company. the primary market makers are for a GSEs that are assigned a risk weight of The agencies are adopting the outflow particular security, and a covered 20 percent under the agencies’ risk- rates as proposed for several reasons. company should know if it is the based capital rules, to the extent such First, one purpose of the LCR is to primary market maker for a particular transactions were secured by assets implement a standardized quantitative security. other than level 1 or level 2A liquid liquidity stress measure and this, in assets. Under the proposed rule, loans of turn, counsels toward not allowing j. Secured Funding Transactions and collateral to facilitate customer short covered companies discretion in Asset Exchange Outflow Amounts positions were secured funding determining outflow rates. Second, i. Definitions and Outflow Rates transactions, subject to outflow rates these outflow rates are not intended to generally as described above for other The proposed rule would have measure the cost to a covered company types of secured funding transactions. of addressing franchise or reputational defined a secured funding transaction as Secured funding transactions in the risk through participation in the market. a transaction giving rise to a cash form of customer short positions give Rather, as the primary market maker for obligation of a covered company that is rise to liquidity risk because the a security, the market expects that the secured under applicable law by a lien customer may abruptly close its covered company or its consolidated on specifically designated assets owned positions, removing funding from the subsidiary will continue to purchase the by the covered company that gives the covered company. Further, customers securities, especially if they issued the counterparty, as holder of the lien, may remove their entire relationship securities. Thus, the 3 percent and 5 priority over the assets in the case of with the covered company, causing the percent rates are reasonable. Third, with bankruptcy, insolvency, liquidation, or firm to lose the funding associated with regard to investors not being willing to resolution. As defined, secured funding the short position. In the particular case repurchase securities at a given price, transactions would have included where customer short positions were the price will be the then-market price, repurchase transactions, FHLB covered by other customers’ collateral which reflects the outflow the market advances, secured deposits, loans of that does not consist of HQLA, the maker will have if it is required to collateral to effect customer short proposed rule would have applied an purchase securities from a counterparty positions, and other secured wholesale outflow rate of 50 percent, rather than that it cannot then re-sell. That reduced funding arrangements with Federal the generally applicable 100 percent price is reflected in the outflow rate. Reserve Banks, regulated financial outflow rate for other secured funding Historical experience in past bear companies, non-regulated funds, or transactions secured by assets that are markets and the recent financial crisis other counterparties. not HQLA. The 50 percent outflow rate shows that market makers will continue Under the proposed rule, secured reflected the agencies’ recognition of to make markets in most debt issuances, funding transactions maturing within 30 there being some interrelatedness particularly when such market makers calendar days of the calculation date between such customer short positions or their consolidated subsidiaries are would have given rise to cash outflows and other customer long positions the issuers of a particular security. during the stress period. This outflow within the covered company, and that The agencies further believe that these risk, together with the potential for customers in aggregate may not be able outflow rates are appropriate to address additional outflows in the form of to close all short positions without also the potential future support a covered collateral calls to support a given level significantly reducing leverage. In the company will provide with regard to its of secured funding transactions, was case of customers moving their primary market making role for its own reflected in the proposed secured relationships, closing short positions debt, and would not directly discourage funding transaction outflow rates. The would also be associated with moving any such support. In addition, the agencies believed that rather than long positions for which the covered outflow rates only apply to debt applying an outflow rate based on the company may have been providing securities issued by a covered company nature of the funding provider, the funding in the form of margin loans. or its consolidated subsidiary. It would proposed rule should generally apply an The 50 percent outflow rate for these not apply to a covered company’s efforts outflow rate based on the quality and customer short positions was designed to provide secondary market liquidity to liquidity of the collateral securing the to recognize potential symmetry with the securities of other banking funding. For secured funding the inflows generated from margin loans organizations. transactions, the quality of the assets secured by assets that are not HQLA, to Moreover, a covered company would securing the transaction is a significant which the proposed rule applied an not be required to calculate this outflow factor in determining the likelihood that inflow rate of 50 percent, and that are amount unless it or its consolidated a covered company will be able to roll described in section II.C.4.f. of this subsidiary is the primary market maker over the transaction at maturity with a Supplementary Information section. for its own debt securities. While the range of market participants and The agencies proposed to treat final rule does not define the term maintain the associated funding over borrowings from Federal Reserve Banks market maker, the agencies generally time. In the proposed rule, secured the same as other secured funding

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transactions because these borrowings outflow rates (and secured lending to level 2B liquid asset collateral. As are not automatically rolled over, and a inflow rates). These commenters also discussed above in section II.B.2.f, the Federal Reserve Bank may choose not to argued that all major indices in G–20 agencies believe that assets that are not renew the borrowing. Therefore, the jurisdictions should qualify as level 2B HQLA may not remain liquid during a agencies believed an outflow rate based liquid assets for the purposes of secured stress scenario. Accordingly, any on the quality and liquidity of the funding transaction cash flows. secured funding transaction maturing in collateral posted was most appropriate Other commenters recommended less than 30 calendar days that is for such transactions. The agencies applying an outflow rate that would secured by assets that are not HQLA noted in the proposed rule that should ensure that secured funding transactions may not roll over or could be subject to the Federal Reserve Banks offer secured by assets that are not HQLA substantial haircuts. Thus, secured alternative facilities with different terms would not have an outflow rate that was funding transactions that are secured by than the current primary credit facility, greater than the outflow rate applied to assets that are not HQLA under the final or modify the terms of the primary an unsecured funding transaction with rule receive the outflow rate appropriate credit facility, outflow rates for the LCR the same counterparty in order to avoid for this type of collateral and the may be modified. inconsistency. One commenter relevant counterparty. In addition to secured funding requested that the agencies limit the Although a covered company may transactions, which relate solely to a definition of secured funding have the option of reallocating the secured cash obligation, an asset transaction to only include repurchase composition of the collateral that is exchange would have been defined agreements. securing a portfolio of transactions at a under the proposed rule as a transaction With respect to the definition of a future date, the outflow rates for a that requires the counterparties to secured funding transaction, the secured funding transaction or asset exchange non-cash assets. Asset agencies continue to believe that the exchange is based on the collateral exchanges can give rise to a change in principle liquidity characteristics of an securing the transaction as of the a covered company’s liquidity, such as asset which were considered when calculation date. where the covered company is obligated determining the inclusion of an asset as The agencies agree with certain to provide higher-quality assets in HQLA also are applicable to the commenters that, as a general matter, return for less liquid, lower-quality determination of the outflow rates for the outflow rate for a secured funding assets. The proposal would have any transactions that are secured by transaction should not be greater than reflected this risk through the proposed those assets and that the definition of that applicable to an equivalent asset exchange outflow rates, which such transactions should include more wholesale unsecured funding would have been based on the HQLA than repurchase agreements. transaction (that is not an operational levels of the assets exchanged and Accordingly, the agencies are adopting deposit) from the same counterparty. would have progressively increased as the definition of secured funding Under § l.32(j)(2) of the final rule, in the assets to be relinquished by a transaction largely as proposed, with a instances where the outflow rate covered company increased in quality clarification that the definition of applicable to a secured funding relative to those to be received from the secured funding transaction only transaction (conducted with a asset exchange counterparty. includes transactions that are subject to counterparty that is not a retail § l.32(j)(2) of the proposed rule set a legally binding agreement as of the customer or counterparty) would exceed forth the outflow rates for various asset calculation date. In addition and as that of an equivalent wholesale exchanges. described above under section II.C.3.a, unsecured funding transaction (that is In general, commenters’ concerns the agencies have opted to treat secured not an operational deposit) with the l with the outflow rates for secured retail transactions under § .32(a) of the same counterparty, the covered funding transactions pertained to final rule. Accordingly, the secured company may apply the lower outflow perceptions of the relative liquidity of funding transaction and asset exchange rate to the transaction.78 The reduced l various asset classes and whether outflow rates under § .32(j) of the final outflow rate would not, however, be particular types of assets should have rule would apply only to transactions applicable if the secured funding been classified as HQLA in the with a wholesale counterparty. transaction was secured by collateral proposed rule, as described in section Consistent with the proposed rule, the that was received by the covered II.B above. For example, one commenter final rule’s outflow rates for secured company under a secured lending argued that a transaction secured by funding transactions that mature within transaction or asset exchange. government MMFs should receive the 30 calendar days of the calculation date Additionally, the reduced outflow same outflow rate as a transaction that are based upon the HQLA categorization would still be considered a secured is secured by level 1 liquid assets and, of the assets securing the transaction funding transaction outflow amount similarly, a transaction secured by other and are generally as proposed (see Table under § l.32(j) of the final rule for the types of MMFs should have the same 3a). Consistent with this treatment and purposes of reporting and determining outflow rate as a transaction secured by as discussed in section II.B above, the applicable maturity date (see Table level 2A liquid assets because MMFs MMFs do not meet the definition of have high credit quality and are liquid. HQLA under the final rule and a 3a). Furthermore and as discussed Some commenters noted that, under the secured funding transaction that is below, for collateralized deposits as proposed rule, level 2B liquid assets secured by an MMF generally will defined in the final rule, the outflow that are common equity securities were receive the 100 percent outflow rate rate applicable to part or all of the limited to shares in the S&P 500 index, associated with collateral that is not 78 The agencies note that, for counterparties that common shares recognized by local HQLA. Further, the agencies believe it are financial sector entities, the applicable non- regulatory authorities in other would be inappropriate to establish an operational deposit unsecured wholesale funding jurisdictions, and, potentially, shares in exception to this principle, whereby, for outflow rate would be 100 percent under other indices. These commenters example, secured funding transactions § l.32(h)(5) of the final rule. Thus, for such counterparties, the secured funding transaction requested that the agencies consider a secured by non-U.S. equity securities outflow rates would be equivalent or higher narrow expansion of this asset category that are not level 2B liquid assets would depending on the collateral securing the for the purposes of secured funding be subject to the outflow rate applicable transaction.

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secured funding transaction amount the remaining term of secured lending distress, it is not plausible that a state may potentially be the outflow rate transactions, asset exchanges or other or local government could withdraw a applicable to a wholesale operational transactions that are secured by lower amount of unsecured deposits deposit from the same counterparty, for rehypothecated assets may extend than secured public sector deposits, as the portion of the deposit that meets the beyond 30 calendar days from a contemplated by the outflow rates remaining criteria for classification as calculation date, meaning that the assigned to the applicable unsecured an operational deposit. covered company will have a wholesale funding and secured funding Under the final rule, the treatment of continuing obligation to return categories.79 Many commenters also asset exchange outflows is adopted collateral at a future date. The inflow argued that applying a higher outflow generally as proposed (see Table 3b). rates that are to be applied to secured rate to collateralized municipal deposits However, the agencies are clarifying that lending transactions and asset versus unsecured municipal deposits in the case where a covered company exchanges where received collateral has could discourage banking organizations will not have the required collateral to been reused to secure other transactions from accepting collateralized public deliver to the counterparty upon the are described in section II.C.4 below. sector deposits. Thus, several maturity of an asset exchange, the In addition to comments broadly commenters requested that if covered company should assume it will relating to definitions and outflow rates collateralized public sector deposits are be required to make a cash purchase of for secured funding transactions, categorized as secured funding the necessary security prior to the commenters raised specific concerns transactions in the final rule, the maturity of the asset exchange. regarding the treatment of collateralized agencies should assign a lower outflow Accordingly, and consistent with the municipal and other deposits as secured rate to these deposits. These Basel III Revised Liquidity Framework, funding transactions, the outflow rates commenters suggested that the agencies the covered company should include in associated with certain prime brokerage provide the same treatment for its outflow amount an outflow for the transactions, and the treatment of FHLB collateralized deposits as they do for purchase of the security. As reflected in secured funding. unsecured deposits and take into § l.32(j)(3)(x)–(xiii) of the final rule and ii. Collateralized Deposits consideration the historical behavior of in Table 3b, below, under these the depositor to determine the provisions, the outflow rate would be Under the proposed rule, all secured appropriate outflow rate. Other the fair value of the asset that the deposits would have been treated as commenters pointed out that the covered company would be required to secured funding transactions. Some unsecured deposits of municipalities purchase in the open market minus the commenters objected to the proposed would have been subject to outflow value of the collateral that the covered rule’s inclusion of collateralized public rates in the range of 20 percent to 40 company would receive on the sector deposits as secured funding percent under the proposed rule, in settlement of the asset exchange, which transactions on the grounds that such contrast to the more stringent outflow is determined by the rule’s haircuts for deposits are relationship-based, were rates applicable to secured funding HQLA and non-HQLA. more stable during the recent financial transactions backed by lower quality The agencies are clarifying that assets crisis, and are typically secured by a collateral.80 Additionally, some collateralizing secured funding more stable portfolio of collateral than commenters stated that the secured transactions as of a calculation date are the collateral that secures secured funding transaction outflow rates that encumbered and therefore cannot be funding transactions such as repurchase would have applied to collateralized considered as eligible HQLA at the agreements. Commenters argued that public sector deposits under the calculation date. However, because during the recent financial crisis, state proposed rule would have diverged outflow rates are applied to the cash and local governments that placed from the Basel III Revised Liquidity obligations of a covered company under deposits secured by municipal Framework. These commenters argued secured funding transactions subject to securities with banking organizations that the Basel standard assigned a 25 a legally binding agreement as of a did not withdraw such funds due to percent outflow rate for secured funding calculation date, these outflow rates do concern over the quality of the collateral transactions with public sector entities not depend on whether the collateral underlying their deposits. These that have a risk-weight of 20 percent securing the transactions at the commenters further argued that it is under the Basel capital standards. calculation date was or was not eligible often the case that the collateral used to Likewise, one commenter recommended HQLA prior to the calculation date. secure a government’s deposits can be assigning collateralized public sector The agencies recognize that certain that government’s own bonds. deposits an outflow rate of no more than assets that are collateralizing a secured As discussed in section II.B.5 of this 15 percent because, according to the funding transaction (or a derivative Supplementary Information section, commenter, bank Call Report data liability or other obligation) as of a commenters argued that collateralized suggests that, even during the recent calculation date, and certain assets that public sector deposits, which are financial crisis, the peak secured have been delivered to a counterparty in required by law to be collateralized with municipal deposit outflow rates an asset exchange, may be high-quality assets, should not be generally did not exceed approximately rehypothecated collateral that was made treated like short-term, secured funding 15 percent. Another commenter also available to the covered company from transactions, because collateralized recommended that the agencies adopt a a secured lending, asset exchange, or public sector deposits are not the type other transaction. As described in of transactions susceptible to the risk of 79 Under the proposed rule, secured funding section II.C.2 above, the maturity date of manipulation that commenters believed transactions that are secured by collateral that is not any such secured lending transaction or HQLA, would have received a 100 percent outflow was the focus of the proposed rule. rate while unsecured non-operational wholesale asset exchange determined under Commenters further argued that this funding that is not fully covered by deposit § l.31 of the final rule cannot be earlier classification would lead to unnecessary insurance would have received an outflow rate of than the maturity date of the secured distortions that could increase the cost 40 percent. funding transaction or asset exchange 80 However, other commenters also argued that of these deposits for bank customers. the outflow rate for unsecured deposits of 40 for which the collateral has been reused. Commenters also contended that percent under the proposed rule was unduly Furthermore, the agencies recognize that during a period of financial market punitive.

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30 percent maximum outflow rate unsecured deposit from the same the outflow rate for deposits secured by assumption for deposits collateralized depositor. Other commenters requested level 2A liquid assets will be 15 percent. by municipal securities. Finally, other clarification as to whether collateralized As described above for secured funding commenters requested clarification as to corporate trust deposits that otherwise transactions in general, the agencies are whether collateralized public sector met the criteria for operational deposits amending the final rule so that the deposits that otherwise meet the criteria would be eligible for the operational outflow rate applicable to a secured for operational deposits would be deposit outflow rate. One commenter deposit is not greater than the eligible for the operational deposit requested that collateralized corporate equivalent outflow rate for an unsecured outflow rates. trust deposits be excluded from the LCR deposit from the same counterparty. Further, because municipal securities requirements entirely. A few The agencies believe this amendment would not have been included as HQLA commenters requested that addresses a number of the concerns under the proposed rule, commenters collateralized corporate trust deposits be expressed by commenters with respect were concerned that in certain cases a excluded from the unwind mechanism to collateralized deposits. For example, banking organization could be required used to determine the adjusted excess while public sector deposits secured by to hold HQLA equal to the deposits that HQLA amount as addressed in section level 2A liquid assets would be assigned a public entity had placed with the II.B.5.d above. a 15 percent outflow rate, similar banking organization in addition to the The agencies recognize the particular deposits secured by FHLB letters of collateral specified to be held against characteristics of collateralized public credit (which are not HQLA under the the deposit as a matter of state law in sector and certain collateralized final rule) may receive the 40 percent order to meet the outflow rates that the corporate trust deposits. The agencies outflow rate applicable to unsecured proposed rule would have assumed. A acknowledge that a covered company’s deposits from a wholesale counterparty commenter proposed that the outflow collateralized public sector deposits that is not a financial sector entity rate for a collateralized deposit should may, in part, be related to longer-term (versus a 100 percent outflow rate). The only be applied to the deposit amount relationships with its counterparties, agencies believe the application of less the value of collateral posted by the established through a public bidding outflow rates in this manner is covered company. A few commenters process that is specific to the appropriate and that a further reduced inquired as to whether preferred counterparties’ requirements. The outflow rate specific to public sector deposits secured by FHLB letters of agencies also recognize that certain deposits would not be appropriate. credit would be assigned the same 15 corporate trust deposits are required by Additionally, because the secured percent outflow rate as secured funding federal law to be collateralized.82 Such funding transaction outflow rates are transactions secured with U.S. GSE deposits are governed by complex derived from the quality and liquidity obligations or if those that satisfy the governing documents, such as trust profile of the collateral securing the operational deposit criteria would indentures, that may limit the deposit in a manner which is consistent receive an outflow rate no higher than customer’s discretion to withdraw, pay, with the liquidity value of that collateral 25 percent.81 or disburse funds. The agencies further if it were held unencumbered by the Many commenters requested the acknowledge that there may be covered company, the agencies do not exclusion of collateralized public sector relationship characteristics that believe that it is appropriate to net the deposits from the secured transaction influence the availability, volume, and amount of the deposit by the collateral unwind mechanism used to determine potential stability of collateralized posted by the covered company. adjusted liquid assets amounts as public sector and corporate trust Furthermore, specifically and solely addressed in section II.B.5.d above. deposits placed at covered companies. in the case of a secured funding In addition to comments relating to However, given the collateral transaction that meets the definition of public sector deposits, the agencies requirements and potential collateral a collateralized deposit under the final received a number of comments relating flows associated with such deposits, rule, a covered company may assess to corporate trust deposits. Commenters whether required by law or otherwise, whether such a collateralized deposit argued that funds in corporate trust the agencies continue to believe that the meets the criteria for an operational accounts are very stable due to the liquidity risk of collateralized public deposit under § l.4 of the final rule.83 specialized nature of the banking sector deposits, collateralized corporate If such collateralized deposits meet the relationship and constraints imposed by trust deposits, and all other secured criteria for an operational deposit, the governing documents. Moreover, due to deposits is appropriately addressed covered company may determine the the specialized nature of indentured through their treatment as secured amount of the collateralized deposit that trustee and agency engagements funding transactions where the deposits would receive the 25 percent outflow associated with corporate trust deposits, meet the definition of such transactions. rate applicable to an unsecured withdrawal and disbursements of funds Under the final rule, the outflow rate operational deposit that is not fully may be strictly limited. However, assigned to all secured deposits, covered by deposit insurance (see Table certain corporate trust deposits would including collateralized public sector 3a). Any portion of the collateralized have met the definition of secured and corporate trust deposits, with a deposit that is not an operational funding transactions under the maturity as determined under § l.31 of deposit under the covered company’s proposed rule. Consistent with other the final rule of 30 calendar days or less excess operational deposit amount comments received relating to secured will be principally based on the quality methodology will receive the outflow funding transactions in general, of the collateral used to secure the rate applicable to a wholesale unsecured commenters were concerned that the deposits. The outflow rate applicable to non-operational deposit from the same outflow rate applicable to a all secured deposits meeting the counterparty. With respect to the collateralized corporate trust deposit definition of a secured funding requests by commenters to apply the 25 may be higher than that applied to an transaction that are secured by level 1 percent outflow rate to all collateralized liquid assets will be zero percent, while 81 As discussed above under section II.B.2.f.iv, 83 All other secured deposits would not be FHLB letters of credit would not qualify as HQLA 82 12 CFR 9.10 (national banks) and 12 CFR eligible for the operational deposit outflow rates under the final rule. 150.300–150.320 (Federal savings associations). under the final rule.

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public sector deposits that are secured outflow rate to all customer shorts that all customer short positions covered by by level 2B liquid assets or non-HQLA, are covered by any collateral that is not assets that are not HQLA, irrespective of the agencies believe that deposits not HQLA, irrespective of the source, and the source of the collateral. While the meeting the criteria for operational also to customer short positions that are standardized framework of the final rule deposits would be less stable during a covered by other methods, such as is not designed to reflect the individual period of market stress due to the lack hedges to customer swaps and securities collateral allocation or risk management of an operational relationship tying the specifically obtained by a prime broker practices of covered companies, the funds to the service provided by the to cover the customer short positions. agencies expect that covered companies covered company. Accordingly, the These commenters argued that this will have in place liquidity risk agencies have not made secured funding treatment would better capture risk management practices commensurate transactions with public sector entities management practices that rely on with the complexity of their prime eligible for the 25 percent outflow rate symmetrical treatment of customer long brokerage business activities, including applicable to secured funding and short positions. These commenters collateral tracking, collateral transactions with sovereign entities, also argued that applying this approach concentration monitoring, and potential multilateral development banks, and to closing customer short positions exposure resulting from the exercise of U.S. GSEs subject to a 20 percent risk- would reflect customers’ offsetting customer options to withdraw funding. weight under the agencies’ risk-based reduction in leverage irrespective of the The outflow rate applicable to capital rules. source of collateral and would capture customer short positions that are iii. Prime Brokerage Secured Funding the risks related to internal coverage of covered by other customers’ collateral Transactions Outflows short positions. One commenter that does not consist of HQLA is suggested that the funding risk created specifically intended to parallel the The agencies received several by internalization, where collateral is inflow rate applicable to secured comments regarding the outflow provided by and utilized for various lending transactions that are margin treatment of secured funding secured transactions within the covered loans secured by assets that are not transactions in the context of prime company without being externally HQLA under § l.33(f)(1)(vii) of the brokerage activities. As described above, sourced, is more accurately assessed by final rule.84 This 50 percent outflow rate in general under the proposed rule measuring customer and CUSIP reflects the agencies’ recognition of secured funding transactions, including concentrations, rather than looking at some correlation between such certain loans of collateral to cover the asset class or the type of long-short customer short positions and other customer short positions, that are pair because more concentrated customer long positions within a secured by assets that are not HQLA ownership impacts the risk of covered company, and the fact that would have required an outflow rate of internalization providing stable funding. customers in aggregate may not be able 100 percent. However, certain secured to close all short positions without also funding transactions that are customer Consistent with the Basel III Revised Liquidity Framework, the final rule significantly de-leveraging, or in the short positions of collateral that do not case of moving their relationship, also consist of HQLA and are covered by prescribes the outflow amount for each secured funding transaction moving the long positions for which the another customer’s collateral would covered company may have been have received a 50 percent outflow rate. individually, while taking into account providing funding in the form of margin As explained above, the 50 percent the potential dependency of certain loans. In contrast, if a customer short outflow rate reflected the agencies’ secured transactions upon the source of position is covered by the covered recognition of some interrelatedness the collateral securing the transaction. company’s long positions of assets that between such customer short positions Cash obligations of a covered company are not HQLA, the outflow rate assigned and other customer long positions to a counterparty that are generated to the customer short position would be within the covered company, and the through loans of collateral to cover a that applicable to other secured funding fact that customers in aggregate may not customer short position pose liquidity transactions under the final rule. be able to close all short positions risks that are similar to other secured Furthermore, the agencies recognize without also significantly de-leveraging, funding transactions as described above. that prime brokerage activities may or in the case of moving their For this reason, the agencies believe that entail significant rehypothecation of relationship, also moving the long funding from a customer short position assets to secure certain secured funding positions for which the covered should be treated as a secured funding transactions. The agencies emphasize company may have been providing transaction, and that the outflow the treatment for determining the funding in the form of margin loans. associated with this funding should, in maturity of such transactions under Commenters argued that this section of general, be consistent with all other § l.31 of the final rule and the inflows the proposed rule did not address a forms of secured funding transactions. rates applicable to secured lending covered company’s internal process for In the case where a covered company deciding how to source collateral to has received funding from, for example, transactions and assets exchanges under l cover short positions, such as the the cash proceeds of a customer’s short § .33(f) of the final rule. process for choosing between utilizing sale of an asset that is not HQLA, the iv. Federal Home Loan Bank Secured inventory securities, external closing out of the short position by the Funding Transactions customer at its discretion may lead to borrowings, or using other customers’ Under the proposed rule, secured the covered company being required to collateral. Commenters argued that funding transactions with sovereign relinquish cash in return for the receipt when customer short positions are entities, multilateral development of the borrowed asset. In general, the covered by inventory securities, these banks, and U.S. GSEs that are assigned outflow rate applicable to an individual securities are frequently held as hedges a 20 percent risk weight under the secured funding transaction secured by to other customer positions. These agencies’ risk-based capital rules and commenters indicated that the source of assets that are not HQLA is 100 percent the collateral covering the customer under the final rule. The agencies 84 Margin loans that are secured by assets that are short position is irrelevant, and believe that it would be inappropriate to not HQLA are assigned an inflow rate of 50 percent recommended applying a 50 percent apply an outflow rate of 50 percent to under the final rule.

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that are not secured by level 1 or level deposits, would be subject to the same pools of collateral, and that this 2A liquid assets would have received a outflow rate as FHLB advances. collateral may potentially include 25 percent outflow rate. Several The agencies are aware of the HQLA. Under § l.22(b)(1)(ii) of the commenters requested clarification as to important contribution made by the final rule, HQLA that is pledged to a whether this 25 percent proposed FHLB system in providing funding to central bank or U.S. GSE to secure outflow rate would have applied to all banking organizations and of the general borrowing capacity but is not securing secured FHLB advances or only those collateral used to support FHLB existing borrowings may be treated as secured by level 2B liquid assets. Some borrowings. The agencies are clarifying unencumbered for the purposes of commenters stated that if the agencies that, under the final rule, the identifying eligible HQLA. The agencies intended to apply the 25 percent preferential 25 percent outflow rate acknowledge that in cases where applicable to secured funding outflow rate only to advances secured advances and undrawn FHLB capacity transactions with certain sovereigns, by level 2B liquid assets, it would are secured by a pool of collateral, multilateral development banks and significantly increase the cost of FHLB covered companies may wish to U.S. GSEs applies to secured funding advances to member institutions exercise the flexibility of designating transactions that are secured by either which collateral pledged to a FHLB is because such advances are typically level 2B liquid assets or assets that are secured by mortgages or mortgage- securing currently outstanding not HQLA and that mature within 30 borrowings and also designating which related securities that are not HQLA. calendar days of a calculation date. subset of such collateral is securing Commenters recommended reducing the FHLB advances that mature more than those advances maturing within 30 outflow rate applicable to FHLB 30 calendar days from a calculation date calendar days of a calculation date. The advances to 3 percent, the outflow rate are excluded from net cash outflows. agencies believe allowing covered for stable retail deposits. Other Given the broad range of collateral commenters requested confirmation that accepted by FHLBs and the possibility companies this flexibility is appropriate, FHLB advances are subject to a of collateral quality deterioration or but emphasize that no asset may be maximum outflow rate of 25 percent increased collateral haircuts, the double counted as eligible HQLA and as and posited that involuntary outflow agencies do not believe that a lower securing a borrowing as of a calculation rates for FHLB advances have outflow rate for FHLB advances, such as date. approached zero historically. The the 3 percent outflow rate proposed by Tables 3a and 3b summarize the agencies were also asked to clarify a commenter, would be appropriate. secured funding transaction and asset whether FHLB guarantees, including The agencies recognize that FHLB exchange outflow rates under the final letters of credit that secure public sector advances may be secured by diverse rule.

TABLE 3a—SECURED FUNDING TRANSACTION OUTFLOW RATES

Categories for maturing secured funding transactions Secured funding outflow rate

Secured by level 1 liquid assets ...... 0%. Secured by level 2A liquid assets ...... 15%. Transactions with sovereigns, multilateral development banks and U.S. GSEs subject to a 20% 25%. risk weight not secured by level 1 or level 2A liquid assets. Secured by level 2B liquid assets ...... 50%. Customer short positions covered by other customers’ collateral that is not HQLA ...... 50%. Secured by assets that are not HQLA, except as above ...... 100%. If the outflow rate listed above is greater than that for a wholesale unsecured transaction (that Apply to the secured funding transaction is not an operational deposit) with the same wholesale counterparty. amount the wholesale unsecured non-oper- ational outflow rate for that counterparty. For collateralized deposits where the secured funding transaction outflow rate listed above is Apply to each portion of the secured funding greater than that for a wholesale unsecured transaction with the same wholesale transaction amount the wholesale unsecured counterparty. outflow rate applicable to that portion, for that counterparty, including amounts that may be operational deposits or excess oper- ational deposit amounts.

TABLE 3b—ASSET EXCHANGE OUTFLOW RATES

Asset exchange Covered company must deliver at maturity Covered company will receive at maturity outflow rate

Where a covered company has the asset that it will be required to deliver at the maturity of an asset exchange or where the asset has been re- used in a transaction that will mature no later than the maturity date of the asset exchange such that the asset required to be delivered will be available at the maturity date, and where the:

Level 1 liquid assets ...... Level 1 liquid assets ...... 0% Level 1 liquid assets ...... Level 2A liquid assets ...... 15% Level 1 liquid assets ...... Level 2B liquid assets ...... 50% Level 1 liquid assets ...... Assets that are not HQLA ...... 100% Level 2A liquid assets ...... Level 2A liquid assets ...... 0% Level 2A liquid assets ...... Level 2B liquid assets ...... 35% Level 2A liquid assets ...... Assets that are not HQLA ...... 85% Level 2B liquid assets ...... Level 2B liquid assets ...... 0% Level 2B liquid assets ...... Assets that are not HQLA ...... 50%

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TABLE 3b—ASSET EXCHANGE OUTFLOW RATES—Continued

Asset exchange Covered company must deliver at maturity Covered company will receive at maturity outflow rate

Where a covered company does not have the asset that it will be required to deliver at the maturity of an asset exchange and where the asset has not been reused in a transaction that will mature no later than the maturity date of the asset exchange, and where the:

Level 1, 2A, 2B liquid assets, or assets that are not HQLA .... Level 1 liquid assets ...... 0% Level 2A liquid assets ...... 15% Level 2B liquid assets ...... 50% Assets that are not HQLA ...... 100%

k. Foreign Central Bank Borrowings such expenses being included as Under the final rule, variable rate Outflow Amount outflows, yet the inflows from non- demand note amounts payable within The agencies recognize central banks’ financial revenues would be excluded. 30 calendar days of a calculation date lending terms and expectations differ by Therefore, this commenter argued, the will be treated as a committed liquidity jurisdiction. Accordingly, for a covered final rule should exclude operational facility to a financial sector entity and company’s borrowings from a particular costs from outflows and exclude from will receive a 100 percent outflow rate foreign jurisdiction’s central bank, the inflows non-financial revenues that are pursuant to § l.32(e)(1)(vii) of the final proposed rule would have assigned an not enumerated in § l.33(b)–(f) of the rule. The agencies believe that this outflow rate equal to the outflow rate proposed rule and excluded under treatment is appropriate because such that such jurisdiction has established for § l.33(g) of the proposed rule (other payments would likely be made by a central bank borrowings under a cash inflows). One commenter covered company to support amounts minimum liquidity standard. The requested clarification that there was no coming due within 30 calendar days of proposed rule would have provided outflow rate associated with trade a calculation date. With respect to an further that if such an outflow rate has finance instruments and letters of credit implicit agreement to guarantee a not been established in a foreign with performance requirements under covered company’s sponsored product, jurisdiction, the outflow rate for such the proposed rule. Another commenter covered companies may be prohibited borrowings would be treated as secured asked for clarification of the treatment from doing so under § l.13 of the BHC funding pursuant to § l.32(j) of the of contingent trade finance obligations Act, and such support has long been proposed rule. under the final rule. Another discouraged by the agencies.85 If, The agencies received no comments commenter asked for guidance on the however, a covered company’s on this section and have adopted treatment of projected cash outflows for guarantee is in the form of a guaranteed proposed § l.32(k) without change in certain contingency funding obligations investment contract (GIC) or a synthetic the final rule. such as variable rate demand notes, GIC (commonly referred to as a stable value funds, and other similarly wrapper), then it will be treated as a l. Other Contractual Outflow Amounts structured products, noting that while commitment to a financial sector entity The proposed rule would have the proposed rule did not provide or SPE as appropriate under applied a 100 percent outflow rate to outflow rates for these categories, the § l.32(e)(1)(vii) or (viii) of the final amounts payable within 30 calendar Basel III Liquidity Framework provided rule. days of a calculation date under for national discretion when m. Excluded Amounts for Intragroup applicable contracts that are not determining rates for such products. Transactions otherwise specified in the proposed The agencies are clarifying that the rule. Some commenters argued that the final rule excludes from outflows The proposed rule would have 100 percent outflow rate would have operational costs, because the agencies excluded from a covered company’s applied to some contractual expenses believe that assets specifically outflows and inflows all transactions payable within 30 calendar days of a designated to cover costs, such as between the covered company and a calculation date, such as operating costs wages, rents, or facility maintenance, consolidated subsidiary or between and salaries that are operational generally would not be available to consolidated subsidiaries of a covered expenses and should be excluded from cover liquidity needs that arise during company. Such transactions were outflows. One commenter also argued stressed market conditions. excluded on the grounds that they that the proposed rule’s treatment of The final rule does not provide a would not result in a net liquidity such expenses was not consistent with specific outflow rate for trade finance change for a covered company on a the examples of ‘‘other outflows’’ obligations that are subject to the consolidated basis. illustrated in Paragraph 141 of the Basel movement of goods or the provision of One commenter expressed concern III Revised Liquidity Framework, which services. This would include that section 32(h) of the proposed rule includes outflows to cover unsecured documentary trade letters of credit; was contrary to the symmetrical collateral borrowings, uncovered short documentary and clean collection; treatment of funding provided by and to positions, dividends or contractual import and export bills; and guarantees interest payments and specifically directly related to trade finance 85 See, e.g., OCC, Board, FDIC, and SEC, ‘‘Prohibitions and Restrictions on Proprietary excludes from this category operating obligations, such as shipping Trading and Certain Interests in, and Certain costs. The commenter requested that the guarantees. Instead, a covered company Relationships With, Hedge Funds and Private final rule be consistent with the Basel III should calculate outflow amounts for Equity Funds,’’ 79 FR 5536, 5790 (January 31, Revised Liquidity Framework. Further, lending commitments, such as direct 2014); ‘‘Interagency Policy on Banks/Thrifts import or export financing for non- Providing Financial Support to Funds Advised by one commenter argued that including the Banking Organization or its Affiliates,’’ OCC contractual expenses that are financial firms, in accordance with Bulletin 2004–2, Federal Reserve Supervisory Letter operational in nature would result in § l.32(e) of the final rule. 04–1, FDIC FIL–1–2004 (January 5, 2004).

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covered companies and its subsidiaries would have consisted of any inflows deterioration. Another commenter and between its subsidiaries in section derived from amounts that a covered remarked on the asymmetry of the 32(m)(1), which would have entirely company holds in operational deposits proposed rule’s treatment of excluded outflows arising from at other regulated financial companies. commitments, noting that if a covered transactions between the covered Because these deposits are made for company must include loan company and its consolidated operational purposes, the agencies commitments in its outflows, then it subsidiary. Consistent with the reasoned that it would be unlikely that should be allowed to include forward proposed rule’s section 32(m), the final a covered company would be able to commitments to sell loans to GSEs in its rule excludes from a covered company’s withdraw these funds in a crisis to meet inflows. outflows and inflows all transactions other liquidity needs, and therefore A commenter argued that the between the covered company and a excluded them. The final rule adopts proposed rule would discourage consolidated subsidiary or between this provision as proposed. The agencies covered companies from investing in consolidated subsidiaries of a covered expect covered companies to the housing industry or GSE-backed company. As discussed above under understand what deposits they have securities because these would be II.C.3.h, to address commenters placed at other financial companies that subject to a 15 percent haircut when concerns, the agencies have clarified are operational in nature and to use the counted as HQLA and any expected that the 100 percent affiliate outflow same methodology to assess the inflow from mortgage commitments rate under § l.32(h)(2) of the final rule operational nature of its deposits at within the next 30 days would be applies solely to funding from a other financial companies as it uses to excluded from the net outflow consolidated subsidiary of the same top- assess the operational nature of their calculation. This commenter noted that tier company of which the covered deposit liabilities from other financial it is unclear what impact this treatment company is a consolidated subsidiary, companies. would have on the mortgage markets. but that is not a consolidated subsidiary A commenter requested clarification The agencies recognize that covered of the covered company, due to the lack as to whether cash held at agent banks companies may receive inflows as a of the consolidation of the inflows and for other than operational purposes can result of the sale of mortgages or count towards a covered company’s outflows with the covered company derivatives that are mortgage HQLA or inflow amount. The agencies under applicable accounting standards. commitments within 30 days after the are clarifying that, depending on the Accordingly, the agencies have removed calculation date. However, the agencies l manner in which the cash is held, it the language from proposed § .32(h)(2) believe that there are some potential may qualify as an unsecured payment that would have applied the outflow liquidity risks from mortgage operations contractually payable to the covered rate to funding from a consolidated that should be captured in the LCR. company by a financial sector entity subsidiary of the covered company. During the recent financial crisis, it was under § l.33(d)(1) of the final rule, in evident that many institutions were 4. Inflow Amounts which case it would be subject to a 100 unable to rapidly reduce mortgage Under the proposed rule, a covered percent inflow rate. As discussed in company’s total cash inflow amount section II.B.2.c above such placements lending pipelines even as market would be the lesser of: (1) the sum of the do not meet the criteria for inclusion as demand for mortgages slowed. Because cash inflow amounts as described in HQLA. of these liquidity risks, the final rule § l.33 of the proposed rule; and (2) 75 The second category would have requires an outflow rate for mortgage percent of the expected cash outflows as excluded amounts that a covered commitments of 10 percent, with an calculated under § l.32 of the proposed company expects to receive or is exclusion of inflows. On balance, the rule. Similar to the total cash outflow contractually entitled to receive from agencies believe the 10 percent outflow amount, the total cash inflow amount derivative transactions due to forward rate for commitments coupled with no would have been calculated by sales of mortgage loans and any recognition of inflows is appropriate multiplying the outstanding balances of derivatives that are mortgage due to the risks evidenced in the recent contractual receivables and other cash commitments. financial crisis. The agencies are inflows as of a calculation date by the Two commenters recommended that therefore finalizing this aspect of the inflow rates described in § l.33 of the the agencies distinguish forward sales of rule as proposed. proposed rule. In addition, the proposed mortgage loans under GSE standby The third excluded category would rule would have excluded certain programs from other warehouse have comprised amounts arising from inflows from the cash inflow amounts, facilities, reasoning that the nature of any credit or liquidity facility extended as described immediately below. The the commitments provided under those to a covered company. The agencies agencies have adopted this structure for programs and the creditworthiness of believe that in a stress scenario, inflows calculating total cash inflows in the the GSEs should permit each covered from such facilities may not materialize final rule, with certain updates to the company to include 100 percent of its due to restrictive covenants or proposed inflow rates to address notional balances under GSE standby termination clauses. Furthermore, comments received. programs as an inflow. Commenters reliance by covered companies on argued that, unlike a warehouse facility, inflows from credit facilities with other a. Items Not Included as Inflows which involves the counterparty risk of financial entities would materially Under the proposed rule, the agencies a non-government-sponsored enterprise increase the interconnectedness within identified six categories of items that and the potential that loans will not the system. Thus, the material financial would have been explicitly excluded close or will have incomplete loan distress at one institution could result in from cash inflows. These exclusions documents, GSE standby programs additional strain throughout the were meant to ensure that the include only closed and funded loans financial system as the company draws denominator of the proposed LCR with the liquidity option provided down its lines of credit. Because of would not be influenced by potential directly by FNMA and FHLMC. these likelihoods, the proposed rule cash inflows that may not be reliable According to the commenters, the loans would not have counted a covered sources of liquidity during a stressed are always eligible to be delivered to company’s credit and liquidity facilities scenario. The first excluded category FNMA and FHLMC regardless of credit as inflows.

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Some commenters recommended that calendar days of a calculation date. The sector entities) and secured lending at least 50 percent of the unused agencies received no comments on this transactions, are treated as maturing on portions of a covered company’s provision of the proposed rule and have the first calendar day after the committed borrowing capacity at a adopted it in the final rule without calculation date. The agencies recognize FHLB be treated as an inflow under the change. these specific inflows as day-one final rule. Commenters requested that The fifth excluded category of inflows inflows to reflect symmetry in the the agencies allow a banking would have comprised amounts payable outflow assumptions. Any other non- organization to increase its inflow to the covered company or any maturity inflow would be excluded amounts and thus decrease the outstanding exposure to a customer or under this provision. denominator of its LCR by an amount counterparty that is a nonperforming b. Net Derivatives Cash Inflow Amount equal to at least 50 percent of the asset as of a calculation date or that the unused borrowing commitments from covered company has reason to expect In § l.33(b) of the proposed rule, the an FHLB. The agencies have considered will become a nonperforming exposure agencies proposed that a covered the role that FHLB borrowings played in 30 calendar days or less from a company’s net derivative cash inflow the recent crisis and have decided not calculation date. Under the proposed amount would equal the sum of the to recognize collateralized lines of credit rule, a nonperforming exposure was payments and collateral that a covered in favor of promoting on-balance sheet defined as any exposure that is past due company will receive from each liquidity. by more than 90 calendar days or on counterparty to its derivative A commenter requested that the nonaccrual status. This provision transactions, less, for each counterparty, agencies revisit the assumptions about recognized the potential that a covered if subject to a qualifying master netting asymmetric outflows and inflows under company will not receive the full inflow agreement, the sum of payments and credit and liquidity facilities. The amounts due from a nonperforming collateral that the covered company will commenter proposed that a covered customer. The agencies received no make or deliver to each counterparty. nonbank company be permitted to comments on this provision of the This calculation would have include amounts from committed credit proposed rule and have retained it in incorporated the amounts due from and and liquidity facilities extended to the final rule as proposed. to counterparties under applicable covered companies as inflows at the The sixth excluded category of transactions within 30 calendar days of same rates at which it would be inflows would have comprised items a calculation date. Netting would have required to assume outflows if it that have no contractual maturity date been permissible at the highest level extended the same facilities to the same or items that mature more than 30 permitted by a covered company’s counterparties, but only if the facilities calendar days after a calculation date. contracts with a counterparty and could do not contain material adverse change The agencies are concerned that in a not include off-setting inflows where a clauses, financial covenants, or other time of liquidity stress a covered covered company has included as terms that could allow a counterparty to company’s counterparties will not pay eligible HQLA any assets that the cancel the facility if the covered amounts that are not contractually counterparty has posted to support company experienced stress. According required in order to maintain their own those inflows. If the derivatives to the commenter, the balance sheet and liquidity or balance sheet. Items that transactions are not subject to a funding profile of covered nonbank mature more than 30 calendar days after qualifying master netting agreement, companies are substantially different a calculation date generally fall outside then the derivative cash inflows for that from other covered companies. of the scope of the net cash outflow counterparty would have been included The agencies continue to emphasize denominator. in the net derivative cash inflow amount the importance of on-balance sheet The agencies received several and the derivative cash outflows for that liquidity and not the capacity to draw comments relating to the treatment of counterparty would have been included upon a facility, which, as stated above, the term of margin loans and, more in the net derivative cash outflow may or may not materialize in a generally, the maturity treatment of amount, without any netting. Under the liquidity stress scenario even where the secured transactions that may be proposed rule, the net derivative cash facilities do not contain material interrelated. The treatment of these inflow amount would have been adverse change clauses or financial secured transactions is described in calculated in accordance with existing covenants. During a period of material section II.C.4.f, below. valuation methodologies and expected financial distress, companies may not be Another commenter stated that loans contractual derivative cash flows. In the in a position to extend funds under the that are offered on an open maturity event that the net derivative cash inflow facilities. Therefore, the agencies are basis and contractually due on demand, for a particular counterparty was less adopting this provision in the final rule such as trade receivables, should be than zero, such amount would have as proposed. included as inflows rather than been required to be included in a The fourth excluded category of excluded as items that do not have a covered company’s net derivative cash inflows would have consisted of contractual maturity date under outflow amount for that counterparty. amounts included in a covered proposed § l.33(a)(6). As with the net derivative cash company’s HQLA amount under Section l.31 of the final rule outflow amount, pursuant to § l.21 of the proposed rule and any describes how a covered company must § l.33(a)(2), the net derivative cash amount payable to the covered company determine the maturity date of a inflow amount would not have included with respect to those assets. The transaction for the purposes of the rule. amounts arising in connection with agencies reasoned that because HQLA is The agencies have revised this provision forward sales of mortgage loans and already included in the numerator at to provide a maturity date for certain derivatives that are mortgage fair market value, including such non-maturity transactions that would commitments. The net derivative cash amounts as inflows would result in have otherwise been excluded as inflow amount would have included double counting. Consistent with the inflows under the final rule. Thus, as derivatives that hedge interest rate risk Basel III Revised Liquidity Framework, discussed below, certain unsecured associated with a mortgage pipeline. this exclusion also would have included wholesale cash inflows (including non- The agencies received no comments all HQLA that mature within 30 maturity deposits at other financial unique to this provision of the proposed

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rule. All related comments focused on some activity to a limited extent, e. Securities Cash Inflow Amount the net derivatives cash outflow amount covered companies would likely The proposed rule would have provision. This provision was intended continue to renew at least a portion of provided that inflows from securities to complement the net derivatives cash maturing credit and extend some new owned by a covered company that were outflow amount provision, and the loans due to reputational and business not included in a covered company’s provision that would apply at any given considerations. Therefore, the agencies HQLA amount and that would mature time would depend on whether the proposed to apply an inflow rate of 50 within 30 calendar days of the covered company had a net ‘‘due to’’ or percent for inflows due from wholesale calculation date would have received a ‘‘due from’’ position with the customers or counterparties that are not 100 percent inflow rate. Such amounts counterparty. In the final rule, the financial sector entities, or consolidated would have included all contractual agencies have made changes to subsidiaries thereof. With respect to dividend, interest, and principal § l.33(b) that are consistent with the revolving credit facilities, already drawn payments due and expected to be paid changes described above in section amounts would not have been included to a covered company within 30 II.C.3.c that the agencies made to in a covered company’s inflow amount, calendar days of a calculation date, § l.32(c). In both cases, the agencies and undrawn amounts would be treated regardless of their liquidity. The have permitted the netting of foreign as outflows under § l.32(e) of the agencies received no comments on this currency exchange derivative proposed rule. This is based upon the provision of the proposed rule and have transactions that result in the full agencies’ assumption that a covered retained it in the final rule. exchange of cash principal payments in company’s counterparty would not different currencies within the same f. Secured Lending and Asset Exchange repay funds it is not contractually Cash Inflow Amounts business day. As with all net cash obligated to repay in a stressed scenario. inflows, any resulting net derivatives i. Definitions and Inflow Rates cash inflow amount would be subject to A commenter requested that the final The proposed rule provided that a the overall 75 percent cap on total net rule provide a 100 percent inflow covered company would be able to inflows. treatment for inflows due from trade financing activities with a residual recognize cash inflows from secured c. Retail Cash Inflow Amount maturity of 30 calendar days or less as lending transactions that matured The proposed rule would have of the calculation date, rather than the within 30 calendar days of a calculation allowed a covered company to count as overall 50 percent outflow for non- date. The proposed rule would have an inflow 50 percent of all contractual financial sector entities. Trade finance defined a secured lending transaction as payments it expects to receive within 30 receivables coming due from non- any lending transaction that gave rise to calendar days from retail customers and financial corporate entities that are a cash obligation of a counterparty to a counterparties. This inflow rate contractually due within 30 days covered company that was secured reflected the agencies’ expectation that receive the same treatment as other under applicable law by a lien on covered companies will need to loans coming due from non-financial specifically designated assets owned by maintain a portion of their retail lending counterparties and that is a 50 percent the counterparty and included in the activity even during periods of liquidity inflow. This recognizes that the covered covered company’s HQLA amount that stress. The agencies received no company will likely have new lending gave the covered company, as a holder comments on this provision of the and loan renewals for at least a portion of the lien, priority over the assets in the proposed rule and have retained it in of loans coming due within the next 30 case of bankruptcy, insolvency, the final rule as proposed. days. The agencies continue to believe liquidation, or resolution. Secured lending transactions would have d. Unsecured Wholesale Cash Inflow that these inflow rates accurately reflect the effect of material liquidity stress included reverse repurchase Amount transactions, margin loans, and upon an institution, as described above, securities borrowing transactions. The agencies believed that for and are thus adopting this provision of purposes of the proposed rule, all The proposed rule would have the final rule as proposed. wholesale inflows (for example, assigned inflow rates to all contractual principal and interest receipts) from One commenter requested payments due to the covered company financial sector entities (and clarification regarding the proposed under secured lending transactions consolidated subsidiaries thereof) and rule’s treatment of fee income. The based on the quality of the assets from central banks generally would commenter argued that unless fee securing the transaction. These inflow have been available to meet a covered income is included under wholesale rates generally would have company’s liquidity needs. Therefore, payments, there appeared to be no complemented the outflow rates on the agencies proposed to assign such provision or discussion of the secured funding transactions under inflows a rate of 100 percent. possibility that fee income will greatly § l.32(j)(1) of the proposed rule. The agencies also expect covered decline during market stress. The Consistent with the Basel III Revised companies to maintain ample liquidity agencies consider fee income to be a Liquidity Framework, the inflow to sustain core businesses lines, contractual payment and its inflow rate amount from secured lending including continuing to extend credit to would depend on whether the transactions or the outflow amount from retail customers and wholesale counterparty owing the fee is a retail secured funding transactions would customers and counterparties that are customer or counterparty (in which case have been calculated on the basis of not financial sector entities. Indeed, one the inflow rate would be 50 percent each transaction individually. However, purpose of the proposed rule was to under § l.33(c)), a financial sector the symmetry between the proposed ensure that covered companies would entity or central bank (in which case the inflow and outflow rates recognized the have sufficient liquidity to sustain such inflow rate would be 100 percent under benefits of a matched book approach to business lines during a period of § l.33(d)(1)), or a non-financial sector managing secured transactions, where liquidity stress. While the agencies wholesale customer or counterparty (in applicable. The proposed rule also acknowledge that, in times of liquidity which case the inflow rate would be 50 would have assigned a 50 percent stress, covered companies can curtail percent under § l.33(d)(2)). inflow rate to the contractual payments

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due from customers that had borrowed agencies recognized the need to clarify In the case of a secured lending on margin, where such margin loans the distinction between the criteria for transaction that matures within 30 were collateralized by assets that were assets identified as HQLA in § l.20 of calendar days of a calculation date that not HQLA. the final rule and the requirements for is secured by an asset that is not held While the provisions relating to eligible HQLA set forth in § l.22 of the by the covered company as eligible secured lending transactions governed final rule. The agencies recognize that HQLA, but where the collateral has not the cash obligations of counterparties, secured lending transactions may be been rehypothecated such that the asset the proposed rule would have defined secured by assets that are not eligible is still held by the covered company and asset exchanges as the transfer of non- HQLA and agree with commenters that is available for immediate return to the cash assets. A covered company’s the definition of secured lending counterparty, the agencies have adopted liquidity position may improve in transaction was too narrow and that it a 100 percent inflow rate (except for instances where a counterparty is should be revised to remove the margin loans secured by assets that are contractually obligated to deliver higher requirement that the collateral securing not HQLA, which will receive a 50 quality assets to the covered company in a secured lending transaction must be percent inflow rate). Unlike secured return for less liquid, lower-quality eligible HQLA. Therefore, under the lending transactions where collateral is assets. The proposed rule would have final rule, secured lending transactions held as eligible HQLA and is therefore reflected this through the proposed asset include the cash obligations of included in the calculation of the HQLA exchange inflow rates, which were counterparties to the covered company amount at the calculation date, the based on a comparison of the quality of that are secured by assets that are HQLA agencies determined that the inflow for the asset to be delivered by a covered regardless of whether the HQLA is transactions where collateral is not held company with the quality of the asset to eligible HQLA and also include the cash as eligible HQLA but is available for be received from a counterparty. Asset obligations of counterparties that are immediate return to the counterparty exchange inflow rates progressively secured by assets that are not HQLA. should receive a 100 percent inflow increased on a spectrum that ranged Accordingly, the agencies have reflecting the settlement of the from a zero percent inflow rate where a amended the requirements for the counterparty’s cash obligation at the covered company would be receiving secured lending transaction inflow maturity date. assets that are the same HQLA level as amounts under § l.33(f) of the final Section II.C.4.ii below discusses the assets that it would be required to rule to remove the references to the instances where the collateral securing deliver through a 100 percent inflow requirement that the assets securing a the secured lending transaction has rate where a covered company would be secured lending transaction be eligible been rehypothecated in another receiving assets that are of significantly HQLA. transaction as of a calculation date. The higher quality than the assets that it The agencies continue to believe that inflow rates applied to maturing secured would be required to deliver. the inflow rate for a secured lending lending transactions are shown in Table Many commenters noted that a transaction that has a maturity date (as 4a. contradiction existed between the determined under § l.31 of the final With respect to asset exchange definition of a secured lending rule) within 30 calendar days should be inflows, the agencies did not receive transaction under the proposed rule, based on the type of collateral that is significant comments on the proposed which would have been limited to used to secure that transaction. rule’s treatment of asset exchanges and transactions that were secured by assets Generally, the agencies assume that are adopting them in the final rule included in the covered company’s upon the maturity of a secured lending largely as proposed (Table 4b.). HQLA amount, and the proposed transaction, the covered company may However, the agencies are clarifying for secured lending transaction cash inflow be obligated to return the collateral to purposes of the final rule that where a amounts which would have recognized the counterparty and receive cash from covered company has rehypothecated inflows for secured lending transactions the counterparty in fulfilment of the an asset received from a counterparty in that are secured by assets that are not counterparty’s cash obligation. an asset exchange transaction, a zero HQLA. Commenters therefore requested Therefore, for the purpose of percent inflow rate would be applied to that the final rule clarify that the 100 recognizing a cash inflow, it is crucial the transaction under the final rule, percent inflow rate would be applied to that the collateral securing a secured reflecting the agencies’ concern that the transactions secured by assets that are lending transaction be identified as covered company would be required to not eligible HQLA. In addition, other being available for return to the purchase the asset on the open market commenters objected to the fact that the counterparty at the maturity of the to settle the asset exchange, as described proposed rule applied inflow rates for transaction. for assets exchange outflows in section secured lending transactions secured by Under the final rule, the secured II.C.3.j above. level 1, level 2A, and level 2B liquid lending transaction inflow rates are assets only when the assets were eligible ii. The Reuse of Collateral and Certain designed to complement the outflow Prime Brokerage Transactions HQLA. These commenters argued that rates for secured funding transactions the difference in phrasing could lead to (that are not secured funding The proposed rule would have uncertainty about the treatment of transactions conducted with sovereigns, applied a 50 percent inflow rate to transactions secured by liquid assets multilateral development banks, or U.S. inflows from collateralized margin loans that are not included in a company’s GSEs and are not customer short that are secured by assets that are not eligible HQLA because the operational positions facilitated by other customers’ HQLA and that are not reused by the requirements are not satisfied. collateral) secured by the same quality covered company to cover any of its Moreover, the commenters argued that of collateral and, for collateral that is short positions. Several commenters the perceived matched book parity of held by the covered company as eligible the proposed rule would not apply to a HQLA,86 the haircuts for the various received with rehypothecation rights if the owner large number of transactions that has the contractual right to withdraw the asset categories of HQLA. without an obligation to pay more than de minimis actually have matched maturities. remuneration at any time during the prospective 30 As described in section II.B.3 of this 86 The agencies reiterate that a covered company calendar-day period per § l.22(b)(5) of the final Supplementary Information section, the cannot treat an asset as eligible HQLA that it rule.

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requested that the agencies expand this The agencies recognize that prime under the final rule of greater than 30 inflow rate to also apply to brokerage, matched book, and other calendar days from a calculation date collateralized margin loans that are activities conducted at covered should be excluded from the LCR secured by collateral that is eligible companies make significant use of the calculation. Similarly, the agencies HQLA or otherwise held at the covered rehypothecation of collateral that may believe this principle should be company and not reused in any other have been provided for use by the maintained in respect to margin loans transaction.87 These commenters also covered company through secured with remaining contractual terms of suggested this proposed 50 percent lending transactions and asset greater than 30 calendar days from a inflow rate should be applied regardless exchanges (together with derivative calculation date because a covered of the maturity of the loan because, assets, other secured counterparty company may not rely on inflows that although such margin loans may have a obligations, or other transactions). are not required, by relevant contractual contractual maturity date that is more Beyond the reuse of specific collateral, terms, to occur within the 30 calendar- than 30 calendar days from a calculation the agencies also recognize the potential day period of the LCR calculation. With date, the contractual agreements would interrelationship of certain transactions respect to margin loans that are secured require the customer to repay the loan within prime brokerage activities, both by HQLA, the agencies believe that the in the event the customer’s portfolio at an individual customer level (for inflow rates applied to secured lending composition materially changes. example, through market neutrality transactions, which are complementary Commenters argued that the agencies requirements) and in the aggregate to the outflow rates for secured funding had not taken into account that a portfolio of customers. Consistent with transactions that are secured by HQLA, significant portion of prime brokerage the Basel III Revised Liquidity are appropriate given the cash business consists of short-term secured Framework, the agencies do not believe obligation of the counterparty. financing, such as margin loans and that a 100 percent inflow rate for all Moreover, where margin loans are loans of securities to effect customer margin loans secured by assets that are secured by assets that the covered short positions. Commenters also not HQLA and that mature within 30 company includes as eligible HQLA, the expressed concern that the terms of calendar days of a calculation date is inflow rates applied to the secured certain contracts, such as term margin appropriate. The 50 percent inflow rate lending transactions would be agreements, require customers to on these margin loans recognizes that complementary to the haircut maintain market neutral portfolios with not all margin loans may pay down assumptions for the various categories increasing margin requirements and during a stress period and covered of HQLA and also are appropriate given reduced leverage or financing based on companies may have to continue to the cash obligation of the counterparty the level of asymmetry between fund a proportion of margin loans over and the covered company’s obligation to customer long and short positions. In time. In requiring the 50 percent inflow return the value of the HQLA. particular, commenters requested that rate on such margin loans, the agencies The agencies are aware that collateral the agencies recognize collateralized note the symmetry with the secured may be rehypothecated to secure a term margin loans not secured by HQLA funding transaction outflow rate secured funding transaction or other as generating inflows regardless of required for customer short positions transaction or obligation (or delivered in maturity because financings under term that are covered by other customers’ an asset exchange) that matures either within 30 calendar days of a calculation margin loans are designed to be treated collateral that is not HQLA. The date, or that matures more than 30 as overnight transactions that are due on agencies believe this symmetrical calendar days after a calculation date. In demand if the customer does not satisfy treatment balances the general treatment either case, different inflow rates are the loan terms. of individual secured funding and applied under the final rule to the secured lending transactions under the More generally, commenters asked secured lending transaction (or asset rule with certain relationships that may that the agencies revise the proposed exchange) that provides the collateral in potentially apply within prime rule such that it more fully capture the order to address the interdependency brokerage activities, including matched secured lending and secured with the secured funding transaction (or contractual market neutrality clauses funding transactions that occur in prime asset exchange) for which the collateral applicable to certain customers and brokerage and matched book activity. As was reused. addressed in section II.C.1. b of this certain aggregate customer behaviors. If the transaction or obligation for Supplementary Information section, The agencies are further clarifying that which the collateral has been reused has commenters also requested that certain margin loans secured by HQLA are a maturity date (as determined under related inflow amounts be excluded required to apply the inflow rates § l.31 of the final rule) within 30 from the aggregate cap on inflows in applicable to any other type of secured calendar days of a calculation date, the calculating the net cash inflow amount. lending transaction secured by the same covered company may anticipate Commenters asked the agencies to collateral, including inflow rates receiving, or regaining access to, the reevaluate the treatment of matched applicable to collateral that is eligible collateral within the 30-day period. transactions based on whether the HQLA. As discussed in section II.C.1.b Assuming that the maturities are collateral is rehypothecated or remains above, although the final rule permits matched or that the maturity of the in inventory and based on the term of the use of specified netting in the secured lending transaction is later than the secured funding transaction to determination of certain transaction that of the secured funding transaction, determine the covered company’s net amounts, no individual inflow the covered company may therefore cash outflow over a 30 calendar-day categories are exempt from the aggregate anticipate having the collateral available period. cap of inflows at 75 percent of gross at the maturity of the secured lending outflows in the net cash inflow amount transaction (or asset exchange) from 87 As discussed above, the agencies have adopted calculation. which the collateral was originally a 100 percent inflow rate for all secured lending The agencies believe that, consistent obtained. Accordingly, under the final transactions that are secured by assets that are not with other foundational elements of the rule, if collateral obtained from a eligible HQLA, have not been rehypothecated by the bank, and are available for the immediate return final rule, secured lending transactions secured lending transaction (or received to the counterparty at any time. that have a maturity date as determined from a prior asset exchange) that

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matures within 30 calendar days of a for outflows and inflows occurring lending transaction (or asset exchange) calculation date is reused in a secured within a 30 calendar-day period. may need to be rolled over and will not funding transaction (or delivered in a Consistent with the Basel III Revised give rise to a cash (or net collateral) second asset exchange) that matures Liquidity Framework, the final rule will inflow, reflecting its need to continue to within 30 calendar days of a calculation not recognize inflows from secured cover the secured funding transaction date, the covered company may lending transactions (or asset (or asset exchange or other transaction recognize an inflow from the secured exchanges) that mature within 30 or obligation). For example, a covered lending transaction (or prior asset calendar days from a calculation date company would not recognize an inflow where the collateral received is reused exchange) as occurring at the maturity from a margin loan that matures within in a secured funding transaction (or date.88 As required under § l.31 of the 30 calendar days of a calculation date if asset exchange) that matures more than the loan was secured by collateral that final rule, the maturity of this secured 30 calendar days from the calculation had been reused in a term repurchase lending transaction (or prior asset date, or where the collateral is otherwise exchange) must be no earlier than the reused in a transaction or to cover any transaction that matured more than 30 secured funding transaction (or second obligation that could extend beyond 30 calendar days from a calculation date. asset exchange). This treatment will calendar days from a calculation date. Tables 4a and 4b summarize the generally apply a symmetric treatment This is because a covered company inflow rates for secured lending should assume that such secured transactions and asset exchanges.

TABLE 4a—SECURED LENDING TRANSACTION INFLOW RATES

Secured lending inflow rate applied Categories for secured lending transactions maturing within 30 calendar days of the calculation date to contractual amounts due from the counterparty

Where the asset securing the secured lending transaction is included in the covered company’s eligible HQLA as of the calculation date, and the transaction is:

Secured by level 1 liquid assets ...... 0% Secured by level 2A liquid assets ...... 15% Secured by level 2B liquid assets ...... 50%

Where the asset securing the secured lending transaction is not included in the covered company’s eligible HQLA as of the calculation date but is still held by the covered company and is available for immediate return to the counterparty, and the transaction is:

Secured by level 1, level 2A or level 2B liquid assets ...... 100% A collateralized margin loan secured by assets that are not HQLA ...... 50% Not a collateralized margin loan and is secured by assets that are not HQLA ...... 100%

Where the asset securing the secured lending transaction has been rehypothecated and used to secure, or has been delivered into, any trans- action or obligation which:

Will not mature or expire within 30 calendar days or may extend beyond 30 calendar days of the calculation date ...... 0%

Where the asset securing the secured lending transaction has been rehypothecated and used to secure any secured funding transaction or ob- ligation, or delivered in an asset exchange, that will mature within 30 calendar days of the calculation date,* and the secured lending trans- action is:

Secured by level 1 liquid assets ...... 0% Secured by level 2A liquid assets ...... 15% Secured by level 2B liquid assets ...... 50% A collateralized margin loan secured by assets that are not HQLA ...... 50% Not a collateralized margin loan and is secured by assets that are not HQLA ...... 100% * Under § l.31(a)(3) of the final rule, the maturity date of the secured lending transaction cannot be earlier than the maturity date of the se- cured funding transaction or asset exchange.

TABLE 4b—ASSET EXCHANGE INFLOW RATES

Asset exchange Covered company will receive at maturity Covered company must post at maturity inflow rate

Where the asset originally received in the asset exchange has not been rehypothecated to secure any transaction or obligation, or delivered in an asset exchange, that will mature or expire more than 30 calendar days from a calculation date or may extend beyond 30 calendar days of a calculation date: **

Level 1 liquid assets ...... Level 1 liquid assets ...... 0% Level 1 liquid assets ...... Level 2A liquid assets ...... 15% Level 1 liquid assets ...... Level 2B liquid assets ...... 50% Level 1 liquid assets ...... Assets that are not HQLA ...... 100%

88 The amount of the inflow would be determined received in the secured lending transaction or prior asset exchange was HQLA or non-HQLA as by whether the collateral that the covered company summarized in Tables 4a and 4b.

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TABLE 4b—ASSET EXCHANGE INFLOW RATES—Continued

Asset exchange Covered company will receive at maturity Covered company must post at maturity inflow rate

Level 2A liquid assets ...... Level 1 or level 2A liquid assets ...... 0% Level 2A liquid assets ...... Level 2B liquid assets ...... 35% Level 2A liquid assets ...... Assets that are not HQLA ...... 85% Level 2B liquid assets ...... Level 1 or level 2A or level 2B liquid assets ...... 0% Level 2B liquid assets ...... Assets that are not HQLA ...... 50%

Where the asset originally received in the asset exchange has been rehypothecated to secure any transaction or obligation, 0% or delivered in an asset exchange, which will mature or expire more than 30 calendar days from the calculation date or may extend beyond 30 calendar days of the calculation date: ** Under § l.31(a)(3) of the final rule, the maturity date of the asset exchange cannot be earlier than the maturity date of the transaction or obligation for which the collateral was reused.

g. Segregated Account Inflow Amount potentially lead to a reduction in the consistent with the outflow and inflow l Several commenters noted that unlike amount that is required to be segregated, calculations required under § .32 and l the Basel III Revised Liquidity and a corresponding release of a portion § .33 of the final rule as applied to any Framework, the proposed rule did not of the amount held as of a calculation transaction affecting the calculation of recognize inflows from the release of date. Accordingly, the agencies have the segregated balance. If the calculated included a provision in the final rule assets held in segregated accounts in future balance of the segregated account that permits a covered company to accordance with regulatory assets is less than the balance at the recognize certain inflows from broker- requirements for the protection of calculation date, then the broker-dealer dealer segregated account releases based customer trading assets, such as Rule segregated account inflow amount is the on the change in fair value of the 15c3–3.89 A few commenters argued value of assets that would be released customer segregated account balances that Rule 15c3–3 is, in effect, a liquidity from the segregated accounts. between the calculation date and 30 rule that ensures that broker-dealers In addition and as discussed above, calendar days following the calculation have sufficient liquid assets to meet the agencies have added a provision to date. the maturity date calculation their obligations to customers. Another The agencies do not believe that 100 requirements of § l.31(a)(5) of the final commenter argued that by failing to percent of the value of segregated rule to clarify that broker-dealer address these assets in the proposed accounts held as of a calculation date segregated account inflow under rule, the agencies had failed to consider would be an appropriate inflow amount § l.33(g) will not be deemed to occur the SEC’s functional regulation of because this inflow amount may not, in broker-dealers. Commenters noted that fact, be realized by the covered until the date of the next scheduled because these inflows are not company. As a general matter, the final calculation of the amount as required specifically addressed in the proposed rule requires outflow amounts and under applicable legal requirements for rule, the assets would be treated as inflow amounts to be calculated by the protection of customer assets with encumbered and would not be eligible using only the balances and transaction respect to each broker-dealer segregated to offset deposits subject to the outflow amounts at a calculation date, and not account, in accordance with the covered rate applicable to affiliated sweep based on anticipated future balances or company’s normal frequency of deposits. A commenter argued that obligation amounts. However, recalculating such requirements. If, for because of the regulatory regime that consistent with the Basel III Revised example, a broker-dealer performs this governs these segregated assets, there is Liquidity Framework, the agencies have calculation on a daily basis, the inflow no market risk to the banking determined that the appropriate inflow may occur on the day following a organization. One commenter requested amount for the release of broker-dealer calculation date. If a broker-dealer that the release of balances held in segregated account assets is dependent typically performs the calculation on a segregated accounts be subject to a 100 on the anticipated amount of broker- weekly basis, the inflow would be percent inflow rate. dealer segregated account assets that deemed to occur the day of the next The agencies recognize that may need to be held by the covered regularly scheduled calculation. segregated accounts required for the company 30 calendar days from a h. Other Cash Inflow Amounts protection of customer trading assets are calculation date. The anticipated designed to meet potential outflows to amount of broker-dealer segregated Under the proposed rule, the covered customers under certain circumstances. account assets that may need to be held company’s inflow amount, as of the The agencies also recognize, however, 30 calendar days from a calculation date calculation date, would have included that such segregated amounts held as of should be based on the impact of those zero percent of other cash inflow an LCR calculation date will be amounts outflow and inflow amounts described amounts not described elsewhere in the calculated by the covered company at or under the final rule that are specifically proposed rule. The agencies continue to prior to the calculation date and relevant to the calculation of the believe that limiting inflow amounts in generally on a net basis across existing segregated amount under applicable the final rule to those categories customer free cash, loans, and short law. The covered company must specified, which reflect certain stressed positions. The agencies acknowledge therefore calculate the anticipated assumptions, is important to the that these segregated amounts will required balance of the broker-dealer calculation of the total cash inflow necessarily be recalculated within a 30 segregated account assets as of 30 amount and the LCR as a whole. The calendar-day period, which could calendar days from a calculation date, agencies received no comments on this assuming that customer cash and provision of the proposed rule and have 89 17 CFR 240.15c3–3. collateral positions have changed retained it in the final rule as proposed.

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i. Excluded Amount for Intragroup report non-compliance to the overheated, similar to the Transactions appropriate Federal banking agency countercyclical capital requirements Under the proposed rule, inflow appears to contradict the BCBS premise under the Basel III capital framework. In the proposed rule, consistent with amounts would not have included that the stock of HQLA should be the Basel III Revised Liquidity amounts arising out of transactions available for use during periods of Framework, the agencies affirmed the between a covered company and its stress. Other commenters requested that principle that a covered company’s consolidated subsidiary or amounts the agencies take into consideration that HQLA amount is expected to be arising out of transactions between a when an institution’s LCR falls below available for use to address liquidity consolidated subsidiary of a covered 100 percent, it is not necessarily needs in a time of stress. The agencies company and another consolidated indicative of any real liquidity concerns. Commenters expressed concern that believe that the proposed LCR shortfall subsidiary of that covered company. framework would provide them with The agencies received no comments on disclosure requirements under securities laws or stock exchange listing the appropriate amount of supervisory this provision of the proposed rule and flexibility to respond to LCR shortfalls. have retained it in the final rule. rules could require an institution to immediately and publicly report an LCR Depending on the circumstances, an III. Liquidity Coverage Ratio Shortfall below 100 percent or the adoption of a LCR shortfall would not have necessarily resulted in supervisory Although the Basel III Revised remediation plan, which would make action, but, at a minimum, would have Liquidity Framework provides that a the HQLA de facto unusable during resulted in heightened supervisory banking organization is required to times of stress and could exacerbate any monitoring. The notification procedures maintain an amount of HQLA sufficient burgeoning liquidity stress being that were to be followed whenever a to meet its liquidity needs within a 30 experienced. Similarly, commenters covered company dropped below the calendar-day stress period, it also makes expressed concern that media reports of required LCR were intended to enable an institution’s LCR falling below100 clear that it may be necessary for a supervisors to monitor and respond percent would not necessarily reflect banking organization to fall below the appropriately to the unique the underlying reasons and complexities requirement during a period of liquidity circumstances that are giving rise to a in the case of a temporary LCR shortfall stress. The Basel III Revised Liquidity covered company’s LCR shortfall. This and may create liquidity instability. Framework therefore provides that any supervisory monitoring and response supervisory decisions in response to a Accordingly, such commenters would be hindered if such notification reduction of a banking organization’s recommended that any public were only to occur when a covered LCR should take into consideration the disclosure at the bank holding company company dropped a specified objectives of the Basel III Revised level be carefully tailored. Alternatively, percentage below the LCR requirement. Liquidity Framework. This provision of one commenter requested that any Such notification may give rise to a the Basel III Revised Liquidity supervisory procedures be triggered supervisory or enforcement action, Framework indicates that supervisory only when a covered company’s LCR depending on operational issues at a actions should not discourage or deter a has fallen by at least 5 percent for a covered company, whether the violation banking organization from using its period of at least 3 business days. In is a part of a pattern or practice, whether HQLA when necessary to meet order to accommodate normal the liquidity shortfall was temporary or unforeseen liquidity needs arising from fluctuations in a firm’s day-to-day caused by an unusual event, and the financial stress that exceeds normal liquidity position, the commenter extent of the shortfall or business fluctuations. encouraged the agencies to consider noncompliance. The agencies believe The proposed rule included a providing more flexibility in the final the proposed LCR shortfall framework supervisory framework for addressing a rule. One commenter requested that the provides appropriate supervisory shortfall with respect to the rule’s LCR agencies clarify whether, in addition to flexibility and are adopting it in the that is consistent with the intent of monitoring a covered company’s final rule substantially as proposed. having HQLA available for use during compliance with the LCR, the agencies The agencies recognize that there will stressed conditions, as described in the would be taking other indicators of be a period of time during which Basel III Revised Liquidity Framework. financial health into account. Another covered companies will be calculating This supervisory framework included commenter noted that daily notification their LCR on the last day of each notice and response procedures that requirements to a covered company’s calendar month, rather than on each would have required a covered appropriate Federal banking agency for business day. Accordingly, the final rule company to notify its appropriate non-compliance with the LCR would requires that during that period, if a Federal banking agency of any LCR detract from the company’s critical covered company’s LCR is below the shortfall on any business day, and operating duties. Several commenters required minimum when it is calculated would have provided the appropriate requested that the agencies reconsider on the last day of each calendar month, Federal banking agency with flexibility the negative connotation of falling or if its supervisor has determined that in its supervisory response. In addition, below the target ratio and the the covered company is otherwise if a covered company’s LCR fell below requirement to provide a written materially noncompliant, the covered the minimum requirement for three remediation plan, which they stated company must promptly consult with consecutive business days or if its would cause the LCR to become a bright the appropriate Federal banking agency supervisor determined that the covered line requirement to be met each day to determine whether the covered company is otherwise materially instead of serving as a cushion for company must provide a written noncompliant with the proposed rule, stressful times. One commenter remediation plan. the proposed rule would have required requested that the agencies consider A covered company dropping below the covered company to provide to its making greater use of the the LCR requirement will necessitate supervisor a plan for remediation of the countercyclical potential of liquidity allocating resources to address the LCR liquidity shortfall. regulation by permitting liquidity shortfall. However, the agencies believe Some commenters stated that the requirements to be adjusted upward this allocation of resources is requirement in the proposed rule to during periods where markets are appropriate to promote the overall

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safety and soundness of the covered Several commenters stated that Framework. One commenter stated that company. As with all supervisory compliance with the proposed this approach would minimize the monitoring, the agencies will monitor a transition timeline would require likelihood of an adverse impact on the covered company’s compliance with the comprehensive information technology financial markets. One commenter final rule in conjunction with the improvements and governance stated that an accelerated agencies’ overall supervisory processes over a short period of time. implementation timeline would make it framework. If necessary, the agencies One commenter noted that covered impossible for there to be a level playing will adjust the supervisory response to companies will need to make field for LCR comparison across all address any deterioration in the operational changes to comply with the internationally active banking financial condition of a covered new requirement and that some covered organizations until 2019 when the Basel company. companies will need to adjust their III Revised Liquidity Framework With regard to counter cyclicality, by asset composition significantly. One becomes fully implemented in other requiring that ample liquid assets be commenter argued that certain covered jurisdictions, and that asymmetrical held during favorable conditions such companies have not historically been treatment between the United States and that a covered company can use them in subject to formal regulatory reporting Europe will advantage foreign lenders times of stress, the LCR effectively requirements at the holding company and borrowers, as well as their works as a countercyclical requirement. level and that the agencies should economies. The agencies are not adding additional consider this in determining whether to countercyclical elements to the final impose accelerated implementation on A few commenters expressed concern rule. these companies. The commenter that the proposed transition timeline As noted elsewhere in this further stated that the implementation was in part predicated on a level of Supplementary Information section, the challenges posed by the proposal would shortfall in HQLA estimated by the proposed rule did not include be particularly acute for these covered agencies. One commenter argued that disclosure requirements for the LCR and companies and requested that the final the empirical evidence justifying the the agencies anticipate that they will rule provide an extended transition agencies’ aggregate HQLA amount seek comment on reporting period for those companies that have shortfall conclusion on which the requirements through a future notice, not traditionally been subject to the implementation timing was based is which will be tailored to disclose the regulatory reporting regimes that are very limited and requested that the appropriate level of information. The applicable to bank holding companies. agencies revisit the conclusion agencies are clarifying that, other than Similarly, two commenters noted that regarding the amount of shortfall. The any public disclosure requirements that U.S. banking organizations that have not commenter expressed concern that the may be proposed in a separate notice, been identified as G–SIBs by the shortfall assumption may be based on reports to the agencies of any decline in Financial Stability Board have not been the less stringent approach of the Basel a covered company’s LCR below 100 previously required to report their III Revised Liquidity Framework. The percent, and any related supervisory liquidity positions on a daily basis commenter also expressed concern that actions would be considered and treated under the Board’s FR 2052a reporting the estimate of the LCR shortfall does as confidential supervisory information. form, and thus these banking not take into account any shortfall that IV. Transition and Timing organizations have not had time to may be present in foreign banking upgrade data and systems to be in a organizations that will be required to The proposed rule included a position to comply with the proposed form an intermediate holding company transition period for the LCR that would rule and its daily reporting under the Board’s Regulation YY,90 and have required covered companies to requirements. Additionally, according thus the estimate of the shortfall is maintain a minimum LCR as follows: 80 to commenters, accelerated likely significantly underestimated.91 A percent beginning on January 1, 2015, implementation would compress the commenter stated that its analysis 90 percent beginning on January 1, full cost and burden of compliance into indicated that a number of institutions 2016, and 100 percent beginning on an extremely brief period for these would find it difficult to reach a LCR of January 1, 2017, and thereafter. The organizations. 80 percent by 2015. Several commenters proposed transition period accounted A few commenters requested that the requested that a quantitative impact for the potential implications of the agencies consider that the study be conducted before the agencies proposed rule on financial markets, implementation of the proposed LCR implement an accelerated credit extension, and economic growth requirements would happen implementation schedule. Several and sought to balance these concerns contemporaneously with the commenters requested that the agencies with the proposed LCR’s important role implementation of other resource- clarify the interaction between the daily in promoting a more robust and resilient intensive regulatory requirements, all of calculation requirement under the banking sector. which would require changes to the Commenters expressed concern with: proposed rule, and the current liquidity infrastructure of banking organizations. reporting that certain firms are (i) The proposed transition period with Several commenters requested that the regard to the operational requirements undertaking under the Board’s FR 2052a implementation date of the rule be and Liquidity Monitoring Report (FR necessary to meet the proposed rule, (ii) delayed, with some specifically 2052b) reporting forms. In particular, the fact that the transition period differs requesting delay by 12 months to begin the commenters expressed concern that from the timetable published in the no earlier than January 1, 2016, one the agencies would be requiring Basel III Revised Liquidity Framework, commenter requesting a delay by 24 multiple daily calculations and reports and (iii) the HQLA shortfall amount that months to begin no earlier than January with respect to the same data. the financial system faces. One 1, 2017, and another commenter commenter expressed concern that the requesting a phase-in period of three 90 proposal was premature because the years. See 12 CFR 252.153. 91 As noted above, the agencies have not applied BCBS is currently reviewing ways to Several commenters requested that the requirements of the rule to foreign banking reduce the complexity and opaqueness the proposed transition time frame organizations or intermediate holding companies of the Basel III capital framework. follow the Basel III Revised Liquidity that are not otherwise covered companies.

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With respect to commenters’ concerns In determining the proposed these firms are currently submitting regarding the proposed rule’s deviation transition time frame, the agencies were daily liquidity reports. Under the final from the Basel III Revised Liquidity aware that covered companies may face rule, these covered companies are Framework phase-in, the agencies a range of implementation issues in required to calculate the LCR on the last believe the accelerated phase-in coming into compliance with the business day of each calendar month properly reflects the significant progress proposed rule. The agencies asked in from January 1, 2015, to June 30, 2015, covered companies have made since the the proposal whether the proposed and on each business day from July 1, financial crisis in enhancing their transition periods were appropriate for 2015, onwards. All other covered overall liquidity positions. The agencies all covered companies in respect to the companies must calculate the LCR on continue to believe that the minimum proposed LCR. Recognizing the last business day of each calendar level of the LCR that would be commenters’ concerns regarding the month beginning January 1, 2015, and applicable in each calendar year operational difficulty for organizations on each business day from July 1, 2016, specified in the proposed transition that were not already subject to daily onwards. The transition provisions of periods is appropriate to ensure that the liquidity reporting requirements, and the final rule are also set forth in Table financial stability benefits presented by the systems changes necessary to 5 below. calculate the LCR accurately on a daily the standard are appropriately realized. In developing these transition basis, the agencies believe it is periods, the agencies analyzed data Accordingly, as with the proposed rule, appropriate to differentiate the received from several institutions under the final rule requires covered transition periods for calculation of the a quantitative impact study as well as companies to maintain a LCR as follows: liquidity coverage ratio based on the supervisory data from each of the 80 percent beginning on January 1, size, complexity, and potential systemic institutions that would be subject to the 2015, 90 percent beginning on January impact of covered companies. The final final rule. Based on the review of this 1, 2016, and 100 percent beginning on rule therefore requires covered data, the agencies believe that the January 1, 2017, and thereafter. These depository institution holding transition periods set forth in the rule transition periods are intended to companies with $700 billion or more in are appropriately tailored to the size, facilitate compliance with a new total consolidated assets or $10 trillion complexity, and potential systemic minimum liquidity requirement and the or more in assets under custody, and impact of covered companies. The agencies expect that covered companies any depository institution that is a agencies do not currently believe that with LCRs at or near 100 percent consolidated subsidiary of such additional data is necessary for the generally would not reduce their depository institution holding adjustment of the transition periods, but liquidity coverage during the transition companies that has total consolidated will monitor the implementation of the period. The agencies emphasize that the assets equal to $10 billion or more, to final rule by covered companies during final rule’s LCR is a minimum conform to transition periods that are the transition periods. requirement and that companies should different from those for other covered Although the agencies have not have internal liquidity management companies. The agencies expect these proposed the regulatory or public systems and policies in place to ensure largest, most complex firms to have the reporting requirements for the final rule, they hold liquid assets sufficient to meet most sophisticated liquidity risk the agencies anticipate that they will their institution-specific liquidity needs monitoring procedures, commensurate seek comment on reporting that could arise in a period of stress. with their size and complexity,92 and requirements through a future notice.

TABLE 5—TRANSITION PERIOD FOR THE LIQUIDITY COVERAGE RATIO

Transition period Liquidity coverage ratio

Calendar year 2015 ...... 80 Calendar year 2016 ...... 90 Calendar year 2017 and thereafter ...... 1.00

Calculation Frequency

Covered depository institution holding companies with $700 billion or more in total consolidated assets or $10 trillion or more in assets under custody, and any depository institution that is a consolidated subsidiary of such depository institution holding companies that has total consolidated assets equal to $10 billion or more: Last business day of the calendar month ...... Beginning January 1, 2015. Each business day ...... Beginning July 1, 2015 and thereafter. All other covered companies: Last business day of the calendar month ...... Beginning January 1, 2015. Each business day ...... Beginning July 1, 2016 and thereafter.

V. Modified Liquidity Coverage Ratio standards, including differentiating among companies for purposes of Section 165 of the Dodd-Frank Act among covered companies on an applying the Board’s standards authorizes the Board to tailor the individual basis or by category of established under section 165, the Board 93 application of its enhanced prudential institution. When differentiating may consider the companies’ size,

92 For example, the Board’s Regulation YY profile and business model of the particular the standardized approach of the U.S. liquidity requires large domestic bank holding companies to institution. See 12 CFR 252.33–35. The firm- coverage ratio framework, which provides for develop internal liquidity risk-management and specific liquidity requirements set forth in the comparability across firms within the United States. stress testing practices that are tailored to the risk Board’s Regulation YY are intended to complement 93 See 12 U.S.C. 5365(a) and (b).

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capital structure, riskiness, complexity, companies would not have been ensure are backed by adequate liquidity financial activities, and any other risk- required to calculate a maximum will migrate to those institutions that related factor the Board deems cumulative peak net outflow day for are not required to hold as much appropriate.94 total net cash outflows as required for liquidity. One commenter requested that The Basel III Revised Liquidity covered companies subject to the the Federal Reserve articulate the Framework was developed for unmodified LCR.95 The requirements of justification for applying the LCR to the internationally active banking the modified LCR standard would have selected institutions, particularly in organizations, taking into account the otherwise been the same as the light of other supervisory efforts to complexity of their funding sources and unmodified LCR as described in the monitor and strengthen liquidity structure. Although depository proposal, including the proposed HQLA management. institution holding companies with at criteria and the calculation of the HQLA As discussed in section I of this least $50 billion in total consolidated amount, and modified LCR holding Supplementary Information section, the assets that are not covered companies companies would have to comply with agencies believe that the unmodified (modified LCR holding companies) are all unmodified aspects of the standard LCR is appropriate for the size, large financial companies with to the same extent as covered complexity, risk profile, and extensive operations in banking, companies. interconnectedness of covered brokerage, and other financial activities, companies. Consistent with the they generally are smaller in size, less A. Threshold for Application of the enhanced prudential standards complex in structure, and less reliant on Modified Liquidity Coverage Ratio requirements in Regulation YY, the riskier forms of market funding than Requirement Board continues to believe that bank covered companies. On a relative basis, One commenter expressed support for holding companies and savings and the modified LCR holding companies the modified LCR, stating that modified loan holding companies with total tend to have simpler balance sheets, LCR holding companies have consolidated assets of at least $50 better enabling management and substantially less complex funding and billion dollars that are not covered supervisors to take corrective actions risk profiles than covered companies. companies should be subject to the more quickly in a stressed scenario than The commenter stated that operating modified LCR. Further, the Board is the case with a covered company. under the modified LCR will allow such believes that tailoring the requirements Accordingly, the Board proposed to a holding company to remain of the quantitative minimum standard tailor the proposed rule’s application of competitive without compromising its for organizations that are not covered the liquidity coverage ratio requirement commitment to liquidity risk companies under the rule is consistent to modified LCR holding companies management or drastically limiting the with the Dodd-Frank Act and that it is pursuant to its authority under section amount of maturity transformation it appropriate for modified LCR holding 165 of the Dodd-Frank Act. Although undertakes on behalf of its customers. A companies with less complex funding the Board believes it is important for all commenter further expressed support structures to be required to hold lower bank holding companies subject to for the Board’s use of cumulative net amounts of HQLA under the rule. section 165 of the Dodd-Frank Act (and cash outflows over the stress period in similarly situated savings and loan the modified LCR compared to the net B. 21 Calendar-Day Stress Period holding companies) to be subject to a cumulative peak calculation in the Several commenters noted that the 21 quantitative liquidity requirement as an unmodified LCR requirement’s calendar-day stress period is enhanced prudential standard, it proposed rule. operationally challenging because recognizes that these smaller companies As discussed above in section I.D., banking organizations typically manage would likely not have as great a several commenters requested that the and operate on a month-end or 30-day systemic impact as larger, more complex agencies apply the modified LCR to all cycle. Thus, commenters suggested that companies if they experienced liquidity banking organizations with limited the modified LCR be based on a stress. Therefore, because the options international operations regardless of calendar month stress period, rather for addressing their liquidity needs asset size. The commenters argued that than the 21 calendar-day stress period under such a scenario (or, if necessary, the risk and funding profile of banking in the proposal, and argued that the 21 for resolving such companies) would organizations with balance sheets of calendar-day basis of the modified LCR likely be less complex and therefore $250 billion or more in total would have made it difficult to fully more likely to be implemented in a consolidated assets and limited embed the calculation into internal shorter period of time, the Board international operations is more processes including liquidity stress proposed a modified LCR incorporating consistent with that of modified LCR testing and balance sheet forecasts. One a shorter (21 calendar-day) stress holding companies than with commenter argued that the benefits of a scenario for modified LCR holding internationally active G–SIBs, for which 21 calendar-day measurement period companies. the commenters say the LCR was would typically be small because most The proposed modified LCR would originally intended. A commenter stated holding companies that would be have been a simpler, less stringent form that deposit pricing may be adversely subject to the modified LCR do not of the proposed rule’s liquidity coverage affected by the threshold for application generally rely on short-term funding; ratio (for the purposes of this section V., of the modified LCR requirement and however, the same commenter unmodified LCR) and would have expressed concerns regarding an unlevel requested the 70% outflow rate for non- imposed outflow rates based on a 21 playing field across banking maturity cash outflows be retained. calendar-day rather than a 30 calendar- organizations. Another commenter Commenters argued that the 21 day stress scenario. As a result, outflow stated that the proposed rule’s tiered calendar-day forward-looking stress rates for the proposed modified LCR approach to assessing liquidity risks period required under the modified LCR generally would have been 70 percent of among U.S. banking organizations raises would consistently omit key recurring the unmodified LCR’s outflow rates. In the potential unintended consequence payment activity that occurs on the addition, modified LCR holding that certain risks the agencies wish to calendar-month cycle and would force the banks to manage cash flows in an 94 See 12 U.S.C. 5365(a)(2). 95 See supra section II.C. abnormal manner. Commenters also

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argued that the 21 calendar-day calculation of the modified LCR. To month following the calculation date. measurement period would make the tailor the minimum quantitative The Board recognizes that the modified LCR holding companies’ LCR standard for modified LCR holding calculation requirements under the extremely volatile. One commenter companies while generally maintaining modified LCR present certain requested that the agencies give such the amount of HQLA required for these operational challenges to modified LCR firms the option to utilize a 30 calendar- firms under the proposal, the Board is holding companies. The Board is day measurement period, whereas amending the modified LCR delaying the earliest date upon which a others requested that the modified LCR denominator such that the net cash modified LCR holding company must be based on 30 calendar-day time frame outflows shall be the net cash outflows comply with this rule to January 1, and outflow rates be set at 70 percent of calculated under the unmodified 2016. In addition, the Board is adopting the outflow rate in the unmodified liquidity coverage ratio requirements in the final rule a monthly calculation liquidity coverage ratio. One commenter over a 30 calendar-day stress period requirement, rather than the daily stated that many of the calibrations in (excluding step 2 of the peak day calculation requirement in the proposed the rule, such as the treatment of approach described in section II.C.1 of rule. This monthly calculation operational deposits, municipal this Supplementary Information section) requirement reflects the difference in deposits, and level 2A securities, multiplied by a factor of 0.7. size, complexity, and funding profile of overstate the liquidity risk of the C. Calculation Requirements and the institutions subject to the modified institutions covered by the modified Comments on Modified LCR Reporting LCR. Modified LCR holding companies LCR. The commenter requested that the will be subject to the transition periods agencies consider a lower LCR The proposed rule would have set forth in Table 6 below. If a modified compliance threshold, such as 50 applied the modified LCR to depository LCR holding company’s LCR is below percent, to better align with the more institution holding companies the required minimum when it is stable funding profile of modified LCR domiciled in the United States that have calculated on the last day of each holding companies. total consolidated assets of $50 billion calendar month, or if its supervisor has or more based on the average of the total determined that the covered company is Commenters suggested that the asset amount reported on the modified LCR be based on a monthly otherwise materially noncompliant, the institution’s four most recent FR Y–9Cs. covered company must promptly cycle so that 31-day, 30-day, and 28-day One commenter requested that the months are all treated as a cycle for the consult with the Board to determine agencies clarify when companies subject whether the covered company must modified LCR. Two commenters stated to the modified LCR are required to start provide a written remediation plan. that the 21 calendar-day measurement meeting the requirement: The day on period would create additional which the company files the fourth FR As discussed in section I of this measurement and reporting burdens and Y–9C showing that it is subject to the Supplementary Information section, the inconsistencies, because it deviates from rule, the day of the quarter following the agencies anticipate proposing reporting other similar liquidity standards filing of that report, or another date. requirements in a future notice. This proposed by the BCBS and by the Dodd- One commenter requested that the future notice would contain the Frank Act. agencies clarify the mechanics for reporting requirements for institutions The Board agrees with commenters calculating the modified LCR and subject to the Board’s modified LCR, that there is merit in using a stress reporting to the regulators. Specifically, including any applicable reporting date period that is consistent with periods the commenter asked whether the requirements. over which liquidity risk is monitored modified LCR requires a daily The Board is clarifying that a by modified LCR holding companies as calculation. One commenter modified LCR holding company is part of their internal practices. Thus, recommended that regional banking required to comply with the modified consistent with the risk management organizations be required to calculate LCR on the first day of the quarter practices required under the Board’s the LCR monthly and to report the following the date at which the average Regulation YY, the Board is applying a information on a delayed basis, for total consolidated assets of the holding stress period of 30 days to the example on the 20th day of the calendar company equal or exceed $50 billion.

TABLE 6—TRANSITION PERIOD FOR THE MODIFIED LIQUIDITY COVERAGE RATIO

Transition period Liquidity coverage ratio

Calendar year 2016 .90 Calendar year 2017 and thereafter 1.00

Calculation Frequency

All modified LCR holding companies...... Last business day of the calendar Beginning January 1, 2016 and there- month. after.

VI. Plain Language The agencies sought to present the VII. Regulatory Flexibility Act proposed rule in a simple and Section 722 of the Gramm-Leach straightforward manner and did not Section 4 of the Regulatory Flexibility 96 Act 97 (RFA), requires an agency to Bliley Act requires the agencies to use receive any comments on the use of prepare a final regulatory flexibility plain language in all proposed and final plain language. rules published after January 1, 2000. analysis (FRFA) when an agency promulgates a final rule unless, 96 Pub L. 106–102, 113 Stat. 1338, 1471, 12 U.S.C. 4809. 97 5 U.S.C. 604.

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pursuant to section 5(b) of the RFA, the final rule generally would apply to quantitative liquidity standard for agency certifies that the final rule will Board-regulated institutions with (i) internationally active banking not, if promulgated, have a significant total consolidated assets equal to $250 organizations with $250 billion or more economic impact on a substantial billion or more; (ii) total consolidated in total assets or $10 billion or more of number of small entities 98 (defined for on-balance sheet foreign exposure equal on-balance sheet foreign exposure purposes of the RFA to include banking to $10 billion or more; or (iii) total (internationally active banking entities with total assets less than or consolidated assets equal to $10 billion organizations), and their consolidated equal to $550 million and trust or more if that Board-regulated subsidiary depository institutions with companies with total assets less than or institution is a depository institution $10 billion or more in in total equal to $38.5 million (small banking subsidiary of a company subject to the consolidated assets. One FDIC- entities)).99 Pursuant to section 5(b) of proposed rule. The modified version of supervised institution will satisfy the the RFA, the OCC and the FDIC are the liquidity coverage ratio would apply foregoing criteria as of the effective date certifying that the final rule will not to top-tier bank holding companies and of the final rule, and it is not a small have a significant economic impact on savings and loan holding companies entity. As of December 31, 2013, based a substantial number of small entities. domiciled in the United States that have on a $550 million threshold, the FDIC total consolidated assets of $50 billion OCC supervises 3,353 small state nonmember or more. The modified version of the banks, and 51 small state savings As discussed previously in this liquidity coverage ratio would not apply associations. The only FDIC-supervised Supplementary Information section, the to: (i) A grandfathered unitary savings institutions subject to the final rule have final rule generally will apply to and loan holding company that derived $10 billion or more in total consolidated national banks and Federal savings 50 percent or more of its total assets. Therefore, the FDIC does not associations with: (i) Total consolidated consolidated assets or 50 percent of its believe that the proposed rule will assets equal to $250 billion or more; (ii) total revenues on an enterprise-wide result in a significant economic impact consolidated total on-balance sheet basis from activities that are not on a substantial number of small entities foreign exposure equal to $10 billion or financial in nature under section 4(k) of under its supervisory jurisdiction. more; or (iii) total consolidated assets the Bank Holding Company Act; (ii) a Pursuant to section 5(b) of the RFA, equal to $10 billion or more if a national top-tier bank holding company or the FDIC certifies that the final rule will bank or Federal savings association is a savings and loan holding company that not have a significant economic impact consolidated subsidiary of a company is an insurance underwriting company; on a substantial number of small FDIC- subject to the proposed rule. As of or (iii) a top-tier bank holding company supervised institutions. December 31, 2013, the OCC supervises or savings and loan holding company 1,231 small entities. The only OCC- that has 25 percent or more of its total VIII. Paperwork Reduction Act supervised institutions subject to the consolidated assets in subsidiaries that Request for Comment on Proposed final rule have $10 billion or more in are insurance underwriting companies Information Collection total consolidated assets. Accordingly, and either calculates its total no OCC-supervised small banking consolidated assets in accordance with Certain provisions of the proposed entities meet the criteria to be a covered GAAP or estimates its total consolidated rule contain ‘‘collection of information’’ institution under the final rule. assets, subject to review and adjustment requirements within the meaning of the Therefore, the final rule will not have a by the Board. The final rule focuses on Paperwork Reduction Act (PRA) of 1995 significant economic impact on a these financial institutions because of (44 U.S. C. 3501–3521). In accordance substantial number of small OCC- their complexity, funding profiles, and with the requirements of the PRA, the supervised banking entities. potential risk to the financial system. agencies may not conduct or sponsor, Pursuant to section 5(b) of the RFA, As of June 30, 2014, there were and the respondent is not required to the OCC certifies that the final rule will approximately 657 small state member respond to, an information collection not have a significant economic impact banks, 3,716 small bank holding unless it displays a currently valid on a substantial number of small companies, and 254 small savings and Office of Management and Budget national banks and small Federal loan holding companies. No small top- (OMB) control number. savings associations. tier bank holding company, top-tier The OCC and FDIC submitted this savings and loan holding company, or collection to OMB at the proposed rule Board state member bank would be subject to stage. The information collection The Board is providing a final the rule, so there would be no requirements contained in this joint regulatory flexibility analysis with additional projected compliance final rule are being submitted by the respect to this final rule. As discussed requirements imposed on small bank FDIC and OCC to OMB for approval above, this final rule would implement holding companies, savings and loan under section 3507(d) of the PRA and a quantitative liquidity requirement holding companies, or state member section 1320.11 of OMB’s implementing consistent with the liquidity coverage banks. regulations (5 CFR part 1320). The ratio established by the BCBS. The The Board believes that the final rule Board reviewed the final rule under the Board received no public comments will not have a significant impact on authority delegated to the Board by related to the initial Regulatory small banking organizations supervised OMB. The agencies received no Flexibility Act analysis in the proposed by the Board and therefore believes that comments regarding the collection at rule from the Chief Council for there are no significant alternatives to the proposed rule stage. Advocacy of the Small Business the rule that would reduce the economic Comments are invited on: Administration or from the general impact on small banking organizations (a) Whether the collections of public. supervised by the Board. information are necessary for the proper As discussed previously in this performance of the agencies’ functions, FDIC Supplementary Information section, the including whether the information has As described previously in this practical utility; 98 5 U.S.C. 605(b). Supplementary Information section, the (b) The accuracy of the agencies’ 99 See 79 FR 33647 (June 12, 2014). final rule generally will establish a estimates of the burden of the

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information collections, including the permitted by law, and there would be Reporting Burden validity of the methodology and no mandatory retention period for the § l.40(a)—0.25 hours. assumptions used; proposed collections of information. § l.40(b)—0.25 hours. (c) Ways to enhance the quality, Section l.22 will require that, with § l.40(b)(4)—0.25 hours. utility, and clarity of the information to respect to each asset eligible for be collected; inclusion in a covered company’s HQLA Recordkeeping Burden (d) Ways to minimize the burden of amount, the covered company must § l.22(a)(2) and (5)—20 hours. the information collections on implement policies that require eligible § l.40(b)—100 hours. respondents, including through the use HQLA to be under the control of the of automated collection techniques or management function in the covered FDIC other forms of information technology; company responsible for managing Estimated Number of Respondents: 2. and liquidity risk. The management function Total Estimated Annual Burden: 249 (e) Estimates of capital or start-up must evidence its control over the hours. costs and costs of operation, HQLA by segregating the HQLA from maintenance, and purchase of services other assets, with the sole intent to use OCC to provide information. the HQLA as a source of liquidity, or Estimated Number of Respondents: 20 All comments received, including demonstrating the ability to monetize national banks and Federal savings attachments and other supporting the assets and making the proceeds associations. materials, are part of the public record available to the liquidity management Total Estimated Annual Burden: 2,485 and subject to public disclosure. Do not function without conflicting with a hours. enclose any information in your business or risk management strategy of Board comment or supporting materials that the covered company. In addition, you consider confidential or § l.22 will require that a covered Estimated Number of Respondents: 42 inappropriate for public disclosure. company must have a documented for § l.22; 3 for § l.40. Commenters may submit comments methodology that results in a consistent Total Estimated Annual Burden: 1,153 on aspects of this notice that may affect treatment for determining that the hours. burden estimates at the addresses listed covered company’s eligible HQLA meet IX. OCC Unfunded Mandates Reform in the ADDRESSES section. A copy of the the requirements of § l.22. comments may also be submitted to the Act of 1995 Determination Section l.40 will require that a OMB desk officer for the agencies: By covered company must notify its The OCC has analyzed the final rule mail to U.S. Office of Management and appropriate Federal banking agency on under the factors set forth in the Budget, 725 17th Street NW., 10235, any day when its liquidity coverage Unfunded Mandates Reform Act of 1995 Washington, DC 20503; by facsimile to ratio is calculated to be less than the (UMRA) (2 U.S.C. 1532). For purposes 202–395–6974; or by email to: oira_ minimum requirement in § l.10. If a of this analysis, the OCC considered [email protected]. Attention, covered company’s liquidity coverage whether the final rule includes a Federal Banking Agency Desk Officer. ratio is below the minimum requirement Federal mandate that may result in the Proposed Information Collection in § __.10 for three consecutive days, or expenditure by State, local, and tribal if its appropriate Federal banking governments, in the aggregate, or by the Title of Information Collection: private sector, of $100 million or more Reporting and Recordkeeping agency has determined that the institution is otherwise materially (adjusted annually for inflation) in any Requirements Associated with Liquidity one year. Coverage Ratio: Liquidity Risk noncompliant, the covered company must promptly provide a plan for The OCC has determined that this Measurement, Standards, and final rule is likely to result in the Monitoring. achieving compliance with the minimum liquidity requirement in expenditure by the private sector of Frequency of Response: Annual and $100 million or more (adjusted annually event generated. § l.10 and all other requirements of this part to its appropriate Federal for inflation) in any one year. When the Affected Public: final rule is published in the Federal FDIC: Insured state non-member banking agency. Register, the OCC’s UMRA written banks, state savings associations, and The liquidity plan must include, as statement will be available at: http:// certain subsidiaries of these entities. applicable, (1) an assessment of the www.regulations.gov, Docket ID OCC– OCC: National banks, Federal savings covered company’s liquidity position; 2013–0016. associations, or any operating subsidiary (2) the actions the covered company has thereof. taken and will take to achieve full Text of Common Rule Board: Insured state member banks, compliance, including a plan for (All Agencies) bank holding companies, savings and adjusting the covered company’s risk loan holding companies, and any profile, risk management, and funding PART [ll]—LIQUIDITY RISK subsidiary thereof. sources in order to achieve full MEASUREMENT STANDARDS Abstract: compliance and a plan for remediating The final rule implements a any operational or management issues Subpart A General Provisions quantitative liquidity requirement that contributed to noncompliance; (3) Sec. consistent with the LCR standard an estimated time frame for achieving l.1 Purpose and applicability. established by the BCBS and contains full compliance; and (4) a commitment l.2 Reservation of authority. requirements subject to the PRA. The to provide a progress report to its l.3 Definitions. reporting and recordkeeping appropriate Federal banking agency at l.4 Certain operational requirements. requirements are found in §§ l.22 and least weekly until full compliance is Subpart B Liquidity Coverage Ratio l .40. Compliance with the information achieved. l.10 Liquidity coverage ratio. collections will be mandatory. Estimated Paperwork Burden Responses to the information collections Subpart C High-Quality Liquid Assets will be kept confidential to the extent Estimated Burden per Response: l.20 High-quality liquid asset criteria.

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l.21 High-quality liquid asset amount. the requirements of this part beginning than otherwise required under this part, l.22 Requirements for eligible high- on January 1, 2015; or to take any other measure to improve quality liquid assets. (ii) A [BANK] that becomes subject to the [BANK]’s liquidity risk profile, if the Subpart D Total Net Cash Outflow the minimum liquidity standard and [AGENCY] determines that the l.30 Total net cash outflow amount. other requirements of this part under [BANK]’s liquidity requirements as l.31 Determining maturity. paragraphs (b)(1)(i) through (iii) of this calculated under this part are not l.32 Outflow amounts. section after September 30, 2014, must commensurate with the [BANK]’s l.33 Inflow amounts. comply with the requirements of this liquidity risks. In making part beginning on April 1 of the year in Subpart E Liquidity Coverage Shortfall determinations under this section, the which the [BANK] becomes subject to [AGENCY] will apply notice and l.40 Liquidity coverage shortfall: the minimum liquidity standard and response procedures as set forth in [12 Supervisory framework. other requirements of this part, except: CFR 3.404 (OCC), 12 CFR 263.202 Subpart F Transitions (A) From April 1 to December 31 of (Board), and 12 CFR 324.5 (FDIC)]. l.50 Transitions. the year in which the [BANK] becomes (b) Nothing in this part limits the subject to the minimum liquidity authority of the [AGENCY] under any Subpart A—General Provisions standard and other requirements of this other provision of law or regulation to part, the [BANK] must calculate and take supervisory or enforcement action, l § .1 Purpose and applicability. maintain a liquidity coverage ratio including action to address unsafe or (a) Purpose. This part establishes a monthly, on each calculation date that unsound practices or conditions, minimum liquidity standard for certain is the last business day of the applicable deficient liquidity levels, or violations [BANK]s on a consolidated basis, as set calendar month; and of law. forth herein. (B) Beginning January 1 of the year (b) Applicability. (1) A [BANK] is after the first year in which the [BANK] § l.3 Definitions. subject to the minimum liquidity becomes subject to the minimum For the purposes of this part: standard and other requirements of this liquidity standard and other Affiliated depository institution part if: requirements of this part under means with respect to a [BANK] that is (i) It has total consolidated assets paragraph (b)(1) of this section, and a depository institution, another equal to $250 billion or more, as thereafter, the [BANK] must calculate depository institution that is a reported on the most recent year-end and maintain a liquidity coverage ratio consolidated subsidiary of a bank [REGULATORY REPORT]; on each calculation date; and holding company or savings and loan (ii) It has total consolidated on- (iii) A [BANK] that becomes subject to holding company of which the [BANK] balance sheet foreign exposure at the the minimum liquidity standard and is also a consolidated subsidiary. most recent year-end equal to $10 other requirements of this part under Asset exchange means a transaction billion or more (where total on-balance paragraph (b)(1)(iv) of this section after in which, as of the calculation date, the sheet foreign exposure equals total September 30, 2014, must comply with counterparties have previously cross-border claims less claims with a the requirements of this part subject to exchanged non-cash assets, and have head office or guarantor located in a transition period specified by the each agreed to return such assets to each another country plus redistributed [AGENCY]. other at a future date. Asset exchanges guaranteed amounts to the country of (3) This part does not apply to: do not include secured funding and the head office or guarantor plus local (i) A bridge financial company as secured lending transactions. country claims on local residents plus defined in 12 U.S.C. 5381(a)(3), or a Bank holding company is defined in revaluation gains on foreign exchange subsidiary of a bridge financial section 2 of the Bank Holding Company and derivative transaction products, company; or Act of 1956, as amended (12 U.S.C. 1841 calculated in accordance with the (ii) A new depository institution or a et seq.). Federal Financial Institutions bridge depository institution, as defined Brokered deposit means any deposit Examination Council (FFIEC) 009 in 12 U.S.C. 1813(i). held at the [BANK] that is obtained, Country Exposure Report); (4) A [BANK] subject to a minimum directly or indirectly, from or through (iii) It is a depository institution that liquidity standard under this part shall the mediation or assistance of a deposit is a consolidated subsidiary of a remain subject until the [AGENCY] broker as that term is defined in section company described in paragraphs determines in writing that application of 29 of the Federal Deposit Insurance Act (b)(1)(i) or (ii) of this section and has this part to the [BANK] is not (12 U.S.C. 1831f(g)), and includes a total consolidated assets equal to $10 appropriate in light of the [BANK]’s reciprocal brokered deposit and a billion or more, as reported on the most asset size, level of complexity, risk brokered sweep deposit. recent year-end Consolidated Report of profile, scope of operations, affiliation Brokered sweep deposit means a Condition and Income; or with foreign or domestic covered deposit held at the [BANK] by a (iv) The [AGENCY] has determined entities, or risk to the financial system. customer or counterparty through a that application of this part is (5) In making a determination under contractual feature that automatically appropriate in light of the [BANK]’s paragraphs (b)(1)(iv) or (4) of this transfers to the [BANK] from another asset size, level of complexity, risk section, the [AGENCY] will apply notice regulated financial company at the close profile, scope of operations, affiliation and response procedures in the same of each business day amounts identified with foreign or domestic covered manner and to the same extent as the under the agreement governing the entities, or risk to the financial system. notice and response procedures in [12 account from which the amount is being (2) Subject to the transition periods CFR 3.404 (OCC), 12 CFR 263.202 transferred. set forth in subpart F of this part: (Board), and 12 CFR 324.5 (FDIC)]. Calculation date means any date on (i) A [BANK] that is subject to the which a [BANK] calculates its liquidity minimum liquidity standard and other § l.2 Reservation of authority. coverage ratio under § l.10. requirements of this part under (a) The [AGENCY] may require a Client pool security means a security paragraph (b)(1) of this section on [BANK] to hold an amount of high- that is owned by a customer of the September 30, 2014, must comply with quality liquid assets (HQLA) greater [BANK] that is not an asset of the

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[BANK], regardless of a [BANK]’s more of its total consolidated assets or Deposit insurance means deposit hypothecation rights with respect to the 50 percent of its total revenues on an insurance provided by the Federal security. enterprise-wide basis (as calculated Deposit Insurance Corporation under Collateralized deposit means: under GAAP) from activities that are not the Federal Deposit Insurance Act (12 (1) A deposit of a public sector entity financial in nature under section 4(k) of U.S.C. 1811 et seq.). held at the [BANK] that is secured the Bank Holding Company Act (12 Derivative transaction means a under applicable law by a lien on assets U.S.C. 1842(k)); financial contract whose value is owned by the [BANK] and that gives the (2) A top-tier depository institution derived from the values of one or more depositor, as holder of the lien, priority holding company that is an insurance underlying assets, reference rates, or over the assets in the event the [BANK] underwriting company; or indices of asset values or reference rates. enters into receivership, bankruptcy, (3)(i) A top-tier depository institution Derivative contracts include interest rate insolvency, liquidation, resolution, or holding company that, as of June 30 of derivative contracts, exchange rate similar proceeding; or the previous calendar year, held 25 derivative contracts, equity derivative (2) A deposit of a fiduciary account percent or more of its total consolidated contracts, commodity derivative held at the [BANK] for which the assets in subsidiaries that are insurance contracts, credit derivative contracts, [BANK] is a fiduciary and sets aside underwriting companies (other than forward contracts, and any other assets owned by the [BANK] as security assets associated with insurance for instrument that poses similar under 12 CFR 9.10 (national bank) or 12 credit risk); and counterparty credit risks. Derivative CFR 150.300 through 150.320 (Federal (ii) For purposes of paragraph 3(i) of contracts also include unsettled savings associations) and that gives the this definition, the company must securities, commodities, and foreign depositor priority over the assets in the calculate its total consolidated assets in currency exchange transactions with a event the [BANK] enters into accordance with GAAP, or if the contractual settlement or delivery lag receivership, bankruptcy, insolvency, company does not calculate its total that is longer than the lesser of the liquidation, resolution, or similar consolidated assets under GAAP for any market standard for the particular proceeding. regulatory purpose (including instrument or five business days. A Committed means, with respect to a compliance with applicable securities derivative does not include any credit facility or liquidity facility, that laws), the company may estimate its identified banking product, as that term under the terms of the legally binding total consolidated assets, subject to is defined in section 402(b) of the Legal written agreement governing the facility: review and adjustment by the Board of Certainty for Bank Products Act of 2000 (1) The [BANK] may not refuse to Governors of the Federal Reserve (7 U.S.C. 27(b)), that is subject to section extend credit or funding under the System. 403(a) of that Act (7 U.S.C. 27a(a)). facility; or Covered nonbank company means a Designated company means a (2) The [BANK] may refuse to extend designated company that the Board of company that the Financial Stability credit under the facility (to the extent Governors of the Federal Reserve Oversight Council has determined permitted under applicable law) only System has required by rule or order to under section 113 of the Dodd-Frank upon the satisfaction or occurrence of comply with the requirements of 12 CFR Act (12 U.S.C. 5323) shall be supervised one or more specified conditions not part 249. by the Board of Governors of the Federal including change in financial condition Credit facility means a legally binding Reserve System and for which such of the borrower, customary notice, or agreement to extend funds if requested determination is still in effect. administrative conditions. at a future date, including a general Dodd-Frank Act means the Dodd- Company means a corporation, working capital facility such as a Frank Wall Street Reform and Consumer partnership, limited liability company, revolving credit facility for general Protection Act, Public Law 111–203, depository institution, business trust, corporate or working capital purposes. 124 Stat. 1376 (2010). special purpose entity, association, or A credit facility does not include a Eligible HQLA means a high-quality similar organization. legally binding written agreement to liquid asset that meets the requirements Consolidated subsidiary means a l extend funds at a future date to a set forth in § .22. company that is consolidated on the Fair value means fair value as counterparty that is made for the balance sheet of a [BANK] or other determined under GAAP. company under GAAP. purpose of refinancing the debt of the Financial sector entity means an Controlled subsidiary means, with counterparty when it is unable to obtain investment adviser, investment respect to a company or a [BANK], a a primary or anticipated source of company, pension fund, non-regulated consolidated subsidiary or a company funding. See liquidity facility. fund, regulated financial company, or that otherwise meets the definition of Customer short position means a identified company. ‘‘subsidiary’’ in section 2(d) of the Bank legally binding written agreement Foreign withdrawable reserves means Holding Company Act of 1956 (12 pursuant to which the customer must a [BANK]’s balances held by or on U.S.C. 1841(d)). deliver to the [BANK] a non-cash asset behalf of the [BANK] at a foreign central Covered depository institution that the customer has already sold. bank that are not subject to restrictions holding company means a top-tier bank Deposit means ‘‘deposit’’ as defined on the [BANK]’s ability to use the holding company or savings and loan in section 3(l) of the Federal Deposit reserves. holding company domiciled in the Insurance Act (12 U.S.C. 1813(l)) or an GAAP means generally accepted United States other than: equivalent liability of the [BANK] in a accounting principles as used in the (1) A top-tier savings and loan jurisdiction outside of the United States. United States. holding company that is: Depository institution is defined in High-quality liquid asset (HQLA) (i) A grandfathered unitary savings section 3(c) of the Federal Deposit means an asset that is a level 1 liquid and loan holding company as defined in Insurance Act (12 U.S.C. 1813(c)). asset, level 2A liquid asset, or level 2B section 10(c)(9)(A) of the Home Owners’ Depository institution holding liquid asset, in accordance with the Loan Act (12 U.S.C. 1461 et seq.); and company means a bank holding criteria set forth in § l_.20. (ii) As of June 30 of the previous company or savings and loan holding HQLA amount means the HQLA calendar year, derived 50 percent or company. amount as calculated under § l.21.

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Identified company means any for Reconstruction and Development, payment of fees, taxes, and other company that the [AGENCY] has the European Investment Bank, the expenses; and determined should be treated for the European Investment Fund, the Nordic (12) Collection and aggregation of purposes of this part the same as a Investment Bank, the Caribbean funds. regulated financial company, Development Bank, the Islamic Pension fund means an employee investment company, non-regulated Development Bank, the Council of benefit plan as defined in paragraphs (3) fund, pension fund, or investment Europe Development Bank, and any and (32) of section 3 of the Employee adviser, based on activities similar in other entity that provides financing for Retirement Income and Security Act of scope, nature, or operations to those national or regional development in 1974 (29 U.S.C. 1001 et seq.), a entities. which the U.S. government is a ‘‘governmental plan’’ (as defined in 29 Individual means a natural person, shareholder or contributing member or U.S.C. 1002(32)) that complies with the and does not include a sole which the [AGENCY] determines poses tax deferral qualification requirements proprietorship. comparable risk. provided in the Internal Revenue Code, Investment adviser means a company Non-regulated fund means any hedge or any similar employee benefit plan registered with the SEC as an fund or private equity fund whose established under the laws of a foreign investment adviser under the investment adviser is required to file jurisdiction. Investment Advisers Act of 1940 (15 SEC Form PF (Reporting Form for Public sector entity means a state, U.S.C. 80b–1 et seq.) or foreign Investment Advisers to Private Funds local authority, or other governmental equivalents of such company. and Certain Commodity Pool Operators subdivision below the U.S. sovereign Investment company means a person and Commodity Trading Advisors), entity level. or company registered with the SEC other than a small business investment Publicly traded means, with respect to under the Investment Company Act of company as defined in section 102 of an equity security, that the equity 1940 (15 U.S.C. 80a–1 et seq.) or foreign the Small Business Investment Act of security is traded on: equivalents of such persons or 1958 (15 U.S.C. 661 et seq.). (1) Any exchange registered with the companies. Nonperforming exposure means an SEC as a national securities exchange Liquid and readily-marketable means, exposure that is past due by more than under section 6 of the Securities with respect to a security, that the 90 days or nonaccrual. Exchange Act of 1934 (15 U.S.C. 78f); or (2) Any non-U.S.-based securities security is traded in an active secondary Operational deposit means unsecured exchange that: market with: wholesale funding or a collateralized (1) More than two committed market (i) Is registered with, or approved by, deposit that is necessary for the [BANK] makers; a national securities regulatory to provide operational services as an (2) A large number of non-market authority; and independent third-party intermediary, maker participants on both the buying (ii) Provides a liquid, two-way market agent, or administrator to the wholesale and selling sides of transactions; for the security in question. (3) Timely and observable market customer or counterparty providing the Qualifying master netting agreement prices; and unsecured wholesale funding or (1) Means a legally binding written (4) A high trading volume. collateralized deposit. In order to agreement that: Liquidity facility means a legally recognize a deposit as an operational (i) Creates a single obligation for all binding written agreement to extend deposit for purposes of this part, a individual transactions covered by the funds at a future date to a counterparty [BANK] must comply with the agreement upon an event of default, that is made for the purpose of requirements of § l.4(b) with respect to including upon an event of receivership, refinancing the debt of the counterparty that deposit. bankruptcy, insolvency, liquidation, when it is unable to obtain a primary or Operational services means the resolution, or similar proceeding, of the anticipated source of funding. A following services, provided they are counterparty; liquidity facility includes an agreement performed as part of cash management, (ii) Provides the [BANK] the right to to provide liquidity support to asset- clearing, or custody services: accelerate, terminate, and close out on backed commercial paper by lending to, (1) Payment remittance; a net basis all transactions under the or purchasing assets from, any structure, (2) Administration of payments and agreement and to liquidate or set-off program or conduit in the event that cash flows related to the safekeeping of collateral promptly upon an event of funds are required to repay maturing investment assets, not including the default, including upon an event of asset-backed commercial paper. purchase or sale of assets; receivership, bankruptcy, insolvency, Liquidity facilities exclude facilities that (3) Payroll administration and control liquidation, resolution, or similar are established solely for the purpose of over the disbursement of funds; proceeding, of the counterparty, general working capital, such as (4) Transmission, reconciliation, and provided that, in any such case, any revolving credit facilities for general confirmation of payment orders; exercise of rights under the agreement corporate or working capital purposes. If (5) Daylight overdraft; will not be stayed or avoided under a facility has characteristics of both (6) Determination of intra-day and applicable law in the relevant credit and liquidity facilities, the facility final settlement positions; jurisdictions, other than in receivership, must be classified as a liquidity facility. (7) Settlement of securities conservatorship, resolution under the See credit facility. transactions; Federal Deposit Insurance Act, Title II Multilateral development bank means (8) Transfer of capital distributions of the Dodd-Frank Act, or under any the International Bank for and recurring contractual payments; similar insolvency law applicable to Reconstruction and Development, the (9) Customer subscriptions and U.S. government-sponsored enterprises; Multilateral Investment Guarantee redemptions; and Agency, the International Finance (10) Scheduled distribution of (iii) Does not contain a walkaway Corporation, the Inter-American customer funds; clause (that is, a provision that permits Development Bank, the Asian (11) Escrow, funds transfer, stock a non-defaulting counterparty to make a Development Bank, the African transfer, and agency services, including lower payment than it otherwise would Development Bank, the European Bank payment and settlement services, make under the agreement, or no

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payment at all, to a defaulter or the in a manner similar to entities described including deposits, unsecured funding, estate of a defaulter, even if the in paragraphs (1) through (6) of this and credit facility and liquidity facility defaulter or the estate of the defaulter is definition (e.g., a foreign banking transactions, in the same way it a net creditor under the agreement); and organization, foreign insurance manages its transactions with (2) In order to recognize an agreement company, foreign securities broker or individuals; as a qualifying master netting agreement dealer or foreign financial market (ii) Transactions with the business for purposes of this part, a [BANK] must utility). customer have liquidity risk comply with the requirements of (8) A regulated financial company characteristics that are similar to § l.4(a) with respect to that agreement. does not include: comparable transactions with Reciprocal brokered deposit means a (i) U.S. government-sponsored individuals; and brokered deposit that a [BANK] receives enterprises; (iii) The total aggregate funding raised through a deposit placement network on (ii) Small business investment from the business customer is less than a reciprocal basis, such that: companies, as defined in section 102 of $1.5 million; or (1) For any deposit received, the the Small Business Investment Act of (3) A living or testamentary trust that: [BANK] (as agent for the depositors) 1958 (15 U.S.C. 661 et seq.); (i) Is solely for the benefit of natural places the same amount with other (iii) Entities designated as Community persons; depository institutions through the Development Financial Institutions (ii) Does not have a corporate trustee; network; and (CDFIs) under 12 U.S.C. 4701 et seq. and and (2) Each member of the network sets 12 CFR part 1805; or (iii) Terminates within 21 years and the interest rate to be paid on the entire (iv) Central banks, the Bank for 10 months after the death of grantors or amount of funds it places with other International Settlements, the beneficiaries of the trust living on the network members. International Monetary Fund, or effective date of the trust or within 25 Regulated financial company means: multilateral development banks. years, if applicable under state law. (1) A depository institution holding Reserve Bank balances means: Retail deposit means a demand or company or designated company; (1) Balances held in a master account term deposit that is placed with the (2) A company included in the of the [BANK] at a Federal Reserve [BANK] by a retail customer or organization chart of a depository Bank, less any balances that are counterparty, other than a brokered institution holding company on the attributable to any respondent of the deposit. Form FR Y–6, as listed in the hierarchy [BANK] if the [BANK] is a Retail mortgage means a mortgage that report of the depository institution correspondent for a pass-through is primarily secured by a first or holding company produced by the account as defined in section 204.2(l) of subsequent lien on one-to-four family National Information Center (NIC) Web Regulation D (12 CFR 204.2(l)); residential property. site,1 provided that the top-tier (2) Balances held in a master account Savings and loan holding company depository institution holding company of a correspondent of the [BANK] that means a savings and loan holding is subject to a minimum liquidity are attributable to the [BANK] if the company as defined in section 10 of the standard under 12 CFR part 249; [BANK] is a respondent for a pass- Home Owners’ Loan Act (12 U.S.C. (3) A depository institution; foreign through account as defined in section 1467a). bank; credit union; industrial loan 204.2(l) of Regulation D; SEC means the Securities and company, industrial bank, or other (3) ‘‘Excess balances’’ of the [BANK] Exchange Commission. similar institution described in section as defined in section 204.2(z) of Secured funding transaction means 2 of the Bank Holding Company Act of Regulation D (12 CFR 204.2(z)) that are any funding transaction that is subject 1956, as amended (12 U.S.C. 1841 et maintained in an ‘‘excess balance to a legally binding agreement as of the seq.); national bank, state member bank, account’’ as defined in section 204.2(aa) calculation date and gives rise to a cash or state non-member bank that is not a of Regulation D (12 CFR 204.2(aa)) if the obligation of the [BANK] to a depository institution; [BANK] is an excess balance account counterparty that is secured under (4) An insurance company; participant; or applicable law by a lien on assets (5) A securities holding company as (4) ‘‘Term deposits’’ of the [BANK] as owned by the [BANK], which gives the defined in section 618 of the Dodd- defined in section 204.2(dd) of counterparty, as holder of the lien, Frank Act (12 U.S.C. 1850a); broker or Regulation D (12 CFR 204.2(dd)) if such priority over the assets in the event the dealer registered with the SEC under term deposits are offered and [BANK] enters into receivership, section 15 of the Securities Exchange maintained pursuant to terms and bankruptcy, insolvency, liquidation, Act (15 U.S.C. 78o); futures commission conditions that: resolution, or similar proceeding. merchant as defined in section 1a of the (i) Explicitly and contractually permit Secured funding transactions include Commodity Exchange Act of 1936 (7 such term deposits to be withdrawn repurchase transactions, loans of U.S.C. 1 et seq.); swap dealer as defined upon demand prior to the expiration of collateral to the [BANK]’s customers to in section 1a of the Commodity the term, or that effect short positions, other secured Exchange Act (7 U.S.C. 1a); or security- (ii) Permit such term deposits to be loans, and borrowings from a Federal based swap dealer as defined in section pledged as collateral for term or Reserve Bank. 3 of the Securities Exchange Act (15 automatically-renewing overnight Secured lending transaction means U.S.C. 78c); advances from the Federal Reserve any lending transaction that is subject to (6) A designated financial market Bank. a legally binding agreement of the utility, as defined in section 803 of the Retail customer or counterparty calculation date and gives rise to a cash Dodd-Frank Act (12 U.S.C. 5462); and means a customer or counterparty that obligation of a counterparty to the (7) Any company not domiciled in the is: [BANK] that is secured under applicable United States (or a political subdivision (1) An individual; law by a lien on assets owned by the thereof) that is supervised and regulated (2) A business customer, but solely if counterparty, which gives the [BANK], and to the extent that: as holder of the lien, priority over the 1 http://www.ffiec.gov/nicpubweb/nicweb/ (i) The [BANK] manages its assets in the event the counterparty NicHome.aspx. transactions with the business customer, enters into receivership, bankruptcy,

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insolvency, liquidation, resolution, or by the full faith and credit of the United (3) The customer must hold the similar proceeding, including reverse States government. deposit at the [BANK] for the primary repurchase transactions and securities Unsecured wholesale funding means a purpose of obtaining the operational borrowing transactions. liability or general obligation of the services provided by the [BANK]; Securities Exchange Act means the [BANK] to a wholesale customer or (4) The deposit account must not be Securities Exchange Act of 1934 (15 counterparty that is not secured under designed to create an economic U.S.C. 78a et seq.). applicable law by a lien on assets incentive for the customer to maintain Sovereign entity means a central owned by the [BANK], including a excess funds therein through increased government (including the U.S. wholesale deposit. revenue, reduction in fees, or other government) or an agency, department, Wholesale customer or counterparty offered economic incentives; ministry, or central bank of a central means a customer or counterparty that government. is not a retail customer or counterparty. (5) The [BANK] must demonstrate Special purpose entity means a Wholesale deposit means a demand or that the deposit is empirically linked to company organized for a specific term deposit that is provided by a the operational services and that it has purpose, the activities of which are wholesale customer or counterparty. a methodology that takes into account significantly limited to those the volatility of the average balance for __ appropriate to accomplish a specific § .4 Certain operational requirements. identifying any excess amount, which purpose, and the structure of which is (a) Qualifying master netting must be excluded from the operational intended to isolate the credit risk of the agreements. In order to recognize an deposit amount; special purpose entity. agreement as a qualifying master netting (6) The deposit must not be provided Stable retail deposit means a retail agreement as defined in § l.3, a in connection with the [BANK]’s deposit that is entirely covered by [BANK] must: provision of prime brokerage services, deposit insurance and: (1) Conduct sufficient legal review to which, for the purposes of this part, are (1) Is held by the depositor in a conclude with a well-founded basis a package of services offered by the transactional account; or (and maintain sufficient written [BANK] whereby the [BANK], among (2) The depositor that holds the documentation of that legal review) that: other services, executes, clears, settles, account has another established (i) The agreement meets the and finances transactions entered into relationship with the [BANK] such as requirements of the definition of by the customer or a third-party entity another deposit account, a loan, bill qualifying master netting agreement in on behalf of the customer (such as an payment services, or any similar service § l.3; and executing broker), and where the or product provided to the depositor (ii) In the event of a legal challenge [BANK] has a right to use or that the [BANK] demonstrates to the (including one resulting from default or rehypothecate assets provided by the satisfaction of the [AGENCY] would from receivership, bankruptcy, customer, including in connection with make deposit withdrawal highly insolvency, liquidation, resolution, or the extension of margin and other unlikely during a liquidity stress event. similar proceeding) the relevant judicial similar financing of the customer, Structured security means a security and administrative authorities would subject to applicable law, and includes whose cash flow characteristics depend find the agreement to be legal, valid, operational services provided to a non- upon one or more indices or that has binding, and enforceable under the law regulated fund; and embedded forwards, options, or other of the relevant jurisdictions; and derivatives or a security where an (2) Establish and maintain written (7) The deposits must not be for investor’s investment return and the procedures to monitor possible changes arrangements in which the [BANK] (as issuer’s payment obligations are in relevant law and to ensure that the correspondent) holds deposits owned by contingent on, or highly sensitive to, agreement continues to satisfy the another depository institution bank (as changes in the value of underlying requirements of the definition of respondent) and the respondent assets, indices, interest rates, or cash qualifying master netting agreement in temporarily places excess funds in an flows. § l.3. overnight deposit with the [BANK]. Structured transaction means a (b) Operational deposits. In order to Subpart B—Liquidity Coverage Ratio secured transaction in which repayment recognize a deposit as an operational of obligations and other exposures to the deposit as defined in § l.3: § l.10 Liquidity coverage ratio. transaction is largely derived, directly or (1) The related operational services indirectly, from the cash flow generated must be performed pursuant to a legally (a) Minimum liquidity coverage ratio by the pool of assets that secures the binding written agreement, and: requirement. Subject to the transition obligations and other exposures to the (i) The termination of the agreement provisions in subpart F of this part, a transaction. must be subject to a minimum 30 [BANK] must calculate and maintain a Two-way market means a market calendar-day notice period; or liquidity coverage ratio that is equal to where there are independent bona fide (ii) As a result of termination of the or greater than 1.0 on each business day offers to buy and sell so that a price agreement or transfer of services to a in accordance with this part. A [BANK] reasonably related to the last sales price third-party provider, the customer must calculate its liquidity coverage or current bona fide competitive bid and providing the deposit would incur ratio as of the same time on each offer quotations can be determined significant contractual termination costs business day (elected calculation time). within one day and settled at that price or switching costs (switching costs The [BANK] must select this time by within a relatively short time frame include significant technology, written notice to the [AGENCY] prior to conforming to trade custom. administrative, and legal service costs the effective date of this rule. The U.S. government-sponsored enterprise incurred in connection with the transfer [BANK] may not thereafter change its means an entity established or chartered of the operational services to a third- elected calculation time without prior by the Federal government to serve party provider); written approval from the [AGENCY]. public purposes specified by the United (2) The deposit must be held in an (b) Calculation of the liquidity States Congress, but whose debt account designated as an operational coverage ratio. A [BANK]’s liquidity obligations are not explicitly guaranteed account; coverage ratio equals:

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(1) The [BANK]’s HQLA amount as of liquid and readily-marketable and is one (iii) Not an obligation of a financial the calculation date, calculated under of the following types of assets: sector entity and not an obligation of a subpart C of this part; divided by (1) A security issued by, or guaranteed consolidated subsidiary of a financial (2) The [BANK]’s total net cash as to the timely payment of principal sector entity; or outflow amount as of the calculation and interest by, a U.S. government- (2) A publicly traded common equity date, calculated under subpart D of this sponsored enterprise, that is investment share that is: part. grade under 12 CFR part 1 as of the (i) Included in: calculation date, provided that the claim (A) The Russell 1000 Index; or Subpart C—High-Quality Liquid Assets is senior to preferred stock; or (B) An index that a [BANK]’s (2) A security that is issued by, or supervisor in a foreign jurisdiction § l.20 High-quality liquid asset criteria. guaranteed as to the timely payment of recognizes for purposes of including (a) Level 1 liquid assets. An asset is principal and interest by, a sovereign equity shares in level 2B liquid assets a level 1 liquid asset if it is one of the entity or multilateral development bank under applicable regulatory policy, if following types of assets: that is: the share is held in that foreign (1) Reserve Bank balances; (i) Not included in level 1 liquid jurisdiction; (2) Foreign withdrawable reserves; assets; (ii) Issued in: (3) A security that is issued by, or (ii) Assigned no higher than a 20 (A) U.S. dollars; or unconditionally guaranteed as to the percent risk weight under subpart D of (B) The currency of a jurisdiction timely payment of principal and interest [AGENCY CAPITAL REGULATION] as where the [BANK] operates and the by, the U.S. Department of the Treasury; of the calculation date; [BANK] holds the common equity share (4) A security that is issued by, or (iii) Issued or guaranteed by an entity in order to cover its net cash outflows unconditionally guaranteed as to the whose obligations have a proven record in that jurisdiction, as calculated under timely payment of principal and interest as a reliable source of liquidity in subpart D of this part; by, a U.S. government agency (other repurchase or sales markets during (iii) Issued by an entity whose than the U.S. Department of the stressed market conditions, as publicly traded common equity shares Treasury) whose obligations are fully demonstrated by: have a proven record as a reliable source and explicitly guaranteed by the full (A) The market price of the security of liquidity in repurchase or sales faith and credit of the U.S. government, or equivalent securities of the issuer markets during stressed market provided that the security is liquid and declining by no more than 10 percent conditions, as demonstrated by: readily-marketable; during a 30 calendar-day period of (A) The market price of the security (5) A security that is issued by, or significant stress, or or equivalent securities of the issuer unconditionally guaranteed as to the (B) The market haircut demanded by declining by no more than 40 percent timely payment of principal and interest counterparties to secured lending and during a 30 calendar-day period of by, a sovereign entity, the Bank for secured funding transactions that are significant stress, or International Settlements, the collateralized by the security or (B) The market haircut demanded by International Monetary Fund, the equivalent securities of the issuer counterparties to securities borrowing European Central Bank, European increasing by no more than 10 and lending transactions that are Community, or a multilateral percentage points during a 30 calendar- collateralized by the publicly traded development bank, that is: day period of significant stress; and common equity shares or equivalent (i) Assigned a zero percent risk weight (iv) Not an obligation of a financial securities of the issuer increasing by no under subpart D of [AGENCY CAPITAL sector entity, and not an obligation of a more than 40 percentage points, during REGULATION] as of the calculation consolidated subsidiary of a financial a 30 calendar day period of significant date; sector entity. stress; (ii) Liquid and readily-marketable; (c) Level 2B liquid assets. An asset is (iv) Not issued by a financial sector (iii) Issued or guaranteed by an entity a level 2B liquid asset if the asset is entity and not issued by a consolidated whose obligations have a proven record liquid and readily-marketable and is one subsidiary of a financial sector entity; as a reliable source of liquidity in of the following types of assets: (v) If held by a depository institution, repurchase or sales markets during (1) A corporate debt security that is: is not acquired in satisfaction of a debt stressed market conditions; and (i) Investment grade under 12 CFR previously contracted (DPC); and (iv) Not an obligation of a financial part 1 as of the calculation date; (vi) If held by a consolidated sector entity and not an obligation of a (ii) Issued or guaranteed by an entity subsidiary of a depository institution, consolidated subsidiary of a financial whose obligations have a proven record the depository institution can include sector entity; or as a reliable source of liquidity in the publicly traded common equity (6) A security issued by, or repurchase or sales markets during share in its level 2B liquid assets only unconditionally guaranteed as to the stressed market conditions, as if the share is held to cover net cash timely payment of principal and interest demonstrated by: outflows of the depository institution’s by, a sovereign entity that is not (A) The market price of the corporate consolidated subsidiary in which the assigned a zero percent risk weight debt security or equivalent securities of publicly traded common equity share is under subpart D of [AGENCY CAPITAL the issuer declining by no more than 20 held, as calculated by the [BANK] under REGULATION], where the sovereign percent during a 30 calendar-day period subpart D of this part. entity issues the security in its own of significant stress, or currency, the security is liquid and (B) The market haircut demanded by § l.21 High-quality liquid asset amount. readily-marketable, and the [BANK] counterparties to secured lending and (a) Calculation of the HQLA amount. holds the security in order to meet its secured funding transactions that are As of the calculation date, a [BANK]’s net cash outflows in the jurisdiction of collateralized by the corporate debt HQLA amount equals: the sovereign entity, as calculated under security or equivalent securities of the (1) The level 1 liquid asset amount; subpart D of this part. issuer increasing by no more than 20 plus (b) Level 2A liquid assets. An asset is percentage points during a 30 calendar- (2) The level 2A liquid asset amount; a level 2A liquid asset if the asset is day period of significant stress; and plus

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(3) The level 2B liquid asset amount; provide an asset that will be eligible asset that is eligible for inclusion in a minus HQLA; less the amount of the reserve [BANK]’s HQLA amount, a [BANK] (4) The greater of: balance requirement under section must meet all of the following (i) The unadjusted excess HQLA 204.5 of Regulation D (12 CFR 204.5). operational requirements: amount; and (2) Adjusted level 2A liquid asset (1) The [BANK] must demonstrate the (ii) The adjusted excess HQLA amount. A [BANK]’s adjusted level 2A operational capability to monetize the amount. liquid asset amount equals 85 percent of HQLA by: (b) Calculation of liquid asset the fair value of all level 2A liquid (i) Implementing and maintaining amounts. (1) Level 1 liquid asset assets that would be eligible HQLA and appropriate procedures and systems to amount. The level 1 liquid asset amount would be held by the [BANK] upon the monetize any HQLA at any time in equals the fair value of all level 1 liquid unwind of any secured funding accordance with relevant standard assets held by the [BANK] as of the transaction (other than a collateralized settlement periods and procedures; and calculation date that are eligible HQLA, deposit), secured lending transaction, (ii) Periodically monetizing a sample less the amount of the reserve balance asset exchange, or collateralized of HQLA that reasonably reflects the requirement under section 204.5 of derivatives transaction that matures composition of the [BANK]’s eligible Regulation D (12 CFR 204.5). within 30 calendar days of the HQLA, including with respect to asset (2) Level 2A liquid asset amount. The calculation date where the [BANK] will type, maturity, and counterparty level 2A liquid asset amount equals 85 provide an asset that is eligible HQLA characteristics; percent of the fair value of all level 2A and the counterparty will provide an (2) The [BANK] must implement liquid assets held by the [BANK] as of asset that will be eligible HQLA. policies that require eligible HQLA to be the calculation date that are eligible (3) Adjusted level 2B liquid asset under the control of the management HQLA. amount. A [BANK]’s adjusted level 2B function in the [BANK] that is charged (3) Level 2B liquid asset amount. The liquid asset amount equals 50 percent of with managing liquidity risk, and this level 2B liquid asset amount equals 50 the fair value of all level 2B liquid assets management function must evidence its percent of the fair value of all level 2B that would be eligible HQLA and would control over the HQLA by either: liquid assets held by the [BANK] as of be held by the [BANK] upon the unwind (i) Segregating the HQLA from other the calculation date that are eligible of any secured funding transaction assets, with the sole intent to use the HQLA. (other than a collateralized deposit), HQLA as a source of liquidity; or (c) Calculation of the unadjusted secured lending transaction, asset (ii) Demonstrating the ability to excess HQLA amount. As of the exchange, or collateralized derivatives monetize the assets and making the calculation date, the unadjusted excess transaction that matures within 30 proceeds available to the liquidity HQLA amount equals: calendar days of the calculation date management function without (1) The level 2 cap excess amount; where the [BANK] will provide an asset conflicting with a business or risk plus that is eligible HQLA and the management strategy of the [BANK]; (2) The level 2B cap excess amount. counterparty will provide an asset that (3) The fair value of the eligible HQLA (d) Calculation of the level 2 cap will be eligible HQLA. must be reduced by the outflow amount excess amount. As of the calculation (g) Calculation of the adjusted excess that would result from the termination date, the level 2 cap excess amount HQLA amount. As of the calculation of any specific transaction hedging equals the greater of: date, the adjusted excess HQLA amount eligible HQLA; (1) The level 2A liquid asset amount equals: (4) The [BANK] must implement and plus the level 2B liquid asset amount (1) The adjusted level 2 cap excess maintain policies and procedures that minus 0.6667 times the level 1 liquid amount; plus determine the composition of its eligible asset amount; and (2) The adjusted level 2B cap excess HQLA on each calculation date, by: (2) 0. amount. (i) Identifying its eligible HQLA by (e) Calculation of the level 2B cap (h) Calculation of the adjusted level 2 legal entity, geographical location, excess amount. As of the calculation cap excess amount. As of the currency, account, or other relevant date, the level 2B excess amount equals calculation date, the adjusted level 2 identifying factors as of the calculation the greater of: cap excess amount equals the greater of: date; (1) The level 2B liquid asset amount (1) The adjusted level 2A liquid asset (ii) Determining that eligible HQLA minus the level 2 cap excess amount amount plus the adjusted level 2B meet the criteria set forth in this section; minus 0.1765 times the sum of the level liquid asset amount minus 0.6667 times and 1 liquid asset amount and the level 2A the adjusted level 1 liquid asset amount; (iii) Ensuring the appropriate liquid asset amount; and and diversification of the eligible HQLA by (2) 0. (2) 0. asset type, counterparty, issuer, (i) Calculation of the adjusted level 2B (f) Calculation of adjusted liquid asset currency, borrowing capacity, or other excess amount. As of the calculation amounts. (1) Adjusted level 1 liquid factors associated with the liquidity risk date, the adjusted level 2B excess liquid asset amount. A [BANK]’s adjusted of the assets; and level 1 liquid asset amount equals the asset amount equals the greater of: (1) The adjusted level 2B liquid asset (5) The [BANK] must have a fair value of all level 1 liquid assets that amount minus the adjusted level 2 cap documented methodology that results in would be eligible HQLA and would be excess amount minus 0.1765 times the a consistent treatment for determining held by the [BANK] upon the unwind of sum of the adjusted level 1 liquid asset that the [BANK]’s eligible HQLA meet any secured funding transaction (other amount and the adjusted level 2A liquid the requirements set forth in this than a collateralized deposit), secured asset amount; and section. lending transaction, asset exchange, or (2) 0. (b) Generally applicable criteria for collateralized derivatives transaction eligible HQLA. A [BANK]’s eligible that matures within 30 calendar days of § l.22 Requirements for eligible high- HQLA must meet all of the following the calculation date where the [BANK] quality liquid assets. criteria: will provide an asset that is eligible (a) Operational requirements for (1) The assets are unencumbered in HQLA and the counterparty will eligible HQLA. With respect to each accordance with the following criteria:

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(i) The assets are free of legal, statutory, regulatory, contractual, or (i) The net cumulative maturity regulatory, contractual, or other supervisory restrictions, including outflow amount for any of the 30 restrictions on the ability of the [BANK] sections 23A and 23B of the Federal calendar days following the calculation to monetize the assets; and Reserve Act (12 U.S.C. 371c and 12 date is equal to the sum of the outflow (ii) The assets are not pledged, U.S.C. 371c–1) and Regulation W (12 amounts for instruments or transactions explicitly or implicitly, to secure or to CFR part 223); identified in § l.32(g), (h)(1), (h)(2), provide credit enhancement to any (4) For HQLA held by a consolidated (h)(5), (j), (k), and (l) that have a transaction, but the assets may be subsidiary of the [BANK] that is maturity date prior to or on that considered unencumbered if the assets organized under the laws of a foreign calendar day minus the sum of the are pledged to a central bank or a U.S. jurisdiction, the [BANK] may include inflow amounts for instruments or government-sponsored enterprise the eligible HQLA of the consolidated transactions identified in § l.33(c), (d), where: subsidiary organized under the laws of (e), and (f) that have a maturity date (A) Potential credit secured by the a foreign jurisdiction in its HQLA prior to or on that calendar day. assets is not currently extended to the amount up to: (ii) The net day 30 cumulative [BANK] or its consolidated subsidiaries; (i) The amount of net cash outflows of maturity outflow amount is equal to, as and the consolidated subsidiary as of the of the 30th day following the calculation (B) The pledged assets are not 30th calendar day after the calculation date, the sum of the outflow amounts for required to support access to the date, as calculated by the [BANK] for instruments or transactions identified in payment services of a central bank; the [BANK]’s minimum liquidity § l.32(g), (h)(1), (h)(2), (h)(5), (j), (k), (2) The asset is not: standard under this part; plus and (l) that have a maturity date 30 (i) A client pool security held in a (ii) Any additional amount of assets calendar days or less from the segregated account; or that are available for transfer to the top- calculation date minus the sum of the (ii) An asset received from a secured tier [BANK] during times of stress inflow amounts for instruments or funding transaction involving client without statutory, regulatory, transactions identified in § l.33(c), (d), pool securities that were held in a contractual, or supervisory restrictions; (e), and (f) that have a maturity date 30 segregated account; (5) The [BANK] must not include as calendar days or less from the (3) For eligible HQLA held in a legal eligible HQLA any assets, or HQLA calculation date. entity that is a U.S. consolidated resulting from transactions involving an (2) As of the calculation date, a subsidiary of a [BANK]: asset that the [BANK] received with [BANK]’s maturity mismatch add-on is (i) If the U.S. consolidated subsidiary rehypothecation rights, if the is subject to a minimum liquidity equal to: counterparty that provided the asset or (i) The greater of: standard under this part, the [BANK] the beneficial owner of the asset has a may include the eligible HQLA of the (A) 0; and contractual right to withdraw the assets (B) The largest net cumulative U.S. consolidated subsidiary in its without an obligation to pay more than HQLA amount up to: maturity outflow amount as calculated de minimis remuneration at any time under paragraph (b)(1)(i) of this section (A) The amount of net cash outflows during the 30 calendar days following of the U.S. consolidated subsidiary for any of the 30 calendar days the calculation date; and following the calculation date; minus calculated by the U.S. consolidated (6) The [BANK] has not designated subsidiary for its own minimum (ii) The greater of: the assets to cover operational costs. (A) 0; and liquidity standard under this part; plus (c) Maintenance of U.S. eligible (B) The net day 30 cumulative (B) Any additional amount of assets, HQLA. A [BANK] is generally expected maturity outflow amount as calculated including proceeds from the to maintain as eligible HQLA an amount under paragraph (b)(1)(ii) of this section. monetization of assets, that would be and type of eligible HQLA in the United (3) Other than the transactions available for transfer to the top-tier States that is sufficient to meet its total identified in § l.32(h)(2), (h)(5), or (j) or [BANK] during times of stress without net cash outflow amount in the United § l.33(d) or (f), the maturity of which statutory, regulatory, contractual, or States under subpart D of this part. supervisory restrictions, including is determined under § l.31(a), sections 23A and 23B of the Federal Subpart D—Total Net Cash Outflow transactions that have no maturity date Reserve Act (12 U.S.C. 371c and 12 are not included in the calculation of U.S.C. 371c–1) and Regulation W (12 § l.30 Total net cash outflow amount. the maturity mismatch add-on. CFR part 223); and (a) Calculation of total net cash § l.31 Determining maturity. (ii) If the U.S. consolidated subsidiary outflow amount. As of the calculation is not subject to a minimum liquidity date, a [BANK]’s total net cash outflow (a) For purposes of calculating its standard under this part, the [BANK] amount equals: liquidity coverage ratio and the may include the eligible HQLA of the (1) The sum of the outflow amounts components thereof under this subpart, U.S. consolidated subsidiary in its calculated under § l.32(a) through (l); a [BANK] shall assume an asset or HQLA amount up to: minus transaction matures: (A) The amount of the net cash (2) The lesser of: (1) With respect to an instrument or outflows of the U.S. consolidated (i) The sum of the inflow amounts transaction subject to § l.32, on the subsidiary as of the 30th calendar day calculated under § l.33(b) through (g); earliest possible contractual maturity after the calculation date, as calculated and date or the earliest possible date the by the [BANK] for the [BANK]’s (ii) 75 percent of the amount transaction could occur, taking into minimum liquidity standard under this calculated under paragraph (a)(1) of this account any option that could accelerate part; plus section; plus the maturity date or the date of the (B) Any additional amount of assets, (3) The maturity mismatch add-on as transaction as follows: including proceeds from the calculated under paragraph (b) of this (i) If an investor or funds provider has monetization of assets, that would be section. an option that would reduce the available for transfer to the top-tier (b) Calculation of maturity mismatch maturity, the [BANK] must assume that [BANK] during times of stress without add-on. (1) For purposes of this section: the investor or funds provider will

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exercise the option at the earliest possible contractual maturity date based entire amount is covered by deposit possible date; on the borrower using the entire notice insurance; and (ii) If an investor or funds provider period. (5) 40 percent of all funding from a has an option that would extend the (3) With respect to a transaction retail customer or counterparty that is maturity, the [BANK] must assume that subject to § l.33(f)(1)(iii) through (vii) not: the investor or funds provider will not (secured lending transactions) or § l (i) A retail deposit; exercise the option to extend the .33(f)(2)(ii) through (x) (asset (ii) A brokered deposit provided by a maturity; exchanges), to the extent the transaction retail customer or counterparty; or (iii) If the [BANK] has an option that is secured by collateral that has been (iii) A debt instrument issued by the would reduce the maturity of an pledged in connection with either a [BANK] that is owned by a retail obligation, the [BANK] must assume secured funding transaction or asset customer or counterparty (see paragraph that the [BANK] will exercise the option exchange that has a remaining maturity (h)(2)(ii) of this section). at the earliest possible date, except if of 30 calendar days or less as of the (b) Structured transaction outflow either of the following criteria are calculation date, the maturity date is the amount. If the [BANK] is a sponsor of satisfied, in which case the maturity of later of the maturity date determined a structured transaction where the the obligation for purposes of this part under paragraph (a)(2) of this section for issuing entity is not consolidated on the will be the original maturity date at the secured lending transaction or asset [BANK]’s balance sheet under GAAP, issuance: exchange or the maturity date the structured transaction outflow (A) The original maturity of the determined under paragraph (a)(1) of amount for each such structured obligation is greater than one year and this section for the secured funding transaction as of the calculation date is the option does not go into effect for a transaction or asset exchange for which the greater of: (1) 100 percent of the amount of all period of 180 days following the the collateral has been pledged. issuance of the instrument; or debt obligations of the issuing entity (4) With respect to a transaction that that mature 30 calendar days or less (B) The counterparty is a sovereign has no maturity date, is not an entity, a U.S. government-sponsored from such calculation date and all operational deposit, and is subject to the commitments made by the issuing entity enterprise, or a public sector entity. l provisions of § .32(h)(2), (h)(5), (j), or to purchase assets within 30 calendar (iv) If the [BANK] has an option that (k) or § l.33(d) or (f), the maturity date would extend the maturity of an days or less from such calculation date; is the first calendar day after the and obligation it issued, the [BANK] must calculation date. Any other transaction assume the [BANK] will not exercise (2) The maximum contractual amount that has no maturity date and is subject of funding the [BANK] may be required that option to extend the maturity; and to the provisions of § l.32 must be (v) If an option is subject to a to provide to the issuing entity 30 considered to mature within 30 calendar contractually defined notice period, the calendar days or less from such days of the calculation date. [BANK] must determine the earliest calculation date through a liquidity possible contractual maturity date (5) With respect to a transaction facility, a return or repurchase of assets l regardless of the notice period. subject to the provisions of § .33(g), on from the issuing entity, or other funding (2) With respect to an instrument or the date of the next scheduled agreement. transaction subject to § l.33, on the calculation of the amount required (c) Net derivative cash outflow latest possible contractual maturity date under applicable legal requirements for amount. The net derivative cash outflow or the latest possible date the the protection of customer assets with amount as of the calculation date is the transaction could occur, taking into respect to each broker-dealer segregated sum of the net derivative cash outflow account any option that could extend account, in accordance with the amount for each counterparty. The net the maturity date or the date of the [BANK]’s normal frequency of derivative cash outflow amount does transaction as follows: recalculating such requirements. not include forward sales of mortgage (i) If the borrower has an option that (b) [Reserved] loans and any derivatives that are would extend the maturity, the [BANK] § l.32 Outflow amounts. mortgage commitments subject to must assume that the borrower will paragraph (d) of this section. The net exercise the option to extend the (a) Retail funding outflow amount. A derivative cash outflow amount for a maturity to the latest possible date; [BANK]’s retail funding outflow amount counterparty is the sum of: (ii) If the borrower has an option that as of the calculation date includes (1) The amount, if greater than zero, would reduce the maturity, the [BANK] (regardless of maturity or of contractual payments and collateral must assume that the borrower will not collateralization): that the [BANK] will make or deliver to exercise the option to reduce the (1) 3 percent of all stable retail the counterparty 30 calendar days or maturity; deposits held at the [BANK]; less from the calculation date under (iii) If the [BANK] has an option that (2) 10 percent of all other retail derivative transactions other than would reduce the maturity of an deposits held at the [BANK]; transactions described in paragraph instrument or transaction, the [BANK] (3) 20 percent of all deposits placed (c)(2) of this section, less the contractual must assume the [BANK] will not at the [BANK] by a third party on behalf payments and collateral that the [BANK] exercise the option to reduce the of a retail customer or counterparty that will receive from the counterparty 30 maturity; are not brokered deposits, where the calendar days or less from the (iv) If the [BANK] has an option that retail customer or counterparty owns calculation date under derivative would extend the maturity of an the account and the entire amount is transactions other than transactions instrument or transaction, the [BANK] covered by deposit insurance; described in paragraph (c)(2) of this must assume the [BANK] will exercise (4) 40 percent of all deposits placed section, provided that the derivative the option to extend the maturity to the at the [BANK] by a third party on behalf transactions are subject to a qualifying latest possible date; and of a retail customer or counterparty that master netting agreement; and (v) If an option is subject to a are not brokered deposits, where the (2) The amount, if greater than zero, contractually defined notice period, the retail customer or counterparty owns of contractual principal payments that [BANK] must determine the latest the account and where less than the the [BANK] will make to the

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counterparty 30 calendar days or less (vi) 40 percent of the undrawn (1) Changes in financial condition. from the calculation date under foreign amount of all committed credit facilities 100 percent of all additional amounts of currency exchange derivative extended by the [BANK] to a financial collateral the [BANK] could be transactions that result in the full sector entity or a consolidated contractually required to pledge or to exchange of contractual cash principal subsidiary thereof, including a special fund under the terms of any transaction payments in different currencies within purpose entity (other than those as a result of a change in the [BANK]’s the same business day, less the described in paragraph (e)(1)(viii) of this financial condition; contractual principal payments that the section) that is a consolidated (2) Derivative collateral potential [BANK] will receive from the subsidiary of a financial sector entity, valuation changes. 20 percent of the fair counterparty 30 calendar days or less but excluding other commitments value of any collateral securing a from the calculation date under foreign described in paragraph (e)(1)(i) or (v) of derivative transaction pledged to a currency exchange derivative this section; counterparty by the [BANK] that is not transactions that result in the full (vii) 100 percent of the undrawn a level 1 liquid asset; exchange of contractual cash principal amount of all committed liquidity (3) Potential derivative valuation payments in different currencies within facilities extended by the [BANK] to a changes. The absolute value of the the same business day. financial sector entity or a consolidated largest 30-consecutive calendar day (d) Mortgage commitment outflow subsidiary thereof, including a special cumulative net mark-to-market amount. The mortgage commitment purpose entity (other than those collateral outflow or inflow realized outflow amount as of a calculation date described in paragraph (e)(1)(viii) of this during the preceding 24 months is 10 percent of the amount of funds the section) that is a consolidated resulting from derivative transaction [BANK] has contractually committed for subsidiary of a financial sector entity, valuation changes; its own origination of retail mortgages but excluding other commitments (4) Excess collateral. 100 percent of that can be drawn upon 30 calendar described in paragraph (e)(1)(i) or (v) of the fair value of collateral that: days or less from such calculation date. this section and liquidity facilities (i) The [BANK] could be required by (e) Commitment outflow amount. (1) included in paragraph (b)(2) of this contract to return to a counterparty A [BANK]’s commitment outflow section; because the collateral pledged to the amount as of the calculation date (viii) 100 percent of the undrawn [BANK] exceeds the current collateral includes: amount of all committed credit and requirement of the counterparty under (i) Zero percent of the undrawn liquidity facilities extended to a special the governing contract; amount of all committed credit and purpose entity that issues or has issued (ii) Is not segregated from the liquidity facilities extended by a commercial paper or securities (other [BANK]’s other assets such that it [BANK] that is a depository institution than equity securities issued to a cannot be rehypothecated; and to an affiliated depository institution company of which the special purpose (iii) Is not already excluded as eligible that is subject to a minimum liquidity entity is a consolidated subsidiary) to HQLA by the [BANK] under § l standard under this part; finance its purchases or operations, and .22(b)(5); (ii) 5 percent of the undrawn amount excluding liquidity facilities included in (5) Contractually required collateral. of all committed credit and liquidity paragraph (b)(2) of this section; and 100 percent of the fair value of collateral facilities extended by the [BANK] to (ix) 100 percent of the undrawn that the [BANK] is contractually retail customers or counterparties; amount of all other committed credit or required to pledge to a counterparty (iii) 10 percent of the undrawn liquidity facilities extended by the and, as of such calculation date, the amount of all committed credit facilities [BANK]. [BANK] has not yet pledged; extended by the [BANK] to a wholesale (2) For the purposes of this paragraph (6) Collateral substitution. (i) Zero customer or counterparty that is not a (e), the undrawn amount of a committed percent of the fair value of collateral financial sector entity or a consolidated credit facility or committed liquidity pledged to the [BANK] by a subsidiary thereof, including a special facility is the entire unused amount of counterparty where the collateral purpose entity (other than those the facility that could be drawn upon qualifies as level 1 liquid assets and described in paragraph (e)(1)(viii) of this within 30 calendar days of the eligible HQLA and where, under the section) that is a consolidated calculation date under the governing contract governing the transaction, the subsidiary of such wholesale customer agreement, less the amount of level 1 counterparty may replace the pledged or counterparty; liquid assets and the amount of level 2A collateral with other assets that qualify (iv) 30 percent of the undrawn liquid assets securing the facility. as level 1 liquid assets, without the amount of all committed liquidity (3) For the purposes of this paragraph consent of the [BANK]; facilities extended by the [BANK] to a (e), the amount of level 1 liquid assets (ii) 15 percent of the fair value of wholesale customer or counterparty that and level 2A liquid assets securing a collateral pledged to the [BANK] by a is not a financial sector entity or a committed credit or liquidity facility is counterparty, where the collateral consolidated subsidiary thereof, the fair value of level 1 liquid assets and qualifies as level 1 liquid assets and including a special purpose entity (other 85 percent of the fair value of level 2A eligible HQLA and where, under the than those described in paragraph liquid assets that are required to be contract governing the transaction, the (e)(1)(viii) of this section) that is a pledged as collateral by the counterparty may replace the pledged consolidated subsidiary of such counterparty to secure the facility, collateral with assets that qualify as wholesale customer or counterparty; provided that: level 2A liquid assets, without the (v) 50 percent of the undrawn amount (i) The assets pledged upon a draw on consent of the [BANK]; of all committed credit and liquidity the facility would be eligible HQLA; and (iii) 50 percent of the fair value of facilities extended by the [BANK] to (ii) The [BANK] has not included the collateral pledged to the [BANK] by a depository institutions, depository assets as eligible HQLA under subpart C counterparty where the collateral institution holding companies, and of this part as of the calculation date. qualifies as level 1 liquid assets and foreign banks, but excluding (f) Collateral outflow amount. The eligible HQLA and where under, the commitments described in paragraph collateral outflow amount as of the contract governing the transaction, the (e)(1)(i) of this section; calculation date includes: counterparty may replace the pledged

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collateral with assets that qualify as (1) 100 percent of all brokered (ii) Where the entire amount of the level 2B liquid assets, without the deposits at the [BANK] provided by a deposits is covered by deposit consent of the [BANK]; retail customer or counterparty that are insurance; and (iv) 100 percent of the fair value of not described in paragraphs (g)(5) (9) 40 percent of all brokered sweep collateral pledged to the [BANK] by a through (9) of this section and which deposits at the [BANK] provided by a counterparty where the collateral mature 30 calendar days or less from the retail customer or counterparty where qualifies as level 1 liquid assets and calculation date; less than the entire amount of the eligible HQLA and where, under the (2) 10 percent of all brokered deposits deposit balance is covered by deposit contract governing the transaction, the at the [BANK] provided by a retail insurance. counterparty may replace the pledged customer or counterparty that are not (h) Unsecured wholesale funding collateral with assets that do not qualify described in paragraphs (g)(5) through outflow amount. A [BANK]’s unsecured as HQLA, without the consent of the (9) of this section and which mature wholesale funding outflow amount, for [BANK]; later than 30 calendar days from the all transactions that mature within 30 (v) Zero percent of the fair value of calculation date; calendar days or less of the calculation collateral pledged to the [BANK] by a date, as of the calculation date includes: (3) 20 percent of all brokered deposits (1) For unsecured wholesale funding counterparty where the collateral at the [BANK] provided by a retail qualifies as level 2A liquid assets and that is not an operational deposit and is customer or counterparty that are not not provided by a financial sector entity eligible HQLA and where, under the described in paragraphs (g)(5) through or consolidated subsidiary of a financial contract governing the transaction, the (9) of this section and which are held in sector entity: counterparty may replace the pledged a transactional account with no (i) 20 percent of all such funding, collateral with assets that qualify as contractual maturity date, where the where the entire amount is covered by level 1 or level 2A liquid assets, without entire amount is covered by deposit deposit insurance and the funding is not the consent of the [BANK]; insurance; a brokered deposit; (vi) 35 percent of the fair value of (4) 40 percent of all brokered deposits (ii) 40 percent of all such funding, collateral pledged to the [BANK] by a at the [BANK] provided by a retail where: counterparty where the collateral customer or counterparty that are not (A) Less than the entire amount is qualifies as level 2A liquid assets and described in paragraphs (g)(5) through covered by deposit insurance; or eligible HQLA and where, under the (9) of this section and which are held in (B) The funding is a brokered deposit; contract governing the transaction, the a transactional account with no (2) 100 percent of all unsecured counterparty may replace the pledged contractual maturity date, where less wholesale funding that is not an collateral with assets that qualify as than the entire amount is covered by operational deposit and is not included level 2B liquid assets, without the deposit insurance; in paragraph (h)(1) of this section, consent of the [BANK]; (5) 10 percent of all reciprocal including: (i) Funding provided by a company (vii) 85 percent of the fair value of brokered deposits at the [BANK] that is a consolidated subsidiary of the collateral pledged to the [BANK] by a provided by a retail customer or same top-tier company of which the counterparty where the collateral counterparty, where the entire amount [BANK] is a consolidated subsidiary; qualifies as level 2A liquid assets and is covered by deposit insurance; eligible HQLA and where, under the and (6) 25 percent of all reciprocal contract governing the transaction, the (ii) Debt instruments issued by the brokered deposits at the [BANK] counterparty may replace the pledged [BANK], including such instruments provided by a retail customer or collateral with assets that do not qualify owned by retail customers or counterparty, where less than the entire as HQLA, without the consent of the counterparties; amount is covered by deposit insurance; [BANK]; (3) 5 percent of all operational (viii) Zero percent of the fair value of (7) 10 percent of all brokered sweep deposits, other than operational collateral pledged to the [BANK] by a deposits at the [BANK] provided by a deposits that are held in escrow counterparty where the collateral retail customer or counterparty: accounts, where the entire deposit qualifies as level 2B liquid assets and (i) That are deposited in accordance amount is covered by deposit insurance; (4) 25 percent of all operational eligible HQLA and where, under the with a contract between the retail deposits not included in paragraph contract governing the transaction, the customer or counterparty and the [BANK], a controlled subsidiary of the (h)(3) of this section; and counterparty may replace the pledged (5) 100 percent of all unsecured collateral with other assets that qualify [BANK], or a company that is a controlled subsidiary of the same top- wholesale funding that is not otherwise as HQLA, without the consent of the described in this paragraph (h). [BANK]; and tier company of which the [BANK] is a controlled subsidiary; and (i) Debt security buyback outflow (ix) 50 percent of the fair value of amount. A [BANK]’s debt security (ii) Where the entire amount of the collateral pledged to the [BANK] by a buyback outflow amount for debt deposits is covered by deposit counterparty where the collateral securities issued by the [BANK] that insurance; qualifies as level 2B liquid assets and mature more than 30 calendar days after eligible HQLA and where, under the (8) 25 percent of all brokered sweep the calculation date and for which the contract governing the transaction, the deposits at the [BANK] provided by a [BANK] or a consolidated subsidiary of counterparty may replace the pledged retail customer or counterparty: the [BANK] is the primary market maker collateral with assets that do not qualify (i) That are not deposited in in such debt securities includes: as HQLA, without the consent of the accordance with a contract between the (1) 3 percent of all such debt [BANK]. retail customer or counterparty and the securities that are not structured (g) Brokered deposit outflow amount [BANK], a controlled subsidiary of the securities; and for retail customers or counterparties. [BANK], or a company that is a (2) 5 percent of all such debt The brokered deposit outflow amount controlled subsidiary of the same top- securities that are structured securities. for retail customers or counterparties as tier company of which the [BANK] is a (j) Secured funding and asset of the calculation date includes: controlled subsidiary; and exchange outflow amount. (1) A

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[BANK]’s secured funding outflow specified in paragraph (h)(3) or (4) of asset exchanges, not described in amount, for all transactions that mature this section, as applicable, if such paragraphs (j)(3)(x) through (xiii) of this within 30 calendar days or less of the outflow rate is lower than the outflow section, where the [BANK] will receive calculation date, as of the calculation rate specified in paragraph (j)(1) of this HQLA from the asset exchange date includes: section. counterparty; and (i) Zero percent of all funds the (3) A [BANK]’s asset exchange (ix) 50 percent of the fair value of the [BANK] must pay pursuant to secured outflow amount, for all transactions that level 2B liquid assets the [BANK] must funding transactions, to the extent that mature within 30 calendar days or less post to a counterparty pursuant to asset the funds are secured by level 1 liquid of the calculation date, as of the exchanges, not described in paragraphs assets; calculation date includes: (j)(3)(x) through (xiii) of this section, (ii) 15 percent of all funds the [BANK] (i) Zero percent of the fair value of the where the [BANK] will receive assets must pay pursuant to secured funding level 1 liquid assets the [BANK] must that are not HQLA from the asset transactions, to the extent that the funds post to a counterparty pursuant to asset exchange counterparty; are secured by level 2A liquid assets; exchanges, not described in paragraphs (x) Zero percent of the fair value of (iii) 25 percent of all funds the (j)(3)(x) through (xiii) of this section, the level 1 liquid assets the [BANK] will [BANK] must pay pursuant to secured where the [BANK] will receive level 1 receive from a counterparty pursuant to funding transactions with sovereign liquid assets from the asset exchange an asset exchange where the [BANK] entities, multilateral development counterparty; has rehypothecated the assets posted by banks, or U.S. government-sponsored (ii) 15 percent of the fair value of the the asset exchange counterparty, and, as enterprises that are assigned a risk level 1 liquid assets the [BANK] must of the calculation date, the assets will weight of 20 percent under subpart D of post to a counterparty pursuant to asset not be returned to the [BANK] within 30 [AGENCY CAPITAL REGULATION], to exchanges, not described in paragraphs calendar days; the extent that the funds are not secured (j)(3)(x) through (xiii) of this section, (xi) 15 percent of the fair value of the by level 1 or level 2A liquid assets; where the [BANK] will receive level 2A level 2A liquid assets the [BANK] will (iv) 50 percent of all funds the liquid assets from the asset exchange receive from a counterparty pursuant to [BANK] must pay pursuant to secured counterparty; an asset exchange where the [BANK] funding transactions, to the extent that (iii) 50 percent of the fair value of the has rehypothecated the assets posted by the funds are secured by level 2B liquid level 1 liquid assets the [BANK] must the asset exchange counterparty, and, as assets; post to a counterparty pursuant to asset of the calculation date, the assets will (v) 50 percent of all funds received exchanges, not described in paragraphs not be returned to the [BANK] within 30 from secured funding transactions that (j)(3)(x) through (xiii) of this section, calendar days; are customer short positions where the where the [BANK] will receive level 2B (xii) 50 percent of the fair value of the customer short positions are covered by liquid assets from the asset exchange level 2B liquid assets the [BANK] will other customers’ collateral and the counterparty; receive from a counterparty pursuant to collateral does not consist of HQLA; and (iv) 100 percent of the fair value of the an asset exchange where the [BANK] (vi) 100 percent of all other funds the level 1 liquid assets the [BANK] must has rehypothecated the assets posted by [BANK] must pay pursuant to secured post to a counterparty pursuant to asset the asset exchange counterparty, and, as funding transactions, to the extent that exchanges, not described in paragraphs of the calculation date, the assets will the funds are secured by assets that are (j)(3)(x) through (xiii) of this section, not be returned to the [BANK] within 30 not HQLA. where the [BANK] will receive assets calendar days; and (2) If an outflow rate specified in that are not HQLA from the asset (xiii) 100 percent of the fair value of paragraph (j)(1) of this section for a exchange counterparty; the non-HQLA the [BANK] will receive secured funding transaction is greater (v) Zero percent of the fair value of from a counterparty pursuant to an asset than the outflow rate that the [BANK] is the level 2A liquid assets that [BANK] exchange where the [BANK] has required to apply under paragraph (h) of must post to a counterparty pursuant to rehypothecated the assets posted by the this section to an unsecured wholesale asset exchanges, not described in asset exchange counterparty, and, as of funding transaction that is not an paragraphs (j)(3)(x) through (xiii) of this the calculation date, the assets will not operational deposit with the same section, where [BANK] will receive be returned to the [BANK] within 30 counterparty, the [BANK] may apply to level 1 or level 2A liquid assets from the calendar days. the secured funding transaction the asset exchange counterparty; (k) Foreign central bank borrowing outflow rate that applies to an (vi) 35 percent of the fair value of the outflow amount. A [BANK]’s foreign unsecured wholesale funding level 2A liquid assets the [BANK] must central bank borrowing outflow amount transaction that is not an operational post to a counterparty pursuant to asset is, in a foreign jurisdiction where the deposit with that counterparty, except exchanges, not described in paragraphs [BANK] has borrowed from the in the case of: (j)(3)(x) through (xiii) of this section, jurisdiction’s central bank, the outflow (i) Secured funding transactions that where the [BANK] will receive level 2B amount assigned to borrowings from are secured by collateral that was liquid assets from the asset exchange central banks in a minimum liquidity received by the [BANK] under a secured counterparty; standard established in that jurisdiction. lending transaction or asset exchange, in (vii) 85 percent of the fair value of the If the foreign jurisdiction has not which case the [BANK] must apply the level 2A liquid assets the [BANK] must specified a central bank borrowing outflow rate specified in paragraph (j)(1) post to a counterparty pursuant to asset outflow amount in a minimum liquidity of this section for the secured funding exchanges, not described in paragraphs standard, the foreign central bank transaction; and (j)(3)(x) through (xiii) of this section, borrowing outflow amount must be (ii) Collateralized deposits that are where the [BANK] will receive assets calculated in accordance with paragraph operational deposits, in which case the that are not HQLA from the asset (j) of this section. [BANK] may apply to the operational exchange counterparty; (l) Other contractual outflow amount. deposit amount, as calculated in (viii) Zero percent of the fair value of A [BANK]’s other contractual outflow accordance with § l.4(b), the the level 2B liquid assets the [BANK] amount is 100 percent of funding or operational deposit outflow rate must post to a counterparty pursuant to amounts, with the exception of

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operating expenses of the [BANK] (such (b)(2) of this section, less the contractual to secured lending transactions, as rents, salaries, utilities, and other payments and collateral that the [BANK] including margin loans extended to similar payments), payable by the will make or deliver to the counterparty customers, to the extent that the [BANK] to counterparties under legally 30 calendar days or less from the payments are secured by collateral that binding agreements that are not calculation date under derivative has been rehypothecated in a otherwise specified in this section. transactions other than transactions transaction and, as of the calculation (m) Excluded amounts for intragroup described in paragraph (b)(2) of this date, will not be returned to the [BANK] transactions. The outflow amounts set section, provided that the derivative within 30 calendar days; forth in this section do not include transactions are subject to a qualifying (ii) 100 percent of all contractual amounts arising out of transactions master netting agreement; and payments due to the [BANK] pursuant between: (2) The amount, if greater than zero, to secured lending transactions not (1) The [BANK] and a consolidated of contractual principal payments that described in paragraph (f)(1)(vii) of this subsidiary of the [BANK]; or the [BANK] will receive from the section, to the extent that the payments (2) A consolidated subsidiary of the counterparty 30 calendar days or less are secured by assets that are not [BANK] and another consolidated from the calculation date under foreign eligible HQLA, but are still held by the subsidiary of the [BANK]. currency exchange derivative [BANK] and are available for immediate transactions that result in the full return to the counterparty at any time; § l.33 Inflow amounts. exchange of contractual cash principal (iii) Zero percent of all contractual (a) The inflows in paragraphs (b) payments in different currencies within payments due to the [BANK] pursuant through (g) of this section do not the same business day, less the to secured lending transactions not include: contractual principal payments that the described in paragraphs (f)(1)(i) or (ii) of (1) Amounts the [BANK] holds in [BANK] will make to the counterparty this section, to the extent that the operational deposits at other regulated 30 calendar days or less from the payments are secured by level 1 liquid financial companies; calculation date under foreign currency assets; (2) Amounts the [BANK] expects, or is exchange derivative transactions that (iv) 15 percent of all contractual contractually entitled to receive, 30 result in the full exchange of contractual payments due to the [BANK] pursuant calendar days or less from the cash principal payments in different to secured lending transactions not calculation date due to forward sales of currencies within the same business described in paragraphs (f)(1)(i) or (ii) of mortgage loans and any derivatives that day. this section, to the extent that the are mortgage commitments subject to (c) Retail cash inflow amount. The payments are secured by level 2A liquid § l.32(d); retail cash inflow amount as of the assets; (3) The amount of any credit or calculation date includes 50 percent of (v) 50 percent of all contractual liquidity facilities extended to the all payments contractually payable to payments due to the [BANK] pursuant [BANK]; the [BANK] from retail customers or to secured lending transactions not (4) The amount of any asset that is counterparties. described in paragraphs (f)(1)(i) or (ii) of eligible HQLA and any amounts payable (d) Unsecured wholesale cash inflow this section, to the extent that the to the [BANK] with respect to that asset; amount. The unsecured wholesale cash payments are secured by level 2B liquid (5) Any amounts payable to the inflow amount as of the calculation date assets; [BANK] from an obligation of a includes: (vi) 100 percent of all contractual customer or counterparty that is a (1) 100 percent of all payments payments due to the [BANK] pursuant nonperforming asset as of the contractually payable to the [BANK] to secured lending transactions not calculation date or that the [BANK] has from financial sector entities, or from a described in paragraphs (f)(1)(i), (ii), or reason to expect will become a consolidated subsidiary thereof, or (vii) of this section, to the extent that the nonperforming exposure 30 calendar central banks; and payments are secured by assets that are days or less from the calculation date; (2) 50 percent of all payments not HQLA; and and contractually payable to the [BANK] (vii) 50 percent of all contractual (6) Amounts payable to the [BANK] from wholesale customers or payments due to the [BANK] pursuant with respect to any transaction that has counterparties that are not financial to collateralized margin loans extended no contractual maturity date or that sector entities or consolidated to customers, not described in matures after 30 calendar days of the subsidiaries thereof, provided that, with paragraph (f)(1)(i) of this section, calculation date (as determined by § l respect to revolving credit facilities, the provided that the loans are secured by .31). amount of the existing loan is not assets that are not HQLA. (b) Net derivative cash inflow amount. included in the unsecured wholesale (2) A [BANK]’s asset exchange inflow The net derivative cash inflow amount cash inflow amount and the remaining amount as of the calculation date as of the calculation date is the sum of undrawn balance is included in the includes: the net derivative cash inflow amount outflow amount under § l.32(e)(1). (i) Zero percent of the fair value of for each counterparty. The net (e) Securities cash inflow amount. The assets the [BANK] will receive from a derivative cash inflow amount does not securities cash inflow amount as of the counterparty pursuant to asset include amounts excluded from inflows calculation date includes 100 percent of exchanges, to the extent that the asset under paragraph (a)(2) of this section. all contractual payments due to the received by the [BANK] from the The net derivative cash inflow amount [BANK] on securities it owns that are counterparty has been rehypothecated for a counterparty is the sum of: not eligible HQLA. in a transaction and, as of the (1) The amount, if greater than zero, (f) Secured lending and asset calculation date, will not be returned to of contractual payments and collateral exchange cash inflow amount. (1) A the [BANK] within 30 calendar days; that the [BANK] will receive from the [BANK]’s secured lending cash inflow (ii) Zero percent of the fair value of counterparty 30 calendar days or less amount as of the calculation date level 1 liquid assets the [BANK] will from the calculation date under includes: receive from a counterparty pursuant to derivative transactions other than (i) Zero percent of all contractual asset exchanges, not described in transactions described in paragraph payments due to the [BANK] pursuant paragraph (f)(2)(i) of this section, where

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the [BANK] must post level 1 liquid dealer segregated account inflow than the minimum requirement in § l assets to the asset exchange amount is the fair value of all assets .10. counterparty; released from broker-dealer segregated (b) Liquidity plan. (1) For the period (iii) 15 percent of the fair value of accounts maintained in accordance with during which a [BANK] must calculate level 1 liquid assets the [BANK] will statutory or regulatory requirements for a liquidity coverage ratio on the last receive from a counterparty pursuant to the protection of customer trading business day of each applicable asset exchanges, not described in assets, provided that the calculation of calendar month under subpart F of this paragraph (f)(2)(i) of this section, where the broker-dealer segregated account part, if the [BANK]’s liquidity coverage the [BANK] must post level 2A liquid inflow amount, for any transaction ratio is below the minimum requirement assets to the asset exchange affecting the calculation of the in § l.10 for any calculation date that counterparty; segregated balance (as required by is the last business day of the applicable (iv) 50 percent of the fair value of applicable law), shall be consistent with calendar month, or if the [AGENCY] has level 1 liquid assets the [BANK] will the following: determined that the [BANK] is receive from counterparty pursuant to (1) In calculating the broker-dealer otherwise materially noncompliant with asset exchanges, not described in segregated account inflow amount, the the requirements of this part, the paragraph (f)(2)(i) of this section, where [BANK] must calculate the fair value of [BANK] must promptly consult with the the [BANK] must post level 2B liquid the required balance of the customer [AGENCY] to determine whether the assets to the asset exchange reserve account as of 30 calendar days [BANK] must provide to the [AGENCY] counterparty; from the calculation date by assuming a plan for achieving compliance with (v) 100 percent of the fair value of that customer cash and collateral the minimum liquidity requirement in level 1 liquid assets the [BANK] will positions have changed consistent with § l.10 and all other requirements of receive from a counterparty pursuant to the outflow and inflow calculations this part. asset exchanges, not described in required under §§ l.32 and l.33. (2) For the period during which a paragraph (f)(2)(i) of this section, where (2) If the fair value of the required [BANK] must calculate a liquidity the [BANK] must post assets that are not balance of the customer reserve account coverage ratio each business day under HQLA to the asset exchange as of 30 calendar days from the subpart F of this part, if a [BANK]’s counterparty; calculation date, as calculated liquidity coverage ratio is below the (vi) Zero percent of the fair value of consistent with the outflow and inflow minimum requirement in § l.10 for level 2A liquid assets the [BANK] will calculations required under §§ l.32 and three consecutive business days, or if receive from a counterparty pursuant to l.33, is less than the fair value of the the [AGENCY] has determined that the asset exchanges, not described in required balance as of the calculation [BANK] is otherwise materially paragraph (f)(2)(i) of this section, where date, the difference is the segregated noncompliant with the requirements of the [BANK] must post level 1 or level account inflow amount. this part, the [BANK] must promptly 2A liquid assets to the asset exchange (3) If the fair value of the required provide to the [AGENCY] a plan for counterparty; balance of the customer reserve account achieving compliance with the (vii) 35 percent of the fair value of as of 30 calendar days from the minimum liquidity requirement in § l level 2A liquid assets the [BANK] will calculation date, as calculated .10 and all other requirements of this receive from a counterparty pursuant to consistent with the outflow and inflow part. asset exchanges, not described in calculations required under §§ l.32 and (3) The plan must include, as paragraph (f)(2)(i) of this section, where l.33, is more than the fair value of the applicable: the [BANK] must post level 2B liquid required balance as of the calculation assets to the asset exchange (i) An assessment of the [BANK]’s date, the segregated account inflow liquidity position; counterparty; amount is zero. (viii) 85 percent of the fair value of (ii) The actions the [BANK] has taken (h) Other cash inflow amounts. A and will take to achieve full compliance level 2A liquid assets the [BANK] will [BANK]’s inflow amount as of the receive from a counterparty pursuant to with this part, including: calculation date includes zero percent of (A) A plan for adjusting the [BANK]’s asset exchanges, not described in other cash inflow amounts not included paragraph (f)(2)(i) of this section, where risk profile, risk management, and in paragraphs (b) through (g) of this funding sources in order to achieve full the [BANK] must post assets that are not section. HQLA to the asset exchange compliance with this part; and (i) Excluded amounts for intragroup (B) A plan for remediating any counterparty; transactions. The inflow amounts set (ix) Zero percent of the fair value of operational or management issues that forth in this section do not include contributed to noncompliance with this level 2B liquid assets the [BANK] will amounts arising out of transactions receive from a counterparty pursuant to part; between: (iii) An estimated time frame for asset exchanges, not described in (1) The [BANK] and a consolidated paragraph (f)(2)(i) of this section, where achieving full compliance with this subsidiary of the [BANK]; or part; and the [BANK] must post assets that are (2) A consolidated subsidiary of the (iv) A commitment to report to the HQLA to the asset exchange [BANK] and another consolidated [AGENCY] no less than weekly on counterparty; and subsidiary of the [BANK]. (x) 50 percent of the fair value of level progress to achieve compliance in 2B liquid assets the [BANK] will receive Subpart E—Liquidity Coverage accordance with the plan until full from a counterparty pursuant to asset Shortfall compliance with this part is achieved. exchanges, not described in paragraph (c) Supervisory and enforcement (f)(2)(i) of this section, where the § l.40 Liquidity coverage shortfall: actions. The [AGENCY] may, at its [BANK] must post assets that are not Supervisory framework. discretion, take additional supervisory HQLA to the asset exchange (a) Notification requirements. A or enforcement actions to address counterparty. [BANK] must notify the [AGENCY] on noncompliance with the minimum (g) Broker-dealer segregated account any business day when its liquidity liquidity standard and other inflow amount. A [BANK]’s broker- coverage ratio is calculated to be less requirements of this part.

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Subpart F—Transitions (3) Beginning July 1, 2016, through ■ c. Removing ‘‘[BANK]’’ and adding December 31, 2016, the [BANK] must ‘‘national bank or Federal savings __ § .50 Transitions. calculate and maintain a liquidity association’’ in its place, wherever it (a) Covered depository institution coverage ratio on each calculation date appears; holding companies with $700 billion or in accordance with this part that is ■ d. Removing ‘‘[BANK]s’’ and adding more in total consolidated assets or $10 equal to or greater than 0.90. ‘‘national banks and Federal savings trillion or more in assets under custody. (4) On January 1, 2017, and thereafter, associations’’ in its place, wherever it For any depository institution holding the [BANK] must calculate and maintain appears; company that has total consolidated a liquidity coverage ratio on each ■ e. Removing ‘‘[BANK]’s’’ and adding assets equal to $700 billion or more, as calculation date that is equal to or ‘‘national bank’s or Federal savings reported on the company’s most recent greater than 1.0. association’s’’ in its place, wherever it Consolidated Financial Statements for [End of Common Rule Text] appears; Holding Companies (FR Y–9C), or $10 ■ f. Removing ‘‘[REGULATORY trillion or more in assets under custody, List of Subjects REPORT]’’ and adding ‘‘Consolidated as reported on the company’s most 12 CFR Part 50 Reports of Condition and Income’’ in its recent Banking Organization Systemic place, wherever it appears; and Risk Report (FR Y–15), and any Administrative practice and ■ g. Removing ‘‘[12 CFR 3.404 (OCC), 12 depository institution that is a procedure; Banks, banking; Liquidity; CFR 263.202 (Board), and 12 CFR 324.5 consolidated subsidiary of such Reporting and recordkeeping (FDIC)]’’ and adding ‘‘12 CFR 3.404’’ in depository institution holding company requirements; Savings associations. its place, wherever it appears. that has total consolidated assets equal 12 CFR Part 249 ■ 3. Section 50.1 is amended by: to $10 billion or more, as reported on ■ Administrative practice and a. Revising paragraph (b)(1)(iii); the most recent year-end Consolidated ■ procedure; Banks, banking; Federal b. Removing the word ‘‘or’’ at the end Report of Condition and Income: Reserve System; Holding companies; of paragraph (b)(3)(i); (1) Beginning January 1, 2015, ■ c. Removing the period at the end of Liquidity; Reporting and recordkeeping through June 30, 2015, the [BANK] must paragraph (b)(3)(ii) and adding ‘‘; or’’ in requirements. calculate and maintain a liquidity its place; and coverage ratio monthly, on each 12 CFR Part 329 ■ d. Adding paragraph (b)(3)(iii). calculation date that is the last business Administrative practice and The addition and revision read as day of the applicable calendar month, in procedure; Banks, banking; Federal follows: accordance with this part, that is equal Deposit Insurance Corporation, FDIC; to or greater than 0.80. § 50.1 Purpose and applicability. Liquidity; Reporting and recordkeeping (2) Beginning July 1, 2015 through * * * * * requirements. December 31, 2015, the [BANK] must (b) * * * calculate and maintain a liquidity Adoption of Common Rule (1) * * * (iii) It is a depository institution that coverage ratio on each calculation date The adoption of the common rules by in accordance with this part that is has total consolidated assets equal to the agencies, as modified by the agency- $10 billion or more, as reported on the equal to or greater than 0.80. specific text, is set forth below: (3) Beginning January 1, 2016, most recent year-end Consolidated through December 31, 2016, the [BANK] Department of the Treasury Report of Condition and Income and is a consolidated subsidiary of one of the must calculate and maintain a liquidity Office of the Comptroller of the following: coverage ratio on each calculation date Currency in accordance with this part that is (A) A covered depository institution equal to or greater than 0.90. 12 CFR Chapter I holding company that has total consolidated assets equal to $250 billion (4) On January 1, 2017, and thereafter, Authority and Issuance the [BANK] must calculate and maintain or more, as reported on the most recent a liquidity coverage ratio on each For the reasons set forth in the year-end Consolidated Financial calculation date that is equal to or common preamble, the OCC adds the Statements for Holding Companies greater than 1.0. text of the common rule as set forth at reporting form (FR Y–9C), or, if the (b) Other [BANK]s. For any [BANK] the end of the SUPPLEMENTARY covered depository institution holding subject to a minimum liquidity standard INFORMATION as part 50 of chapter I of company is not required to report on the under this part not described in title 12 of the Code of Federal FR Y–9C, its estimated total paragraph (a) of this section: Regulations and further amends part 50 consolidated assets as of the most recent (1) Beginning January 1, 2015, as follows: year-end, calculated in accordance with through December 31, 2015, the [BANK] the instructions to the FR Y–9C; must calculate and maintain a liquidity PART 50—LIQUIDITY RISK (B) A depository institution that has coverage ratio monthly, on each MEASUREMENT STANDARDS total consolidated assets equal to $250 billion or more, as reported on the most calculation date that is the last business ■ 1. The authority citation for part 50 is recent year-end Consolidated Report of day of the applicable calendar month, in added to read as follows: accordance with this part, that is equal Condition and Income; or to or greater than 0.80. Authority: 12 U.S.C. 1 et seq., 93a, 481, (C) A covered depository institution (2) Beginning January 1, 2016, 1818, and 1462 et seq. holding company or depository through June 30, 2016, the [BANK] must ■ 2. Part 50 is amended by: institution that has consolidated total calculate and maintain a liquidity ■ a. Removing ‘‘[AGENCY]’’ and adding on-balance sheet foreign exposure at the coverage ratio monthly, on each ‘‘OCC’’ in its place, wherever it appears; most recent year-end equal to $10 calculation date that is the last business ■ b. Removing ‘‘[AGENCY CAPITAL billion or more (where total on-balance day of the applicable calendar month, in REGULATION]’’ and adding ‘‘(12 CFR sheet foreign exposure equals total accordance with this part, that is equal part 3)’’ in its place, wherever it cross-border claims less claims with a to or greater than 0.90. appears; head office or guarantor located in

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another country plus redistributed ■ d. Adding new paragraphs (b)(1)(iv) concentration, interconnectedness, mix guaranteed amounts to the country of and (v); of the activities of the designated the head office or guarantor plus local ■ e. Revising paragraphs (b)(2)(iii) and company or any other risk-related factor country claims on local residents plus (5); and that the Board determines is revaluation gains on foreign exchange ■ f. Adding new paragraph (c). appropriate. The additions and revisions read as and derivative transaction products, ■ calculated in accordance with the follows: 8. In § 249.3, add definitions for Federal Financial Institutions ‘‘Board’’, ‘‘Board-regulated institution’’, § 249.1 Purpose and applicability. Examination Council (FFIEC) 009 and ‘‘State member bank’’ in Country Exposure Report); or * * * * * alphabetical order, to read as follows: (b) * * * * * * * * § 249.3 Definitions. (1) * * * (3) * * * (i) It has total consolidated assets * * * * * (iii) A Federal branch or agency as Board means the Board of Governors defined by 12 CFR 28.11. equal to $250 billion or more, as reported on the most recent year-end (as of the Federal Reserve System. * * * * * applicable): Board-regulated institution means a (A) Consolidated Financial state member bank, covered depository Board of Governors of the Federal institution holding company, or covered Reserve System Statements for Holding Companies reporting form (FR Y–9C), or, if the nonbank company. 12 CFR Chapter II Board-regulated institution is not * * * * * Authority and Issuance required to report on the FR Y–9C, its State member bank means a state estimated total consolidated assets as of bank that is a member of the Federal For the reasons set forth in the Reserve System. common preamble, the Board adds the the most recent year end, calculated in * * * * * text of the common rule as set forth at accordance with the instructions to the FR Y–9C; or ■ the end of the SUPPLEMENTARY 9. In § 249.22, revise paragraph (b)(3) (B) Consolidated Report of Condition INFORMATION as part 249 of chapter II of to read as follows: and Income (Call Report); title 12 of the Code of Federal § 249.22 Requirements for eligible high- Regulations and further amends part * * * * * quality liquid assets. 249 as follows: (iv) It is a covered nonbank company; (v) It is a covered depository * * * * * PART 249—LIQUIDITY RISK institution holding company that meets (b) * * * MEASUREMENT STANDARDS the criteria in § 249.60(a) but does not (3) For eligible HQLA held in a legal (REGULATION WW) meet the criteria in paragraphs (b)(1)(i) entity that is a U.S. consolidated or (ii) of this section, and is subject to subsidiary of a Board-regulated ■ 4. The authority citation for part 249 complying with the requirements of this institution: (i) If the U.S. consolidated subsidiary is added to read as follows: part in accordance with subpart G of is subject to a minimum liquidity this part; or Authority: 12 U.S.C. 248(a), 321–338a, standard under this part, 12 CFR part 481–486, 1467a(g)(1), 1818, 1828, 1831p–1, * * * * * 1831o–1, 1844(b), 5365, 5366, 5368. 50, or 12 CFR part 329, the Board- (2) * * * regulated institution may include the ■ 5. Revise the heading for part 249 as (iii) A Board-regulated institution that eligible HQLA of the U.S. consolidated set forth above. becomes subject to the minimum subsidiary in its HQLA amount up to: ■ 6. Part 249 is amended by: liquidity standard and other (A) The amount of net cash outflows ■ a. Removing ‘‘[AGENCY]’’ and adding requirements of this part under of the U.S. consolidated subsidiary ‘‘Board’’ in its place wherever it paragraph (b)(1)(vi) of this section after calculated by the U.S. consolidated appears. September 30, 2014, must comply with subsidiary for its own minimum ■ b. Removing ‘‘[AGENCY CAPITAL the requirements of this part subject to liquidity standard under this part, 12 REGULATION]’’ and adding a transition period specified by the CFR part 50, or 12 CFR part 329; plus ‘‘Regulation Q (12 CFR part 217)’’ in its Board. (B) Any additional amount of assets, place wherever it appears. * * * * * including proceeds from the ■ c. Removing ‘‘[BANK]’’ and adding (5) In making a determination under monetization of assets, that would be ‘‘Board-regulated institution’’ in its paragraphs (b)(1)(vi) or (4) of this available for transfer to the top-tier place wherever it appears. section, the Board will apply, as Board-regulated institution during times ■ d. Removing ‘‘[BANK]s’’ and adding appropriate, notice and response of stress without statutory, regulatory, ‘‘Board-regulated institutions’’ in its procedures in the same manner and to contractual, or supervisory restrictions, place wherever it appears. the same extent as the notice and including sections 23A and 23B of the ■ e. Removing ‘‘[BANK]’s’’ and adding response procedures set forth in 12 CFR Federal Reserve Act (12 U.S.C. 371c and ‘‘Board-regulated institution’s’’ in its 263.202. 12 U.S.C. 371c–1) and Regulation W (12 place wherever it appears. (c) Covered nonbank companies. The CFR part 223); ■ f. Removing‘‘[12 CFR 3.404 (OCC), 12 Board will establish a minimum (ii) If the U.S. consolidated subsidiary CFR 263.202 (Board), and 12 CFR 324.5 liquidity standard for a designated is not subject to a minimum liquidity (FDIC)]’’ and adding ‘‘12 CFR 263.202’’ company under this part by rule or standard under this part, or 12 CFR part in its place wherever it appears. order. In establishing such standard, the 50, or 12 CFR part 329, the Board- ■ 7. Amend § 249.1 by: Board will consider the factors set forth regulated institution may include the ■ a. Revising paragraph (b)(1)(i); in sections 165(a)(2) and (b)(3) of the eligible HQLA of the U.S. consolidated ■ b. Removing the word ‘‘or’’ at the end Dodd-Frank Act and may tailor the subsidiary in its HQLA amount up to: of paragraph (b)(1)(iii); application of the requirements of this (A) The amount of the net cash ■ c. Redesignating paragraph (b)(1)(iv) part to the designated company based outflows of the U.S. consolidated as paragraph (b)(1)(vi); on the nature, scope, size, scale, subsidiary as of the 30th calendar day

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after the calculation date, as calculated estimated total consolidated assets for a liquidity coverage ratio monthly, on by the Board-regulated institution for the most recent four quarters, calculated each calculation date, in accordance the Board-regulated institution’s in accordance with the instructions to with this subpart, that is equal to or minimum liquidity standard under this the FR Y–9C) and does not meet the greater than 1.0. part; plus applicability criteria set forth in § 249.62 High-quality liquid asset amount. (B) Any additional amount of assets, § 249.1(b). including proceeds from the (b) Applicable provisions. Except as A covered depository institution monetization of assets, that would be otherwise provided in this subpart, the holding company subject to this subpart available for transfer to the top-tier provisions of subparts A through E of must calculate its HQLA amount in Board-regulated institution during times this part apply to covered depository accordance with subpart C of this part. of stress without statutory, regulatory, institution holding companies that are § 249.63 Total net cash outflow. contractual, or supervisory restrictions, subject to this subpart. (a) A covered depository institution (c) Applicability. Subject to the including sections 23A and 23B of the holding company subject to this subpart transition periods set forth in § 249.61: Federal Reserve Act (12 U.S.C. 371c and must calculate its cash outflows and 12 U.S.C. 371c–1) and Regulation W (12 (1) A Board-regulated institution that meets the threshold for applicability of inflows in accordance with subpart D of CFR part 223); and this part, provided, however, that as of this subpart under paragraph (a) of this * * * * * the calculation date, the total net cash section on September 30, 2014, must ■ outflow amount of a covered depository 10. In § 249.40, revise paragraph (b)(1) comply with the requirements of this institution subject to this subpart equals to read as follows: subpart beginning on January 1, 2015; 70 percent of: § 249.40 Liquidity coverage shortfall: and (1) The sum of the outflow amounts (2) A Board-regulated institution that Supervisory framework. calculated under § 249.32(a) through (l); first meets the threshold for * * * * * less: (b) Liquidity plan. (1) For the period applicability of this subpart under (2) The lesser of: during which a Board-regulated paragraph (a) of this section after (i) The sum of the inflow amounts institution must calculate a liquidity September 30, 2014, must comply with under § 249.33(b) through (g); and coverage ratio on the last business day the requirements of this subpart (ii) 75 percent of the amount in of each applicable calendar month beginning on the first day of the first paragraph (a)(1) of this section as under subparts F or G of this part, if the quarter after which it meets the calculated for that calendar day. Board-regulated institution’s liquidity threshold set forth in paragraph (a). (b) [Reserved] coverage ratio is below the minimum § 249.61 Liquidity coverage ratio. Federal Deposit Insurance Corporation requirement in § 249.10 for any (a) Calculation of liquidity coverage 12 CFR Chapter III calculation date that is the last business ratio. A Board-regulated institution day of the applicable calendar month, or subject to this subpart must calculate Authority and Issuance if the Board has determined that the and maintain a liquidity coverage ratio For the reasons set forth in the Board-regulated institution is otherwise in accordance with § 249.10 and this common preamble, the Federal Deposit materially noncompliant with the subpart, provided however, that such Insurance Corporation amends chapter requirements of this part, the Board- Board-regulated institution shall only be III of title 12 of the Code of Federal regulated institution must promptly required to maintain a liquidity Regulations as follows: consult with the Board to determine coverage ratio that is equal to or greater whether the Board-regulated institution than 1.0 on last business day of the PART 329—LIQUIDITY RISK must provide to the Board a plan for applicable calendar month. A Board- MEASUREMENT STANDARDS achieving compliance with the regulated institution subject to this ■ 12. The authority citation for part 329 minimum liquidity requirement in subpart must calculate its liquidity is added to read as follows: § 249.10 and all other requirements of coverage ratio as of the same time on this part. each calculation day (elected Authority: 12 U.S.C. 1815, 1816, 1818, * * * * * calculation time). The Board-regulated 1819, 1828, 1831p–1, 5412. ■ 11. Add subpart G to read as follows: institution must select this time by ■ 13. Part 329 is added as set forth at the written notice to the Board prior to the end of the common preamble. Subpart G—Liquidity Coverage Ratio effective date of this rule. The Board- ■ 14. Part 329 is amended by: for Certain Bank Holding Companies regulated institution may not thereafter ■ a. Removing ‘‘[AGENCY]’’ and adding Sec. change its elected calculation time ‘‘FDIC’’ in its place wherever it appears. 249.60 Applicability. without prior written approval from the ■ b. Removing ‘‘[AGENCY CAPITAL 249.61 Liquidity coverage ratio. Board. REGULATION]’’ and adding ‘‘12 CFR 249.62 High-quality liquid asset amount. (b) Transitions. For any Board- part 324’’ in its place wherever it 249.63 Total net cash outflow. regulated institution subject to a appears. minimum liquidity standard under this ■ c. Removing ‘‘A [BANK]’’ and adding § 249.60 Applicability. subpart: ‘‘An FDIC-supervised institution’’ in its (a) Scope. This subpart applies to a (1) Beginning January 1, 2016, place wherever it appears. covered depository institution holding through December 31, 2016, the Board- ■ d. Removing ‘‘a [BANK]’’ and add ‘‘an company domiciled in the United States regulated institution must calculate and FDIC-supervised institution’’ in its place that has total consolidated assets equal maintain a liquidity coverage ratio wherever it appears. to $50 billion or more, based on the monthly, on each calculation date, in ■ e. Removing ‘‘[BANK]’’ and adding average of the Board-regulated accordance with this subpart, that is ‘‘FDIC-supervised institution’’ in its institution’s four most recent FR Y–9Cs equal to or greater than 0.90. place wherever it appears. (or, if a savings and loan holding (2) Beginning January 1, 2017 and ■ f. Removing ‘‘[BANK]s’’ and adding company is not required to report on the thereafter, the Board-regulated ‘‘FDIC-supervised institutions’’ in its FR Y–9C, based on the average of its institution must calculate and maintain place wherever it appears.

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■ g. Removing ‘‘[BANK]’s’’ and adding institution holding company is not ■ 16. In § 329.3, add definitions for ‘‘FDIC-supervised institution’s’’ in its required to report on the FR Y–9C, its ‘‘FDIC’’ and ‘‘FDIC-supervised place wherever it appears. estimated total consolidated assets as of institution’’ in alphabetical order, to ■ h. Removing ‘‘[REGULATORY the most recent year-end, calculated in read as follows: REPORT]’’ and adding ‘‘Consolidated accordance with the instructions to the Report of Condition and Income’’ in its FR Y–9C; § 329.3 Definitions. place wherever it appears. (B) A depository institution that has * * * * * ■ i. Removing ‘‘[12 CFR 3.404 (OCC), 12 total consolidated assets equal to $250 CFR 263.202 (Board), and 12 CFR 324.5 billion or more, as reported on the most FDIC means the Federal Deposit (FDIC)]’’ and adding ‘‘12 CFR 324.5’’ in recent year-end Consolidated Report of Insurance Corporation. its place wherever it appears. Condition and Income; FDIC-supervised institution means ■ 15. In § 329.1, revise paragraph (C) A covered depository institution any state nonmember bank or state (b)(1)(iii) to read as follows: holding company or depository savings association. institution that has total consolidated * * * * * § 329.1 Purpose and applicability. on-balance sheet foreign exposure at the Dated: September 3, 2014. * * * * * most recent year-end equal to $10 (b) * * * billion or more (where total on-balance Thomas J. Curry, (1) * * * sheet foreign exposure equals total Comptroller of the Currency. (iii) It is a depository institution that cross-border claims less claims with a By order of the Board of Governors of the has total consolidated assets equal to head office or guarantor located in Federal Reserve System. $10 billion or more, as reported on the another country plus redistributed Robert deV. Frierson, most recent year-end Consolidated guaranteed amounts to the country of Report of Condition and Income and is the head office or guarantor plus local Secretary of the Board. a consolidated subsidiary of one of the country claims on local residents plus Dated at Washington, DC, this 3rd day of following: revaluation gains on foreign exchange September 2014. (A) A covered depository institution and derivative transaction products, By order of the Board of Directors. holding company that has total assets calculated in accordance with the Federal Deposit Insurance Corporation. Federal Financial Institutions equal to $250 billion or more, as Robert E. Feldman, reported on the most recent year-end Examination Council (FFIEC) 009 Consolidated Financial Statements for Country Exposure Report); or Executive Secretary. Holding Companies reporting form (FR (D) A covered nonbank company. [FR Doc. 2014–22520 Filed 10–9–14; 8:45 am] Y–9C), or, if the covered depository * * * * * BILLING CODE P

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Part IV

Federal Maritime Commission

46 CFR Part 515 Ocean Transportation Intermediary Licensing and Financial Responsibility Requirements, and General Duties; Proposed Rule

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FEDERAL MARITIME COMMISSION filer requests confidentiality. Questions • Delete the proposed tiered claim regarding filing or treatment of and claim processing system that would 46 CFR Part 515 confidential responses to this notice give shippers priority to the proceeds of [Docket No. 13–05] should be directed to the Commission’s an OTI’s financial responsibility. ANPR Secretary, Karen V. Gregory, at the section 515.23(c)–(d). The current rules RIN 3072–AC44 telephone number or email provided in covering claims and claim processing this notice. remain unchanged. The requirement in Ocean Transportation Intermediary ANPR section 515.21(a)(4), that OTIs Background Licensing and Financial Responsibility restore their financial responsibility to Requirements, and General Duties In 1998, Congress passed the Ocean the full required amount within 60 days AGENCY: Federal Maritime Commission. Shipping Reform Act (OSRA), Public of a claim being paid against it, is also Law 105–258, 112 Stat. 1902, amending dropped. ACTION: Notice of proposed rulemaking. the Shipping Act of 1984 in several • Eliminate draft requirements on SUMMARY: The Federal Maritime respects relating to ocean freight common carriers and marine terminal Commission proposes to amend its rules forwarders (OFFs) and non-vessel- operators to notify the Commission of governing the licensing, financial operating common carriers (NVOCCs), their court or other transportation responsibility requirements and duties defining both as ocean transportation claims against OTIs, as well as the of Ocean Transportation Intermediaries. intermediaries (OTIs). The Commission requirement that such notifications The proposed rule is intended to adapt thereafter adopted new regulations at 46 would be published on the to changing industry conditions, CFR Part 515 to implement changes Commission’s Web site. ANPR section effectuated by OSRA. Licensing, 515.23(e)–(f). improve regulatory effectiveness, • improve transparency, streamline Financial Responsibility Requirements, Delete the proposed added processes and reduce regulatory and General Duties for Ocean documentation requirements for OTIs burdens. Transportation Intermediaries, 28 SRR and agents (ANPR section 515.31(a) and 629–654 (March 8, 1999). (Docket No. (c)), including a requirement for agency DATES: Comments are due on or before 98–28 Final Rule). agreements to be in writing (ANPR December 12, 2014. On May 21, 2013 the Commission section 515.31(k)). • ADDRESSES: Address all comments published an Advance Notice of Remove the potential provision concerning this proposed rule to: Proposed Rulemaking (ANPR) establishing a rebuttable presumption Karen V. Gregory, Secretary, proposing the first significant that an agent acts on its own behalf if Federal Maritime Commission, modifications to Part 515 in fourteen it does not include the name and license 800 North Capitol Street NW., years. 78 FR 32946, May 31, 2013. The or registration number of an OTI on Washington, DC 20573–0001, Commission received over eighty documents the agent issues. ANPR Phone: (202) 523–5725, section 515.23(a). comments from the public within the • Email: [email protected]. extended comment closing date. Though Drop the proposed new FOR FURTHER INFORMATION CONTACT: OTIs submitted the largest number of requirements on OTIs to include their Vern W. Hill, Managing Director, comments, significant comments were license and registration numbers in their Office of the Managing Director, also submitted by associations of OTIs, advertisements and to require their Federal Maritime Commission, vessel operating common carriers agents to include their principals’ 800 North Capitol Street NW., (VOCCs), groups of VOCCs, individual names and addresses in their advertising. ANPR section 515.31(j)(1). Washington, DC 20573–0001, financial responsibility providers and • Tel.: (202) 523–5800, surety associations. After reviewing the Remove a new requirement on OTIs Email: [email protected]. comments and identifying provisions and agents not to include false or that had drawn strong views from a misleading information in SUPPLEMENTARY INFORMATION: advertisements. ANPR section Submit Comments: Include in the sizeable number of OTIs and others, the Commission determined to make the 515.31(j)(2). subject line: Docket No. 13–05, • Remove proposed provision following changes in the modifications Comments on Ocean Transportation establishing a rebuttable presumption Intermediary Regulation Revisions. proposed in the ANPR: • that an entity has performed the services Non-confidential filings may be Drop all proposed financial it advertised. ANPR section 515.31(j)(3). submitted in hard copy or as a Microsoft responsibility increases. ANPR section • Delete the term ‘‘Advertisement’’ in Word or PDF attachment addressed to 515.21. The current required levels will ANPR section 515.2(a), as a [email protected]. Confidential filings remain unchanged. consequence of the elimination of ANPR • must be accompanied by a transmittal Eliminate new potential section 515.31(j). letter that identifies the filing as qualifications specified for OTIs and • Drop fees for renewals of OTI ‘‘confidential’’ and describes the nature their Qualifying Individuals (QIs). licenses and registrations. and extent of the confidential treatment ANPR sections 515.2(p), 515.11(a)(1)– • Drop the proposal for a Certificate requested. Any comment that contains (2), (b), (c), (e). Also dropped the of Good Standing to be submitted for confidential information must consist of proposed shortened deadline for renewals. the complete filing and be marked by replacing a QI after the QI’s death, The Commission determined to drop the filer as ‘‘Confidential-Restricted,’’ retirement or resignation. ANPR section from this proceeding further with the material claimed to be 515.20(c). The current 30-day consideration of a new NVOCC license confidential clearly marked on each requirement to replace a QI is retained. category for those operating only in the page. A public version must be • Remove the proposed additional household goods trade. Features of such submitted with the confidential version bases specified for revocation or a license category would be a lower if applicable. The Commission will suspension of licenses (ANPR section financial responsibility requirement, provide confidential treatment to the 515.16) and termination or suspensions tailored standards for such OTIs, and extent allowed by law for submissions, of registrations of foreign-based the development of guidelines for such or parts of submissions, for which the NVOCCs (ANPR section 515.19(g)). a separate license category. Such a

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license category was included as one of companies,’’ while retaining the current documents pursuant to which cargo is a number of recommendations adopted language that entities covered are those transported whether or not they are by the Commission with respect to its ‘‘existing under or authorized by the ‘‘equivalent’’ to ocean bills of lading, as consideration of the Final Report for laws of the United States or of a foreign provided in the current definition of Fact Finding Investigation No. 27, country.’’ ‘‘freight forwarding services.’’ 46 CFR Potentially Unlawful, Unfair or The definition of ‘‘principal’’ § 515.2(h)(5). Deceptive Ocean Transportation (§ 515.2(o)) is revised to make it more As indicated above, the ANPR Practices Related to the Movement of concise and is not intended to change definition of ‘‘advertisement’’ in section Household Goods or Personal Property its meaning or scope. This definition 515.2(a) is deleted as unnecessary, in U.S.-Foreign Oceanborne Trades. has been carried forward over the consistent with the deletion of ANPR Other suggestions deemed beyond the decades substantially unchanged but section 515.31(j). Proposed section scope of the changes proposed for the always limited in focus to principals of 515.2(a) contains the definition of ‘‘Act Commission’s OTI regulations will not licensed ocean freight forwarders. It was or Shipping Act of 1984.’’ These be considered for purposes of this first promulgated pursuant to the alternative references to the NOPR. Shipping Act, 1916, as amended, and Commission’s governing statute, as carried forward in regulations recodified into positive law in 2006, The Notice of Proposed Rulemaking implementing the Shipping Act of 1984 appear throughout Part 515. The modifications in this NOPR and OSRA. The definition of ‘‘registered non- address changes in industry conditions, It is significant that the type of vessel-operating common carrier’’ is streamline internal processes, improve principal referred to in this definition is new. It identifies NVOCCs that are transparency, and remove unwarranted the person or entity to whom a licensed located outside of the United States and regulatory burdens. The NOPR also ocean freight forwarder owes a fiduciary opt to register rather than to obtain a reflects the Commission’s experience in duty. In contrast, the use of the word license. implementing the current regulations ‘‘principal’’ in these regulations is The term ‘‘qualifying individual’’ is since 1999, and addresses issues and focused upon an OTI’s status (whether added and defines QI as an individual questions that have arisen over time. an NVOCC or a licensed ocean freight who meets the Shipping Act’s The NOPR includes several issues forwarder) as the principal with respect experience and character requirements. first addressed in the ANPR: to the various types of agents that the The QI must meet those requirements at • Carries forward requirements for OTI may employ to carry on its the time a license is issued and must renewal of licenses and registrations but business. thereafter maintain the necessary the frequency is changed to every three The absence of a definition for character. The OTI must timely replace years (from 2 years), and provides that ‘‘principal’’ where it refers to an OTI the QI, as provided by the Commission’s renewal forms will be entirely on-line acting as the principal is consistent with rules, when the designated QI ceases to and user-friendly. the Commission’s decision in 1999 not act as the QI, whether by resignation, • Carries forward the requirement to define the term agent when retirement or death. implementing the OSRA amendments. that common carriers verify OTI Section 515.3—License; When Required licenses and registrations, tariff There the Commission reasoned that publication and financial responsibility, defining ‘‘agent’’ was unnecessary This section is modified to delete, as provided such verifications can be made ‘‘because the term is used . . . to reflect unneeded, a requirement that at a single location on the Commission’s the large body of agency law. The ‘‘separately incorporated branch offices’’ Commission does not want to Web site. must be licensed when they serve as inappropriately alter that definition, • Carries forward a new expedited agent of a licensed OTI. All separately thus limiting or conflicting with the law hearing procedure, subject to the incorporated entities that perform OTI relied on by the shipping industry in following provisions: (1) The procedure services, for which they assume applying these regulations.’’ Docket No. will not result in summary revocations, responsibility for the transportation, are 98–28 Final Rule, supra at 28 SRR 651. terminations or suspensions; (2) a covered by the requirements that they The Commission adheres to its prior licensee must be given notice and a be licensed and otherwise comply with view that there is no need to further hearing for failure to renew; and, (3) the financial responsibility obligations define the term ‘‘principal’’ in such appeals to the Commission remain of Part 515. The Commission also contexts. available for adverse decisions. deletes the requirement that only The definitions of ‘‘freight forwarding licensed intermediaries in the United Significant proposed changes are services’’ (§ 515.2(h)) and ‘‘non-vessel- discussed below. States may perform OTI services on operating common carrier services’’ behalf of ‘‘an unlicensed ocean Subpart A—General (§ 515.2(k)) are also revised to better transportation intermediary’’ (i.e., reflect OTIs’ current practices and Section 515.2—Definitions foreign-based NVOCC), substituting in terminology. For example, ‘‘freight its stead the requirement that The Commission proposes to remove forwarding services’’ are revised to ‘‘registered NVOCC[s]’’ must use several definitions that are no longer include preparation of ‘‘export licensed OTIs as agents in the United relevant to the Commission’s regulatory documents, including required States with respect to OTI services activities, including ‘‘ocean freight ‘electronic export information,’ ’’ rather performed in the United States. broker’’ (§ 515.2(n)), ‘‘brokerage’’ than being limited to preparation of (§ 515.2(d)) and ‘‘small shipment’’ paper-based export declarations Section 515.4—License; When Not (§ 515.2(u)). (§ 515.2(h)(2)). OFF and NVOCC Required In addition, the Commission proposes services are both revised to include Section 515.4(b)—Branch Offices. The modifying the definition of ‘‘person’’ preparation of ocean common carrier Commission proposes to eliminate the (§ 515.2(n)). The revised definition not and NVOCC bills of lading ‘‘or other regulatory burden associated with only conforms to the definition of shipping documents’’ (§ 515.2(h)(5) and procuring and maintaining additional ‘‘person’’ in 1 U.S.C. 1, but also § 515.2(k)(4)). The change ensures that financial responsibility to cover an specifically includes ‘‘limited liability the services cover preparation of the OTI’s unincorporated branch offices by

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deleting the reference to obtaining been applied by the Commission since LLC’s operating agreement so provides. additional financial responsibility 1999. The Commission has applied this currently set out in section 515.4(b)(ii). The current content of section standard since the current regulations A corresponding change is made to 515.11(a)(2) is modified by deleting its were promulgated in order to adapt to section 515.21 by deleting the current content as redundant. The requirements OTIs’ frequent election to form their text of paragraph 515.21(a)(4). The rule in section 515.21(a) (prohibiting all businesses as LLCs. also proposes to delete section 515.4(d), persons from operating as an OTI The Commission considers it which refers to ocean freight brokers, as without having furnished the required desirable to revise section 515.11(e) to it is no longer needed. financial responsibility) and § 515.22 mirror the Commission’s 1999 (requiring an OTI establish its financial clarification that, in order for a foreign- Section 515.5—Forms and Fees responsibility prior to the date it based NVOCC to establish a presence in Section 515.5(b) is modified to commences furnishing OTI services) the United States for purposes of provide that all license applications and clearly provide that an OTI must first obtaining a license, it ‘‘must set up an registration forms must be filed with the obtain financial responsibility before it unincorporated office that is resident in Commission electronically unless a performs OTI services. the United States.’’ Docket No. 98–28, waiver request to file on paper is The new content inserted in section Licensing, Financial Responsibility granted by the Director of the Bureau of 515.11(a)(2), as proposed, makes it clear Requirements, and General Duties for Certification and Licensing. Electronic that the Commission may consider all Ocean Transportation Intermediaries information relevant to the filing anticipates the implementation of (Confirmation of interim final rule and determination of whether the applicant on-line filing and processing of all correction), 28 SRR 667, 668 (FMC has the necessary character to render applications and forms. 1999). OTI services. Types of information that Section 515.5(c)(1) has been added may be considered include, but are not Section 515.12—Application for License and requires OTIs to pay applicable fees limited to: Violations of any shipping Section 515.12(a) is revised to clarify within ten (10) business days of the time laws or statutes relating to the import, instructions on filing a license of submission of such applications and export or transport of merchandise in application, including the payment of forms. As the Commission has international trade; operating as an OTI fees. The Commission recently issued a developed the ability to receive on-line without a license or registration; state direct final rule establishing that notices payments by credit or debit cards via and federal felonies and misdemeanors; of application filings shall be made on Pay.gov and the Automated Clearing voluntary and non-voluntary the Commission’s Web site. See, Docket House system, the payment of any bankruptcies not discharged; tax liens; 14–08, Procedure for Public Notification applicable fees is simplified and court and administrative judgments and of Ocean Transportation Intermediary facilitates the OTI’s ability to pay within proceedings; non-compliance with Licensing Activity. 79 FR 42986, July 24, the 10-day window. Failure to make immigration status requirements; and 2014. The direct final rule similarly timely payment could cause an denial, revocation, or suspension of a provides that Commission notices of application or registration to be rejected. Transportation Worker Identification license revocations and suspensions, Section 515.5(c)(2) is added to make Credential or of a customs broker’s required by section 515.16(b), will be it easier for OTI applicants and license. The types of information that made on the Commission’s Web site. As licensees to quickly find the fees that may be considered with respect to this rule has already become effective, apply to filings they make, by setting character, set out in NOPR section there is no need to further address it in out all fees applicable under Part 515 515.11(a)(2), reflect the types of this rulemaking proceeding. (e.g., fees for filing of license information that the Commission’s Section 515.12(b) is revised to provide applications and registrations) in one Bureau of Certification and Licensing for rejection of applications that are place. Section 515.5(c)(2) directs OTIs to (BCL) has considered and applied facially incomplete or where the the substantive sections in Part 515 that during the 15 years since the current applicant fails to meet the requirements give rise to the fees. regulations went into effect. This of the Shipping Act or the Commission’s section informs applicants of issues that regulations. The application fee is Subpart B—Eligibility and Procedure should be addressed in filing their returned to the applicant along with a for Licensing; Procedure for applications so as not to unnecessarily statement of reasons for the rejection. Registration delay processing of their applications. A new section 515.12(c) establishes a Section 515.11—Basic Requirements for The current content of section process pursuant to which BCL shall Licensing; Eligibility 515.11(a)(3) is no longer needed. The close applications where applicants fail paragraph is deleted, as it provided for to timely provide information or The revisions in ANPR section NVOCCs that had tariffs and financial documents needed for review. The date 515.11(a)(1) have been dropped from responsibility in place at the time the for submission of such information will further consideration, and the paragraph OSRA licensing requirements went into be provided by BCL to the applicant. as it appears in the Commission’s effect in 1999 to be temporarily The Commission will apply section current regulation will remain grandfathered pending promulgation of 515.12(c) reasonably and flexibly. Once unchanged, except for the addition of a regulations. the date has been established for a sentence clarifying the experience The existing requirement in section response by BCL, the applicant should required of a foreign-based NVOCC that 515.11(b)(2) that all partners must keep BCL fully informed as to the elects to become licensed. Such foreign- execute an OTI’s application is deleted. reasons for any response delays in order based NVOCCs must acquire the The current wording of 515.11(b)(3) as to avoid closure of its application. requisite experience with respect to to corporations is retained. Applicants whose applications are shipments in the United States Section 515.11(b)(4) is added to closed may reapply at any time. oceanborne foreign commerce, though identify the positions within the With the addition of the new content the experience may be acquired in the management structure of an LLC that are inserted in section 515.5(c), the content U.S. or a foreign country. The added eligible to be designated as QI. The QI of current section 515.12(c) sentence reflects the standard that has may be an ‘‘officer’’ of an LLC if the (Investigation) is redesignated as section

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515.12(d). Section 515.12(d) is required to be reported under current Licensing Activity. 79 FR 42986, July 24, redesignated as 515.12(e) and is revised regulations (change of business address, 2014, to authorize notices of revocations to require that BCL be promptly advised retirement or resignation of a QI, failure and suspensions of licenses to be made only of changes in material facts to notify/increase the OTI’s surety bond, by publication on the Commission’s relevant to an application. The failure to advise the Commission of Web site. Commission’s current section 515.12(e) operation under a new trade name), Section 515.17—Hearing Procedures is superseded by the electronic filing subsequent contacts made by Governing: Denial, Revocation, or requirement in section 515.5(b). Commission staff indicate a failure to Suspension of OTI Licenses timely report averaging 14.6–24.4% for Section 515.14—Issuance, Renewal, and 2012–2013. This experience includes The proposal would streamline Use of License NVOCCs and OFFs, both large and appeal procedures for denial of OTI Section 515.14(c) is new. The small. license applications, and for revocation Commission’s proposes to change The information required by the or suspension of OTI licenses. license and registration renewal periods Commission in promulgating the Currently, such appeals are conducted to every three (3) years, rather than two current rules is no less necessary today. under the Commission’s Rules of years as proposed in the ANPR. If The NOPR renewal process reflects Practice and Procedure, published at 46 adopted, OTI licenses will be issued for approximately 15 years of Commission CFR part 502, and provide for full an initial three year period and renewed experience and will help ensure that evidentiary hearings, a process that is every three years thereafter. necessary information is kept up to date. often lengthy and expensive. Rather Section 515.14(d)(1) is also new and As indicated in § 515.14(d)(3), this than applying a formal full hearing requires licensees to renew their renewal process will not trigger a process for such denials, revocations or licenses 60 days prior to the renewal detailed Commission review or suspensions, this section provides for a date of their license by up-dating an on- consideration of the character and more efficient process for each type of line form with any changes or eligibility of existing licensed OTIs, delegated action. corrections that they find in the except, as provided in § 515.14(d)(2), Section 515.17(a) provides that information displayed on screen. This when an OTI supplies information that requests for hearing under sections paragraph also provides that a new requires a separate review or approval 515.15 (license denials) and 515.16 license bear a renewal date on the same pursuant to section 515.20. Responsive (license revocations and suspensions) day and month as the date on which the to numerous ANPR comments, the are to be referred to the Commission’s license was originally issued, with the Commission intends that the renewal General Counsel, who will designate a renewal day and month remaining the process will be entirely on-line and user hearing officer for review and decision. same for successive renewals. The friendly. BCL will provide to the hearing officer renewal date remains the same In proposing this change, the a copy of the notice given to the regardless of the date a renewal form is Commission is mindful that no renewal applicant or licensee and BCL’s submitted or the date a renewed license dates are included on the licenses of the materials supporting the notice, upon is issued. This feature provides ongoing approximately 4,700 OTIs that are being advised by the hearing officer that certainty to the licensee as to its status. currently licensed. Accordingly, a a hearing request has been made. The The proposed renewal process for process is needed to allow these OTIs to hearing officer will provide a copy of OTIs is straightforward as their license renew their licenses without BCL’s material, not otherwise will be issued with renewal dates by unreasonable burden or processing privileged, to the requesting party along which renewal must be completed. The delays that may occur if large numbers with a notice advising the party of its license renewal requirement is intended of renewal applications are submitted right to submit written argument, to ensure that information essential to all at once. The Commission seeks affidavits of fact, other information, and the Commission’s oversight of OTIs is comments from the public as to the documents within 30 days of the date of verified periodically. Renewal will process they consider would best the notice. BCL will submit its response require licensed OTIs to verify on-line achieve this goal. For example, would no later than 20 days after the their QIs’ identification and contact email notification by BCL to each such submission by the requesting party. information, changes in business or licensee of the renewal date assigned by These records and submissions shall organization, trade names, tariff BCL enable these OTIs to renew their constitute the entire record for decision publication information, physical licenses without confusion? upon which the hearing officer’s address, and electronic contact data. decision will be based. The hearing OTIs would only update information Section 515.15—Denial of License officer’s decision is to be issued within that is no longer accurate. The hearing provisions in section 40 days of the record being closed. Renewals by licensees will provide 515.15(c) are revised to refer to the new After the hearing officer’s decision is the Commission with updated hearing procedures set forth in section issued, an OTI may file a petition for information that the Commission 515.17. Such hearings are currently Commission review of the hearing currently requires in sections 515.12(d) conducted pursuant to the more officer’s decision pursuant to and 515.18 (the content of current complex adjudicatory hearing § 501.21(f)(1). The section provides for section 515.18 is located in NOPR procedures in Part 502 of the Commission review of staff actions, section 515.20). At any given time, BCL Commission’s regulations. such as that of the hearing officer, taken has 30 to 40 inquiries concerning the under delegated authority. identity of a licensee’s QI, officers, Section 515.16—Revocation or Section 515.17(c) has been added to owners, or business affiliations, Suspension of License clarify that where a revocation, notwithstanding the fact that current As discussed above with respect to termination or suspension also involves sections 515.12(d) and 515.18 have long section 515.12(a)(1) (notices of the filing an enforcement action that, for example, required OTIs to inform the Commission of license applications), section involves the assessment of penalties, within 30 days of a change. 515.16(b) was revised in Docket No. 14– formal proceedings before an Furthermore, with respect to four 08, Procedure for Public Notification of Administrative Law Judge are still specific categories of information Ocean Transportation Intermediary required. The Commission’s discovery

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rules remain available to licensees in require only financial responsibility Subpart D—Duties and Responsibilities such instances. providers to report the filing notices of of Ocean Transportation claims to the Commission. Also, the Intermediaries; Reports to Commission Section 515.19—Registration of Foreign- Commission has dropped the ANPR Based Non-Vessel-Operating Common Section 515.31—General Duties requirement that notices of claims be Carriers published on the Commission’s Web Section 515.31 has been revised Since the ANPR was issued, the site. Section 515.23(c) now provides for throughout to apply to all OTIs, both Commission revised Part 515, effective notices of claims and claim payments to licensed and registered. Without such a July 19, 2013, as a necessary element to be submitted only to the Commission. change, registrants would not be subject its determination in Docket No. 11–22, to, for example, the section 515.31(f) Non-Vessel-Operating Common Carrier Section 515.25—Filing of Proof of requirement prohibiting preparation of Negotiated Rate Arrangements; Tariff Financial Responsibility claims that the registrant has reason to Publication Exemption, 78 FR 42886, believe are false or fraudulent. July 18, 2013. The Commission added a Section 515.25(a)(1) is revised to Section 515.31(g) places an obligation new registration requirement for clarify that an application for a license on all OTIs to promptly respond to foreign-based unlicensed NVOCCs, the will become invalid, and approval requests for all records and books of content of which is largely identical to rescinded, if the required proof of accounts made by authorized that contained in ANPR section 515.19. financial responsibility is not filed Commission representatives. In Except as addressed below, the within 120 days of notification of addition, section 515.31(g) now clarifies Commission will retain the adopted text license approval. The rule provides that that OTI principals are responsible for of 515.19. applicants whose applications have requiring that their agents promptly Existing section 515.19(g)(1) informs become invalid may submit a new Form respond to requests directed to such foreign-based registered NVOCCs of FMC–18, with the required fee, at any agents. grounds upon which the Commission time. The section also provides that an As a result of the deletion of ANPR may base terminations or suspensions of NVOCC’s registration will not be sections 515.31(j) and (k), ANPR section the effectiveness of a registration. effective until the registrant has 515.31(l) (prohibiting any entity from Proposed section 515.19(g)(2) provides furnished proof of financial advertising or holding out to provide that a registrant may request a hearing responsibility, filed a Form FMC–1, and OTI services unless it has a valid OTI using the same procedures set out in published a tariff. license or registration) is redesignated as section 515.31(j). Proposed section § 515.17 governing hearing requests for Section 515.26—Termination of 515.31(j) is an outgrowth of the OTI licensees. Financial Responsibility Commission’s decision in Docket No. Section 515.20—Changes in 06–01, Worldwide Relocations, Inc., et Organization This section is revised to provide that registrations may be terminated, as well al.—Possible Violations, 32 SRR 495, The content in this section (moved as licenses revoked, without hearing or 503 (FMC 2012), in which it analyzed from § 515.18) removes, as unneeded, other proceeding in the event that the factors to be considered when the provision that specifically requires required financial responsibility is determining whether an entity has held separately incorporated branch offices terminated. itself out to the general public to to obtain their own licenses. All provide NVOCC services. In Worldwide separately incorporated entities that Section 515.27—Proof of Compliance— Relocations, the Commission cited provide OTI services in their own name NVOCC Common Carriers by Water—Status of are required to be licensed, irrespective Express Companies, Truck Lines and Section 515.27(a) has been revised to of whether they are related to another Other Non-Vessel Carriers, 1 SRR 292, restate the paragraph to make clear that incorporated OTI. 301 (FMC 1961), in which it found that no common carrier shall ‘‘knowingly Section 515.20(c) will continue to persons or entities may hold themselves and willfully’’ transport cargo for an provide that OTIs operating as out ‘‘by the establishment and NVOCC unless the common carrier has partnerships, corporations or LLCs must maintenance of tariffs, by advertisement determined that the NVOCC has a submit a report within 30 business days and solicitation, and otherwise.’’ The license or registration, has published a when their QI ceases to serve as a full- Commission also cited Activities, Tariff tariff, and has provided proof of time employee of the OTI. New content Filing Practices and Carrier Status of financial responsibility. Section is added to section 515.20(e) identifying Containerships, Inc., 6 SRR 483, 489 n. 515.27(b)(2) has been revised to insert changes to a licensee’s organization that 7 (FMC 1965), noting that the concept the Commission’s web address as a must also be reported to the of holding out includes, among other location that common carriers can Commission on an ongoing basis, such things, advertisement and solicitation. consult to verify an NVOCC’s status. as changes in business address, criminal Similarly, section 515.31(j) applies to The Commission is working to ensure conviction or indictment of the licensee, OFFs, as they hold out to perform ocean that common carriers can make the QI or its officers, and changes of 5 freight forwarding services via required verifications at a single, percent or more in the common equity advertising and solicitation. ownership or voting securities of the convenient, location on the OTI. No fee will be charged for filings Commission’s Web site. Section 515.33—Records Required To pursuant to section 515.20(e). Be Kept Subpart C Appendices Subpart C—Financial Responsibility The introductory paragraph of Section Requirements; Claims Against Ocean Appendices A through F are removed 515.33 is revised to clarify that all OTIs Transportation Intermediaries from their current location between shall maintain records pertaining to section 515.27 and section 515.31, and their OTI business, and that the records Section 515.23—Claims Against an moved to the end of Part 515. The must be maintained in useable form and Ocean Transportation Intermediary Commission believes that moving these readily available to the Commission. Section 515.23(c) has been modified forms to the end will make use of Part This records retention requirement to reflect the Commission’s vote to 515 less cumbersome. applies whether the records are kept in

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the United States or in foreign locations. proposed rule will have an impact on a is willfully and knowingly committed, The requirement to keep such records substantial number of small entities. in which case the amount of the civil solely in the United States is deleted. However, the Commission has penalty may not exceed $45,000 for determined that the impact on entities each violation; for other violations of Subpart E—Freight Forwarding Fees affected by the proposed rule will not be the provisions of this part, the civil and Compensation significant. Most of the proposed penalties range from $9,000 to $45,000 Section 515.41—Forwarder and changes have been found to have either for each violation (46 U.S.C. 41107– Principal; Fees no economic impact or beneficial 41109). Each day of a continuing economic impacts. Concerning the one violation shall constitute a separate The current content of section change with the potential to generate violation. 515.41(c) (ocean freight forwarders shall economic disbenefit, i.e., the license ■ 4. Revise § 515.2 to read as follows: not deny equal terms of special renewal requirement, the dollar contracts to similarly situated shippers) magnitude of the economic impact has § 515.2 Definitions. is deleted. The Commission has been estimated to be less than one-tenth The terms used in this part are determined it is no longer needed. of one percent of average annual defined as follows: (a) Act or Shipping Act means the Section 515.42—Forwarder and Carrier; revenue for even the smallest entities. Shipping Act of 1984, as amended. 46 Compensation Accordingly, the Chairman of the Federal Maritime Commission hereby U.S.C. 40101–41309. Section 515.42(c) is revised to certifies that this rule will not have a (b) Beneficial interest includes a lien specifically authorize electronic significant economic impact on a or interest in or right to use, enjoy, certifications by forwarders to carriers substantial number of small entities. profit, benefit, or receive any advantage, that forwarding services have been The Commission invites comment from either proprietary or financial, from the provided. Such electronic certifications members of the public who believe the whole or any part of a shipment of cargo (e.g., an automated forwarder database) rule will have a significant economic where such interest arises from the must identify the shipments for which impact on the U.S.-based OTIs. financing of the shipment or by compensation is made and provide for This rule is not a ‘‘major rule’’ under operation of law, or by agreement, the forwarder’s confirmation that the 5 U.S.C. 804(2). express or implied. The term ‘‘beneficial services for which forwarder interest’’ shall not include any List of Subjects in 46 CFR Part 515 compensation is to be paid have been obligation in favor of an ocean provided. This provision will ensure, Freight, Freight forwarders, Maritime transportation intermediary arising for example, that the forwarder will carriers, Reporting and recordkeeping solely by reason of the advance of out- confirm that the carrier’s list of requirements. of-pocket expenses incurred in shipments is correct, and, if not, the For the reasons stated in the dispatching a shipment. forwarder will advise the carrier of supplementary information, the Federal (c) Branch office means any office in shipments that should be added or Maritime Commission proposes to the United States established by or deleted. Certifications must be retained amend 46 CFR Part 515 as follows: maintained by or under the control of a for a period of 5 years by the common licensee for the purpose of rendering carrier. The Commission anticipates that PART 515—LICENSING, FINANCIAL intermediary services, which office is such electronic certification will RESPONSIBILITY REQUIREMENTS, located at an address different from that facilitate carrier payments through the AND GENERAL DUTIES FOR OCEAN of the licensee’s designated home office. banking system’s automated TRANSPORTATION INTERMEDIARIES (d) Commission means the Federal clearinghouse (ACH) payment network, Maritime Commission. ■ 1. The authority citation for part 515 (e) Common carrier means any person a lower cost and more convenient continues to read as follows: procedure for both carrier and holding itself out to the general public forwarder. Authority: 5 U.S.C. 553; 31 U.S.C. 9701; to provide transportation by water of 46 U.S.C. 305, 40102, 40104, 40501–40503, passengers or cargo between the United Regulatory Flexibility Act—Threshold 40901–40904, 41101–41109, 41301–41302, States and a foreign country for Analysis and Chairman’s Certification 41305–41307; Pub. L. 105–383, 112 Stat. compensation that: of No Significant Economic Impact 3411; 21 U.S.C. 862. (1) Assumes responsibility for the transportation from the port or point of When an agency issues a rulemaking Subpart A—General receipt to the port or point of proposal, the Regulatory Flexibility Act ■ 2–3. In § 515.1, revise paragraph (b) to destination, and (RFA) requires the agency to ‘‘prepare read as follows: (2) Utilizes, for all or part of that and make available for public comment transportation, a vessel operating on the an initial regulatory flexibility analysis’’ § 515.1 Scope. high seas or the Great Lakes between a which will ‘‘describe the impact of the * * * * * port in the United States and a port in proposed rule on small entities.’’ 5 (b) Information obtained under this a foreign country, except that the term U.S.C. 603(a). Section 605 of the RFA part is used to determine the does not include a common carrier allows an agency to certify a rule, in lieu qualifications of ocean transportation engaged in ocean transportation by ferry of preparing an analysis, if the proposed intermediaries and their compliance boat, ocean tramp, chemical parcel rulemaking is not expected to have a with shipping statutes and regulations. tanker, or by a vessel when primarily significant economic impact on a Failure to follow the provisions of this engaged in the carriage of perishable substantial number of small entities. part may result in denial, revocation or agricultural commodities: This proposed rule directly affects all suspension of an ocean transportation (i) If the common carrier and the U.S. licensed OTIs, of which there are intermediary license or registration. owner of those commodities are wholly- currently 4,648. The FMC estimates that Persons operating without the proper owned, directly or indirectly, by a approximately 97 percent of these OTIs license or registration may be subject to person primarily engaged in the are small entities. Therefore, the civil penalties not to exceed $9,000 for marketing and distribution of those Commission has determined that this each such violation, unless the violation commodities, and

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(ii) Only with respect to those (1) Purchasing transportation services employed to facilitate ocean commodities. from a common carrier and offering transportation of property, refers to the (f) Compensation means payment by such services for resale to other persons; shipper, consignee, seller or purchaser a common carrier to a freight forwarder (2) Payment of port-to-port or of such property, and to anyone acting for the performance of services as multimodal transportation charges; on behalf of such shipper, consignee, specified in § 515.2(h). (3) Entering into affreightment seller or purchaser. (g) Freight forwarding fee means agreements with underlying shippers; (p) Qualifying individual (QI) means charges billed by an ocean freight (4) Issuing bills of lading or other an individual who meets the experience forwarder to a shipper, consignee, seller, shipping documents; and character requirements of section 19 purchaser, or any agent thereof, for the (5) Assisting with clearing shipments of the Shipping Act (46 U.S.C. 40901– performance of freight forwarding in accordance with U.S. government 40904) and this part. services. regulations; (q) Reduced forwarding fees means (h) Freight forwarding services refers (6) Arranging for inland charges to a principal for forwarding to the dispatching of shipments on transportation and paying for inland services that are below the licensed behalf of others, in order to facilitate freight charges on through ocean freight forwarder’s usual charges shipment by a common carrier, which transportation movements; for such services. may include, but are not limited to, the (7) Paying lawful compensation to (r) Registered non-vessel-operating following: ocean freight forwarders; common carrier (registered NVOCC) (1) Ordering cargo to port; (8) Coordinating the movement of means an NVOCC whose primary place (2) Preparing and/or processing export shipments between origin or destination of business is located outside the United documents, including the required and vessel; States and who elects not to become ‘electronic export information’; (9) Leasing containers; licensed as an NVOCC, but to register (3) Booking, arranging for or (10) Entering into arrangements with with the Commission as provided in confirming cargo space; origin or destination agents; § 515.19, post a bond or other surety in (4) Preparing or processing delivery (11) Collecting freight monies from the required amount, and publish a orders or dock receipts; shippers and paying common carriers as tariff as required by 46 CFR part 520. (5) Preparing and/or processing a shipper on NVOCC’s own behalf. (s) Shipment means all of the cargo common carrier bills of lading or other (l) Ocean common carrier means a carried under the terms of a single bill shipping documents; common carrier that operates, for all or of lading. (6) Preparing or processing consular part of its common carrier service, a (t) Shipper means: documents or arranging for their vessel on the high seas or the Great (1) A cargo owner; certification; Lakes between a port in the United (2) The person for whose account the (7) Arranging for warehouse storage; States and a port in a foreign country, ocean transportation is provided; (8) Arranging for cargo insurance; except that the term does not include a (3) The person to whom delivery is to (9) Assisting with clearing shipments common carrier engaged in ocean be made; in accordance with United States transportation by ferry boat, ocean (4) A shippers’ association; or Government export regulations; tramp, or chemical parcel-tanker. (5) A non-vessel-operating common (10) Preparing and/or sending (m) Ocean transportation carrier that accepts responsibility for advance notifications of shipments or intermediary (OTI) means an ocean payment of all charges applicable under other documents to banks, shippers, or freight forwarder or a non-vessel- the tariff or service contract. consignees, as required; operating common carrier. For the (u) Special contract is a contract for (11) Handling freight or other monies purposes of this part, the term ocean freight forwarding services which advanced by shippers, or remitting or (1) Ocean freight forwarder (OFF) provides for a periodic lump sum fee. advancing freight or other monies or means a person that— (v) Transportation-related activities credit in connection with the (i) In the United States, dispatches which are covered by the financial dispatching of shipments; shipments from the United States via a responsibility obtained pursuant to this (12) Coordinating the movement of common carrier and books or otherwise part include, to the extent involved in shipments from origin to vessel; and arranges space for those shipments on the foreign commerce of the United (13) Giving expert advice to exporters behalf of shippers; and States, any activity performed by an concerning letters of credit, other (ii) Processes the documentation or ocean transportation intermediary that documents, licenses or inspections, or performs related activities incident to is necessary or customary in the on problems germane to the cargoes’ those shipments; and provision of transportation services to a dispatch. (2) Non-vessel-operating common customer, but are not limited to the (i) From the United States means carrier (NVOCC) means a common following: oceanborne export commerce from the carrier that does not operate the vessels (1) For an ocean transportation United States, its territories, or by which the ocean transportation is intermediary operating as an ocean possessions, to foreign countries. provided, and is a shipper in its freight forwarder, the freight forwarding (j) Licensee is any person licensed by relationship with an ocean common services enumerated in § 515.2(h), and the Federal Maritime Commission as an carrier. (2) For an ocean transportation ocean transportation intermediary. (n) Person means individuals, intermediary operating as a non-vessel- (k) Non-vessel-operating common corporations, companies, including operating common carrier, the non- carrier services refers to the provision of limited liability companies, vessel-operating common carrier transportation by water of cargo associations, firms, partnerships, services enumerated in § 515.2(k). between the United States and a foreign societies and joint stock companies (w) United States includes the several country for compensation without existing under or authorized by the laws States, the District of Columbia, the operating the vessels by which the of the United States or of a foreign Commonwealth of Puerto Rico, the transportation is provided, and may country. Commonwealth of the Northern include, but are not limited to, the (o) Principal, with respect to a Marianas, and all other United States following: licensed ocean freight forwarder territories and possessions.

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■ 5. Revise § 515.3 to read as follows: executive agencies shipping under the application has been processed in whole International Household Goods Program or in part, the fee will not be refunded. § 515.3 License; when required. administered by the General Services (3) Fees under this part 515 shall be Except as otherwise provided in this Administration, or both, is not subject to as follows: part, no person in the United States may the requirements of subpart B of this (i) Application for new OTI license as act as an ocean transportation part, but may be subject to other required by § 515.12(a): automated filing intermediary unless that person holds a requirements, such as alternative surety $250; paper filing pursuant to waiver valid license issued by the Commission. bonding, imposed by the Department of $825. For purposes of this part, a person is Defense, or the General Services (ii) Application for change to OTI considered to be ‘‘in the United States’’ Administration. license or license transfer as required by if such person is resident in, or ■ 7. Revise § 515.5 to read as follows: § 515.20(a) and (b): automated filing incorporated or established under, the $125; paper filing pursuant to waiver laws of the United States. Registered § 515.5 Forms and fees. $525. NVOCCs must utilize only licensed (a) Forms. License Application Form (iii) A copy of the Regulated Persons ocean transportation intermediaries to FMC–18 Rev., Application for Renewal Index may be purchased for $108 as provide NVOCC services in the United of Ocean Transportation Intermediary provided in § 515.34. ■ States. In the United States, only License Form-___, and Foreign-based 8. Amend the heading for subpart B by licensed OTIs may act as agents to Unlicensed NVOCC Registration/ adding at the end ‘‘and Registration’’ to provide OTI services for registered Renewal Form FMC–65, are found at the read as follows: NVOCCs. Commission’s Web site www.fmc.gov for Subpart B—Eligibility and Procedure ■ 6. Revise § 515.4 to read as follows: completion on-line by applicants, for Licensing and Registration § 515.4 License; when not required. licensees, and registrants. Financial responsibility Forms FMC–48, FMC–67, ■ 9. Revise § 515.11 to read as follows: A license is not required in the FMC–68, FMC–69 may be obtained from following circumstances: § 515.11 Basic requirements for licensing; the Commission’s Web site at (a) Shippers. Any person whose eligibility. www.fmc.gov, from the Director, Bureau primary business is the sale of (a) Necessary qualifications. To be of Certification and Licensing, Federal merchandise may, without a license, eligible for an ocean transportation Maritime Commission, Washington, DC dispatch and perform freight forwarding intermediary license, the applicant must 20573, or from any of the Commission’s services on behalf of its own shipments, demonstrate to the Commission that: Area Representatives. or on behalf of shipments or (1) It possesses the necessary consolidated shipments of a parent, (b) Filing of license applications and experience, that is, its qualifying subsidiary, affiliate, or associated registration forms. All applications and individual has a minimum of three (3) company. Such person shall not receive forms are to be filed electronically years experience in ocean transportation compensation from the common carrier unless a waiver is granted to file in intermediary activities in the United for any services rendered in connection paper form. A waiver request must be States, and the necessary character to with such shipments. submitted in writing to the Director, render ocean transportation (b) Agents, employees, or branch Bureau of Certification and Licensing, intermediary services. A foreign NVOCC offices of a licensed ocean 800 North Capitol Street NW., seeking to be licensed under this part transportation intermediary. An agent, Washington, DC 20573, and must must demonstrate that its qualifying individual employee, or branch office of demonstrate that electronic filing individual has a minimum 3 years’ a licensed ocean transportation imposes an undue burden on the experience in ocean transportation intermediary is not required to be applicant or registrant. The director, or intermediary activities, and the licensed in order to act on behalf of and a designee, will render a decision on the necessary character to render ocean in the name of such licensee; however, request and notify the requestor within transportation intermediary services. branch offices must be reported to the two (2) business days of receiving the The required OTI experience of the QI Commission in Form FMC–18 or request. If a waiver request is granted, of a foreign based NVOCC seeking to pursuant to § 515.20(e). A licensed the approval will provide instructions become licensed under this part ocean transportation intermediary shall for submitting a paper application or (foreign-based licensed NVOCC) may be be fully responsible for the acts and registration. If the waiver request is experience acquired in the U.S. or a omissions of any of its employees and denied, a statement of reasons for the foreign country with respect to agents that are performed in connection denial will be provided. shipments in the United States with the conduct of such licensee’s (c) Fees. (1) All fees shall be paid by: oceanborne foreign commerce. business. (i) Money order, certified, cashier’s, or (2) In addition to information (c) Common carriers. A common personal check payable to the order of provided by the applicant and its carrier, or agent thereof, may perform the ‘‘Federal Maritime Commission;’’ references, the Commission may ocean freight forwarding services (ii) Pay.gov; consider all information relevant to without a license only with respect to (iii) The Automated Clearing House determining whether an applicant has cargo carried under such carrier’s own system; or the necessary character to render ocean bill of lading. Charges for such (iv) By other means authorized by the transportation intermediary services, forwarding services shall be assessed in Director of the Commission’s Office of including but not limited to, conformance with the carrier’s Budget and Finance. information regarding: violations of any published tariffs. (2) Applications or registrations shall shipping laws, or statutes relating to the (d) Federal military and civilian be rejected unless the applicable fee and import, export, or transport of household goods. Any person which any bank charges assessed against the merchandise in international trade; exclusively transports used household Commission are received by the operating as an OTI without a license or goods and personal effects for the Commission within ten (10) business registration; state and federal felonies account of the Department of Defense, days after submission of the application and misdemeanors; voluntary and non- or for the account of the federal civilian or registration. In any instance where an voluntary bankruptcies not discharged;

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tax liens and other court and ■ 10. Revise § 515.12 to read as follows: their applications closed under this administrative judgments and section may reapply at any time by proceedings; compliance with § 515.12 Application for license. submitting a new application with the immigration status requirements (a) Application and forms. (1) Any required filing fee. described in 49 CFR 1572.105; denial, person who wishes to obtain a license (d) Investigation. Each applicant shall revocation, or suspension of a to operate as an ocean transportation be investigated in accordance with Transportation Worker Identification intermediary shall submit electronically § 515.13. Credential under 49 CFR 1572; and the (absent a waiver pursuant to § 515.5(b)) (e) Changes in fact. Each applicant denial, revocation, or suspension of a a completed application Form FMC–18 shall promptly advise the Commission customs broker’s license under 19 CFR Rev. (Application for a License as an of any material changes in the facts Subpart B, section 111. The required Ocean Transportation Intermediary) in submitted in the application. Any OTI experience of the QI of a foreign- accordance with the automated FMC–18 unreported change may delay the based NVOCC seeking to become filing system and corresponding processing and investigation of the licensed under this part (foreign-based instructions. A filing fee shall be paid, application and result in rejection, licensed NVOCC) may be experience as required under § 515.5(c). Notice of closing, or denial of the application. acquired in the U.S. or a foreign country filing of each application shall be ■ 11. In § 515.14, revise the section with respect to shipments in the United published on the Commission’s Web heading and paragraph (b) and add States oceanborne foreign commerce. site www.fmc.gov and shall state the paragraphs (c) and (d) to read as follows: (b) Qualifying individual. The name and address of the applicant and following individuals must qualify the the name and address of the QI. If the § 515.14 Issuance, renewal, and use of license. applicant for a license: applicant is a corporation or (1) Sole proprietorship. The applicant partnership, the names of the officers or * * * * * sole proprietor. partners thereof may be published. For (b) To whom issued. The Commission (2) Partnership. At least one of the an LLC, the names of the managers, will issue a license only in the name of active managing partners. members or officers, as applicable, may the applicant, whether the applicant is (3) Corporation. At least one of the be published. a sole proprietorship, a partnership, a active corporate officers (2) An individual who is applying for corporation, or limited liability (4) Limited liability company. One of a license as a sole proprietor must company. A license issued to a sole the members or managers, or an complete the following certification: proprietor doing business under a trade individual in an equivalent position in name shall be in the name of the sole I, lll, certify under penalty of perjury the LLC as expressly set forth in the LLC under the laws of the United States, that I proprietor, indicating the trade name operating agreement. have not been convicted, after September 1, under which the licensee will be (c) Affiliates of intermediaries. An 1989, of any Federal or state offense conducting business. Only one license independently qualified applicant may involving the distribution or possession of a shall be issued to any applicant be granted a separate license to carry on controlled substance, or that if I have been regardless of the number of names the business of providing ocean so convicted, I am not ineligible to receive under which such applicant may be transportation intermediary services Federal benefits, either by court order or doing business, and except as otherwise even though it is associated with, under operation of law, pursuant to 21 U.S.C. 862. provided in this part, such license is common control with, or otherwise (b) Rejection. Any application which limited exclusively to use by the named related to another ocean transportation appears upon its face to be incomplete licensee and shall not be transferred intermediary through stock ownership or to indicate that the applicant fails to without prior Commission approval to or common directors or officers, if such meet the licensing requirements of the another person. applicant submits: a separate Act, or the Commission’s regulations, (c) Licenses shall be issued for an application and fee, and a valid may be rejected and a notice shall be initial period of three (3) years. instrument of financial responsibility in sent to the applicant, together with an Thereafter, licenses will be renewed for the form and amount prescribed under explanation of the reasons for rejection, sequential three year periods upon § 515.21. The qualifying individual of and the filing fee shall be refunded in successful completion of the renewal one active licensee shall not also be full. Persons who have had their process in paragraph (d) of this section. designated as the qualifying individual applications rejected may submit a new (d) License renewal process. (1) The of an applicant for another ocean Form FMC–18 at any time, together with licensee shall submit electronically to transportation intermediary license, the required filing fee. the Director of the Bureau of unless both entities are commonly (c) Failure to provide necessary Certification and Licensing (BCL) a owned or where one directly controls information and documents. In the completed Form FMC–___ (Application the other. event an applicant fails to provide for Renewal of Ocean Transportation (d) Common carrier. A common documents or information necessary to Intermediary License) no later than sixty carrier or agent thereof which meets the complete processing of its application, (60) days prior to the renewal date set requirements of this part may be notice will be sent to the applicant forth on its license. Upon successful licensed as an ocean freight forwarder to identifying the necessary information completion of the renewal process, the dispatch shipments moving on other and documents and establishing a date Commission shall issue a new license than such carrier’s own bills of lading for submission by the applicant. Failure bearing a renewal date three (3) years subject to the provisions of § 515.42(g). of the applicant to submit the identified later on the same day and month on (e) Foreign-based licensed NVOCC. A materials by the established date will which the license was originally issued. foreign-based NVOCC that elects to result in the closing of its application The renewal date will remain the same obtain a license must establish a without further processing. In the event for subsequent renewals irrespective of presence in the United States by an application is closed as a result of the the date on which the license renewal opening an unincorporated office that is applicant’s failure to provide is submitted or when the renewed resident in the United States and is information or documents necessary to license is issued by the Commission, qualified to do business where it is complete processing, the filing fee will unless another renewal date is assigned located. not be returned. Persons who have had by the Commission.

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(2) Where information provided in an pursuant to the procedures contained in applicant or licensee submitted its OTI’s renewal form, Form FMC–ll, is § 515.17. Otherwise, the action materials. BCL’s notice and materials changed from that set out in its current regarding the license will become supporting its notice, the submission of Form FMC–18 and requires Commission effective. A license may be revoked or the applicant or licensee, and the approval pursuant to § 515.20, the suspended for any of the following responsive submission of BCL shall licensee must promptly submit a request reasons: constitute the entire record upon which for such approval on Form FMC–18 (1) Violation of any provision of the the hearing officer’s decision shall be together with the required filing fee. The Act, or any other statute or Commission based. The hearing officer’s decision licensee may continue to operate as an order or regulation related to carrying shall be issued within forty (40) days ocean transportation intermediary on the business of an ocean after the closing of the record. during the pendency of the transportation intermediary; (c) Commission-initiated enforcement Commission’s approval process. (2) Failure to respond to any lawful proceedings. In proceedings for (3) Though the foregoing license order or inquiry by the Commission; assessment of civil penalties for renewal process is not intended to result (3) Making a materially false or violations of the Shipping Act or in a re-evaluation of a licensee’s misleading statement to the Commission Commission regulations, a license may character, the Commission may review in connection with an application for a be revoked or suspended after notice a licensee’s character at any time, license or an amendment to an existing and an opportunity for hearing under including at the time of renewal, based license; Part 502 (Rules of Practice and upon information received from the (4) A Commission determination that Procedure). licensee or other sources. the licensee is not qualified to render ■ 17. In § 515.19, add paragraph (g)(2) to ■ 12. In § 515.15, revise paragraph (c) to intermediary services; or read as follows: read as follows: (5) Failure to honor the licensee’s § 515.19 Registration of foreign-based financial obligations to the Commission. § 515.15 Denial of license. non-vessel-operating common carriers. (b) Notice. The Commission shall * * * * * publish on the Commission’s Web site (g) * * * (2) Hearing procedure. Registrants (c) Has made any materially false or www.fmc.gov notice of each revocation may request a hearing for terminations misleading statement to the Commission and suspension. in connection with its application; then, or suspensions of the effectiveness of a notice of intent to deny the § 515.18 [Redesignated as § 515.20]. their registrations following the same application shall be sent to the ■ 14. Redesignate § 515.18 as § 515.20. procedures set forth in § 515.17 applicant stating the reason(s) why the (governing hearing requests for denials, Commission intends to deny the § 515.17 [Redesignated as § 515.18]. revocations and suspensions of application. The notice of intent to deny ■ 15. Redesignate § 515.17 as § 515.18. licenses). the application will provide, in detail, a ■ 16. Add new § 515.17 to read as * * * * * statement of the facts supporting denial. follows: ■ 18. Revise newly redesignated An applicant may request a hearing on § 515.20 to read as follows: § 515.17 Hearing procedures governing the proposed denial by submitting to the denial, revocation, or suspension of OTI § 515.20 Changes in organization. Secretary, Federal Maritime license. Commission, Washington, DC 20573, (a) Licenses. The following changes in within twenty (20) days of the date of (a) Hearing requests. All hearing an existing licensee’s organization the notice, a statement of reasons why requests under §§ 515.15 and 515.16 require prior approval of the the application should not be denied. shall be submitted to the Commission’s Commission, and application for such Such hearing shall be provided Secretary. Such requests shall be status change or license transfer shall be pursuant to the procedures contained in referred to the General Counsel to made on Form FMC–18, filed with the § 515.17. Otherwise, the denial of the designate a hearing officer for review Commission’s Bureau of Certification application will become effective and and decision under the procedures and Licensing, and accompanied by the the applicant shall be so notified. established in this section. Upon receipt fee required under § 515.5(c): ■ 13. Revise § 515.16 to read as follows: of a request for hearing, the hearing (1) Transfer of a corporate license to officer shall notify BCL, and BCL will another person; § 515.16 Revocation or suspension of provide to the hearing officer a copy of (2) Change in ownership of a sole license. the notice given to the applicant or proprietorship; (a) Grounds. Except for the automatic licensee and a copy of BCL materials (3) Any change in the business revocation for termination of proof of supporting the notice. The hearing structure of a licensee from or to a sole financial responsibility under § 515.26, officer will then issue a notice advising proprietorship, partnership, limited a license may be revoked or suspended the applicant or, in the case of a liability company, or corporation, after notice and an opportunity for a revocation or suspension of the license, whether or not such change involves a hearing under the procedures of the licensee of the right to submit change in ownership; § 515.17. information and documents, including (4) Any change in a licensee’s name; The notice of revocation or affidavits of fact and written argument, or suspension will provide, in detail, a in support of an OTI application or (5) Change in the identity or status of statement of the facts supporting the continuation of a current OTI license. the designated QI, except as described action. The licensee may request a (b) Notice. The notice shall establish in paragraphs (b) and (c) of this section. hearing on the proposed revocation or a date no later than thirty (30) days from (b) Operation after death of sole suspension by submitting to the the date of the notice for submission of proprietor. In the event that the owner Commission’s Secretary, within twenty all supporting materials by the applicant of a licensed sole proprietorship dies, (20) days of the date of the notice, a or licensee. The notice shall also the licensee’s executor, administrator, statement of reasons why the license provide that the BCL may submit heir(s), or assign(s) may continue should not be revoked or suspended. responsive materials no later than operation of such proprietorship solely Such hearing shall be provided twenty (20) days from the date the with respect to shipments for which the

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deceased sole proprietor had the OTI; or, the addition or reduction of or other surety maintained by an ocean undertaken to act as an ocean one or more partners of a licensed transportation intermediary for damages transportation intermediary pursuant to partnership, one or more members or arising out of its ocean transportation- the existing license, if the death is managers of a Limited Liability related activities. The Commission may reported within 30 days to the Company, or one or more branch offices. also seek payment of civil penalties Commission and to all principals and No fee shall be charged for reporting assessed under section 13 of the shippers for whom services on such such changes. Shipping Act (46 U.S.C. 41107–41109). shipments are to be rendered. The (b) Payment pursuant to a claim. (1) acceptance or solicitation of any other Subpart C—Financial Responsibility If a person does not file a complaint shipments is expressly prohibited until Requirements; Claims Against Ocean with the Commission pursuant to a new license has been issued. Transportation Intermediaries section 11 of the Shipping Act (46 Applications for a new license by the ■ 19. In § 515.21, revise paragraphs U.S.C. 41301–41302, 41305–41307(a)), executor, administrator, heir(s), or (a)(1) through (3), remove paragraph but otherwise seeks to pursue a claim assign(s) shall be made on Form FMC– (a)(4), and revise paragraph (b) to read against an ocean transportation 18, and shall be accompanied by the fee as follows: intermediary bond, insurance, or other required under § 515.5(c). surety for damages arising from its (c) Operation after retirement, § 515.21 Financial responsibility transportation-related activities, it shall resignation, or death of QI. When a requirements. attempt to resolve its claim with the partnership, LLC, or corporation has (a) * * * financial responsibility provider prior to been licensed on the basis of the (1) Any person operating in the seeking payment on any judgment for qualifications of one or more of the United States as an ocean freight damages obtained. When a claimant partners, members, managers or officers forwarder as defined in § 515.2(m)(1) seeks payment under this section, it thereof, and the QI no longer serves as shall furnish evidence of financial simultaneously shall notify both the a full-time employee with the OTI or, is responsibility in the amount of $50,000. financial responsibility provider and the no longer responsible for the licensee’s (2) Any person operating in the ocean transportation intermediary of the OTI activities, the licensee shall report United States as an NVOCC as defined claim by mail or courier service. The such change to the Commission within in § 515.2(m)(2) shall furnish evidence bond, insurance, or other surety may be thirty (30) business days. Within the of financial responsibility in the amount available to pay such claim if: same 30-day period, the licensee shall of $75,000. (i) The ocean transportation furnish to the Commission the name(s) (3) Any registered NVOCC, as defined intermediary consents to payment, and detailed intermediary experience of in § 515.2(r), shall furnish evidence of subject to review by the financial any other active partner(s), member(s), financial responsibility in the amount of responsibility provider; or manager(s) or officer(s) who may qualify $150,000. Such registered NVOCC shall (ii) The ocean transportation the licensee. Such QI(s) must meet the be strictly responsible for the acts and intermediary fails to respond within applicable requirements set forth in omissions of its employees and agents, forty-five (45) days from the date of the § 515.11(a) through (c). The licensee wherever they are located. notice of the claim to address the may continue to operate as an ocean (b) Group financial responsibility. validity of the claim, and the financial transportation intermediary while the When a group or association of ocean responsibility provider deems the claim Commission investigates the transportation intermediaries accepts valid. qualifications of the newly designated liability for an ocean transportation (2) If the parties fail to reach an partner, member, manager, or officer. intermediary’s financial responsibility agreement in accordance with paragraph (d) Acquisition of one or more for such ocean transportation (b)(1) of this section within ninety (90) additional licensees. In the event a intermediary’s transportation-related days of the date of the initial licensee acquires one or more additional activities under the Act, the group or notification of the claim, the bond, licensees, for the purpose of merger, association of ocean transportation insurance, or other surety shall be consolidation, or control, the acquiring intermediaries shall file a group bond available to pay any final judgment for licensee shall advise the Commission of form, insurance form or guaranty form, reparations ordered by the Commission such acquisition, including any change clearly identifying each ocean or damages obtained from an in ownership, within 30 days after such transportation intermediary covered, appropriate court. The financial change occurs by submitting an before a covered ocean transportation responsibility provider shall pay such amended Form FMC–18. No application intermediary may provide ocean judgment for damages only to the extent fee is required when reporting this transportation intermediary services. In they arise from the transportation- change. such cases, a group or association must related activities of the ocean (e) Other changes. Other changes in establish financial responsibility in an transportation intermediary, ordinarily material fact of a licensee shall be amount equal to the lesser of the within thirty (30) days, without reported within thirty (30) days of such amount required by paragraph (a) of this requiring further evidence related to the changes, in writing by mail or email section for each member, or $3,000,000 validity of the claim; it may, however, ([email protected]) to the Director, Bureau of in aggregate. A group or association of inquire into the extent to which the Certification and Licensing, Federal ocean transportation intermediaries may judgment for damages arises from the Maritime Commission, Washington, DC. also file an optional bond rider as ocean transportation intermediary’s 20573. Material changes include, but are provided in § 515.25(b). transportation-related activities. not limited to: changes in business (c) Notices of court and other claims * * * * * address; any criminal indictment or ■ 20. Revise § 515.23 to read as follows: against OTIs by financial responsibility conviction of a licensee, QI, or officer; providers. (1) As provided in each any voluntary or involuntary § 515.23 Claims against an ocean financial responsibility instrument bankruptcy filed by or naming a transportation intermediary. between an OTI and its financial licensee, QI, or officer; changes of five (a) Payments. Shippers, common responsibility provider(s), the issuing (5) percent or more of the common carriers, and other affected persons may financial responsibility provider shall equity ownership or voting securities of seek payment from the bond, insurance, submit a notice to the Commission of

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each claim, court action, or court ■ 22. Revise § 515.26 to read as follows: Appendices A through F to Subpart C judgment against the financial [Removed] responsibility and each claim paid § 515.26 Termination of financial responsibility. ■ 24. Remove appendices A through F (including the amount) by the provider. to subpart C. (2) Notices described in paragraph (1) No license or registration shall remain of this section shall be promptly in effect unless valid proof of a financial Subpart D—Duties and submitted in writing by mail or email responsibility instrument is maintained Responsibilities of Ocean ([email protected]) to the Director, Bureau of on file with the Commission. Upon Transportation Intermediaries; Reports Certification and Licensing, Federal receipt of notice of termination of such to Commission Maritime Commission, Washington, DC financial responsibility, the Commission ■ 20573. shall notify the concerned licensee, 25. Revise § 515.31 to read as follows: (3) Notices required by this section registrant, or registrant’s legal agent in § 515.31 General duties. shall include the name of the claimant, the United States, by mail, courier, or (a) Licensees and registrants; names name of the court and case number other method reasonably calculated to assigned, and the name and license and numbers. Each licensee and provide actual notice, at its last known registrant shall carry on its business number of the OTI involved. Such address, that the Commission shall, notices may include or attach other only under the name in which it was without hearing or other proceeding, licensed or registered and only under its information relevant to the claim. revoke the license or terminate the (d) FMC not a depository. The Federal license or registration number as registration as of the termination date of assigned by the Commission. When the Maritime Commission shall not serve as the financial responsibility instrument, depository or distributor to third parties licensee’s or registrant’s name appears unless the licensee or registrant shall on shipping documents, its Commission of bond, guaranty, or insurance funds in have submitted valid replacement proof the event of any claim, judgment, or license or registration number shall also of financial responsibility before such be included. order for reparation. termination date. Replacement financial (e) Optional bond riders. The Federal (b) Stationery and billing forms. The responsibility must bear an effective name and license or registration number Maritime Commission shall not serve as date no later than the termination date a depository or distributor to third of each OTI shall be permanently of the expiring financial responsibility imprinted on the licensee’s or parties of funds payable pursuant to instrument. optional bond riders described in registrant’s office stationery and billing § 515.25(b). ■ 23. In § 515.27, revise the section forms. ■ 21. Revise § 515.25 to read as follows: heading and paragraphs (a) through (c) (c) Use of license or registration by to read as follows: others; prohibition. No OTI shall permit § 515.25 Filing of proof of financial its name, license, license number, responsibility. § 515.27 Proof of compliance—NVOCC. registration, or registration number to be (a) Filing of proof of financial (a) No common carrier shall used by any person who is not an responsibility—(1) Licenses. Upon knowingly and willfully transport cargo employee or an agent of the OTI. An notification by the Commission that an for the account of an NVOCC unless the entity that also provides OTI services in applicant has been approved for carrier has determined that the NVOCC its own name and not on behalf of a licensing, the applicant shall file with has a license or registration, a tariff, and licensed or registered OTI must be the Director of the Commission’s Bureau financial responsibility as required by separately licensed under this part and of Certification and Licensing, proof of sections 8 (46 U.S.C. 40501—40503) and must provide proof of its own financial financial responsibility in the form and 19 (46 U.S.C. 40901- 40904) of the responsibility and publish a tariff, if amount prescribed in § 515.21. No Shipping Act and this part. applicable. A branch office of an OTI license will be issued until the may use the license of the OTI, provided Commission is in receipt of valid proof (b) A common carrier can obtain proof that the address of the branch office has of financial responsibility from the of an NVOCC’s compliance with the OTI been reported to the Commission in applicant. If, within 120 days of licensing, registration, tariff and Form FMC–18 or pursuant to notification of approval for licensing by financial responsibility requirements by: § 515.20(e). the Commission, the applicant does not (1) Consulting the Commission’s Web (d) Arrangements with ocean file proof that its financial responsibility site www.fmc.gov as provided in transportation intermediaries whose is in effect, the application will be paragraph (d) of this section, to verify licenses have been revoked. Unless prior invalid. Applicants whose applications that the NVOCC has complied with the written approval from the Commission have become invalid may submit a new OTI licensing, registration, tariff, and has been obtained, no OTI shall, directly Form FMC–18, together with the financial responsibility requirements; or or indirectly: required filing fee, at any time. (2) Any other appropriate procedure, (1) Agree to perform ocean (2) Registrations. A registration shall provided that such procedure is set transportation intermediary services on not become effective until the applicant forth in the carrier’s tariff. shipments as an associate, has furnished proof of financial correspondent, officer, employee, agent, responsibility pursuant to § 515.21, has (c) A common carrier that has or sub-agent of any person whose submitted a Form FMC–1, and its employed the procedure prescribed in license has been revoked or suspended published tariff becomes effective paragraph (b)(1) of this section shall be pursuant to § 515.16, or registration pursuant to 46 CFR part 520. deemed to have met its obligations terminated or suspended pursuant to (b) Optional bond rider. Any NVOCC under section 10(b)(11) of the Act (46 § 515.19(g); as defined in § 515.2(m)(2), in addition U.S.C. 41104(11)), unless the common (2) Assist in the furtherance of any to a bond meeting the requirements of carrier knew that such NVOCC was not ocean transportation intermediary § 515.21(a)(2) or (3), may obtain and file in compliance with the OTI licensing, business of an OTI whose license has with the Commission proof of an registration, tariff, and financial been revoked; optional bond rider, as provided in responsibility requirements. (3) Share forwarding fees or freight appendix E or appendix F of this part. * * * * * compensation with any such person; or

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(4) Permit any such person, directly or C.O.D. shipments, drafts, letters of of its principal as part of the services indirectly, to participate, through credit, and any other sums due such rendered to such principal, provided: ownership or otherwise, in the control principal(s) or shipper(s). (1) The in-plant forwarder or direction of the ocean transportation (j) Prohibition. No person may arrangement is reduced to writing and intermediary business of the licensee or advertise or hold out to provide OTI identifies all services provided by either registrant. services unless that person holds a valid party (whether or not constituting a (e) False or fraudulent claims, false OTI license or is registered under this freight forwarding service); states the information. No OTI shall prepare or file part. amount of compensation to be received or assist in the preparation or filing of by either party for such services; sets any claim, affidavit, letter of indemnity, § 515.32 [Amended] forth all details concerning the or other paper or document concerning ■ 26. In § 515.32, in paragraph (b), in the procurement, maintenance or sharing of an ocean transportation intermediary first sentence, remove the word ‘‘sales’’. office facilities, personnel, furnishings, transaction which it has reason to ■ 27. In § 515.33, revise the section equipment and supplies; describes all believe is false or fraudulent, nor shall heading, the introductory text, and powers of supervision or oversight of any such OTI knowingly impart to a paragraph (d) to read as follows: the licensee’s employee(s) to be principal, shipper, common carrier or exercised by the principal; and details other person, false information relative § 515.33 Records to be kept. all procedures for the administration or to any ocean transportation Each licensed or registered NVOCC management of in-plant arrangements intermediary transaction. and each licensed ocean freight between the parties; and (f) Errors and omissions of the forwarder shall maintain in an orderly (2) The arrangement is not an artifice principal or shipper. An OTI who has and systematic manner, and keep for a payment or other unlawful benefit reason to believe that its principal or current and correct, all records and to the principal. shipper has not, with respect to a books of account in connection with its ■ 30. In § 515.42, revise paragraphs (a), shipment to be handled by such OTI, OTI business. The licensed or registered (b), (c), and (f) to read as follows: complied with the laws of the United NVOCC and each licensed freight States, or has made any error or forwarder may maintain these records in § 515.42 Forwarder and carrier compensation; fees. misrepresentation in, or omission from, either paper or electronic form, which any export declaration, bill of lading, shall be readily available in usable form (a) Disclosure of principal. The affidavit, or other document which the to the Commission; the electronically identity of the shipper must always be principal or shipper executes in maintained records shall be no less disclosed in the shipper identification connection with such shipment, shall accessible than if they were maintained box on the bill of lading. The licensed advise its principal or shipper promptly in paper form. These recordkeeping freight forwarder’s name may appear of the suspected noncompliance, error, requirements are independent of the with the name of the shipper, but the misrepresentation or omission, and retention requirements of other federal forwarder must be identified as the shall decline to participate in any agencies. In addition, each licensed shipper’s agent. (b) Certification required for transaction involving such document freight forwarder must maintain the compensation. A common carrier may until the matter is properly and lawfully following records for a period of five pay compensation to a licensed freight resolved. years: (g) Response to requests of forwarder only pursuant to such Commission. Upon the request of any * * * * * common carrier’s tariff provisions. authorized representative of the (d) Special contracts. A true copy, or When a common carrier’s tariff provides Commission, an OTI shall make if oral, a true and complete for the payment of compensation, such available promptly for inspection or memorandum, of every special compensation shall be paid on any reproduction all records and books of arrangement or contract between a shipment forwarded on behalf of others account in connection with its ocean licensed freight forwarder and a where the forwarder has provided a transportation intermediary business, principal, or modification or certification as prescribed in paragraph and shall respond promptly to any cancellation thereof. (c) of this section and the shipper has lawful inquiries by such representative. § 515.34 [Amended] been disclosed on the bill of lading as All OTIs are responsible for requiring provided for in paragraph (a) of this ■ 28. Amend § 515.34 by removing that, upon the request of any authorized section. The common carrier shall be ‘‘$108’’ and adding the phrase ‘‘the fee Commission representative, their agents entitled to rely on such certification set forth in § 515.5(c)’’ in its place. make available all records and books of unless it knows that the certification is account relating to ocean transportation Subpart E—Freight Forwarding Fees incorrect. The common carrier shall intermediary service provided by or for and Compensation retain such certifications for a period of their principals, and respond promptly five (5) years. to any lawful inquiries by such ■ 29. Amend § 515.41 by: (c) Form of certification. When a representative. ■ a. Removing paragraph (c); licensed freight forwarder is entitled to (h) Express written authority. No OTI ■ b. Redesignating paragraphs (d) and compensation, the forwarder shall shall endorse or negotiate any draft, (e) as paragraphs (c) and (d), provide the common carrier with a check, or warrant drawn to the order of respectively; and certification which indicates that the its OTI principal or shipper without the ■ c. Revising newly redesignated forwarder has performed the required express written authority of such OTI paragraph (d). services that entitle it to compensation. principal or shipper. The revision reads as follows: The required certification may be (i) Accounting to principal or shipper. provided electronically by the forwarder An OTI shall account to its principal(s) § 515.41 Forwarder and principal; fees. or may be placed on one copy of the or shipper(s) for overpayments, * * * * * relevant bill of lading, a summary adjustments of charges, reductions in (d) In-plant arrangements. A licensed statement from the forwarder, the rates, insurance refunds, insurance freight forwarder may place an forwarder’s compensation invoice, or as monies received for claims, proceeds of employee or employees on the premises an endorsement on the carrier’s

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compensation check. Electronic and the rules and regulations of the Federal shall become effective thirty (30) days after certification must contain confirmations Maritime Commission relating to evidence of receipt of said notice by the Commission. by the forwarder and the carrier financial responsibility for OTIs (46 CFR Part The Surety shall not be liable for any identifying the shipments upon which 515), this bond shall be available to pay any transportation-related activities of the judgment obtained or any settlement made Principal after the expiration of the 30-day forwarding compensation may be paid. pursuant to a claim under 46 CFR 515.23 for period but such termination shall not affect Each forwarder shall retain evidence in damages against the Insured arising from the the liability of the Principal and Surety for its shipment files that the forwarder, in Insured’s transportation-related activities any event occurring prior to the date when fact, has performed the required services under the Shipping Act, or order for said termination becomes effective. enumerated on the certification. The reparations issued pursuant to section 11 of The Surety consents to be sued directly in certification shall read as follows: the Shipping Act (46 U.S.C. 41301–41302, respect of any bona fide claim owed by 41305–41307(a)), or any penalty assessed Principal for damages, reparations or The undersigned hereby certifies that against the Principal pursuant to section 13 penalties arising from the transportation- neither it nor any holding company, of the Shipping Act (46 U.S.C. 41107–41109); related activities under the Shipping Act of subsidiary, affiliate, officer, director, agent or provided, however, that the Surety’s Principal in the event that such legal liability executive of the undersigned has a beneficial obligation for a group or association of OTIs has not been discharged by the Principal or interest in this shipment; that it is the holder shall extend only to such damages, Surety after a claimant has obtained a final of valid FMC License No., issued by the reparations or penalties described herein as judgment (after appeal, if any) against the Federal Maritime Commission and has are not covered by another surety bond, Principal from a United States Federal or performed the following services: insurance policy or guaranty held by the State Court of competent jurisdiction and has (1) Engaged, booked, secured, reserved, or OTI(s) against which a claim or final complied with the procedures for collecting contracted directly with the carrier or its judgment has been brought and that Surety’s on such a judgment pursuant to 46 CFR agent for space aboard a vessel or confirmed total obligation hereunder shall not exceed 515.23, the Federal Maritime Commission, or the availability of that space; and the amount per OTI provided in 46 CFR where all parties and claimants otherwise (2) Prepared and processed the ocean bill 515.21 or the amount per group or mutually consent, from a foreign court, or of lading, dock receipt, or other similar association of OTIs provided for in 46 CFR where such claimant has become entitled to document with respect to the shipment. 515.21 in aggregate. payment of a specified sum by virtue of a * * * * * Now, Therefore, The condition of this compromise settlement agreement made with (f) Compensation; services performed obligation is that the penalty amount of this the Principal and/or Surety pursuant to 46 by underlying carrier; exemptions. No bond shall be available to pay any judgment CFR 515.23, whereby, upon payment of the or any settlement made pursuant to a claim agreed sum, the Surety is to be fully, licensed freight forwarder shall charge under 46 CFR 515.23 for damages against the irrevocably and unconditionally discharged or collect compensation in the event the Principal arising from the Principal’s from all further liability to such claimant; underlying common carrier, or its agent, transportation-related activities or order for provided, however, that Surety’s total has, at the request of such forwarder, reparations issued pursuant to section 11 of obligation hereunder shall not exceed the performed any of the forwarding the Shipping Act (46 U.S.C. 41301–41302, amount set forth in 46 CFR 515.21, as services set forth in § 515.2(h), unless 41305–41307(a)), or any penalty assessed applicable. such carrier or agent is also a licensed against the Principal pursuant to section 13 The underwriting Surety will immediately freight forwarder, or unless no other of the Shipping Act (46 U.S.C. 41107–41109). notify the Director, Bureau of Certification licensed freight forwarder is willing and This bond shall inure to the benefit of any and Licensing, Federal Maritime and all persons who have obtained a Commission, Washington, DC. 20573, in able to perform such services. judgment or a settlement made pursuant to writing by mail or email ([email protected]), of all * * * * * a claim under 46 CFR 515.23 for damages claims made, lawsuits filed, judgments ■ 31. Add appendices A, B, C, D, E, and against the Principal arising from its rendered, and payments made against this F to part 515 to read as follows: transportation-related activities or order of bond. reparation issued pursuant to section 11 of Signed and sealed this lll day of Appendix A to Part 515—Ocean the Shipping Act (46 U.S.C. 41301–41302, llllll, lll. Transportation Intermediary (OTI) 41305–41307(a)), and to the benefit of the (Please type name of signer under each Bond Form [Form 48] Federal Maritime Commission for any signature.) penalty assessed against the Principal Form FMC–48 lllllllllllllllllllll pursuant to section 13 of the Shipping Act Individual Principal or Partner Federal Maritime Commission (46 U.S.C. 41107–41109). However, the bond lllllllllllllllllllll Ocean Transportation Intermediary (OTI) shall not apply to shipments of used Bond (Section 19, Shipping Act of 1984 (46 household goods and personal effects for the Business Address U.S.C. 40901–40904)) llllll [indicate account of the Department of Defense or the lllllllllllllllllllll whether NVOCC or Freight Forwarder], as account of federal civilian executive agencies Individual Principal or Partner Principal (hereinafter ‘‘Principal’’), and shipping under the International Household lllllllllllllllllllll llllll, as Surety (hereinafter Goods Program administered by the General Business Address ‘‘Surety’’) are held and firmly bound unto the Services Administration. lllllllllllllllllllll United States of America in the sum of The liability of the Surety shall not be Individual Principal or Partner $llllll for the payment of which sum discharged by any payment or succession of lllllllllllllllllllll we bind ourselves, our heirs, executors, payments hereunder, unless and until such administrators, successors and assigns, payment or payments shall aggregate the Business Address jointly and severally. penalty amount of this bond, and in no event lllllllllllllllllllll Whereas, Principal operates as an OTI in shall the Surety’s total obligation hereunder Trade Name, If Any the waterborne foreign commerce of the exceed said penalty amount, regardless of the lllllllllllllllllllll United States in accordance with the number of claims or claimants. Corporate Principal Shipping Act of 1984, 46 U.S.C. 40101– This bond is effective the ll day of lllllllllllllllllllll 41309, and, if necessary, has a valid tariff lllllll, llll and shall continue State of Incorporation published pursuant to 46 CFR part 515 and in effect until discharged or terminated as lllllllllllllllllllll 520, and pursuant to section 19 of the herein provided. The Principal or the Surety Trade Name, If Any Shipping Act (46 U.S.C. 40901–40904), files may at any time terminate this bond by mail this bond with the Commission; or email ([email protected]) written notice to the lllllllllllllllllllll Whereas, this bond is written to ensure Director, Bureau of Certification and Business Address compliance by the Principal with section 19 Licensing, Federal Maritime Commission, lllllllllllllllllllll of the Shipping Act (46 U.S.C. 40901–40904), Washington, DC. 20573. Such termination By

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lllllllllllllllllllll pursuant to a claim under 46 CFR 515.23 for insurance evidenced by this undertaking Title damages against the Insured arising from the shall be applicable only in relation to lllllllllllllllllllll Insured’s transportation-related activities incidents occurring on or after the effective (Affix Corporate Seal) under the Shipping Act, or order for date and before the date termination of this lllllllllllllllllllll reparations issued pursuant to section 11 of undertaking becomes effective. The effective lll Corporate Surety the Shipping Act (46 U.S.C. 41301–41302, date of this undertaking shall be day 41305–41307(a)), or any penalty assessed of lllll, lll, and shall continue in lllllllllllllllllllll against the Insured pursuant to section 13 of effect until discharged or terminated as Business Address the Shipping Act (46 U.S.C. 41107–41109); herein provided. The Insured or the Insurer lllllllllllllllllllll provided, however, that Insurer’s obligation may at any time terminate the Insurance by By for a group or association of OTIs shall mail or email ([email protected]) written notice to lllllllllllllllllllll extend only to such damages, reparations or the Director, Bureau of Certification and Title penalties described herein as are not covered Licensing, Federal Maritime Commission, (Affix Corporate Seal) by another insurance policy, guaranty or Washington, DC 20573. Such termination surety bond held by the OTI(s) against which shall become effective thirty (30) days after Appendix B Part 515—Ocean a claim or final judgment has been brought receipt of said notice by the Commission. Transportation Intermediary (OTI) and that Insurer’s total obligation hereunder The Insurer shall not be liable for any Insurance Form [Form 67] shall not exceed the amount per OTI set forth transportation-related activities under the in 46 CFR 515.21 or the amount per group Shipping Act of the Insured after the Form FMC–67 or association of OTIs set forth in 46 CFR expiration of the 30-day period but such Federal Maritime Commission 515.21 in aggregate. termination shall not affect the liability of the Whereas, the Insurer certifies that it has Insured and Insurer for such activities Ocean Transportation Intermediary (OTI) sufficient and acceptable assets located in the occurring prior to the date when said Insurance United States to cover all liabilities of termination becomes effective. Form Furnished as Evidence of Financial Insured herein described, this Insurance shall (Name of Agent) llll domiciled in the Responsibility Under 46 U.S.C. 40901–40904 inure to the benefit of any and all persons United States, with offices located in the who have a bona fide claim against the This is to certify, that the (Name of United States, at llll is hereby Insured pursuant to 46 CFR 515.23 arising designated as the Insurer’s agent for service Insurance Company), (hereinafter ‘‘Insurer’’) from its transportation-related activities of (Home Office Address of Company) has of process for the purposes of enforcing the under the Shipping Act, or order of issued to (OTI or Group or Association of Insurance certified to herein. reparation issued pursuant to section 11 of OTIs [indicate whether NVOCC(s) or Freight If more than one insurer joins in executing the Shipping Act (46 U.S.C. 41301–41302, Forwarder(s)]) (hereinafter ‘‘Insured’’) of this document, that action constitutes joint 41305–41307(a)), and to the benefit of the (Address of OTI or Group or Association of and several liability on the part of the Federal Maritime Commission for any OTIs) a policy or policies of insurance for insurers. penalty assessed against the Insured pursuant purposes of complying with the provisions of The Insurer will immediately notify the to section 13 of the Shipping Act (46 U.S.C. Section 19 of the Shipping Act of 1984 (46 Director, Bureau of Certification and 41107–41109). U.S.C. 40901–40904) and the rules and Licensing, Federal Maritime Commission, The Insurer consents to be sued directly in regulations, as amended, of the Federal Washington, DC 20573, in writing by mail or Maritime Commission, which provide respect of any bona fide claim owed by email ([email protected]), of all claims made, compensation for damages, reparations or Insured for damages, reparations or penalties lawsuits filed, judgments rendered, and penalties arising from the transportation- arising from the transportation-related payments made against the Insurance. related activities of Insured, and made activities under the Shipping Act, of Insured Signed and sealed this lll day of pursuant to the Shipping Act of 1984 (46 in the event that such legal liability has not llllll, lll. U.S.C. 40101–41309) (Shipping Act). been discharged by the Insured or Insurer lllllllllllllllllllll Whereas, the Insured is or may become an after a claimant has obtained a final judgment Signature of Official signing on behalf of OTI subject to the Shipping Act and the rules (after appeal, if any) against the Insured from Insurer and regulations of the Federal Maritime a United States Federal or State Court of competent jurisdiction and has complied lllllllllllllllllllll Commission, or is or may become a group or Type Name and Title of signer association of OTIs, and desires to establish with the procedures for collecting on such a financial responsibility in accordance with judgment pursuant to 46 CFR 515.23, the This Insurance Form has been filed with section 19 of the Shipping Act (46 U.S.C. Federal Maritime Commission, or where all the Federal Maritime Commission. 40901–40904), files with the Commission parties and claimants otherwise mutually consent, from a foreign court, or where such Appendix C to Part 515—Ocean this Insurance Form as evidence of its Transportation Intermediary (OTI) financial responsibility and evidence of a claimant has become entitled to payment of financial rating for the Insurer of Class V or a specified sum by virtue of a compromise Guaranty Form [Form 68] higher under the Financial Size Categories of settlement agreement made with the Insured Form FMC–68 A.M. Best & Company or equivalent from an and/or Insurer pursuant to 46 CFR 515.23, Federal Maritime Commission acceptable international rating organization whereby, upon payment of the agreed sum, on such organization’s letterhead or the Insurer is to be fully, irrevocably and Guaranty in Respect of Ocean designated form, or, in the case of insurance unconditionally discharged from all further Transportation Intermediary (OTI) Liability provided by Underwriters at Lloyd’s, liability to such claimant; provided, however, for Damages, Reparations or Penalties Arising documentation verifying membership in that Insurer’s total obligation hereunder shall from Transportation-Related Activities Under Lloyd’s, or, in the case of surplus lines not exceed the amount per OTI set forth in the Shipping Act of 1984 (46 U.S.C. 40101– insurers, documentation verifying inclusion 46 CFR 515.21 or the amount per group or 41309) (Shipping Act). on a current ‘‘white list’’ issued by the Non- association of OTIs set forth in 46 CFR 1. Whereas llllllllll (Name of Admitted Insurers’ Information Office of the 515.21. Applicant [indicate whether NVOCC or National Association of Insurance The liability of the Insurer shall not be Freight Forwarder]) (hereinafter ‘‘Applicant’’) Commissioners. discharged by any payment or succession of is or may become an Ocean Transportation Whereas, the Insurance is written to assure payments hereunder, unless and until such Intermediary (‘‘OTI’’) subject to the Shipping compliance by the Insured with section 19 of payment or payments shall aggregate the Act of 1984 (46 U.S.C. 40101–41309) and the the Shipping Act (46 U.S.C. 40901–40904), penalty of the Insurance in the amount per rules and regulations of the Federal Maritime and the rules and regulations of the Federal member OTI set forth in 46 CFR 515.21, or Commission (FMC), or is or may become a Maritime Commission relating to evidence of the amount per group or association of OTIs group or association of OTIs, and desires to financial responsibility for OTIs, this set forth in 46 CFR 515.21, regardless of the establish its financial responsibility in Insurance shall be available to pay any financial responsibility or lack thereof, or the accordance with section 19 of the Shipping judgment obtained or any settlement made solvency or bankruptcy, of Insured. The Act (46 U.S.C. 41107–41109), then, provided

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that the FMC shall have accepted, as with the procedures for collecting on such a 10. Applicant and Guarantor agree to sufficient for that purpose, the Applicant’s judgment pursuant to 46 CFR 515.23, the handle the processing and adjudication of application, supported by evidence of a FMC, or where all parties and claimants claims by claimants under the Guaranty financial rating for the Guarantor of Class V otherwise mutually consent, from a foreign established herein in the United States, or higher under the Financial Size Categories court, or where such claimant has become unless by mutual consent of all parties and of A.M. Best & Company or equivalent from entitled to payment of a specified sum by claimants another country is agreed upon. an acceptable international rating virtue of a compromise settlement agreement Guarantor agrees to appoint an agent for organization on such rating organization’s made with the Applicant and/or Guarantor service of process in the United States. letterhead or designated form, or, in the case pursuant to 46 CFR 515.23, whereby, upon 11. This Guaranty shall be governed by the of Guaranty provided by Underwriters at payment of the agreed sum, the Guarantor is laws in the State of ll to the extent not Lloyd’s, documentation verifying to be fully, irrevocably and unconditionally inconsistent with the rules and regulations of membership in Lloyd’s, or, in the case of discharged from all further liability to such the FMC. surplus lines insurers, documentation claimant. In the case of a guaranty covering 12. This Guaranty is effective the day of l verifying inclusion on a current ‘‘white list’’ the liability of a group or association of OTIs, l, llllll, llll 12:01 a.m., issued by the Non-Admitted Insurers’ Guarantor’s obligation extends only to such standard time at the address of the Guarantor Information Office of the National damages, reparations or penalties described as stated herein and shall continue in force Association of Insurance Commissioners, the herein as are not covered by another until terminated as herein provided. undersigned Guarantor certifies that it has insurance policy, guaranty or surety bond 13. The Guarantor hereby designates as the sufficient and acceptable assets located in the held by the OTI(s) against which a claim or Guarantor’s legal agent for service of process United States to cover all damages arising final judgment has been brought. domiciled in the United States from the transportation-related activities of 5. The Guarantor’s liability under this llllllll, with offices located in the the covered OTI as specified under the Guaranty in respect to any claimant shall not United States at llllllll, for the Shipping Act. exceed the amount of the guaranty; and the purposes of enforcing the Guaranty described 2. Whereas, this Guaranty is written to aggregate amount of the Guarantor’s liability herein. ensure compliance by the Applicant with under this Guaranty shall not exceed the lllllllllllllllllllll amount per OTI set forth in 46 CFR 515.21, section 19 of the Shipping Act (46 U.S.C. (Place and Date of Execution) 40901–40904), and the rules and regulations or the amount per group or association of OTIs set forth in 46 CFR 515.21 in aggregate. lllllllllllllllllllll of the Federal Maritime Commission relating (Type Name of Guarantor) to evidence of financial responsibility for 6. The Guarantor’s liability under this lllllllllllllllllllll OTIs (46 CFR part 515), this guaranty shall Guaranty shall attach only in respect of such (Type Address of Guarantor) be available to pay any judgment obtained or activities giving rise to a cause of action against the Applicant, in respect of any of its any settlement made pursuant to a claim lllllllllllllllllllll transportation-related activities under the under 46 CFR 515.23 for damages against the By Shipping Act, occurring after the Guaranty Applicant arising from the Applicant’s lllllllllllllllllllll has become effective, and before the transportation-related activities under the (Signature and Title) expiration date of this Guaranty, which shall Shipping Act, or order for reparations issued be the date thirty (30) days after the date of Appendix D to Part 515—Ocean pursuant to section 11 of the Shipping Act receipt of mail or email ([email protected]) written (46 U.S.C. 41301–41302, 41305–41307(a)), or Transportation Intermediary (OTI) notice to the Director, Bureau of Certification Group Bond Form [FMC–69] any penalty assessed against the Applicant and Licensing, Federal Maritime pursuant to section 13 of the Shipping Act Commission, Washington, DC. 20573, that Form FMC–69 (46 U.S.C. 41107–41109); provided, however, either Applicant or the Guarantor has elected Federal Maritime Commission that the Guarantor’s obligation for a group or to terminate this Guaranty. The Guarantor association of OTIs shall extend only to such and/or Applicant specifically agree to file Ocean Transportation Intermediary (OTI) damages, reparations or penalties described such written notice of cancellation. Group Supplemental Coverage Bond Form herein as are not covered by another surety 7. Guarantor shall not be liable for (Shipping Act of 1984 (46 U.S.C. 40101– bond, insurance policy, or guaranty held by payments of any of the damages, reparations 41309)) (Shipping Act). the OTI(s) against which a claim or final or penalties hereinbefore described which llllll [indicate whether NVOCC or judgment has been brought and that arise as the result of any transportation- Freight Forwarder], as Principal (hereinafter Guarantor’s total obligation hereunder shall related activities of Applicant after the ‘‘Principal’’), and llllllllll as not exceed the amount per OTI provided for cancellation of the Guaranty, as herein Surety (hereinafter ‘‘Surety’’) are held and in 46 CFR 515.21, in aggregate. provided, but such cancellation shall not firmly bound unto the United States of 3. Now, Therefore, The condition of this affect the liability of the Guarantor for the America in the sum of $llllllll for obligation is that the penalty amount of this payment of any such damages, reparations or the payment of which sum we bind Guaranty shall be available to pay any penalties prior to the date such cancellation ourselves, our heirs, executors, judgment obtained or any settlement made becomes effective. administrators, successors and assigns, pursuant to a claim under 46 CFR 515.23 for 8. Guarantor shall pay, subject to the limit jointly and severally. damages against the Applicant arising from of the amount per OTI set forth in 46 CFR Whereas, (Principal) lllllllll the Applicant’s transportation-related 515.21, directly to a claimant any sum or operates as a group or association of OTIs in activities or order for reparations issued sums which Guarantor, in good faith, the waterborne foreign commerce of the pursuant to section 11 of the Shipping Act determines that the Applicant has failed to United States and pursuant to section 19 of (46 U.S.C. 41301–41302, 41305–41307(a)), or pay and would be held legally liable by the Shipping Act of 1984 (46 U.S.C. 40901– any penalty assessed against the Principal reason of Applicant’s transportation-related 40904), files this bond with the Federal pursuant to section 13 of the Shipping Act activities, or its legal responsibilities under Maritime Commission; (46 U.S.C. 41107–41109). the Shipping Act and the rules and Whereas, this group bond is written to 4. The undersigned Guarantor hereby regulations of the FMC, made by Applicant ensure compliance by the OTIs, enumerated consents to be sued directly in respect of any while this agreement is in effect, regardless in Appendix A of this bond, with section 19 bona fide claim owed by Applicant for of the financial responsibility or lack thereof, of the Shipping Act (46 U.S.C. 40901–40904), damages, reparations or penalties arising or the solvency or bankruptcy, of Applicant. and the rules and regulations of the Federal from Applicant’s transportation-related 9. The Applicant or Guarantor will Maritime Commission relating to evidence of activities under the Shipping Act, in the immediately notify the Director, Bureau of financial responsibility for OTIs (46 CFR Part event that such legal liability has not been Certification and Licensing, Federal Maritime 515), this group bond shall be available to discharged by the Applicant after any such Commission, Washington, DC. 20573, in pay any judgment obtained or any settlement claimant has obtained a final judgment (after writing by mail or email ([email protected]), of all made pursuant to a claim under 46 CFR appeal, if any) against the Applicant from a claims made, lawsuits filed, judgments 515.23 for damages against such OTIs arising United States Federal or State Court of rendered, and payments made under the from OTI transportation-related activities competent jurisdiction and has complied Guaranty. under the Shipping Act, or order for

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reparations issued pursuant to section 11 of sum by virtue of a compromise settlement Individual Principal or Partner the Shipping Act (46 U.S.C. 41301–41302, agreement made with the OTI(s) and/or lllllllllllllllllllll 41305–41307(a)), or any penalty assessed Surety pursuant to 46 CFR 515.23, whereby, Business Address against one or more OTI members pursuant upon payment of the agreed sum, the Surety lllllllllllllllllllll to section 13 of the Shipping Act (46 U.S.C. is to be fully, irrevocably and Individual Principal or Partner 41107–41109); provided, however, that the unconditionally discharged from all further Surety’s obligation for a group or association liability to such claimant(s). lllllllllllllllllllll of OTIs shall extend only to such damages, The liability of the Surety shall not be Business Address reparations or penalties described herein as discharged by any payment or succession of lllllllllllllllllllll are not covered by another surety bond, payments hereunder, unless and until such Individual Principal or Partner insurance policy or guaranty held by the payment or payments shall aggregate the lllllllllllllllllllll OTI(s) against which a claim or final penalty of this bond, and in no event shall Business Address judgment has been brought and that Surety’s the Surety’s total obligation hereunder lllllllllllllllllllll total obligation hereunder shall not exceed exceed the amount per member OTI set forth Trade Name, if Any the amount per OTI provided for in 46 CFR in 46 CFR 515.21, identified in Appendix A, lllllllllllllllllllll 515.21 or the amount per group or or the amount per group or association of Corporate Principal association of OTIs provided for in 46 CFR OTIs set forth in 46 CFR 515.21, regardless 515.21 in aggregate. of the number of OTIs, claims or claimants. lllllllllllllllllllll Now, therefore, the conditions of this This bond is effective the ll day of Place of Incorporation obligation are that the penalty amount of this llllll, llll, and shall continue in lllllllllllllllllllll bond shall be available to pay any judgment effect until discharged or terminated as Trade Name, if Any obtained or any settlement made pursuant to herein provided. The Principal or the Surety lllllllllllllllllllll a claim under 46 CFR 515.23 against the OTIs may at any time terminate this bond by mail Business Address (Affix Corporate Seal) enumerated in Appendix A of this bond for or email ([email protected]) written notice to the lllllllllllllllllllll Director, Bureau of Certification and damages arising from any or all of the By identified OTIs’ transportation-related Licensing, Federal Maritime Commission, activities under the Shipping Act (46 U.S.C. Washington, DC. 20573. Such termination lllllllllllllllllllll 40101–41309), or order for reparations issued shall become effective thirty (30) days after Title pursuant to section 11 of the Shipping Act receipt of said notice by the Commission. lllllllllllllllllllll (46 U.S.C. 41301–41302, 41305–41307(a)), or The Surety shall not be liable for any Principal’s Agent for Service of Process any penalty assessed pursuant to section 13 transportation-related activities of the OTIs (Required if Principal is not a U.S. of the Shipping Act (46 U.S.C. 41107–41109), identified in Appendix A as covered by the Corporation) that are not covered by the identified OTIs’ Principal after the expiration of the 30-day lllllllllllllllllllll individual insurance policy(ies), period, but such termination shall not affect Agent’s Address guaranty(ies) or surety bond(s). the liability of the Principal and Surety for lllllllllllllllllllll any transportation-related activities This group bond shall inure to the benefit Corporate Surety of any and all persons who have obtained a occurring prior to the date when said lllllllllllllllllllll judgment or made a settlement pursuant to termination becomes effective. Business Address (Affix Corporate Seal) a claim under 46 CFR 515.23 for damages The Principal or financial responsibility against any or all of the OTIs identified in provider will promptly notify the lllllllllllllllllllll Appendix A not covered by said OTIs’ underwriting Surety in writing and the By insurance policy(ies), guaranty(ies) or surety Director, Bureau of Certification and lllllllllllllllllllll bond(s) arising from said OTIs’ Licensing, Federal Maritime Commission, Title transportation-related activities under the Washington, DC, 20573, by mail or email lllllllllllllllllllll Shipping Act, or order for reparation issued ([email protected]), of any additions, deletions or pursuant to section 11 of the Shipping Act, changes to the OTIs enumerated in Appendix Appendix E to Part 515—Optional and to the benefit of the Federal Maritime A. In the event of additions to Appendix A, Rider for Additional NVOCC Financial Commission for any penalty assessed against coverage will be effective upon receipt of Responsibility (Optional Rider to Form such notice, in writing, by the Commission said OTIs pursuant to section 13 of the FMC–48) [FORM 48A] Shipping Act (46 U.S.C. 41107–41109). at its office in Washington, DC. In the event However, the bond shall not apply to of deletions to Appendix A, termination of FMC–48A, OMB No. 3072–0018, (04/06/04) coverage for such OTI(s) shall become shipments of used household goods and Optional Rider for Additional NVOCC effective 30 days after receipt of written personal effects for the account of the Financial Responsibility [Optional Rider to notice by the Commission. Neither the Department of Defense or the account of Form FMC–48] federal civilian executive agencies shipping Principal nor the Surety shall be liable for under the International Household Goods any transportation-related activities of the RIDER Program administered by the General OTI(s) deleted from Appendix A that occur The undersigned llllllllll, as after the expiration of the 30-day period, but Services Administration. Principal and llllllllll, as such termination shall not affect the liability The Surety consents to be sued directly in Surety do hereby agree that the existing Bond of the Principal and Surety for any respect of any bona fide claim owed by any No. llllllllll to the United transportation-related activities of said OTI(s) or all of the OTIs identified in Appendix A States of America and filed with the Federal occurring prior to the date when said for damages, reparations or penalties arising Maritime Commission pursuant to section 19 termination becomes effective. from the transportation-related activities of the Shipping Act of 1984 is modified as The underwriting Surety will immediately under the Shipping Act of the OTIs in the follows: notify the Director, Bureau of Certification event that such legal liability has not been 1. The following condition is added to this and Licensing, Federal Maritime discharged by the OTIs or Surety after a Bond: Commission, Washington, DC. 20573, in claimant has obtained a final judgment (after a. An additional condition of this Bond is writing by mail or email ([email protected]), of all appeal, if any) against the OTIs from a United that $llllllllllll (payable in claims made, lawsuits filed, judgments States Federal or State Court of competent U.S. Dollars or Renminbi Yuan at the option rendered, and payments made against this jurisdiction and has complied with the of the Surety) shall be available to pay any group bond. procedures for collecting on such a judgment fines and penalties for activities in the U.S.- Signed and sealed this ll day of pursuant to 46 CFR 515.23, the Federal China trades imposed by the Ministry of llll, lll, Maritime Commission, or where all parties Communications of the People’s Republic of and claimants otherwise mutually consent, (Please type name of signer under each China (‘‘MOC’’) or its authorized competent from a foreign court, or where such claimant signature). communications department of the people’s has become entitled to payment of a specified lllllllllllllllllllll government of the province, autonomous

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region or municipality directly under the Appendix F to Part 515—Optional DC. 20573, accompanied by proof of Central Government or the State Rider for Additional NVOCC Financial transmission of notice to MOC. Such Administration of Industry and Commerce Responsibility for Group Bonds termination shall become effective thirty (30) pursuant to the Regulations of the People’s [Optional Rider to Form FMC–69] days after receipt of said notice and proof of Republic of China on International Maritime transmission by the Federal Maritime FMC–69A, OMB No. 3072–0018 (04/06/04) Commission. The Surety shall not be liable Transportation and the Implementing Rules for fines or penalties imposed on the of the Regulations of the PRC on Optional Rider for Additional NVOCC Principal after the expiration of the 30-day International Maritime Transportation Financial Responsibility for Group Bonds [Optional Rider to Form FMC–69] period but such termination shall not affect promulgated by MOC Decree No. 1, January the liability of the Principal and Surety for 20, 2003. RIDER any fine or penalty imposed prior to the date b. The liability of the Surety shall not be The undersigned lllllllll, as when said termination becomes effective. discharged by any payment or succession of Principal and lllllllll, as Surety 2. This Bond remains in full force and payments pursuant to section 1 of this Rider, do hereby agree that the existing Bond No. effect according to its terms except as unless and until the payment or payments llllll to the United States of America modified above. shall aggregate the amount set forth in and filed with the Federal Maritime In witness whereof we have hereunto set section 1a of this Rider. In no event shall the Commission pursuant to section 19 of the our hands and seals on this llll day of llll ll Surety’s obligation under this Rider exceed Shipping Act of 1984 is modified as follows: , 20 . 1. The following condition is added to this [Principal], the amount set forth in section 1a regardless Bond: By: lllllllllllllllllll of the number of claims. a. An additional condition of this Bond is [Surety], c. The total amount of coverage available that $ llll (payable in U.S. Dollars or under this Bond and all of its riders, Renminbi Yuan at the option of the Surety) By: lllllllllllllllllll available pursuant to the terms of section shall be available to any NVOCC enumerated Privacy Act and Paperwork Reduction llllllll in an Appendix to this Rider to pay any fines 1(a.) of this rider, equals $ . Act Notice The total amount of aggregate coverage and penalties for activities in the U.S.-China equals or exceeds $125,000. trades imposed by the Ministry of The collection of this information is Communications of the People’s Republic of d. This Rider is effective the lll day of authorized generally by Section 19 of China (‘‘MOC’’) or its authorized competent llllll ll , 20 , and shall continue in communications department of the people’s the Shipping Act of 1984 (46 U.S.C. effect until discharged, terminated as herein government of the province, autonomous 40901–40904). This is an optional form. provided, or upon termination of the Bond in region or municipality directly under the Submission is completely voluntary. accordance with the sixth paragraph of the Central Government or the State Failure to submit this form will in no Bond. The Principal or the Surety may at any Administration of Industry and Commerce way impact the Federal Maritime time terminate this Rider by mail or email pursuant to the Regulations of the People’s Commission’s assessment of your firm’s ([email protected]) written notice to the Director, Republic of China on International Maritime financial responsibility. Transportation and the Implementing Rules Bureau of Certification and Licensing, You are not required to provide the Federal Maritime Commission, Washington, of the Regulations of the PRC on International Maritime Transportation information requested on a form that is DC 20573, accompanied by proof of promulgated by MOC Decree No. 1, January subject to the Paperwork Reduction Act transmission of notice to MOC. Such 20, 2003. Such amount is separate and unless the form displays a valid OMB termination shall become effective thirty (30) distinct from the bond amount set forth in control number. Copies of this form will days after receipt of said notice and proof of the first paragraph of this Bond. Payment be maintained until the corresponding transmission by the Federal Maritime under this Rider shall not reduce the bond license has been revoked. Commission. The Surety shall not be liable amount in the first paragraph of this Bond or affect its availability. The Surety shall The time needed to complete and file for fines or penalties imposed on the this form will vary depending on Principal after the expiration of the 30-day indicate that $50,000 is available to pay such individual circumstances. The period but such termination shall not affect fines and penalties for each NVOCC listed on estimated average time is: the liability of the Principal and Surety for appendix A to this Rider wishing to exercise this option. Recordkeeping, 20 minutes; Learning any fine or penalty imposed prior to the date b. The liability of the Surety shall not be about the form, 20 minutes; Preparing when said termination becomes effective. discharged by any payment or succession of 2. This Bond remains in full force and and sending the form to the FMC, 20 payments pursuant to section 1 of this Rider, minutes. effect according to its terms except as unless and until the payment or payments modified above. shall aggregate the amount set forth in If you have comments concerning the In witness whereof we have hereunto set section 1a of this Rider. In no event shall the accuracy of these time estimates or our hands and seals on this day of Surety’s obligation under this Rider exceed suggestions for making this form llllll, 20ll, the amount set forth in section 1a regardless simpler, we would be happy to hear of the number of claims. [Principal], from you. You can write to the c. This Rider is effective the llll day Secretary, Federal Maritime By: lllllllllllllllllll of llllllll, 20ll and shall Commission, 800 North Capitol Street [Surety], continue in effect until discharged, NW., Washington, DC 20573–0001 or By: lllllllllllllllllll terminated as herein provided, or upon termination of the Bond in accordance with email: [email protected]. the sixth paragraph of the Bond. The By the Commission. Principal or the Surety may at any time Karen V. Gregory, terminate this Rider by mail or email (bcl@ Secretary. fmc.gov) written notice to the Director, Bureau of Certification and Licensing, [FR Doc. 2014–24003 Filed 10–9–14; 8:45 am] Federal Maritime Commission, Washington, BILLING CODE 6730–01–P

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Reader Aids Federal Register Vol. 79, No. 197 Friday, October 10, 2014

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING OCTOBER

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. 249...... 61440 Presidential Documents 3 CFR 329...... 61440 Executive orders and proclamations 741–6000 Proclamations: 701...... 59627 The United States Government Manual 741–6000 9174...... 59417 706...... 59627 9175...... 59419 790...... 59627 Other Services 9176...... 59421 Electronic and on-line services (voice) 741–6020 Proposed Rules: 9177...... 60043 931...... 60783 Privacy Act Compilation 741–6064 9178...... 60045 933...... 60783 Public Laws Update Service (numbers, dates, etc.) 741–6043 9179...... 60047 1001...... 60762 TTY for the deaf-and-hard-of-hearing 741–6086 9180...... 60049 1090...... 60762 9181...... 60051 1263...... 60384 9182...... 60053 1277...... 60783 ELECTRONIC RESEARCH 9183...... 60055 9184...... 60737 World Wide Web 14 CFR 9185...... 60939 25 ...... 59423, 59431, 60319 Full text of the daily Federal Register, CFR and other publications 9186...... 60941 39 ...... 59091, 59093, 59096, is located at: www.fdsys.gov. 9187...... 60943 9188...... 60945 59102, 59630, 59633, 59636, Federal Register information and research tools, including Public 59640, 59643, 60322, 60325, Executive Orders: Inspection List, indexes, and Code of Federal Regulations are 60327, 60329, 60331, 60334, 13678...... 60949 located at: www.ofr.gov. 60337, 60339 Administrative Orders: 73...... 59645 E-mail Memorandums: 398...... 60951 Memorandum of FEDREGTOC-L (Federal Register Table of Contents LISTSERV) is Proposed Rules: September 24, an open e-mail service that provides subscribers with a digital 39 ...... 59154, 59157, 59160, 2014 ...... 60041 form of the Federal Register Table of Contents. The digital form 59162, 59459, 59461, 59463, of the Federal Register Table of Contents includes HTML and 5 CFR 59465, 59467, 59468, 59695, PDF links to the full text of each document. 59697, 60384, 60389, 60789 Proposed Rules: To join or leave, go to http://listserv.access.gpo.gov and select 337...... 61266 71...... 60793 Online mailing list archives, FEDREGTOC-L, Join or leave the list 576...... 61266 1245...... 60119 (or change settings); then follow the instructions. 792...... 61266 1260...... 61013 1274...... 61013 PENS (Public Law Electronic Notification Service) is an e-mail 831...... 61266 service that notifies subscribers of recently enacted laws. 842...... 61266 15 CFR To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 7 CFR Proposed Rules: and select Join or leave the list (or change settings); then follow 301...... 61215 762...... 59166 the instructions. 319 ...... 59087, 59089, 61216 FEDREGTOC-L and PENS are mailing lists only. We cannot 761...... 60739 16 CFR respond to specific inquiries. 762...... 60739 1240...... 59962 Reference questions. Send questions and comments about the 763...... 60739 Proposed Rules: Federal Register system to: [email protected] 764...... 60739 306...... 61267 765...... 60739 The Federal Register staff cannot interpret specific documents or Proposed Rules: 17 CFR regulations. 948...... 60117 200...... 59104 CFR Checklist. Effective January 1, 2009, the CFR Checklist no 980...... 60117 Proposed Rules: longer appears in the Federal Register. This information can be 10 CFR 23...... 59898 found online at http://bookstore.gpo.gov/. 140...... 59898 72...... 59623 FEDERAL REGISTER PAGES AND DATE, OCTOBER 431...... 59090 18 CFR Proposed Rules: 2...... 60953 59087–59422...... 1 50...... 60383 4...... 59105 59423–59622...... 2 72...... 59693 38...... 60953 59623–60056...... 3 429...... 60996 380...... 59105 60057–60318...... 6 430...... 60996 431...... 59153 60319–60738...... 7 20 CFR 460...... 59154 60739–60950...... 8 404...... 61221 60951–61214...... 9 11 CFR Proposed Rules: 61215–61562...... 10 Proposed Rules: 620...... 61013 100...... 59459 21 CFR 12 CFR Proposed Rules: 50...... 61440 179...... 59699

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22 CFR 7...... 59167 Proposed Rules: Proposed Rules: 62...... 60294 75...... 59167 52 ...... 59471, 59703, 60123, 515...... 61544 120...... 61226 550...... 61041 60124, 60125, 60405, 61042 60...... 61044 121...... 61226 551...... 61041 47 CFR 123...... 61226 556...... 61041 63...... 60238 20...... 59444 126...... 61226 581...... 61041 81...... 59703 27...... 59138 130...... 61226 582...... 61041 191...... 61268 585...... 61041 194...... 61268 54...... 60090 23 CFR 271...... 59471, 60795 73 ...... 59447, 60090, 60091 31 CFR 771...... 60100 272...... 59471 95...... 60092 34...... 61236 300...... 59179, 59182 Proposed Rules: 24 CFR Proposed Rules: 721...... 59186 54...... 60406 1...... 59699 5...... 59646 42 CFR 73 ...... 60796, 61045, 61271 232...... 59646 32 CFR 405...... 59675 Proposed Rules: 49 CFR Ch. II ...... 61020 Proposed Rules: 412...... 59121, 59675 891...... 60590 86...... 59168, 60794 413...... 59675 10...... 59448 892...... 60590 415...... 59675 26...... 59566 33 CFR 422...... 59675 355...... 59450 25 CFR 100...... 59647 424...... 59675 365...... 59450 Proposed Rules: 117 ...... 59431, 59432, 60976 430...... 59123 369...... 59450 81...... 61021 165 ...... 59648, 59650, 60057, 431...... 59123 383...... 59450 82...... 61021 60745, 61238 433...... 59123 384...... 59450 169...... 60794 Proposed Rules: 435...... 59123 385...... 59450 117...... 61041 436...... 59123 26 CFR 387...... 59450 165...... 59173, 59701 440...... 59123 390...... 59450 485...... 59675 1...... 59112 391...... 59139, 59450 37 CFR 488...... 59675 54...... 59130 392...... 59450 210...... 60977 Proposed Rules: 27 CFR 395...... 59450 409...... 61164 397...... 59450 9...... 60954, 60968 38 CFR 410...... 61164 602...... 60349 Proposed Rules: Proposed Rules: 418...... 61164 622...... 60100 478...... 60391 38...... 59176 440...... 61164 555...... 60391 484...... 61164 Proposed Rules: 771...... 60391 40 CFR 485...... 61164 831...... 61272 51...... 60343 488...... 61164 29 CFR 52 ...... 59433, 59435, 59663, 1001...... 59717 50 CFR 10...... 60634 60059, 60061, 60064, 60065, 1003...... 59717 552...... 60974 60070, 60073, 60075, 60078, 17 ...... 59140, 59992, 60365 2590...... 59130 60081, 60347, 60978, 60985 44 CFR 622...... 60379, 61262 Proposed Rules: 60...... 60993 64...... 59123, 59127 648...... 59150 1910...... 61384 63...... 60898 679 ...... 60381, 61263, 61264 1915...... 61384 81 ...... 59674, 60078, 60081 45 CFR Proposed Rules: 1917...... 61384 93...... 60343 146...... 59130 17 ...... 59195, 59364, 60406, 1918...... 61384 180 ...... 59115, 59119, 60748 147...... 59137 61136 1926...... 61384 194...... 60750 155...... 59137 300...... 60796 271...... 59438, 60756 1355...... 61241 622...... 59204 30 CFR 272...... 59438 648...... 59472 Proposed Rules: 312...... 60087 46 CFR 660...... 61272 5...... 61035 721...... 60759 67...... 61261 679...... 59733, 60802

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in today’s List of Public enacted public laws. To Laws. subscribe, go to http:// LIST OF PUBLIC LAWS Public Laws Electronic listserv.gsa.gov/archives/ Last List October 9, 2014 Notification Service publaws-l.html (PENS) Note: No public bills which Note: This service is strictly have become law were for E-mail notification of new received by the Office of the PENS is a free electronic mail laws. The text of laws is not Federal Register for inclusion notification service of newly available through this service. PENS cannot respond to specific inquiries sent to this address.

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