Vol. 84 Friday, No. 120 June 21, 2019 Pages 29029–29370

Vol. 84 Friday, No. 120 June 21, 2019

Pages 29029–29370

OFFICE OF THE FEDERAL REGISTER

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Contents Federal Register Vol. 84, No. 120

Friday, June 21, 2019

Agency for International Development Seafair Air Show Performance, 2019, Seattle, WA, 29067 PROPOSED RULES Safety Zones: Leave and Holidays for U.S. Personal Services Contractors, Annual Events Requiring Safety Zones in the Captain of including Family and Medical Leave, 29140–29145 the Port Lake Michigan Zone—Chicago Air and Water Show, 29072 Agriculture Department Fireworks Displays in the Fifth Coast Guard District, See Animal and Plant Health Inspection Service 29080–29081 See Commodity Credit Corporation Milwaukee’s July 3rd Fireworks, Milwaukee Harbor, See Food and Nutrition Service Milwaukee, WI, 29076–29078 See Rural Housing Service Security Zone: Seattle’s Seafair Fleet Week Moving Vessels, 2019, Puget Air Force Department Sound, WA, 29072–29073 NOTICES PROPOSED RULES Meetings: Safety Zone: 2019 Public Interface Control Working Group for the USA Triathlon Age Group National Championships Lake NAVSTAR GPS Public Documents, 29177 Erie, Cleveland, OH, 29133–29135 Animal and Plant Health Inspection Service NOTICES Commerce Department Agency Information Collection Activities; Proposals, See Foreign-Trade Zones Board Submissions, and Approvals: See International Trade Administration Horse Protection Regulations, 29157–29158 See National Oceanic and Atmospheric Administration Antitrust Division NOTICES Committee for Purchase From People Who Are Blind or Changes Under National Cooperative Research and Severely Disabled Production Act: NOTICES Consortium for Battery Innovation, 29241–29242 Procurement List; Additions and Deletions, 29175–29177

Centers for Disease Control and Prevention Commodity Credit Corporation NOTICES RULES Meetings: Delivery and Shipping Standards for Cotton Warehouses, Disease, Disability, and Injury Prevention and Control 29030–29033 Special Emphasis Panel, 29209 Civil Rights Commission Comptroller of the Currency NOTICES RULES Meetings: Reduced Reporting for Covered Depository Institutions, Georgia Advisory Committee, 29158 29039–29053 Coast Guard RULES Copyright Office, Library of Congress Drawbridge Operations: PROPOSED RULES Atlantic Intracoastal Waterway (Halifax River), Daytona Copyright Office Fees, 29135–29138 Beach, FL, 29065–29066 St. Johns River, Putnam County, FL, 29063–29065 Defense Department Safety Zone: See Air Force Department Annual Events Requiring Safety Zones in the Captain of See Engineers Corps the Port Lake Michigan Zone—City of Kewaunee RULES Fireworks Display, 29069–29070 General Procedures and Delegations of the Board of Chicago Harbor, Navy Pier Southeast, Chicago, IL, 29066– Regents, Uniformed Services University of the Health 29067, 29078 Sciences, 29062–29063 Columbia River, Fireworks Umatilla, OR, 29070–29072 Public Meeting Procedures of the Board of Regents, Cuyahoga 50th Parade of Lights; Cuyahoga River, Uniformed Services University of the Health Sciences, Cleveland, OH, 29073–29076 29062 Fleet Week Maritime Festival, Pier 66, Elliot Bay, Seattle, NOTICES Washington, 29073 Agency Information Collection Activities; Proposals, Lower Mississippi River, New Orleans, LA, 29073 Submissions, and Approvals: Lower Mississippi River, Ohio River, and Upper Certain Federal Acquisition Regulation Part 15 Mississippi River, Bird’s Point-New Madrid Requirements, 29207–29208 Floodway, 29067–29069 Change Order Accounting, 29205–29206 Ohio River, Miles 90.7 to 91.2, Wheeling, WV, 29078– Contract Funding-Limitation of Costs/Funds, 29208– 29080 29209

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Education Department Federal Communications Commission NOTICES RULES Applications for New Awards: Creation of Interstitial 12.5 Kilohertz Channels in the 800 Mental Health Service Professional Demonstration Grant MHz Band Between 809–817/854–862 MHz; Improve Program, 29180–29186 Access to PLMR Spectrum; Land Mobile Communications Council, 29083–29085 NOTICES Employment and Training Administration Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals, 29202–29203 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Federal Deposit Insurance Corporation DOL-only Performance Accountability, Information, and RULES Reporting System, 29245–29246 Reduced Reporting for Covered Depository Institutions, 29039–29053 Energy Department See Federal Energy Regulatory Commission Federal Emergency Management Agency See Southwestern Power Administration NOTICES NOTICES Meetings: Energy Conservation Program: Technical Mapping Advisory Council, 29223 Decision and Order Granting a Waiver to Beghelli From the Department of Energy Illuminated Exit Sign Test Federal Energy Regulatory Commission Procedure, 29186–29190 NOTICES Meetings: Agency Information Collection Activities; Proposals, Supercritical CO2 Oxy-combustion Technology Group, Submissions, and Approvals, 29194–29195 29190–29191 Application: Equitrans, L.P., 29195–29196 Engineers Corps Gulfstream Natural Gas System, LLC, 29191–29192 NOTICES Combined Filings, 29192–29194, 29197–29199 Environmental Impact Statements; Availability, etc.: Complaints: High Voltage Electrical Transmission Line and its City and County of San Francisco v. Pacific Gas and Associated Infrastructure, Known as Surry-Skiffes Electric Co.; New Comment Date, 29199–29200 Creek-Whealton Aerial Transmission Line Project, Environmental Impact Statements; Availability, etc.: 29177–29179 Pacific Gas and Electric Company and City of Santa Request for Applications: Clara, CA, 29192 Stakeholder Representative Members of the Missouri Environmental Review: River Recovery Implementation Committee, 29179– Texas Eastern Transmission, L.P.; Bernville Compressor 29180 Units Replacement Project, 29194 Meetings: Reliability Technical Conference, 29197–29198 Environmental Protection Agency Request Under Blanket Authorization: PROPOSED RULES Mountain Valley Pipeline, LLC, 29196–29197 Air Quality State Implementation Plans; Approvals and Promulgations: Federal Highway Administration New Mexico and Albuquerque-Bernalillo County; NOTICES Municipal Solid Waste Landfills, 29138–29140 Guidance: NOTICES Safe Harbor Rate Streamlining for Engineering and Design Environmental Assessments; Availability, 29201 Services Consultant Contracts, 29277–29280

Export-Import Bank Federal Reserve System NOTICES RULES Request for Nominations: Reduced Reporting for Covered Depository Institutions, 2019 Advisory Committee, 29202 29039–29053 2019 Sub-Saharan Africa Advisory Committee, 29201– NOTICES 29202 Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29203–29204 Changes in Bank Control: Federal Aviation Administration Acquisitions of Shares of a Bank or Bank Holding PROPOSED RULES Company, 29204–29205 Airworthiness Directives: Formations of, Acquisitions by, and Mergers of Bank Bombardier, Inc., Airplanes, 29108–29111 Holding Companies, 29204 The Boeing Company Airplanes, 29102–29108 Fish and Wildlife Service Federal Bureau of Investigation NOTICES NOTICES Environmental Impact Statements; Availability, etc.: Agency Information Collection Activities; Proposals, Joint Draft Habitat Conservation Plan and Natural Submissions, and Approvals: Community Conservation Plan; Placer County, CA, Background Investigation Medical Release Forms, 29242 29224–29226

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Food and Drug Administration Government Accountability Office RULES NOTICES Guidance: Request for Nominations: Determining the Number of Employees for Purposes of Physician-Focused Payment Model Technical Advisory the Small Business Definition (Current Good Committee, 29209 Manufacturing Practices and Preventive Controls Regulations for Human and Animal Food), 29054– Health and Human Services Department 29055 See Centers for Disease Control and Prevention PROPOSED RULES See Food and Drug Administration Standards for Future Opioid Analgesic Approvals and See Health Resources and Services Administration Incentives for New Therapeutics to Treat Pain and See National Institutes of Health Addiction, 29112–29114 NOTICES NOTICES Privacy Act; Matching Program, 29219–29221 Agency Information Collection Activities; Proposals, Submissions, and Approvals: Health Resources and Services Administration Study of Oncology Indications in Direct-to-Consumer NOTICES Television Advertising, 29213–29216 Agency Information Collection Activities; Proposals, Substances Generally Recognized as Safe: Notification Submissions, and Approvals: Procedure, 29216–29217 Small Rural Hospital Transition Project, 29217–29218 Threshold of Regulation for Substances Used in Food- Requests for Nominations: Advisory Committee on Organ Transplantation, 29218– Contact Articles, 29209–29211 29219 Guidance: Opioid Analgesic Drugs: Considerations for Benefit-Risk Homeland Security Department Assessment Framework, 29211–29212 See Coast Guard Meetings: See Federal Emergency Management Agency Pediatric Oncology Subcommittee of the Oncologic Drugs Advisory Committee; Amendment, 29212–29213 Indian Affairs Bureau NOTICES Confederated Tribes of the Chehalis Reservation Liquor Food and Nutrition Service Ordinance; Repeal and Replace, 29226–29228 RULES Kickapoo Traditional Tribe of Texas Liquor Ordinance; Supplemental Nutrition Assistance Program: Repeal and Replace, 29228–29230 Student Eligibility, Convicted Felons, Lottery and Land Acquisitions: Gambling, and State Verification Provisions of the Delaware Tribe of Indians, 29230–29231 Agricultural Act; Correction, 29029–29030 Interior Department Foreign Assets Control Office See Fish and Wildlife Service RULES See Indian Affairs Bureau Reporting, Procedures and Penalties Regulations, 29055– See Land Management Bureau 29062 See National Park Service NOTICES NOTICES Blocking or Unblocking of Persons and Properties, 29281– Environmental Assessments; Availability, etc.: 29283 Deepwater Horizon Oil Spill Natural Resource Damage Assessment, Florida Trustee Implementation Group Phase V.3 Florida Coastal Access Project, 29231– Foreign-Trade Zones Board 29232 NOTICES Reorganization of Foreign-Trade Zone Under Alternative Internal Revenue Service Site Framework: RULES Sault Ste. Marie; Foreign-Trade Zone 16, Michigan, Guidance Related to Section 951A (Global Intangible Low- 29158–29159 Taxed Income) and Certain Guidance Related to Foreign Tax Credits, 29288–29370 PROPOSED RULES General Services Administration Guidance Under Section 958 (Rules for Determining Stock RULES Ownership) and Section 951A (Global Intangible Low– Civilian Board of Contract Appeals: Taxed Income), 29114–29133 Rules of Procedure of the Civilian Board of Contract NOTICES Appeals, 29085–29088 Agency Information Collection Activities; Proposals, NOTICES Submissions, and Approvals, 29283–29284 Agency Information Collection Activities; Proposals, Submissions, and Approvals: International Trade Administration Certain Federal Acquisition Regulation Part 15 NOTICES Requirements, 29207–29208 Antidumping or Countervailing Duty Investigations, Orders, Change Order Accounting, 29205–29206 or Reviews: Contract Funding-Limitation of Costs/Funds, 29208– Carbon Steel Butt-Weld Pipe Fittings From the People’s 29209 Republic of China, 29164–29168 Environmental Impact Statements; Availability, etc.: Certain Frozen Warmwater Shrimp From the Socialist Land Ports of Entry, 29206 Republic of Vietnam, 29172–29173

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Glycine From India and Japan, 29170–29172 Library of Congress Glycine From India and the People’s Republic of China, See Copyright Office, Library of Congress 29173–29174 Initiation of Five-Year (Sunset) Reviews; Correction, National Aeronautics and Space Administration 29159 NOTICES Steel Propane Cylinders From the People’s Republic of Agency Information Collection Activities; Proposals, China, 29159–29161 Submissions, and Approvals: Determination of Sales at Less Than Fair Value: Certain Federal Acquisition Regulation Part 15 Steel Propane Cylinders From Thailand, 29168–29170 Requirements, 29207–29208 Steel Propane Cylinders From the People’s Republic of Change Order Accounting, 29205–29206 China, 29161–29164 Contract Funding-Limitation of Costs/Funds, 29208– 29209 International Trade Commission NASA Safety Reporting System, 29246–29247 NOTICES Investigations; Determinations, Modifications, and Rulings, National Archives and Records Administration etc.: NOTICES Certain Gas Spring Nailer Products and Components Changes to Agency Records Schedule, 29247 Thereof, 29238–29239 National Highway Traffic Safety Administration Certain Mounting Apparatuses for Holding Portable Electronic Devices and Components Thereof, 29239– PROPOSED RULES 29240 Federal Motor Vehicle Safety Standards: Certain Off-The-Road Tires From China, 29241 Compressed Natural Gas Fuel Container Integrity, 29145– Crawfish Tail Meat From China, 29240–29241 29156 NOTICES Glycine From China, India, and Japan, 29238 Petition for Decision of Inconsequential Noncompliance: Prestressed Concrete Steel Rail Tie Wire From China and Yokohama Tire Corp., 29280–29281 Mexico, 29238 National Institutes of Health Justice Department NOTICES See Antitrust Division Meetings: See Federal Bureau of Investigation National Cancer Institute, 29221 See Justice Programs Office National Institute of Diabetes and Digestive and Kidney NOTICES Diseases, 29221–29223 Agency Information Collection Activities; Proposals, National Institute on Aging, 29221 Submissions, and Approvals: National Institute on Alcohol Abuse and Alcoholism, Application to Transport Interstate or Temporarily Export 29222 Certain National Firearms Act Firearms, 29243– 29244 National Oceanic and Atmospheric Administration September 11th Victim Compensation Fund Claim Form, RULES 29242–29243 Atlantic Highly Migratory Species: North Atlantic Swordfish Fishery, 29088–29091 Justice Programs Office Fisheries of the Exclusive Economic Zone Off Alaska: NOTICES Kamchatka Flounder in the Bering Sea and Aleutian Agency Information Collection Activities; Proposals, Islands Management Area, 29091 Submissions, and Approvals: NOTICES Office for Victims of Crime Training and Technical Application for Exempted Fishing Permits: Assistance Center Feedback Form Package, 29244– General Provisions for Domestic Fisheries; Coastal Pelagic 29245 Species Fishery, 29174–29175 Labor Department National Park Service See Employment and Training Administration RULES Delaware Water Gap National Recreation Area; Removal of Land Management Bureau Outdated Regulations, 29081–29083 NOTICES Change of Hours of Operation for the Lakeview Interagency National Science Foundation Office, Oregon, 29233 NOTICES Environmental Impact Statements; Availability, etc.: Meetings: Eastern Colorado Resource Management Plan; Royal STEM Education Advisory Panel, 29247–29248 Gorge Field Office, CO, 29235–29236 Fuel Breaks in the Great Basin; Idaho, Washington, Nuclear Regulatory Commission Oregon, California, Nevada, and Utah, 29232–29233 NOTICES Proposed Gemfield Mine Project, Esmeralda County, NV, Guidance: 29234 Environmental Dosimetry-Performance Specifications, Proposed Walker Ridge Wind Energy Project and a Testing, and Data Analysis, 29248–29249 Potential Amendment to the Ukiah Resource Management Plan, Colusa and Lake Counties, CA, Overseas Private Investment Corporation 29237–29238 NOTICES Filing of Plats of Survey: Agency Information Collection Activities; Proposals, Colorado, 29235 Submissions, and Approvals, 29249–29251

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Postal Regulatory Commission Surface Transportation Board NOTICES NOTICES New Postal Products, 29251 Control Exemption: Brookhaven Rail Partners, LLC, Related Infrastructure, LLC, BRX Transportation Holdings, LLC, and BRX Rural Housing Service Acquisition Sub, Inc.; Pioneer Railcorp, et al., 29276– RULES 29277 Single Family Housing Direct and Guaranteed Loan Modified Rail Certificate: Programs, 29034–29038 Dakota Southern Railway Company, 29275–29276

Science and Technology Policy Office Transportation Department NOTICES See Federal Aviation Administration Request for Information: See Federal Highway Administration National Research Strategy for the President’s Roadmap See National Highway Traffic Safety Administration To Empower Veterans and End the National Tragedy of Suicide, 29251–29253 Treasury Department See Comptroller of the Currency Securities and Exchange Commission See Foreign Assets Control Office See Internal Revenue Service NOTICES Agency Information Collection Activities; Proposals, Veterans Affairs Department Submissions, and Approvals, 29253–29254, 29270, NOTICES 29273–29274 Agency Information Collection Activities; Proposals, Self-Regulatory Organizations; Proposed Rule Changes: Submissions, and Approvals: Nasdaq BX, Inc., 29270–29273 Technical Industry Standards, 29285 NYSE Arca, Inc., 29254–29262 Environmental Impact Statements; Availability, etc.: NYSE National, Inc., 29262–29267 Technical Memorandum for the Westside Purple Line The Options Clearing Corp., 29267–29270 Extension Project, 29284

Small Business Administration PROPOSED RULES Separate Parts In This Issue Implementation of the Small Business 7(a) Lending Oversight Reform Act, 29092–29102 Part II NOTICES Treasury Department, Internal Revenue Service, 29288– Agency Information Collection Activities; Proposals, 29370 Submissions, and Approvals, 29274–29275

Southwestern Power Administration Reader Aids NOTICES Consult the Reader Aids section at the end of this issue for Integrated System, Sam Rayburn Dam and Robert D. Willis phone numbers, online resources, finding aids, and notice Rate Schedules, 29200–29201 of recently enacted public laws. To subscribe to the Federal Register Table of Contents State Department electronic mailing list, go to https://public.govdelivery.com/ NOTICES accounts/USGPOOFR/subscriber/new, enter your e-mail Meetings: address, then follow the instructions to join, leave, or Foreign Affairs Policy Board, 29275 manage your subscription.

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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.

7 CFR 271...... 29029 272...... 29029 273...... 29029 1423...... 29030 3550...... 29034 3555...... 29034 12 CFR 52...... 29039 208...... 29039 304...... 29039 13 CFR Proposed Rules: 120...... 29092 134...... 29092 14 CFR Proposed Rules: 39 (3 documents) ...... 29102, 29105, 29108 21 CFR 117...... 29054 507...... 29054 Proposed Rules: 15...... 29112 26 CFR 1...... 29114 Proposed Rules: 1...... 29288 31 CFR 501...... 29055 32 CFR 242a...... 29062 242b...... 29062 33 CFR 117 (2 documents) ...... 29063, 29065 165 (14 documents) ...... 29066, 29067, 29069, 29070, 29072, 29073, 29076, 29078, 29080 Proposed Rules: 165...... 29133 36 CFR 7...... 29081 37 CFR Proposed Rules: 201...... 29135 40 CFR Proposed Rules: 62...... 29138 47 CFR 90...... 29083 48 CFR 6106...... 29085 Proposed Rules: Ch. 7 ...... 29140 49 CFR Proposed Rules: 571...... 29145 50 CFR 635...... 29088 679...... 29091

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Rules and Regulations Federal Register Vol. 84, No. 120

Friday, June 21, 2019

This section of the FEDERAL REGISTER 2019 (84 FR 15083), and effective on are already required to report income contains regulatory documents having general June 14, 2019, is as noted in the specific and assets, the impact of this decision applicability and legal effect, most of which regulatory provisions. is negligible. are keyed to and codified in the Code of FOR FURTHER INFORMATION CONTACT: Federal Regulations, which is published under Need for Correction 50 titles pursuant to 44 U.S.C. 1510. Sasha Gersten-Paal, Branch Chief, Certification Policy Branch, Program As published, the text in the The Code of Federal Regulations is sold by Development Division, Food and Paperwork Reduction Act section of the the Superintendent of Documents. Nutrition Service (FNS), 3101 Park final rule does not include the burden Center Drive, Room 810, Alexandria, on SNAP individuals/households to Virginia 22302, (703) 305–2507, report lottery or gambling winnings to DEPARTMENT OF AGRICULTURE [email protected]. State SNAP agencies and requires a technical correction to the affected Food and Nutrition Service SUPPLEMENTARY INFORMATION: The Food and Nutrition Service published a final public, respondent type, number of responses, annual burden hours, and 7 CFR Parts 271, 272 and 273 rule on April 15, 2019, (84 FR 15083), that implements four sections of the estimated cost to respondents. [FNS–2015–0038] Agricultural Act of 2014 affecting Correction eligibility, benefits, and program RIN 0584–AE41 administration requirements for the In final rule FR Doc. 2019–07194, beginning on page 15083 in the issue of Supplemental Nutrition Assistance Supplemental Nutrition Assistance April 15, 2019, make the following Program: Student Eligibility, Convicted Program (SNAP). This document makes correction, in the SUPPLEMENTARY Felons, Lottery and Gambling, and a technical correction to add the burden INFORMATION section: State Verification Provisions of the on SNAP individuals/households to 1. On page 15091 in the first column, Agricultural Act of 2014; Correction report lottery or gambling winnings to State SNAP agencies to the burden revise the 13 lines of text before the AGENCY: Food and Nutrition Service details below based on a prior estimate heading ‘‘Description of Costs and (FNS), USDA. in IC 0584–0064. It is estimated that a Assumptions’’ to read as follows: ACTION: Final rule; correction. total of 27,500 participants, or 550 Affected public: State agencies, State SNAP participants per State, will spend gambling entities, gaming entities, SUMMARY: This document contains a total of 4,593 hours at a rate of .167 households. technical corrections to the Paperwork hours per response to report their Regulation Section: 7 CFR 272.17. Reduction Act section of final rule substantial winnings to the State SNAP Respondent Type: State agencies, entitled ‘‘Supplemental Nutrition agency at a rate of $7.25 per hour for a gaming entities, households. Assistance Program: Student Eligibility, total estimated cost of $33,296 for all Estimated number of respondents: Convicted Felons, Lottery and respondents annually. FNS utilized the 27,750. Gambling, and State Verification estimate of .167 hours to report a change Total annual responses: First year Provisions of the Agricultural Act of based on a prior estimate in IC 0584– 1,584,650; Ongoing 1,584,100. 2014,’’ published in the Federal 0064 on how long it takes a household Estimated annual burden hours: First Register on April 15, 2019. to complete a simplified periodic report. year 560,814 hrs; Ongoing 192,814 hrs. DATES: FNS is not including the burden on Estimated cost to respondents: First Effective date: This document is SNAP individuals/households to year $23,228,636; Ongoing $3,785,436. effective June 21, 2019. reapply for benefits should they become 2. On page 15092, add a table before Compliance date: Compliance with eligible again. Since individuals/ the heading ‘‘E-Government Act the final rule published on April 15, households applying for SNAP benefits Compliance’’ to read as follows:

Number of Description of Estimated Annual Total annual burden Estimated Hourly wage Estimate Reg. section Respondent type activity number of report or responses hours per total burden rate * cost to respondents record filed response hours respondents

7 CFR 273.11(r) ... SNAP Individuals/ Report lottery r 27,500 1 27,500 0.167 4,593 $7.25 $33,296 Households. gambling winnings to state SNAP Agency.

SNAP Individual/Household Subtotal Reporting ...... 27,500 1 27,500 ...... 4,593 ...... 33,296

7 CFR 272.17 ...... State SNAP Agen- Establish coopera- 50 5 250 320 80,000 59.35 4,748,000 cy Managers. tive agreements with State public agency and gaming entities **. 7 CFR 272.17 ...... State Public Agen- Establish coopera- 50 1 50 320 16,000 $59.35 949,600 cy Gaming Enti- tive agreements ty Managers. with State SNAP agency **.

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7 CFR 272.17 ...... State SNAP IT Create a data 50 1 50 4,160 208,000 53.74 11,177,920 Staff. matching system with State public agency and gaming entities **. 272.17 and State SNAP Agen- Eligibility worker 50 260 13,000 0.667 8,671 21.45 185,993 273.11(r). cy Eligibility follow-up— Worker. misidentified winners. 7 CFR 272.17 and State SNAP Agen- Eligibility worker 50 460 23,000 1 23,000 21.45 493,350 7 CFR 273.11(r). cy Eligibility follow-up—true Worker. winners. 7 CFR 272.17 and State SNAP Agen- Eligibility worker 50 411 20,550 1 20,550 21.45 440,798 7 CFR 273.11(r). cy Eligibility work new appli- Worker. cations (churn). 7 CFR 272.17 ...... State Public Agen- Input data into 50 6,000 300,000 0.08 24,000 19.56 469,440 cy Gaming Enti- data matching ty Staff Member. system for use by State SNAP agency. 7 CFR 272.17 ...... State SNAP IT Maintain a data 50 1 50 320 16,000 53.74 859,840 Staff. matching system with State public agency and gaming entities.

State Agency Subtotal Reporting ...... 50 7,139 356,950 ...... 396,221 ...... 19,324,940

7 CFR 272.17 ...... Gaming Entity ** Establish coop- 200 1 200 320 64,000 40.12 2,567,680 Managers. erative agreements with State SNAP agency. 7 CFR 272.17 ...... Gaming Entity Input data into 200 6000 1,200,000 0.08 96,000 13.57 1,302,720 Staff Member. data matching system for use by State SNAP agency.

Business Subtotal Reporting ...... 200 6,001 1,200,200 ...... 160,000 ...... 3,870,400

Individual, States and Business Reporting Grand 27,750 13,141 1,584,650 ...... 560,814 ...... 23,228,636 Total Burden Estimates. * Based on the Bureau of Labor Statistics May 2017 Occupational and Wage Statistics. The salaries of State SNAP agency managers and public gaming entity managers are considered to be ‘‘General and Operations Managers (11–1021).’’ The salaries of gaming entity managers are considered to be ‘‘Gaming Managers (11–9071).’’ The salaries of State SNAP IT Staff are considered to be ‘‘Software Developers, Systems Software (15–1133).’’ The salaries of the eligibility workers are considered to be ‘‘Eligibility Interviewers, Government Programs (43–4061).’’ The salaries of public gaming entity staff member are considered to be ‘‘Information and Record Clerks, All Other (43–4199).’’ The salaries of gaming entity staff member are considered to be ‘‘Gaming Cage Workers (43–3041).’’ (http://www.bls.gov/oes/ home.htm). ** These are only first year costs and are next expected to re-occur annually.

Dated: June 5, 2019. SUMMARY: This rule amends the Washington, DC 20250–3061; email: Brandon Lipps, regulations that specify the storage and [email protected], or Administrator, Food and Nutrition Service. handling of cotton at warehouses telephone: 202–690–2434. [FR Doc. 2019–12910 Filed 6–20–19; 8:45 am] approved by the Commodity Credit SUPPLEMENTARY INFORMATION: The BILLING CODE 3410–30–P Corporation (CCC). The amendment Commodity Credit Corporation Charter modifies the weekly accounting and Act (15 U.S.C. 714) authorizes CCC to reporting for cotton bales made enter into storage agreements with DEPARTMENT OF AGRICULTURE available for shipment to assure private individuals and companies to compliance with CCC requirements. allow warehouse operators to store Commodity Credit Corporation This rule also revises the regulations to commodities owned by CCC or pledged reflect transfer of administrative as security to CCC for marketing 7 CFR Part 1423 oversight of warehouse programs and assistance loans. Warehouse operators activities from the Farm Service Agency who enter into these agreements must [Doc. No. AMS–FTPP–18–0085] (FSA) to the Agricultural Marketing comply with regulations established by Service (AMS). the United States Department of Delivery and Shipping Standards for DATES: Effective June 24, 2019. Agriculture (USDA) at 7 CFR part Cotton Warehouses FOR FURTHER INFORMATION CONTACT: Dan 1423—Commodity Credit Corporation Schofer, Cotton Program Manager, Approved Warehouses. Section 1423.11 AGENCY: Commodity Credit Corporation, Warehouse Commodity Management specifies delivery and shipping USDA. Division, AMS Fair Trade Practices standards for cotton warehouses. Under Program, USDA, 1400 Independence § 1423.11, cotton warehouse operators ACTION: Final rule. Ave. SW, Stop 3061, Room 2555-South, are required to deliver stored cotton

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without unnecessary delay. To assure required 4.5%. In this example, the programs and activities from FSA to delivery without unnecessary delay, option to calculate BMAS compliance AMS in 2018. Corresponding changes warehouse operators are required to using the rolling average of the reporting are made to § 1423.3, removing the maintain an inventory of bales made week and the week preceding the definition for the Kansas City available for shipment (BMAS) of at reporting week would result in a Commodity Office (KCCO) from the list least 4.5 percent of the warehouse’s determination by CCC that the cotton of definitions, and to §§ 1423.7(d), storage capacity in effect during the warehouse operator is in compliance 1423.8(b), and 1423.13, replacing relevant week of shipment. Warehouse with a BMAS of 4.5% for the reporting references to FSA and KCCO with operators are required to report the week. references to AMS. number of BMAS to CCC on a weekly In another example, a cotton A proposed rule concerning this basis. warehouse operator schedules 4.5% of action was published in the Federal Previously, § 1423.11 of the the applicable storage capacity for Register on April 5, 2019 (84 FR 13562), regulations allowed bales made delivery in each of three consecutive and a 30-day comment period ending available for shipment by the warehouse weeks. During the first week, the cotton May 6, 2019, was provided to allow operator but not picked up (BNPU) by warehouse operator actually makes interested persons to respond to the the shipper to count for up to two available for shipment 6.0% of the proposal. Three comments were reporting weeks when calculating and applicable storage capacity. During the received. reporting BMAS for the reporting week. second week, the cotton warehouse All three comments, including one This rule revises the definition of BMAS operator only makes 2.0% of applicable comment submitted on behalf of eight in § 1423.11(b) by allowing BNPU to be storage capacity available for shipment. cotton industry associations, expressed counted for only one week, with BMAS During the third week, the cotton support for the proposed changes. to include only bales actually shipped warehouse operator makes 7.0% of Commenters explained that the or not picked up for that reporting week. applicable storage capacity available for proposed changes to BMAS accounting Under the revised regulations, the shipment. In this example, the cotton should have a positive effect on the flow warehouse operator can meet the 4.5% warehouse operator is considered to of U.S. cotton into the market and cotton flow requirement by averaging have delivered cotton without improve shipping and tracking the BMAS for the current reporting unnecessary delay during the first and efficiency. week with either the BMAS for the the third weeks. During the second One commenter asked why other previous week or the BMAS for week however, the CCC can use the two- recommendations from the industry at a following week. Under revised week rolling average of either the National Cotton Council meeting were § 1423.11(a), CCC will use a two-week applicable week and the immediately not addressed in the proposed rule. One rolling average of BMAS to determine a preceding week, which results in an recommendation pertained to the warehouse operator’s compliance with average BMAS of 4.0%, or the two-week revision of the Cotton Storage the minimum cotton flow rate of 4.5% rolling average of the applicable week of applicable storage capacity. This and the immediately succeeding week, Agreement (Form CCC–823) (CSA), change is intended to give cotton which results in an average BMAS of which must be signed and complied warehouse operators the flexibility to 4.5%, to make its compliance with by warehouses storing CCC-interest address real-time scheduling changes determination for the second week. cotton. The other recommendation and market demands faced by cotton Using the two-week rolling average of pertained to changes to the licensing merchants and shippers. the second and third week to calculate agreement between USDA and EWR, For example, a cotton warehouse the BMAS for the second week allows Inc., the licensed provider of electronic operator has scheduled 4.5% of the the CCC to consider the cotton warehouse receipts for cotton. warehouse’s applicable storage capacity warehouse operator to have delivered The proposed rule explained that to be available for shipment for several cotton without unnecessary delay for conforming changes to the CSA would consecutive weeks. The week before a that second week because the 4.5% be made to reflect the regulatory load is scheduled to be picked-up, a average met the cotton flow revisions in the proposed rule, meaning shipper requests to change its load out requirement. the change in reporting BMAS. The date to an earlier date in the preceding This rule continues to require other recommendations noted by the week, for an amount representing 0.25% warehouse operators to report their commenter refer to actions outside the of the warehouse’s applicable storage BMAS each week based upon the scope of this final rule. Additional capacity. If the warehouse operator has revised definition of BMAS. CCC will changes to the CSA are being made to that specific load (0.25% of licensed determine compliance on the basis of an reflect the transfer of administrative capacity) already staged for a scheduled individual reporting week, or if needed, oversight for the program from FSA to delivery the following week, that load use one of the optional rolling average AMS. Additionally, AMS has been could be picked up earlier—in the week calculations of BMAS for two working closely with the National preceding the original load out date. consecutive reporting weeks. If CCC Cotton Council to address industry Without using a two-week rolling uses the average of the applicable week recommendations regarding staging average and without making any and the immediately succeeding week, orders, shipping orders, and shipping additional bale adjustments, the CCC will determine compliance for the update files contained within EWR warehouse operator would be applicable week after it receives the data provider services. AMS addresses considered to have delivered cotton from the immediately succeeding week. compliance in the Cotton Storage without unnecessary delay for the first These options allow cotton warehouse Agreement between CCC and individual week because its BMAS is 4.75%, which operators to meet the cotton flow warehouse operators. AMS and the is greater than the required 4.5%. requirements of the regulation while National Cotton Council have agreed to However, the warehouse operator would being flexible to the needs of the provide notices to all cotton not be considered to have delivered shipping and merchant industries. warehouses, shippers, and merchants cotton without unnecessary delay Finally, this rule revises § 1423.2 to regarding the regulatory changes in this during the second week because its reflect the transfer of responsibility for final rule and the conforming changes to BMAS is 4.25%, which is less than he administration of CCC warehouse the CSA. EWR will notify its customers

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separately of any EWR programming increased opportunities for citizen responsibility includes entering into changes and new requirements. access to government information and contracts for the storage and handling of Accordingly, no changes will be made services, and for other purposes. CCC-interest commodities with to the rule as proposed, based on the Accordingly, CCC offers options for warehouses. The operators of those comments received. companies requesting service to do so approved warehouses are required to Executive Orders 12866 and 13771, and electronically. comply with CCC regulations, which Final Regulatory Flexibility Analysis include reporting information about the Executive Order 13175 stored commodities to CCC. The specific This rule does not meet the definition This action has been reviewed in requirements that operators of approved of a significant regulatory action accordance with the requirements of warehouses must meet are specified in contained in section 3(f) of Executive Executive Order 13175, Consultation the regulations at 7 CFR part 1423— Order 12866 and is not subject to review and Coordination with Indian Tribal Commodity Credit Corporation by the Office of Management and Governments. The review reveals that Approved Warehouses—and in the Budget (OMB). Additionally, because this regulation would not have signed storage agreement between CCC this rule does not meet the definition of substantial and direct effects on Tribal and the warehouse operator for each a significant regulatory action, it does governments and would not have type of commodity. not trigger the requirements contained significant Tribal implications. Operators of CCC-approved cotton in Executive Order 13771. See OMB’s warehouses are currently required to Memorandum titled ‘‘Interim Guidance Executive Order 12988 report BMAS, among other data, to CCC Implementing Section 2 of the Executive This rule has been reviewed under on a weekly basis. Prior to the revisions Order of January 30, 2017, titled Executive Order 12988, Civil Justice in this rule, bales that were scheduled ‘Reducing Regulation and Controlling Reform. This rule is not intended to and ready for delivery in a previous Regulatory Costs’ ’’ (February 2, 2017). have retroactive effect. USDA has not week, but not picked up by the shipper, Pursuant to the requirements set forth identified any relevant Federal rules and for which another shipping date in the Regulatory Flexibility Act (RFA) that duplicate, overlap, or conflict with had not been established, remained (5 U.S.C. 601 et seq.), CCC has this rule. available for loading and could be considered the economic effect of this A warehouse operator may resolve counted toward BMAS for up to two action on small entities and has any claim regarding noncompliance weeks. This rule clarifies that bales determined that this rule does not have with the shipping standards by any scheduled and ready for delivery during a significant economic impact on a entity other than CCC, such as a a specific week but not picked up by the substantial number of small business merchant or shipper, in a court of end of that reporting week can only be entities. The purpose of the RFA is to competent jurisdiction or through reported as BMAS for the week that fit regulatory actions to the scale of mutually agreed upon arbitration such bales were made available for businesses subject to such actions in procedures. CCC does not have shipment. The National Cotton Council, order that small businesses will not be authority to prohibit one entity from on behalf of the U.S. cotton industry, unduly burdened. filing suit against another in a court of requested this change in order to Currently, there are 326 CCC- law. increase the cotton flow rate to domestic approved warehouses that store cotton. When addressing compliance matters and foreign manufacturers, to more CCC estimates that approximately 50 with CCC, the warehouse operator may quickly respond to domestic and CCC-approved warehouses would be seek reconsideration of enforcement international market needs, and to considered small businesses, according decisions after demonstrating that optimize performance by approved to standards established by the U.S. corrective actions have been taken. cotton warehouse operators. This Small Business Administration (13 CFR change is being made to simplify the Paperwork Reduction Act part 121), which identifies small calculation of BMAS so that certain business size by average annual receipts The cotton warehouse information bales do not need to be accounted for or by the average number of employees collection required in this final rule is beyond the applicable reporting week. at a firm. the weekly reporting of BMAS by cotton The rule revises the accounting for Sizes of cotton warehouses vary in warehouses. BMAS is reported through BNPU in the weekly report to CCC. It size as well as business type, including the EWR system, to which AMS has does not change any warehouse tariffs small, independent country warehouses, access. Authority to collect the or fees. small to large sized warehouses owned information gathered by EWR, Inc., is A corresponding change is also made by cooperatives of producers, and small provided in Public Law 107–171, the to CCC’s Cotton Storage Agreement to large sized warehouses owned by Farm Security and Rural Investment Act (Form CCC–823). The storage agreement corporate shippers/merchants. The of 2002, which also exempts the between CCC and the cotton warehouse requirements that warehouse operators information collection from the operator specifies the requirements the must deliver stored cotton without Paperwork Reduction Act (44 U.S.C. warehouse operator must meet for unnecessary delay and make at least 4.5 Chapter 35). The regulatory changes in storing and handling CCC-interest percent of their applicable storage this final rule will not change the cotton. The standard cotton storage capacity available for shipment apply to burden associated with reporting agreement form is available on the all sizes of warehouses. Thus, the effects BMAS, which must be reported weekly. USDA website at: https:// of this rule are not disproportionately This rule only changes the way CCC forms.sc.egov.usda.gov//efcommon/ greater or lesser for small businesses accounts for the information collected eFileServices/eForms/CCC823.PDF. than for large businesses. and uses it to determine compliance Additional changes to the regulations with cotton delivery and shipping reflect the transfer of administrative E-Gov requirements. responsibility for warehouse USDA is committed to complying management from FSA to AMS. with the E-Government Act to promote Background The revisions in this rule are intended the use of the internet and other AMS administers the CCC-approved to improve the efficiency of cotton flow information technologies to provide warehouse program for CCC. This from U.S. producers and cotton

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warehouses to shippers, and ultimately List of Subjects in 7 CFR Part 1423 § 1423.11 Delivery and shipping standards to cotton manufacturers, by more for cotton warehouses. Agricultural commodities, Cotton, accurately reporting cotton that is Honey, Oilseeds, Reporting and (a) * * * available for shipment. Before the recordkeeping requirements, Surety revisions in this final rule, accounting (2) Be considered to have delivered bonds, Warehouses. for certain bales that may have been cotton without unnecessary delay if the scheduled and ready for shipment but For the reasons set forth in the warehouse operator has made available were not picked up for two weeks or preamble, 7 CFR part 1423 is amended for shipment at least 4.5 percent of its more, potentially inflated BMAS as follows: applicable storage capacity in effect, calculations. This rule change is meant measured as the bales made available to more accurately reflect how the PART 1423—COMMODITY CREDIT for shipment (BMAS): cotton industry actually makes bales CORPORATION APPROVED WAREHOUSES (i) During the relevant week of available for shipment each week. shipment; or Availability and consistent supply of ■ cotton are crucial for the U.S. cotton 1. The authority citation for part 1423 (ii) Calculated as the two-week, industry in order to compete with other continues to read as follows: rolling average of the BMAS for the cotton producing nations. Having Authority: 15 U.S.C. 714b and 714c. relevant week of shipment and the BMAS for the immediately preceding accurate information about bales made ■ 2. Revise § 1423.2 to read as follows: available for shipment contributes to week; or more efficient and effective marketing of § 1423.2 Administration. (iii) Calculated as the two-week, U.S. cotton. On behalf of CCC, the Agricultural rolling average of the BMAS for the Effective Date Marketing Service (AMS) will relevant week of shipment and the administer this part under the BMAS for the immediately succeeding The Administrative Procedure Act (5 supervision of the AMS Administrator. week. U.S.C. 553) requires the publication of (b) * * * a substantive rule 30 days before its § 1423.3 [Amended] (1) BMAS during such week is effective date, unless the rule grants or ■ 3. Amend § 1423.3 by removing the defined as any cotton bales that have recognizes an exemption or relieves a definition for ‘‘KCCO.’’ restriction (5 U.S.C. 553(d)(1)), or the been delivered or are scheduled and ■ 4. Amend § 1423.7 by removing ‘‘, or’’ agency finds good cause for excepting ready for delivery but not picked up at the end of paragraph (c) and adding the rule from the 30-day notice during such week; ‘‘; or’’ in its place and revising requirement (5 U.S.C. 553(d)(3)). USDA paragraph (d) to read as follows: * * * * * finds that it is unnecessary and contrary ■ 7. Amend § 1423.13 by revising to the public interest to postpone the § 1423.7 Net worth alternatives. paragraph (a) to read as follows: effective date of this rule for 30 days * * * * * after publication in the Federal (d) Other alternative instruments and § 1423.13 Appeals, suspensions, and Register. The revisions herein represent forms of financial assurance as the AMS debarment. a relaxation of the regulations and Administrator determines appropriate to provide additional flexibilities to the (a) After initial approval, warehouse secure the warehouse operator’s cotton industry, which recommended operators may request that CCC compliance with this section. the changes. The revisions are necessary reconsider adverse actions when the prior to the beginning of the 2019 cotton ■ 5. Amend § 1423.8 by revising warehouse operator establishes that the shipping season, which begins July 1 in paragraph (b) to read as follows: reasons for the action have been south Texas. Interested parties were § 1423.8 Approval or rejection. remedied or requests reconsideration of invited to comment on the proposed the action and presents to the Director, * * * * * rule, and three comments were received, Warehouse and Commodity (b) CCC will notify the warehouse all of which supported the proposed Management Division, AMS, in writing, operator of rejection under this part in actions. A comment in behalf of eight information in support of such request. writing. The notification will state the cotton industry associations of The warehouse operator may, if causes for rejection. CCC will reconsider producers, ginners, warehouse dissatisfied with the Director’s operators, shippers, marketers, and a warehouse for approval when the warehouse operator establishes that the determination, obtain a review of the textile manufacturers urged USDA to determination and an informal hearing finalize the revision in time for the 2019 reasons for rejection have been remedied or requests reconsideration of by submitting a request to the AMS shipping season. It would be contrary to Administrator. Appeals shall be as the public interest to unnecessarily the action and presents to the Director, prescribed in part 780 of this title, and delay implementation of this final rule, Warehouse and Commodity under such regulations the warehouse thereby potentially disrupting the Management Division, AMS, in writing, orderly shipping of cotton as required information in support of such request. operator shall be considered as a by CCC. Moreover, postponing the The warehouse operator may, if ‘‘participant.’’ effective date of the final rule for 30 dissatisfied with the Director’s * * * * * determination, obtain a review of the days is unnecessary to allow for Dated: June 14, 2019. adjustment of behavior because none is determination and an informal hearing Robert Stephenson, required of regulated entities, who will by submitting a request with the AMS continue to file the same weekly BMAS Administrator. Appeals shall be as Executive Vice President, Commodity Credit reports they have in the past. Therefore, prescribed in part 780 of this title. Corporation. good cause exists for making this rule ■ 6. Amend § 1423.11 by revising [FR Doc. 2019–13089 Filed 6–20–19; 8:45 am] effective 1 day after publication in the paragraphs (a)(2) and (b)(1) to read as BILLING CODE 3410–02–P Federal Register. follows:

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DEPARTMENT OF AGRICULTURE and the observed disconnect between in Section 501(b)(4) of the Housing Act minimum wages and the low median of 1949 and therefore is not restricted in Rural Housing Service income in many areas. Under current the same way as ‘‘very low-’’ and ‘‘low- regulations, the income of a household income’’). 7 CFR Parts 3550 and 3555 with two people earning the minimum The Agency has consulted with HUD, and both agencies agree that the two-tier RIN 0575–AD13 wage would exceed the low-income eligibility limit in 39 to 93 percent of income limit approach is suitable for the Single Family Housing Direct and the counties in 16 states and territories. USDA single family housing loan and Guaranteed Loan Programs In other words, under current grant programs. The impacted income regulations and income limits, the definitions in § 3550.10 are revised to AGENCY: Rural Housing Service, USDA. income from a two-person household state that the respective limit is ‘‘an ACTION: Final rule. earning minimum wage may be adjusted income limit developed in considered too high to qualify for a consultation with HUD’’. The two-tier SUMMARY: The Rural Housing Service direct loan. income limits will be published (RHS or Agency) published a proposed In accordance with Section 501(b)(4) annually via a Procedure Notice and rule on August 31, 2018 to amend its of the Housing Act of 1949 (42 U.S.C. posted to the Agency website at https:// regulations for the direct and guaranteed 1471(b)(4)), the terms ‘‘low income www.rd.usda.gov/files/RD- single family housing loan and grant families or persons’’ and ‘‘very low- DirectLimitMap.pdf. programs. Through this action, RHS income families or persons’’ mean those The Agency is revising the definition finalizes the rule as final based on families and persons whose income do of moderate income so that it does not public comments, but with a revision to not exceed the respective levels exceed the moderate income limit the definition of rural area to cite the established for low-income families and established for the guaranteed single statute which defines rural area and very low-income families under the family housing loan program. The with a technical correction to the United States Housing Act of 1937 (42 Agency will publish a specific limit in suspension or debarment requirement. U.S.C. 1437 et seq.). The income levels the program handbook. DATES: Effective on July 22, 2019, except in the Housing Act of 1937 are generally The revisions to the income for the amendment to § 3550.63 which established by the U.S. Department of definitions will ultimately allow the is effective on August 5, 2019. Housing and Urban Development Agency and HUD to account for the (HUD). RHS currently uses the HUD differences between renting (which is FOR FURTHER INFORMATION CONTACT: income levels without income banding. the focus of HUD and 42 U.S.C. 1437 et Shannon Chase, Finance and Loan However, HUD programs authorized by seq.) and owning a home. This action Analyst, Single Family Housing Direct the Housing Act of 1937 focus on will improve program availability to the Loan Origination Branch, USDA Rural renting as opposed to home purchases, intended recipients. Development, STOP 0783, 1400 which contributes to the (2) Revising § 3550.54(d) to remove Independence Ave. SW, Washington, disqualification of households with the requirement that net family assets be DC 20250–0783, Telephone: (515) 305– minimum wage earners as described included in the calculation of 0399. Email: [email protected]. above. The Agency has been operating repayment income. SUPPLEMENTARY INFORMATION: a pilot in 23 states to test the alternate Currently, net family assets are I. Background methodology of a two-tier income limit considered for determining annual structure to address this issue. income, down payment purposes, and In order to improve the delivery of the For the pilot, the Agency used the repayment income. The Agency will single family housing loan programs authority in 42 U.S.C. 1437a(b)(2)(D), exclude net family assets from and to promote consistency among the which provides for HUD and USDA to repayment income calculations because programs when appropriate, RHS will consult on income ceilings for rural repayment income focuses on the make the following revisions to 7 CFR areas, taking into account the types of income of those who sign the parts 3550 and 3555. programs that will use the income promissory note, whereas net family (1) Revising the definition of rural ceilings as well as subsidy assets considers other family members. area in § 3550.10 to refer to the characteristics. Based on this authority, Net family assets will still be considered definition found in section 520 of the the Agency used a two-tier income limit for annual income and down payment Housing Act of 1949, as amended; and structure for the single family housing purposes. very low-, low-, and moderate-income programs which bands together 1–4 The Agency is revising the regulation definitions to allow for a two-tier person households using the 4-person so that the list of net family assets income limit structure (income banding) income level set by HUD, and 5–8 considered for annual income and down for the single family housing direct loan person households using the 8-person payment purposes would exclude and grant programs. income level established by HUD. The amounts in voluntary retirement The revision to the rural area pilot has successfully served more accounts such as individual retirement definition is technical in nature, as the borrowers, providing meaningful accounts (IRAs), 401(k) plans, Keogh Agency’s definition is already derived homeownership opportunities to those accounts, and the cash value of life from the definition in section 520 of the who would otherwise be denied. The insurance policies. Housing Act of 1949, as amended. The Agency will use income banding to In addition, the Agency is excluding revision will minimize the need for the determine all limits for very low- the value of tax advantaged college Agency to update its regulation and income, low-income, moderate-income, savings plans, the value of tax Handbooks in response to future 38 year term and adjusted median advantaged health or medical savings or changes to section 520 of the Housing income. spending accounts, and other amounts Act of 1949, as amended. Such banding has successfully been deemed by the Agency, from net family The revisions to the income used to establish the moderate income assets considered in the determination definitions will help minimize the limits in the guaranteed single family of annual income and down payments. impact of varying minimum wages housing loan program for years (the Excluding these types of assets when established by the states and territories term ‘‘moderate income’’ is not defined considering annual income or down

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payment requirements will help For the first option, the most widely posted to the Agency website at https:// safeguard the assets for their intended used option, the Agency contracts with www.rd.usda.gov/files/RD-SFHA purposes and promote a healthy a third party that provides building cost reaLoanLimitMap.pdf. The change financial support system for the data for real estate valuations to obtain allows the Agency to adjust the household when it does incur education construction costs, but those percentage(s) as necessary in order to be and health care costs, or enters construction costs are based on responsive to housing market conditions retirement. parameters for homes that do not reflect and trends. The Agency is also removing from net the varied modest homes available to (4) Revising § 3550.68(b)(2) to convert family assets the value, in excess of the program borrowers. In addition, a borrower currently receiving payment consideration received, for any business obtaining the market value is a time- or household assets disposed of for less consuming process relying on collecting assistance method 1 to payment than the fair market value during the 2 and updating recent home sales data, assistance method 2 should that years preceding the income which is particularly difficult given borrower receive a subsequent loan. The determination. This change recognizes Agency staff appraiser shortages over change is related to the income banding that it is not productive or meaningful the past few years. proposal, as payment assistance method to consider assets which have been The Agency has been operating a pilot 2 will more closely align the subsidy disposed of in the past. to test the alternate methodology of provided with what is actually needed Lastly, the Agency is making two basing the area loan limits on a for affordability. The change avoids minor changes primarily for consistency percentage of the FHA Forward One- potentially over-subsidizing borrowers between the direct and guaranteed Family mortgage limits (the HUD 203(b) using payment assistance method 1 single family housing loan regulations. limit). Under the pilot, 80 percent of the under the income banding system and The Agency will include in net family HUD 203(b) limit was used to establish reduces the potential for negative assets any equity in capital investments the area loan limits in selected pilot impacts to the program’s subsidy rate. In for consistency with the guaranteed states. The 80 percent was established addition, RHS is making a technical single family housing loan regulations, based on a side-by-side, county-by- correction to the proposed regulatory as well as obtaining a full understanding county comparison of the Agency’s text, which stated that the conversion of an applicant’s financial condition existing area loan limits to various would occur if a borrower ‘‘received’’ a before making a decision on a loan. In percentages of the HUD 203(b) limits. It subsequent loan, implying that the the exclusions from net family assets, was determined that 80 percent of the conversion to payment assistance the Agency will change the language HUD 203(b) limits was adequate to method 2 would apply retroactively and from ‘‘American Indian trust land’’ to cover the loan amounts in the majority only apply to loans already received. ‘‘American Indian restricted land’’. The of states (vs. lower percentages of 60–70 This meaning is not supported by the terms ‘‘trust land’’ and ‘‘restricted’’ are percent). preamble to the proposed rule. The final often used interchangeably, and the While the pilot states generally regulatory text will correctly state that revision is for consistency between the experienced increases in their area loan the conversion will occur if a borrower direct and guaranteed programs, and limits, the increases were not ‘‘receives’’ a subsequent loan, to ensure will not result in any substantive significant, in part because an that the conversion applies to any future changes. applicant’s qualification amount loan. (3) Revising the methodology used to continues to be limited to repayment determine the area loan limits in ability, property eligibility criteria (for (5) Revising the definition of low- § 3550.63(a) to use a percentage(s), as example, properties financed through income in § 3555.10 for the single determined by the Agency, of the the program are currently subject to family housing guaranteed loan program applicable local HUD section 203(b) 2,000 square feet), and other factors. to allow for the two-tier income limit limit. Average loan amounts in the pilot states structure (income banding) discussed The revisions to the area loan limit increased 13.4 percent from Fiscal Year above. The two-tier income limits will methodology will streamline the 2015 to 2017, while average loan be published annually via a Procedure determination of area loan limits and amounts in the non-pilot states have Notice and posted to the Agency improve the reliability of the data set increased 5.4 percent during the same website at https://www.rd.usda.gov/ used to establish the area loan limits. period. files/RD-GRHLimitMap.pdf. The current process to annually The Agency believes the slightly The single family housing guaranteed establish the area loan limits uses a data higher percent increase in the pilot loan program provides guarantees to set based on overly restrictive states is acceptable for several reasons. lenders who make loans to low- and nationalized parameters and requires a For example, the alternate methodology moderate-income borrowers in rural significant amount of staff time on all makes new construction under the areas who are without sufficient levels (field, state, and national). program more feasible, and new resources or credit to obtain a loan Currently, § 3550.63(a) allows for two construction can improve a rural without the guarantee. As mentioned, methods that a State Director may use community’s housing stock and the guaranteed loan program already to establish area loan limits. The first economy. In addition, this action will uses the two-tier income limit structure option is based on the cost to construct save the Agency more than $70,000 each for moderate income limits. This change a modest home plus the market value of year (which is the cost to obtain the would allow the two-tier income limit an improved lot based on recent sales construction cost data set from a structure to be used for determining the data. The second option allows the State nationally recognized residential cost very low- and low-income limits in the Director to use State Housing Authority provider). A significant amount of staff guaranteed loan program. (SHA) limits as long as the limit is time will also be saved. within 10 percent of the cost data plus The Agency will determine the (6) Making a technical correction to the market value of the improved lot. percentage(s) based on housing market the suspension or debarment This second option is rarely used conditions and trends, and publish the requirement in § 3550.53(f) to refer to 2 because the SHA limits are usually not percentage(s) in the program handbook. CFR parts 180 and 417, instead of 7 CFR within the 10 percent limit. The resulting area loan limits will be 3017 which is obsolete.

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II. Discussion of Relevant Public recipients. The Agency does not believe Agency Response: The change Comments Received on August 31, the changes will open the program to recognizes that it is not productive or 2018, Proposed Rule higher income households at the meaningful to consider assets which The 60-day comment period for the expense of lower income households, have been disposed of in the past. The proposed rule published at 83 FR 44504 and adopts the changes as proposed. percentage of applicants who have ended on October 30, 2018. A total of The Agency has consulted with HUD documented that they disposed of assets 30 comments were received. regarding the implications of differing for less than the market value in the Commenters included affordable income limits within its programs, and preceding two years is nominal. When housing nonprofit organizations, the the Agency’s two-tier income limits. an applicant has disposed of assets in National Association of Home Builders, HUD has not taken a position on this manner, the market value of the the National Association of Realtors, the changing income limits for SHOP, asset in question generally does not National Council of State Housing HOME, CDBG or other HUD exceed the applicable asset threshold for Agencies, the National Rural Housing administered programs. eligibility or down payment Coalition, the Rural Community Comments on revising the requirements. The proposal is adopted methodology used to determine the area Assistance Corporation and the public. without change. Comments on the two-tier income loan limits. The Agency received a limit structure (income banding). The couple of comments which did not Comments on converting borrowers Agency received several comments on support revising the methodology used from payment assistance method 1 to the two-tier income limit structure, and to determine the area loan limits to use method 2 should that borrower receive whether that change will limit the a percentage of the applicable local a subsequent loan. The Agency received program’s ability to serve lower income HUD section 203(b) limit. The a comment regarding whether the borrowers, potentially allowing limited commenters noted that the 203(b) loan Agency is concerned with the amount of subsidy and loan dollars to go to higher limits are not based on housing sale subsidy per household, or the total income households. One commenter prices except for high cost counties and amount of subsidy awarded in any given noted that while appropriation levels for would not be their preferred basis for fiscal year; and whether the Agency the program have been modestly determining loan limits for this expects the total number of loans and increased over time, these increases are program. While they generally do not amount of subsidy to increase. object to changing the method, their not enough to meet the need, before Agency Response: The Agency is concern was the proposed change will expanding the pool of income eligible watchful of subsidy levels on both a per applicants through two-tier income lead to larger loan sizes, and subsidy going to fewer borrowers with larger household and cumulative basis. limits. Standardized payment assistance The Agency also received a few loans leading to less total loans and formulas and periodic reviews of the comments about possible contradictions subsidy for lower-income borrowers. households’ pertinent financial between the two-tier income limits and Agency Response: It is the Agency’s other HUD programs such as Self-Help expectation that by using a reasonable information help to ensure that Homeownership Opportunity Program percentage(s) of the HUD section 203(b) households do not receive more than (SHOP), Home Investment Partnerships limit, rather than the full limits, the the maximum subsidy allowed, which program (HOME), and/or Community Agency’s respective area loan limits will in turns controls the amount of Development Block Grant (CDBG). reflect local, rural housing costs in a cumulative subsidy that is provided. In Agency Response: The program is reasonable and consistent manner. addition, this revision will only impact subject to a statutory requirement in Under the revision, the Agency will existing borrowers currently under section 502(d) of the Housing Act of have the flexibility to establish a payment assistance method 1, who 1949, as amended, which requires that percentage(s) which will be responsive receive subsequent loans. It is expected (1) not less than 40 percent of the funds to housing market conditions and that this revision will reduce the approved in appropriation Acts for use trends. These considerations, in potential for a negative impact on the under this section shall be set aside and conjunction with the expected cost program’s subsidy rate, while aligning made available only for very low- savings to the Agency, suggest that this future subsidy with what the applicable income families or persons; and (2) not will be the most efficient and reasonable households need for affordability. less than 30 percent of the funds method, and the proposal is adopted Therefore, the Agency does not expect allocated to each State under this without change. a significant increase in the number of section shall be available only for very Comments on business or household loans or amount of subsidy because of low-income families or persons. This assets disposed of for less than fair this revision, and the proposal is requirement serves to ensure that market value. The Agency received a adopted without change. proportionate funding is available each couple of comments regarding the year for very low-income households. In change which would no longer consider Statutory Authority turn, the revision seeks to expand the the value of business or household Section 510(k) of Title V the Housing program to account for areas where assets disposed of for less than fair Act of 1949 (42 U.S.C. 1480(k)), as households with members earning market value during the previous two amended, authorizes the Secretary of minimum wage may currently be years, in excess of the consideration Agriculture to promulgate rules and considered too high to qualify for a received, as net family assets. The direct loan. Based on the pilot and other commenters believe the existing policy regulations as deemed necessary to analysis, the Agency believes the helps protect the Agency from potential carry out the purpose of that title. income banding will help make loans fraud, and that applicants selling or Executive Order 12866 available to households (such as those transferring assets for less than market earning minimum wage) that were value may be doing so to reduce their The Office of Management and Budget incongruously excluded from the required contribution toward the (OMB) has designated this rule as not program due to reliance on limits not purchase of the home, or to qualify for significant under Executive Order tailored for the program’s intended payment assistance. 12866.

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Executive Order 12988, Civil Justice Executive Order 13132, Federalism Paperwork Reduction Act Reform The policies contained in this rule do In accordance with the Paperwork This rule has been reviewed under not have any substantial direct effect on Reduction Act of 1995 (44 U.S.C. 3501 Executive Order 12988, Civil Justice States, on the relationship between the et seq.), the information collection Reform. Except where specified, all national government and States, or on activities associated with this rule are State and local laws and regulations that the distribution of power and covered under OMB Number: 0575– are in direct conflict with this rule will responsibilities among the various 0172. This final rule contains no new be preempted. Federal funds carry levels of government. Nor does this rule reporting or recordkeeping requirements Federal requirements. No person is impose substantial direct compliance that would require approval under the required to apply for funding under this costs on State and local governments. Paperwork Reduction Act of 1995. program, but if they do apply and are Therefore, consultation with the States E-Government Act Compliance selected for funding, they must comply is not required. with the requirements applicable to the RHS is committed to complying with Federal program funds. This rule is not Regulatory Flexibility Act the E-Government Act, 44 U.S.C. 3601 et seq., to promote the use of the internet retroactive. It will not affect agreements In compliance with the Regulatory and other information technologies to entered into prior to the effective date Flexibility Act (5 U.S.C. 601 et seq.) the provide increased opportunities for of the rule. Before any judicial action undersigned has determined and citizen access to Government may be brought regarding the provisions certified by signature of this document information and services, and for other of this rule, the administrative appeal that this rule, while affecting small purposes. provisions of 7 CFR part 11 must be entities, will not have an adverse exhausted. economic impact on small entities. This Non-Discrimination Policy Unfunded Mandates Reform Act rule does not impose any significant In accordance with Federal civil new requirements on program recipients Title II of the Unfunded Mandates rights law and U.S. Department of nor does it adversely impact proposed Reform Act of 1995 (UMRA), Public Agriculture (USDA) civil rights real estate transactions involving Law 104–4, establishes requirements for regulations and policies, the USDA, its program recipients as the buyers. Federal agencies to assess the effect of Agencies, offices, and employees, and their regulatory actions on State, local, Executive Order 12372, institutions participating in or and tribal governments and the private Intergovernmental Review of Federal administering USDA programs are sector. Under section 202 of the UMRA, Programs prohibited from discriminating based on the Agency generally must prepare a race, color, national origin, religion, sex, written statement, including a cost- This program/activity is not subject to gender identity (including gender benefit analysis, for proposed and final the provisions of Executive Order expression), sexual orientation, rules with ‘‘Federal mandates’’ that may 12372, which require intergovernmental disability, age, marital status, family/ result in expenditures to State, local, or consultation with State and local parental status, income derived from a tribal governments, in the aggregate, or officials. (See the document related to 7 public assistance program, political to the private sector, of $100 million, or CFR part 3015, subpart V, at 48 FR beliefs, or reprisal or retaliation for prior more, in any one year. When such a 29112, June 24, 1983; 49 FR 22675, May civil rights activity, in any program or statement is needed for a rule, section 31, 1984; 50 FR 14088, April 10, 1985.) activity conducted or funded by USDA 205 of the UMRA generally requires the Executive Order 13175, Consultation (not all bases apply to all programs). Agency to identify and consider a and Coordination With Indian Tribal Remedies and complaint filing reasonable number of regulatory Governments deadlines vary by program or incident. alternatives and adopt the least costly, Persons with disabilities who require most cost-effective, or least burdensome This Executive order imposes alternative means of communication for alternative that achieves the objectives requirements in the development of program information (e.g., braille, large of the rule. regulatory policies that have tribal print, audiotape, American Sign This final rule contains no Federal implications or preempt tribal laws. Language, etc.) should contact the mandates (under the regulatory RHS has determined that the final rule responsible Agency or USDA’s TARGET provisions of Title II of the UMRA) for does not have a substantial direct effect Center at (202) 720–2600 (voice and State, local, and tribal governments or on one or more Indian tribe(s) or on TTY) or contact USDA through the the private sector. Therefore, this rule is either the relationship or the Federal Relay Service at (800) 877–8339. not subject to the requirements of distribution of powers and Additionally, program information may sections 202 and 205 of the UMRA. responsibilities between the Federal be made available in languages other Government and the Indian tribes. Thus, than English. Environmental Impact Statement this final rule is not subject to the To file a program discrimination This document has been reviewed in requirements of Executive Order 13175. complaint, complete the USDA Program accordance with 7 CFR part 1970, Programs Affected Discrimination Complaint Form, AD– subpart A, ‘‘Environmental Policies.’’ It 3027, found online at http:// is the determination of the Agency that The following programs, which are www.ascr.usda.gov/complaint_filing_ this action does not constitute a major listed in the Catalog of Federal Domestic cust.html and at any USDA office or Federal action significantly affecting the Assistance, are affected by this final write a letter addressed to USDA and quality of the human environment, and, rule: Number 10.410, Very Low to provide in the letter all of the in accordance with the National Moderate Income Housing Loans information requested in the form. To Environmental Policy Act of 1969, (specifically the section 502 direct and request a copy of the complaint form, Public Law 91–190, neither an guaranteed loans), and Number 10.417, call (866) 632–9992. Submit your Environmental Assessment nor an Very Low-Income Housing Repair Loans completed form or letter to USDA by: Environmental Impact Statement is and Grants (specifically the section 504 (1) Mail: U.S. Department of required. direct loans and grants). Agriculture Office of the Assistant

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Secretary for Civil Rights, 1400 (f) Suspension or debarment. ■ 5. Effective on August 5, 2019, in Independence Avenue SW, Washington, Applications from applicants who have § 3550.63, paragraph (a)(1) is revised to DC 20250–9410; been suspended or debarred from read as follows: (2) Fax: (202)690–7442; or participation in Federal programs will (3) Email: [email protected]. be handled in accordance with 2 CFR § 3550.63 Maximum loan amount. USDA is an equal opportunity parts 180 and 417. * * * * * provider, employer, and lender. * * * * * (a) * * * List of Subjects in 7 CFR Parts 3550 and ■ 4. In § 3550.54: (1) The area loan limit is the 3555 ■ a. Revise the first sentence of maximum value of the property RHS Administrative practice and paragraph (d) introductory text; will finance in a given locality. This procedure, Environmental impact ■ b. Revise paragraphs (d)(1) limit is based on a percentage(s) of the statements, Fair housing, Grant introductory text and (d)(1)(i); applicable local HUD section 203(b) programs-housing and community ■ c. Revise paragraphs (d)(1)(iv) through limit. The percentage(s) will be development, Housing, Loan programs- (vi); determined by the Agency and ■ housing and community development, d. Remove paragraph (d)(1)(vii); published in the program handbook. ■ Low and moderate income housing, e. Revise paragraphs (d)(2)(i) and (v); The area loan limits will be reviewed at Manufactured homes, Reporting and and least annually and posted to the Agency ■ recordkeeping requirements, Rural f. Add paragraphs (d)(2)(vi) through website. areas. (x). * * * * * For the reasons stated in the The revisions and additions read as preamble, chapter XXXV, title 7 of the follows: ■ 6. In § 3550.68, paragraph (b)(2) is Code of Federal Regulations, is § 3550.54 Calculation of income and revised to read as follows: amended as follows: assets. § 3550.68 Payment subsidies. * * * * * PART 3550—DIRECT SINGLE FAMILY * * * * * HOUSING LOANS AND GRANTS (d) Net family assets. Income from net family assets must be included in the (b) * * * ■ 1. The authority citation for part 3550 calculation of annual income. * * * (2) If a borrower receiving payment continues to read as follows: (1) Net family assets include, but are assistance using payment assistance Authority: 5 U.S.C. 301; 42 U.S.C. 1480. not limited to: method 1 receives a subsequent loan, (i) Equity in real property or other payment assistance method 2 will be Subpart A—General capital investments, other than the used to calculate the subsidy for the dwelling or site; initial loan and subsequent loan. ■ 2. Section 3550.10 is amended by * * * * * * * * * * revising the definitions of ‘‘low (iv) Stocks, bonds, and other forms of income’’, ‘‘moderate income’’, ‘‘rural capital investments that are accessible PART 3555—GUARANTEED RURAL area’’, and ‘‘very low-income’’ to read as without retiring or terminating HOUSING PROGRAM follows: employment; § 3550.10 Definitions. (v) Lump sum receipts such as lottery ■ 7. The authority citation for part 3555 * * * * * winnings, capital gains, inheritances; continues to read as follows: Low income. An adjusted income and (vi) Personal property held as an Authority: 5 U.S.C. 301; 42 U.S.C. 1471 et limit developed in consultation with seq. HUD under 42 U.S.C. 1437a(b)(2)(D). investment. (2) * * * * * * * * Subpart A—General (i) Interest in American Indian Moderate income. An adjusted restricted land; income that does not exceed the ■ 8. Section 3555.10 is amended by * * * * * moderate income limit for the revising the definition of ‘‘low-income’’ (v) Amounts in voluntary retirement guaranteed single family housing loan to read as follows: program authorized by Section 502(h) of plans such as individual retirement the Housing Act of 1949, as amended. accounts (IRAs), 401(k) plans, and § 3555.10 Definitions and abbreviations. * * * * * Keogh accounts (except at the time * * * * * Rural area. An area defined in section interest assistance is initially granted); (vi) The value of an irrevocable trust Low-income. An adjusted income 520 of the Housing Act of 1949, as limit developed in consultation with amended. fund or any other trust over which no member of the household has control; HUD under 42 U.S.C. 1437a(b)(2)(D). * * * * * (vii) Cash value of life insurance * * * * * Very low-income. An adjusted income policies; limit developed in consultation with Dated: June 12, 2019. (viii) The value of tax advantaged HUD under 42 U.S.C. 1437a(b)(2)(D). college savings plans (529 plan, Bruce W. Lammers, * * * * * Coverdell Education Savings Account, Administrator, Rural Housing Service. etc.); [FR Doc. 2019–12988 Filed 6–20–19; 8:45 am] Subpart B—Section 502 Origination (ix) The value of tax advantaged BILLING CODE 3410–XV–P ■ 3. In § 3550.53, paragraph (f) is health or medical savings or spending revised to read as follows: accounts; and (x) Other amounts deemed by the § 3550.53 Eligibility requirements. Agency not to constitute net family * * * * * assets.

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DEPARTMENT OF THE TREASURY FOR FURTHER INFORMATION CONTACT: institutions for the first and third OCC: Cady Codding, Senior Policy calendar quarters, to implement section Office of the Comptroller of the Accountant, Office of the Chief 205 of the Economic Growth, Regulatory Currency Accountant, (202) 649–5764; Kevin Relief, and Consumer Protection Act of Korzeniewski, Counsel, Chief Counsel’s 2018 (EGRRCPA).2 Section 205 of 12 CFR Part 52 Office, (202) 649–5490; or for persons EGRRCPA (section 205) requires the [Docket ID OCC–2018–0032] who are deaf or hearing impaired, TTY, agencies to issue regulations that allow (202) 649–5597. for a reduced reporting requirement for RIN 1557–AE39 Board: Douglas Carpenter, Senior a covered depository institution when Supervisory Financial Analyst, Division the institution makes the first and third FEDERAL RESERVE SYSTEM of Supervision and Regulation, (202) report of condition for a calendar year. 452–2205; Claudia Von Pervieux, Senior Section 205 defines ‘‘covered depository 12 CFR Part 208 Counsel, (202) 452–2552, or Laura Bain, institution’’ as an insured depository [Docket ID R–1618] Senior Attorney, (202) 736–5546, Legal institution ‘‘that— (i) has less than $5,000,000,000 in total consolidated RIN 7100–AF12 Division, Board of Governors of the Federal Reserve System, 20th and C assets; and (ii) satisfies such other FEDERAL DEPOSIT INSURANCE Streets NW, Washington, DC 20551. criteria as the [agencies] determine 3 CORPORATION FDIC: Robert Storch, Chief appropriate.’’ Accountant, Division of Risk Under the proposal, the agencies would have made reduced reporting 12 CFR Part 304 Management Supervision, (202) 898– 8906, [email protected]; or Andrew available to small, non-complex RIN 3064–AE82 Overton, Examination Specialist, institutions, with domestic offices only, Division of Risk Management that meet the definition of ‘‘covered Reduced Reporting for Covered Supervision, (202) 898–8922, aoverton@ depository institution.’’ The proposed Depository Institutions fdic.gov; or Nefretete Smith, Counsel, rule generally would have defined ‘‘covered depository institution’’ to AGENCY: Office of the Comptroller of the Legal Division, (202) 898–6851, Currency (OCC), Treasury; Board of [email protected]; or Kathryn Marks, mean an institution that has less than $5 Governors of the Federal Reserve Counsel, Legal Division, (202) 898– billion in total consolidated assets, has System (Board); and Federal Deposit 3896, [email protected]. no foreign offices, is not required to or has not elected to use subpart E Insurance Corporation (FDIC). SUPPLEMENTARY INFORMATION: (Internal Ratings-Based and Advanced ACTION: Final rule. Table of Contents Measurement Approaches) of the SUMMARY: The OCC, the Board, and the agencies’ regulatory capital rules to I. Background and Overview of the Proposed calculate its risk-based capital FDIC (collectively, the agencies) are Rule issuing a final rule to implement section requirements (i.e., is not an advanced II. Comments Received approaches institution), and is not a 205 of the Economic Growth, Regulatory III. Summary of the Final Rule large or highly complex institution for Relief, and Consumer Protection Act by IV. Section-by-Section Analysis of the Final expanding the eligibility to file the Rule purposes of the FDIC’s deposit agencies’ most streamlined report of A. Covered Depository Institution insurance assessment regulations. The proposed rule would have provided condition, the FFIEC 051 Call Report, to B. Reduced Reporting reduced reporting by offering covered include certain insured depository C. Reservation of Authority V. Related Agency-Specific Revisions depository institutions the option to file institutions with less than $5 billion in VI. Regulatory Analyses a more streamlined FFIEC 051 Call total consolidated assets that meet other A. Paperwork Reduction Act Report, which is already the most criteria, and establishing reduced B. Regulatory Flexibility Act streamlined version of the Call Report, reporting on the FFIEC 051 Call Report C. Plain Language with fewer data items required for the for the first and third reports of D. Riegle Community Development and first and third calendar quarters condition for a year. The OCC and Regulatory Improvement Act of 1994 compared to the current FFIEC 031, Board also are finalizing similar reduced E. OCC Unfunded Mandates Reform Act of 1995 FFIEC 041, or FFIEC 051 Call Reports. reporting for certain uninsured The proposed rule also would have institutions that they supervise with less included a reservation of authority, than $5 billion in total consolidated I. Background and Overview of the Proposed Rule consistent with the current General assets that otherwise meet the same Instructions to the FFIEC 051 Call criteria. This document also includes a On November 19, 2018, the agencies Report, which would permit an agency, Paperwork Reduction Act notice to published a notice of proposed in consultation with the applicable state further reduce the amount of data rulemaking (proposal or proposed rule) chartering authority, for supervisory required to be reported on the FFIEC and associated Paperwork Reduction purposes and on an institution-specific 051 Call Report for the first and third Act (PRA) notice that would provide basis, to require an institution to file a calendar quarters, and other related reduced reporting on the Consolidated different version of the Call Report in changes. The agencies are committed to Reports of Condition and Income (Call any calendar quarter(s) in which it 1 exploring further burden reduction and Reports) for eligible smaller depository otherwise would be eligible to file the are actively evaluating further revisions FFIEC 051 Call Report, based on the to the FFIEC 051 Call Report, consistent 1 The ‘‘Call Report’’ is the report of condition and income for most insured depository institutions. agency’s determination that more with guiding principles developed by There currently are three versions of the Call the FFIEC. The agencies also are Reports: The Consolidated Reports of Condition and Domestic Offices Only and Total Assets Less Than considering ways to simplify the Call Income for a Bank with Domestic and Foreign $1 Billion (FFIEC 051). Report forms and instructions. Offices (FFIEC 031), the Consolidated Reports of 2 83 FR 58432. The EGRRCPA was enacted on Condition and Income for a Bank with Domestic May 24, 2018. Public Law 115–174, 132 Stat. 1296 DATES: This rule is effective July 22, Offices Only (FFIEC 041), and the Consolidated (2018). 2019. Reports of Condition and Income for a Bank with 3 12 U.S.C. 1817(a)(12)(B).

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information is needed for supervisory otherwise meet the same criteria to capital rules to calculate its risk-based purposes. qualify as covered depository capital requirements (i.e., is not an institutions. The agencies’ final rule advanced approaches institution); and is II. Comments Received includes a reservation of authority that not a large or highly complex institution The comment period on the proposal allows the appropriate Federal banking for purposes of the FDIC’s deposit closed on January 18, 2019. The agency of an institution, in connection insurance assessment regulations. The agencies collectively received 1,018 with the state chartering authority, if OCC’s definition also would have comments, including 21 unique applicable, to prohibit an otherwise excluded institutions that file the FFIEC comments and 997 nearly identical eligible institution from using the FFIEC 002 report of condition. The FDIC’s comments using one of two templates. 051 Call Report. definition also would have excluded Commenters included individuals, Through the related PRA notice, the state-licensed insured branches of banks and bank personnel, industry agencies are further reducing the items foreign banks. The agencies note that trade associations, industry analysts, required to be reported by all covered adopting these criteria under the final and members of Congress. depository institutions eligible to file rule would not exclude any institutions Commenters generally expressed the the FFIEC 051 Call Report, as defined in that currently file the FFIEC 051 Call view that the reductions proposed by the final rule, for the first and third Report. The agencies did not receive the agencies did not go far enough in reports of condition for a year beyond comment on these proposed criteria. providing reduced reporting in the first the existing level of reduced reporting The agencies proposed to offer and third calendar quarters to eligible in these two quarters. reduced reporting to an ‘‘insured institutions. Many commenters As discussed further in Section IV.B. depository institution’’ as such term is questioned the agencies’ selection of the of the SUPPLEMENTARY INFORMATION defined in section 3 of the Federal FFIEC 051 Call Report to provide section, the agencies anticipate further Deposit Insurance Act (FDI Act), 12 reporting burden reduction and reductions to the Call Report. In U.S.C. 1813, and as required by section criticized the sufficiency of the particular, the agencies recently 205. The OCC and Board also proposed proposed burden-reducing revisions to proposed additional reductions to the extending eligibility to qualify as a the FFIEC 051 Call Report. Other FFIEC 051 Call Report in connection covered depository institution to commenters expressed concerns that the with a proposal to simplify regulatory uninsured institutions that they proposal would reduce the amount of capital requirements for certain supervise that otherwise meet the same publicly-available information on community banking organizations. The criteria.5 Parity in reporting by insured eligible institutions and increase burden agencies are committed to exploring and uninsured national banks and state on analysts and other members of the further burden reduction and are member banks is appropriate in light of public who would have to obtain actively evaluating further revisions to the similarities between the information information directly from banks. These the FFIEC 051 Call Report, consistent used to review the activities of such comments and the agencies’ responses with guiding principles developed by insured and uninsured institutions. The are discussed in the summary and the FFIEC.4 The agencies also are agencies received one comment that section-by-section analysis of the final considering ways to simplify the Call opposed allowing uninsured rule that follows. Report forms and instructions. The institutions to qualify as covered In addition, a few commenters agencies would take into account depository institutions. The commenter suggested technical revisions to the whether revisions can be made to the expressed concern that uninsured FFIEC 051 Call Report schedules. FFIEC 051 Call Report without violating institutions pose a greater risk to Comments related to the associated Call compliance with existing laws and depositors and U.S. taxpayers than Report collection, including the regulations, jeopardizing safety and insured institutions. The agencies note additional revisions proposed to the soundness supervision and monitoring, that uninsured institutions cannot existing FFIEC 051 Call Report to or impairing the Board’s ability to accept deposits from retail customers further streamline it for reduced conduct monetary policy or the FDIC’s and thus the agencies do not believe reporting, are discussed in the PRA ability to calculate deposit insurance these institutions pose a greater risk to section of the SUPPLEMENTARY assessments. depositors or taxpayers than insured INFORMATION. IV. Section-by-Section Analysis of the institutions. In addition, certain OCC and Board supervised uninsured III. Summary of the Final Rule Final Rule institutions with total assets of less than After carefully considering the A. Covered Depository Institution $1 billion already file the FFIEC 051 comments received, the agencies are The proposal would have defined Call Report. Accordingly, the OCC and adopting the final rule as proposed. ‘‘covered depository institution’’ as an Board are finalizing the extension of The final rule implements section 205 institution that meets all the following eligibility to certain uninsured by prescribing the criteria that the criteria: Has less than $5 billion in total depository institutions as proposed. agencies have determined to be consolidated assets as reported in its appropriate for insured depository Asset Threshold report of condition for the second institutions to qualify as covered calendar quarter of the preceding As mandated by section 205, the depository institutions, offering the calendar year; has no foreign offices; is proposal would have defined a covered expanded group of covered depository not required to or has not elected to use institutions the option to file the FFIEC 5 The FDIC supervises only insured state Subpart E of the agencies’ regulatory 051 Call Report each calendar quarter, nonmember banks, insured state savings associations, and insured state-licensed branches. and establishing the reduced reporting 4 See 83 FR 58434 ((1) Data items serve a long- Currently, no uninsured Board-regulated institution in the FFIEC 051 Call Report term regulatory or public policy purpose by is eligible to file the FFIEC 051 Call Report, but permissible for such institutions for the assisting the FFIEC members in fulfilling their under the final rule one uninsured Board-regulated first and third reports of condition for a missions; (2) data items to be collected maximize institution would meet the criteria for eligibility to practical utility and minimize, to the extent file the FFIEC 051 Call Report. The OCC supervises year. The OCC’s and Board’s final rules practicable and appropriate, burden on financial 49 uninsured institutions that currently are eligible also permit certain uninsured institutions; and (3) equivalent data items are not to file the FFIEC 051 Call Report, which would institutions under their supervision that readily available through other means). increase to 50 under the final rule.

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depository institution as one with less branch or becoming subject to a to $10 billion or more, or is a subsidiary than $5 billion in total consolidated different approach under the agencies’ of a depository institution or holding assets. The proposal would have regulatory capital rules. Therefore, the company that uses the advanced defined ‘‘total consolidated assets’’ as proposal did not include a grace period approaches to calculate its total-risk total assets as reported in an for non-asset-size criteria. The agencies weighted assets.10 Advanced institution’s report of condition. Under did not receive comment on the approaches institutions currently are the proposal, an institution would have proposed non-asset-size criteria and are precluded from filing the FFIEC 051 determined whether it meets the asset- finalizing as proposed. Call Report. Advanced approaches size criterion and is eligible to file the International Activities. The proposal institutions generally must calculate FFIEC 051 Call Report based on the total would have excluded from the their regulatory capital requirements consolidated assets reported in its report definition of ‘‘covered depository under the advanced approaches, which of condition (Schedule RC, Balance institution’’ an institution that has relies in part on internal models and Sheet, Item 12) for the second calendar foreign offices or that is an insured complex formulas, and are subject to quarter of the previous calendar year. branch of a foreign bank. Under the additional requirements such as the This approach is consistent with the proposal, foreign offices would have supplementary leverage ratio.11 While current FFIEC 051 Call Report been defined as: Branches or advanced approaches holding instructions for determining eligibility consolidated subsidiaries in foreign companies typically have total assets of to file the FFIEC 051 Call Report based countries 7 unless located on a U.S. more than $250 billion, their depository on asset size.6 military facility; international banking institution subsidiaries, some of which The agencies continue to believe that facilities as defined under 12 CFR 204.8; may have total assets of less than $5 establishing the asset threshold in this majority-owned Edge Act and billion, also generally are subject to the manner should allow an institution Agreement 8 subsidiaries; and branches advanced approaches. Some of these sufficient time to address any or consolidated subsidiaries in U.S. subsidiaries may engage in specialized accounting or reporting systems territories if the bank is chartered or or highly complex activities that require changes, or other preparation process headquartered in a U.S. state or the more comprehensive and detailed changes, that may be needed if the District of Columbia. Under the financial information to ensure effective institution wants to take advantage of, proposal, insured branches of foreign supervision and monitoring, and thus or becomes no longer eligible for, filing banks would have been those branches are excluded from being eligible to file the FFIEC 051 Call Report in the defined in section 3(s) of the FDI Act, the FFIEC 051 Call Report and receive following calendar year. The agencies 12 U.S.C. 1813(s), which file the FFIEC reduced reporting in the final rule.12 did not receive comment on this aspect 002 version of the report of condition. The agencies did not receive comment of the proposal and are finalizing as The agencies continue to believe it is on this proposed criterion and are proposed. appropriate to exclude these institutions finalizing as proposed. from reduced reporting because the Institutions Assessed as Large or Other Eligibility Criteria nature of these international activities Highly Complex by the FDIC. The Consistent with section 205, the requires more comprehensive and proposal also would have excluded proposal would have prescribed other detailed financial information to from the definition of ‘‘covered eligibility criteria that an institution effectively supervise and monitor them depository institution’’ an insured with total assets of less than $5 billion than would be available on the FFIEC depository institution that is assessed as must meet in order to qualify as a 051 Call Report.9 The agencies did not a ‘‘large institution’’ or ‘‘highly complex covered depository institution. These receive comment on this proposed institution,’’ as defined in the FDIC’s other proposed criteria are based on an criterion and are finalizing as proposed. deposit insurance assessment institution’s international activities, its Advanced Approaches Institutions. regulations.13 treatment under the agencies’ regulatory The proposal would have excluded from capital rules, and its treatment under the definition of ‘‘covered depository 10 See 12 CFR 3.100(b) (OCC); 217.100(b) (Board); the FDIC’s deposit insurance assessment institution’’ an institution that is 324.100(b) (FDIC). The agencies have invited regulations. Unlike the asset-size required to, or has elected to, use comment on a proposed rule that would revise the framework for determining the applicability of the criterion, which is determined as of the Subpart E of the agencies’ regulatory advanced approaches capital requirements for U.S. report of condition filed for the second capital rules to calculate its risk-based banking organizations. See Proposed Changes to calendar quarter (as of June 30) of the capital requirements (i.e., is an Applicability Thresholds for Regulatory Capital and prior calendar year, the proposal would advanced approaches institution). In Liquidity Requirements, 83 FR 66024 (December 21, 2018). have required an institution to general, an advanced approaches 11 See 12 CFR part 3, subpart E, and 12 CFR determine in each calendar quarter institution is an institution that has 3.10(c)(4) (OCC); 12 CFR part 217, subpart E, and whether it meets all of these non-asset- consolidated total assets equal to $250 12 CFR 217.10(c)(4) (Board); 12 CFR part 324, size criteria. If an institution ceases to billion or more, has consolidated total subpart E, and 12 CFR 324.10(c)(4) (FDIC). meet any of these other criteria during on-balance sheet foreign exposure equal 12 If an institution has received an exemption from the application of subpart E of the agencies’ a calendar quarter, then beginning that regulatory capital rules, the exclusion under this same quarter the institution would have 7 The final rule defines ‘‘foreign country’’ to refer criterion would not apply. become ineligible to file the FFIEC 051 to one or more foreign nations, and includes the 13 For the purposes of the FDIC’s deposit Call Report. In contrast to failing the overseas territories, dependencies, and insular insurance assessment regulations, a ‘‘small possessions of those nations and of the United institution’’ generally is an insured depository asset-size criterion, failing to meet the States. This definition also is used in the Board’s institution with less than $10 billion in total assets. non-asset-size criteria often reflects a Regulation K, 12 CFR part 211. See 12 CFR 327.8(e). Generally, a ‘‘large institution’’ significant change in the operations of 8 12 CFR 211.1(c)(2) and (3). is an insured depository institution with more than an institution as a result of deliberate 9 Depository institutions with foreign offices are $10 billion in total assets. See 12 CFR 327.8(f). currently required to file the FFIEC 031 Call Report However, an institution with assets between $5 planning, such as opening a foreign and thus are not currently eligible to file the FFIEC billion and $10 billion may request treatment as a 051 Call Report. U.S. branches of foreign banks large institution for deposit insurance assessments, 6 See FFIEC 051 instructions, https:// (both federally and State-licensed) are required to and few institutions have made this request to date. www.ffiec.gov/pdf/FFIEC_forms/FFIEC051_201903_ file the FFIEC 002 version of the report of See 12 CFR 327.16(f). Generally, a ‘‘highly complex i.pdf. condition. Continued

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Under the FDIC’s deposit insurance most streamlined version of the Call certain items during examinations due assessment regulations, large Report and already provides significant to the more limited information on the institutions and highly complex reduced reporting in the first and third Call Reports. According to the institutions are assessed using CAMELS calendar quarters. The agencies, in the commenter, these reductions to the Call ratings 14 combined with certain PRA section of the proposal, also Report may create greater burden on an forward-looking financial measures that proposed further reducing the reporting institution than the relief provided by reflect the risks such institutions pose to required on the FFIEC 051 Call Report filing a more limited Call Report two the Deposit Insurance Fund.15 The FDIC in the first and third calendar quarters, times per year. uses the data reported by a large by changing reporting of certain items Section 205 allows the agencies to institution or a highly complex from quarterly to semiannual or annual. establish the criteria for reduced institution on either the FFIEC 031 or The final rule implements the reduced reporting. The agencies’ proposal sought FFIEC 041 Call Report, as appropriate, reporting required by section 205 by to further reduce reporting for covered to calculate the institution’s deposit allowing covered depository institutions depository institutions in the first and insurance assessment rate. For example, to file the FFIEC 051 Call Report; the third calendar quarters while still the FDIC uses data on Schedule RC–O agencies, through the PRA section of the collecting the data necessary to meet the regarding higher-risk assets, which are SUPPLEMENTARY INFORMATION, also are agencies’ statutory mandates and not reported on the FFIEC 051 Call further reducing the reporting required missions, ensuring continued receipt of Report, to calculate financial ratios used on the FFIEC 051 Call Report in the first appropriate information to monitor to determine a large or a highly complex and third calendar quarters. safety and soundness and striking a institution’s deposit insurance The majority of comments received by balance between reducing reporting assessment rate. the agencies on the proposal related to burden and obtaining sufficient The agencies did not receive comment the agencies’ proposed use of the FFIEC information for supervisory purposes, on this proposed criterion and are 051 Call Report. Commenters expressed including on-site examinations and off- finalizing as proposed. This eligibility the view that using the FFIEC 051 Call site monitoring of covered depository criterion ensures that an institution that Report to allow reduced reporting in the institutions. meets the asset-size criterion based on first and third calendar quarters would The agencies are implementing the its report of condition for the second not provide sufficient reporting relief, reduced reporting required by section calendar quarter of a previous year, but and cited the agencies’ burden estimates 205 first by offering an expanded group is treated as a large or highly complex under the PRA for the proposed changes of institutions the option to file the institution for deposit insurance to the FFIEC 051 Call Report in support FFIEC 051 Call Report each calendar assessment purposes, will continue to of their views. Many of these quarter. The agencies elected to use the file the FFIEC 031 or FFIEC 041 Call commenters recommended an alternate FFIEC 051 Call Report as the version of Report, as appropriate, which contain version of the Call Report for the first the report of condition to implement the data items required by the FDIC to and third calendar quarters that consists reduced reporting primarily because: It calculate the institution’s deposit only of an institution’s basic financial is the Call Report that collects the least insurance assessment rate. As long as an statements, such as a balance sheet, information; reduced reporting in the institution continues to be assessed as a income statement, and statement of reports for the first and third quarters large or highly complex institution, it is changes in shareholders’ equity. One was one of the primary objectives when ineligible under the final rule to file the commenter suggested offering this the FFIEC 051 Call Report was first FFIEC 051 Call Report, including its simplified reporting to a smaller subset implemented in 2017 and revised in reduced reporting, until it is reclassified of institutions that meet more stringent 2018; and it is already being used by the for deposit insurance assessments and eligibility criteria, such as being well majority of institutions with total assets assessed as a ‘‘small institution.’’ managed. Another commenter suggested below the $5 billion statutory threshold that the agencies should tailor the scope set by section 205. The FFIEC 051 Call B. Reduced Reporting of regulatory reporting to each Report previously was developed to The proposal would have institution based on that institution’s enable institutions with total assets of implemented the reduced reporting characteristics. One commenter less than $1 billion to report less required by section 205 by allowing proposed including a schedule for information, and contains 882 fewer covered depository institutions to file regulatory capital in addition to the data items than the FFIEC 041 Call the FFIEC 051 Call Report, as it is the basic financial statements, while Report, which is the agencies’ standard another commenter requested a Call version of the Call Report.16 The final institution’’ is: (i) An insured depository institution Report that was no longer than 10 pages. rule extends eligibility to file the FFIEC (excluding a credit card bank) that has had $50 Other commenters, particularly 051 Call Report from certain institutions billion or more in total assets for at least four consecutive quarters, is controlled by a U.S. parent investment analysts evaluating the with less than $1 billion in total assets holding company that has had $500 billion or more banking industry, raised concerns about to certain institutions with less than $5 in total assets for four consecutive quarters, or is a reduction in publicly-available billion in total assets. As a result, this controlled by one or more intermediate U.S. parent information from institutions that adopt approach provides significant reporting holding companies that are controlled by a U.S. holding company that has had $500 billion or more reduced reporting. These commenters relief by offering covered depository in assets for four consecutive quarters; or (ii) a indicated they would need to institutions of between $1 billion and processing bank or trust company. See 12 CFR supplement the publicly-available less than $5 billion in total assets that 327.8(g) and (s). information by making specific currently are required to file the FFIEC 14 A financial institution is assigned a ‘‘CAMELS’’ information requests to the institutions 041 Call Report the option to file the composite rating based on an evaluation and rating of six essential components of an institution’s they analyze. Another commenter FFIEC 051 Call Report. Under the final financial condition and operations. These pointed out that some items that would rule, covered depository institutions component factors address the: Adequacy of capital be reported less frequently are used as (C); quality of assets (A); capability of management part of regulatory and investor offsite 16 The current version of the FFIEC 051 Call (M); quality and level of earnings (E); adequacy of monitoring processes, and that limiting Report includes 1,147 reportable data items in each liquidity (L); and sensitivity to market risk (S). of the first and third calendar quarters, compared 15 See 12 CFR 327.16(b); 76 FR 10672, 10688– this information may result in increased with 2,029 reportable data items required on the 10698 (February 25, 2011). information requests or review of FFIEC 041 Call Report in those calendar quarters.

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with total assets between $1 billion and implementation of the final rule, the Call Reports collect the most current less than $5 billion are eligible to file agencies are issuing the accompanying financial and statistical data available in the FFIEC 051 Call Report in each PRA notice to implement changes to the a standardized format to identify calendar quarter of a calendar year, not FFIEC 051 Call Report consistent with uniformly areas of focus for supervision, just in the first and third quarters, the rule. including for on-site and off-site which will provide additional reporting In response to commenters’ requests examinations.20 The agencies use Call relief for these institutions compared to that the agencies implement a Call Report data in monitoring the condition, the FFIEC 041 Call Report. Overall, the Report comprised only of basic financial performance, and risk profile of agencies estimate that the burden hours statements, the agencies note that, by individual institutions and the industry for institutions with total assets between law, they must collect certain data items as a whole. Call Report data assist the $1 billion and less than $5 billion on a quarterly basis, including items agencies in their collective missions of would decline 12.73 hours per quarter, that are not typically found on basic promoting the safety and soundness of from 63.69 hours filing the FFIEC 041 to financial statements.18 In addition to institutions and the financial system 50.96 hours filing the FFIEC 051. information the agencies are required to and the protection of consumer In addition to increasing the number collect on a quarterly basis by statute, financial rights, as well as fulfilling of institutions eligible to file the FFIEC the agencies need other information to agency-specific missions, such as 051 Call Report every quarter, as effectively monitor the safety and conducting monetary policy, promoting discussed in the PRA section of the soundness of institutions and the financial stability, and administering SUPPLEMENTARY INFORMATION, the financial system, as well as to monitor federal deposit insurance. The agencies agencies are further reducing the compliance with consumer financial also use Call Report data in evaluating reporting required on the FFIEC 051 protection laws and regulations and to institutions’ applications, including Call Report in the first and third fulfill agency-specific missions. With interstate merger and acquisition calendar quarters. The agencies are respect to commenters’ concerns that applications. In addition, Call Report reducing the frequency of reporting of the reporting reductions may result in data are used by the appropriate approximately 37 percent of the existing industry analysts or investors not being agencies to calculate institutions’ 17 data items in this report from able to obtain as much information from deposit insurance assessments as well quarterly to semiannual. The principal an institution through its Call Report, as national banks’ and federal savings areas of reduced reporting in the first the agencies note that an institution is associations’ semiannual assessment and third calendar quarters include data not required to switch to the FFIEC 051 fees. In the absence of data collected items related to categories of risk- Call Report, and the final rule does not through a standardized format, such as weighting of various types of assets and restrict an institution from providing the Call Report, the agencies likely other exposures under the agencies’ additional financial information to the would need to rely on significantly regulatory capital rules, fiduciary and public that would otherwise not be more ad hoc data requests to individual related services assets and income, and required to be reported in the first and institutions. A lack of information also troubled debt restructurings by loan third calendar quarters. increases the risk of missing new or category. This reduction in reporting As the agencies explained when significantly changed activities when frequency for certain data items issuing the proposal, Call Report data the agencies plan on-site examinations, provides all covered depository provides critical information necessary which could require the agencies to institutions that currently file the FFIEC for the agencies’ effective supervision of spend additional time on-site reviewing 051 Call Report, including those with depository institutions.19 In their risk areas for which bank data was not less than $1 billion in total assets, with statutory roles of chartering, licensing, submitted in the Call Report. additional reduced reporting in the first The agencies remain mindful, supervising, or insuring institutions, the and third calendar quarters. however, of the impact that collecting agencies principally rely on information The agencies recognize that the Call Report data may have on covered obtained through on-site examinations reduction in reporting frequency offered depository institutions. As discussed in of institutions, off-site supervisory for certain data items as described in the the proposal, the agencies (through the activities between examinations, and PRA section below may not provide as FFIEC) started an initiative to reduce the information reported on an institution’s much of a burden reduction for every reporting burden on all institutions, report of condition. The report of covered depository institution, because especially community banks, in some of those data items are not condition is the Call Report for most December 2014.21 The result of the relevant to or completed by every insured depository institutions. agencies’ multi-year effort was a covered depository institution due to Consistent with the FFIEC’s mandate, meaningful reduction in reporting for all different asset portfolios and activities. institutions that filed the FFIEC 041 Call 18 For example, certain data collection and However, the final rule expediently reporting requirements are satisfied through the Report at the start of the effort. As provides all covered depository collection of data on the various Call Report compared with the FFIEC 041 Call institutions the option of reduced schedules: 12 U.S.C. 1817(a)(4) and (6) require Report in use immediately before the reporting in the first and third calendar reporting of deposit liabilities (Schedules RC–E); 12 implementation of the FFIEC 051 Call U.S.C. 1817(a)(3) and (c) requires four Call Reports quarters. For institutions with total annually that serve as the basis for determining an Report, the current FFIEC 041 Call assets of less than $1 billion that file the institution’s deposit insurance assessment Report now reflects a reduction of current version of the FFIEC 051 Call (Schedule RC–O, and certain items on Schedules approximately 11 percent of the data Report, implementing the further RI, RC, RC–C, RC–E, RC–N, and RC–R); 12 U.S.C. items and provides for reduced 1831n(a)(3)(C) requires that off-balance sheet items streamlined FFIEC 051 Call Report be reported or taken into account in any report of reporting frequency of approximately 3 should require less cost and fewer condition (Schedule RC–L); 12 U.S.C. 1831o and its percent of the data items. The smallest systems changes than switching to a implementing regulations address prompt institutions (with less than $1 billion in completely new version of a regulatory corrective action requirements (12 CFR part 6 total assets) received an even greater (OCC); 12 CFR part 208, subpart D (Board); and 12 report. To align with the CFR part 324, subpart H (FDIC)) and rely on reduction in reporting with the reporting of regulatory capital quarterly (Schedule 17 This percentage is relative to the FFIEC 051 RC–R)). 20 See e.g., 12 U.S.C. 3301. Call Report filed as of June 30, 2018. 19 See 83 FR 58433–58434. 21 See 83 FR 58484.

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implementation of the FFIEC 051 Call authority, if applicable, and on an management and would not be at the Report for the March 31, 2017, reporting institution-specific basis, to require a discretion of examination staff. The date. The FFIEC 051 Call Report now covered depository institution under the agencies received no comment on this represents a reduction of approximately agency’s supervision to file the FFIEC aspect of the proposed rule and are 43 percent of the data items and 041 Call Report, or any successor finalizing it as proposed. provides for reduced reporting thereto, in any calendar quarter or V. Related Agency-Specific Revisions frequency of approximately 6 percent of quarters in which the covered the data items, as compared to the depository institution would otherwise A. Board FFIEC 041 Call Report in use as of be eligible to file the FFIEC 051 Call The Board does not currently have a December 31, 2016, immediately before Report, based on the agency’s rule that sets forth the report of the implementation of the FFIEC 051 determination that such filing is condition filing requirements of state- Call Report. Thus, the implementation necessary for supervisory purposes. In chartered banks that are members of the of the FFIEC 051 Call Report provides making such a determination, the Federal Reserve System (state member a significant reduction in reporting appropriate Federal banking agency may banks), and instead relies on its burden for institutions that choose to consider criteria including whether the statutory authority under section 9 of file this version of the Call Report. institution is significantly engaged in the Federal Reserve Act (FRA) and In the interest of making reduced one or more complex, specialized, or section 7(a)(3) of the FDI Act to require reporting available to covered other higher-risk activities, such as state member banks to provide reports depository institutions expediently, those for which limited information is of condition. In light of section 205’s particularly for institutions with total reported in the FFIEC 051 Call Report requirement that the Board issue a rule assets of between $1 billion and less compared to the FFIEC 041 Call Report. that allows for reduced reporting by than $5 billion, the agencies are For example, if a covered depository certain eligible Board-supervised finalizing this rule as proposed. The institution has a considerable insured depository institutions, the agencies also anticipate further concentration of either trading assets or Board proposed to add a new subpart K reductions to the Call Report. In mortgage banking activities, the to Regulation H,26 which would particular, the agencies have proposed appropriate Federal banking agency may incorporate the rule text implementing additional reductions to the FFIEC 051 seek additional information from that section 205. The Board received no Call Report 22 in connection with the institution by requiring the institution comments on the proposed rule and is proposal 23 that was issued by the to file the FFIEC 041 Call Report. finalizing it as proposed. In addition to agencies in February of 2019 to simplify Generally, a covered depository insured state member banks, the Board regulatory capital requirements for institution’s safety and soundness, size, also supervises uninsured state member qualifying community banking complexity, activities, risk profile, and banks, such as nondepository trust organizations, as required by section other factors, such as an increase in a companies. The Board requires such 201 of the EGRRCPA, which the covered depository institution’s asset institutions to use the Call Report to agencies estimate would further reduce size resulting from a merger or submit financial data. As previously the average FFIEC 051 Call Report acquisition, also may be taken into discussed in SUPPLEMENTARY burden from 39.77 hours to 33.65 hours, consideration. INFORMATION section IV.A., the Board’s a reduction of 6.12 hours per quarter.24 If, after considering such factors, the final rule extends the use of the reduced The agencies are committed to agency determines that a covered reporting requirement to uninsured state exploring further burden reduction and depository institution should be member banks if they meet the criteria are actively evaluating further revisions required to file the FFIEC 041 Call for covered depository institutions to the FFIEC 051 Call Report, consistent Report, the agency would provide notice identified in the rule. with guiding principles developed by to the covered depository institution The Board also proposed to include in the FFIEC.25 The agencies also are prior to the filing requirement’s new subpart K, pursuant to its statutory considering ways to simplify the Call becoming effective. The reservation’s authority under section 9 of the FRA Report forms and instructions. The terms also would be provided in the and section 7(a)(3) of the FDI Act, agencies would take into account notice. Any covered depository § 208.122 that would set forth the whether revisions can be made to the institution required by its appropriate general requirement that all state FFIEC 051 Call Report without violating Federal banking agency under the member banks file consolidated reports compliance with existing laws and reservation of authority to file the FFIEC of condition and income in accordance regulations, jeopardizing safety and 041 Call Report in lieu of the FFIEC 051 with the instructions for these reports. soundness supervision and monitoring, would be required to continue to file the The Board received no comments on or impairing the Board’s ability to FFIEC 041 Call Report until the § 208.122 and is finalizing the appropriate Federal banking agency conduct monetary policy or the FDIC’s subsection as proposed. ability to calculate deposit insurance provides notice to the covered assessments. depository institution that it is no longer B. FDIC required to file the FFIEC 041 Call The FDIC amends part 304 of its Rules C. Reservation of Authority Report. and Regulations, by restructuring the Consistent with the agencies’ This authority provides the agencies regulation and creating a ‘‘subpart A’’ authorities and current practices, the with the flexibility to require an and ‘‘subpart B.’’ Subpart A now final rule includes a reservation of institution to report and disclose contains the current text of part 304, authority that allows the appropriate additional Call Report data if warranted with limited technical, non-substantive Federal banking agency, in consultation by an institution’s individual changes. The technical, non-substantive with the relevant state chartering circumstances and risk profile. changes include: (1) Updating the Consistent with current supervisory address and contact information in 22 84 FR 16560 (April 19, 2019). practices and experience, the exercise of 23 84 FR 3062 (February 8, 2019). the reservation of authority generally 26 The Board’s Regulation H governs the 24 84 FR 16563. would be a decision made by a member membership of state banking institutions in the 25 See 83 FR 58434. of the appropriate agency’s senior Federal Reserve System. 12 CFR part 208.

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§ 304.2; (2) clarifying that § 304.3(a) and objecting to permitting uninsured the FFIEC 051 Call Report for all four (b) apply to insured depository institutions to use reduced reporting. calendar quarters. Therefore, if an institutions; (3) updating references in For the reasons discussed earlier, the institution is eligible to file the FFIEC § 304.3(a) to the various Call Reports to OCC does not agree with the commenter 051 Call Report for the first and third include the recently implemented and is finalizing this provision as calendar quarters pursuant to the rule, FFIEC 051 Call Report; and (4) updating proposed. the institution also could file the FFIEC the references to FDIC divisions to VI. Regulatory Analyses 051 Call Report for the second and reflect changes in nomenclature. In fourth calendar quarters provided the Subpart B, the FDIC includes the A. Paperwork Reduction Act institution continues to meet the non- regulatory text implementing section Certain provisions of the final rule asset-size criteria. The revisions to the 205. affect a ‘‘collection of information’’ eligibility criteria for filing the FFIEC The FDIC believes that this approach within the meaning of the Paperwork 051 Call Report would be made in the to restructuring part 304 will Reduction Act of 1995 (PRA) (44 U.S.C. General Instructions section of the Call incorporate the entirety of the new, 3501–3521). In accordance with the Report instructions and would include substantive text of the final rule that requirements of the PRA, the agencies the increase in the asset-size threshold implements section 205 of the may not conduct or sponsor, and a to less than $5 billion in total assets as EGRRCPA with minimal effect to the respondent is not required to respond well as the addition to the existing non- current text. Thus, a state nonmember to, an information collection unless it asset-size criteria of a criterion to bank or state savings association that displays a currently valid Office of exclude institutions that are treated as believes it qualifies as a covered Management and Budget (OMB) control large or highly complex institutions for depository institution would be able to number. deposit insurance assessment purposes. make that determination based on the The agencies have reviewed the final The Call Report instructions currently regulatory text contained in subpart B. rule, including the changes to the FFIEC provide that, beginning with the first C. OCC 051 Call Report that are discussed in quarterly report date following the this PRA section, and determined that it effective date of a business combination, Insured depository institutions would result in changes to the reporting a transaction between entities under identified in section 205 include requirements associated with the FFIEC common control, or a branch acquisition insured Federal branches of foreign 051 Call Report, which have been that is not a business combination banks, as defined under section 3(s) of previously cleared by the OMB. The involving an institution and one or more the Federal Deposit Insurance Act (12 other depository institutions, the U.S.C. 1813(s)). While these insured agencies made submissions to the OMB resulting institution, regardless of its Federal branches are included in the at the proposed rule stage. The OMB size prior to the transaction, must file statute, they currently file the FFIEC 002 instructed the agencies to resubmit the report of condition. The FFIEC 002 is notice at the final rule stage addressing the FFIEC 041 Call Report if its used by insured and uninsured state any comments received and analyzing consolidated total assets after the and Federal branches and agencies of the expected burden reduction consummation of the transaction are $1 foreign banks and contains a significant associated with the final rule. The final billion or more. The agencies are amount of information relating to the rule expands the eligibility to file the removing this provision from the operations and foreign connections of FFIEC 051 Call Report to certain instructions, but the resulting these entities. As described above in the institutions with $1 billion or more, but institution may be required to file the International Activities section, this less than $5 billion, in total assets that FFIEC 041 Call Report consistent with additional information is necessary for meet other eligibility criteria. In the reservation of authority in the rule. the OCC to supervise insured Federal addition to the expanded eligibility to All of the final FFIEC 051 Call Report branches, and a reduced reporting file this report, the agencies also are eligibility criteria, along with option would not be appropriate given making other revisions to the FFIEC 051 justifications, are provided above in the nature of their activities. Therefore, Call Report, as discussed under Current section IV.A. of the SUPPLEMENTARY the OCC’s final rule includes a criterion Actions below. With the OMB approval, INFORMATION section (‘‘Covered excluding institutions that file the these revisions to the FFIEC 051 Call Depository Institution’’). Based on Call FFIEC 002 report of condition from Report are proposed to take effect as of Report data as of June 30, 2018, there being eligible for reduced reporting. The the September 30, 2019, report date. The were 547 institutions with $1 billion or OCC received no comments on this agencies are proposing to extend for more, but less than $5 billion in total provision and will finalize as proposed. three years, with revision, the reporting assets that likely would meet the In addition to insured depository requirements associated with the Call definition of ‘‘covered depository institutions, which are specifically Report. institution’’ in the final rule. Second, the agencies are revising the identified in section 205, the OCC also Current Actions supervises a number of uninsured reporting frequency and applicability of national banks, such as trust banks. The Overview certain data items in the FFIEC 051 Call OCC has permitted some of these First, as described above, the agencies Report. Specifically, the agencies are institutions to use the Call Report to are revising the criteria for determining reducing the reporting frequency of submit financial data and to use the whether an institution is eligible to file certain existing data items in the FFIEC existing FFIEC 051 if they meet the the FFIEC 051 Call Report to match the 051 Call Report from quarterly to current eligibility requirements for filing criteria in the final rule. While the final semiannual reporting. The agencies are that Call Report. Therefore, the OCC’s rule provides for reduced reporting on reducing reporting in the first and third rule extends the use of the reduced reports filed for the first and third calendar quarters by 502 data items 27 or reporting requirement to uninsured calendar quarters, the agencies are national banks if they meet the criteria revising the eligibility criteria to extend 27 This number includes 69 data items collected on Schedule RC–T, Fiduciary and Related Services, for covered depository institutions to all eligible institutions with less than that are only reported by certain institutions with identified in the rule. As discussed $5 billion in total assets that meet other fiduciary powers that have fiduciary activity to earlier, the OCC received one comment criteria in the final rule the option to file report.

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a reduction of approximately 37 percent less than or equal to 10 percent of total RC–R, Part II, irrelevant for qualifying of the data items included in the June revenue.28 community banking organizations. The 30, 2018, FFIEC 051 Call Report. The agencies received a number of agencies note that if the CBLR proposal Third, for covered depository comments on the proposed reductions is implemented as proposed, institutions with total assets of $1 in frequency. One commenter objected institutions that qualify would billion or more, but less than $5 billion, to the proposal, stating that the changes experience additional burden reduction the agencies are adding to the FFIEC 051 increase the burden associated with in the Call Report compared to Call Report certain data items that these making systems changes and increase preparing the existing reporting on institutions currently report on the the risk of errors if data is only Schedule RC–R. The estimated average FFIEC 041 Call Report, but generally reconciled and reported semiannually burden hours for the FFIEC 051 Call with reduced reporting frequency. The instead of quarterly. Several Report is currently 39.77,30 which agencies are adding these items to meet commenters stated that the frequency would decrease to 33.65 under the the agencies’ data needs and assist the reductions on Schedule RC–T would CBLR proposal. Therefore, the CBLR agencies in fulfilling their missions of not provide a burden reduction for proposal would represent a reduction in ensuring the safety and soundness of them, because many of the data items estimated average burden hours per depository institutions and the financial already are not reported by many small quarter of 6.12 (or 15.39 percent) for the system, as well as the protection of banks. Two commenters stated that the FFIEC 051 Call Report for institutions.31 consumer financial rights and frequency reductions on Schedule RC– The agencies have opted to pursue administering federal deposit insurance. R are meaningless, either because burden relief now and have proposed to As described above, the agencies institutions must still calculate total risk provide additional relief in the future on received 1,018 comments on the weighted assets on Schedule RC–R, Part this schedule. combination proposed rule and PRA II, or that the agencies’ proposed Addition of Data Items to the FFIEC 051 revision. A majority of those comments rulemaking on a simplified leverage Call Report for Institutions With Total addressed the proposed rule, ratio for community banks (CBLR Assets of $1 Billion or More particularly the agencies’ proposal to proposal) 29 would make the existing use the FFIEC 051 Call Report to Schedule RC–R irrelevant for most The agencies are adding certain data establish reduced reporting in the first institutions. items to the FFIEC 051 Call Report that and third quarters. Comments on the The agencies are implementing the would apply only to covered depository proposed revisions to the FFIEC 051 frequency reductions as proposed. The institutions with total assets of $1 Call Report itself are discussed and agencies note that the proposal is only billion or more. These items are addressed under the relevant headings reducing the minimum frequency for currently reported by institutions with below. items reported in the FFIEC 051 Call total assets of $1 billion or more that file Report. Covered depository institutions the FFIEC 031 or FFIEC 041 Call Report, Changes to the Frequency of Data may still elect to submit data on a but they are not required to be Collection in the FFIEC 051 Call Report quarterly basis; the Central Data completed by institutions with less than As explained in more detail in the Repository, which the agencies use to $1 billion in total assets that file the initial PRA section in the proposed rule, receive and store data on the Call FFIEC 031, FFIEC 041, or FFIEC 051 the agencies are reducing the frequency Reports, will still accept quarterly data Call Reports. Therefore, the additional of the following items on the FFIEC 051 submissions for items even if those data items would not represent new Call Report from quarterly to items are only required semiannually. data items for covered depository semiannual (i.e., these items would be Therefore, an institution that wishes to institutions with total assets of $1 reported in the June 30 and December continue submitting these items to the billion or more, but rather are items 31 Call Reports only): agencies on a quarterly basis may do so. carried over from the FFIEC 041 version • Schedule RI, Income Statement, Regarding Schedule RC–R, currently, of the Call Report, generally using the Memorandum item 14. institutions must continue to calculate same definitions and calculations. • Schedule RC–C, Part I, Loans and and report total risk-weighted assets. Furthermore, all but one of these items Leases, Memorandum items 1.a through However, there is some burden would be reported less frequently in the 1.f, and Schedule RC–N, Past Due and reduction associated with eliminating FFIEC 051 Call Report than they are Nonaccrual Loans, Leases, and Other the reporting of the data item currently reported in the FFIEC 041 Call Assets, Memorandum items 1.a through components to calculate total risk- Report. More detailed information on 1.f. weighted assets (inputs) in the first and these items can be found in the PRA • Schedule RC–E, Deposit Liabilities, third quarters. In calculating total risk- section of the agencies’ proposed rule.32 Memorandum items 1.a and 5. weighted assets in the first and third • Schedule RI, Memorandum items • Schedule RC–M, Memoranda, items quarters, institutions may be able to use 15.a. through 15.d. These items 8.a through 8.c. more efficient methods to collect the currently are required quarterly in the • Schedule RC–R, Part II, Regulatory inputs rather than using the template FFIEC 041 Call Report and only would Capital Risk-Weighted Assets, items 1 provided by the agencies, and would be required annually as of December 31 through 25, columns A through U, as not need to validate each input reported in the FFIEC 051 Call Report from applicable, and Memorandum items 1 on Schedule RC–R, Part II, which would institutions with $1 billion or more, but through 3, including all subitems and save the institutions review time in less than $5 billion in total assets. columns. preparing that schedule. In addition, as • Schedule RI–C, Disaggregated Data • Schedule RC–T, Fiduciary and another commenter noted, the agencies’ on the Allowance for Loan and Lease Related Services, items 4 through 13, CBLR proposal would make Schedule Losses (ALLL). The agencies are adding columns A through D; items 14 through a condensed version of the existing 22; and Memorandum items 3.a through 28 Total fiduciary assets are measured as of the FFIEC 041 Schedule RI–C, Part I, to the 3.h, for institutions with total fiduciary preceding December 31. Gross fiduciary and related services income is measured as a percentage of assets greater than $250 million but less revenue (net interest income plus noninterest 30 84 FR 4131 (February 14, 2019). than or equal to $1 billion, and gross income) for the preceding calendar year. 31 84 FR 16560 (April 19, 2019). fiduciary and related services income 29 84 FR 3062 (February 8, 2019). 32 83 FR 58442–58443.

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FFIEC 051 Call Report as Schedule RI– institutions in the other three quarters. Proposed Revision, With Extension for C and reducing the reporting frequency Regarding the comment on the location Three Years, of the Following of this condensed schedule from of these items, the agencies agree with Information Collections quarterly to semiannual (i.e., reported in the commenter’s recommendation and Report Title: Consolidated Reports of the June 30 and December 31 Call will retain the items that were proposed Condition and Income (Call Report). Reports only) for institutions with $1 to be moved from Schedules RI, RI–C, Form Number: FFIEC 031, FFIEC 041, billion or more, but less than $5 billion, and RC–E on their existing schedules and FFIEC 051 (for eligible small in total assets. Consistent with the rather than including them in Schedule institutions). agencies’ proposed and final revisions SU, Supplemental Information. Frequency of Response: Quarterly. to the FFIEC 041 Call Report related to Affected Public: Business or other for- Additional Comments on the Call implementation of the current expected profit. 33 Report credit losses (CECL) methodology, Type of Review: Revision and institutions in this size range that have extension of currently approved adopted CECL would also report The agencies also received one collections. disaggregated data on the allowance for comment suggesting that they propose OCC: credit losses on held-to-maturity revisions to the FFIEC 031 and FFIEC OMB Control No.: 1557–0081. securities on Schedule RI–C on a 041 versions of the Call Report for Estimated Number of Respondents: semiannual basis. institutions with total assets of less than • Schedule RC–E, Memorandum $5 billion that either are not eligible for 1,178 national banks and federal savings items 6 and 7, including all subitems. the reduced reporting or choose not to associations. Estimated Average Burden per These items currently are required use reduced reporting in the FFIEC 051 Response: 44.45 burden hours per quarterly in the FFIEC 041 Call Report Call Report. While the agencies may quarter to file. and only will be required annually as of consider proposing burden-reducing Estimated Total Annual Burden: December 31 in the FFIEC 051 Call revisions to the FFIEC 031 or 041 Report from institutions with $1 billion 209,448 burden hours to file. versions of the Call Report in the future, Board: or more, but less than $5 billion in total the agencies are not prepared to propose assets. OMB Control No.: 7100–0036. • any specific revisions to these versions Estimated Number of Respondents: Schedule RC–O, Other Data for of the Call Report at this time. If an Deposit Insurance and FICO 794 state member banks. institution does not meet the criteria to Estimated Average Burden per Assessments, Memorandum item 2. This use the FFIEC 051 Call Report, then item is required quarterly in the FFIEC Response: 48.42 burden hours per reporting on the existing FFIEC 031 or 041 Call Report, and will continue to be quarter to file. FFIEC 041 Call Report is appropriate. required quarterly in the FFIEC 051 Call Estimated Total Annual Burden: 153,782 burden hours to file. Report from institutions with $1 billion Effective Date or more, but less than $5 billion in total FDIC: assets. Subject to OMB approval, the OMB Control No.: 3064–0052. The agencies received five comments revisions to the FFIEC 051 Call Report Estimated Number of Respondents: on the items proposed to be added to described above would take effect as of 3,483 insured state nonmember banks the FFIEC 051 Call Report. Four the September 30, 2019, report date. The and state savings associations. comments objected to adding the data less than $5 billion asset-size test for Estimated Average Burden per items on Schedules RI and RC–E. These determining eligibility to file the FFIEC Response: 43.44 burden hours per data items relate to consumer deposit 051 Call Report in 2019 would be based quarter to file. accounts and deposit account fees, and on the total assets reported on an Estimated Total Annual Burden: 605,206 burden hours to file. the commenters stated that this institution’s Call Report as of June 30, When the estimates are calculated information should not be collected in 2018. An institution eligible to file the across the agencies considering all the Call Report. One comment requested FFIEC 051 Call Report also has the expected filers of the FFIEC 051 Call that the agencies retain the items to be option to file the FFIEC 041 Call Report. Report, the estimated average burden added to the FFIEC 051 Call Report on For an institution with less than $5 the same schedules and in the same hours per calendar quarter for this billion in total assets that qualifies to report are 40.27 hours. The burden locations in the FFIEC 051 Call Report use the FFIEC 051 Call Report for the as they are reported in the FFIEC 041 hours for filers of the currently first time as a result of the agencies’ approved FFIEC 051 Call Report are Call Report, to minimize the burden of increase in the asset-size reporting making systems changes to implement 39.77 hours (using September 30, 2018, threshold for the FFIEC 051 Call Report data). The increase in the overall the revisions. from less than $1 billion to less than $5 These data items, including the items average for the FFIEC 051 reflects that billion, and that desires to use that on Schedules RI and RC–E, are newly eligible institutions (with total report form but is unable to do so for the necessary for the agencies to supervise assets between $1 billion and less than September 30, 2019, Call Report date, and monitor consumer deposit account $5 billion) generally have amounts to the institution may begin reporting on activity at institutions with total assets report in more items on that report than of $1 billion or more, but less than $5 the FFIEC 051 Call Report as of the current filers (with total assets of less billion that file the FFIEC 051 Call December 31, 2019, report date. than $1 billion). For the current FFIEC Report. The agencies also note that the Beginning in 2020, an institution should 051 Call Report filers, the revisions to items on Schedules RI and RC–E would file whichever version of the Call Report the FFIEC 051 Call Report described in be collected annually instead of for which it is both eligible and chooses this document would decrease average quarterly, which would provide a to file in the first quarter of that year, burden hours per quarter from reduction in burden for these for the remainder of that year if it meets approximately 40.11 hours to 39.08 the asset-size threshold for eligibility as hours, a reduction of 1.03 hours per 33 See 83 FR 49160 (September 28, 2018) and 84 of June 30, 2019, and continues to meet quarter (using December 31, 2018, data). FR 4131 (February 14, 2019). the non-asset-size criteria. For newly eligible filers, the average

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burden hours would decrease from automated processes, the agencies regulatory burden on small entities. The approximately 63.69 hours to 50.96 recognize institutions’ prerogatives to Board did not receive any comment on hours, a reduction of 12.73 hours per make their own business decisions the IRFA. quarter. The estimated burden per regarding the use of automation for the The RFA requires an agency to response for the quarterly filings of the Call Report process. prepare a final regulatory flexibility Call Report is an average that varies by analysis (FRFA) unless the agency B. Regulatory Flexibility Act Analysis agency because of differences in the certifies that the rule will not, if composition of the institutions under The Regulatory Flexibility Act 34 promulgated, have a significant each agency’s supervision (e.g., size (RFA) requires an agency to either economic impact on a substantial distribution of institutions, types of provide an initial regulatory flexibility number of small entities. The FRFA activities in which they are engaged, analysis with a proposed rule for which must contain (1) a statement of the need and existence of foreign offices). In general notice of proposed rulemaking for, and objectives of, the proposed rule; addition, the estimates of the average is required or to certify that the (2) a statement of the significant issues burden per response for FFIEC 051 Call proposed rule will not have a significant raised by the public comments in Report filers are averages across the Call economic impact on a substantial response to the IRFA, a statement of the Reports for these filers for all four number of small entities. The U.S. Small agency’s assessment of such issues, and quarters of the year. As a consequence, Business Administration (SBA) a statement of any changes made in the the estimated average burden blends the establishes size standards that define proposed rule as a result of such effects of reduced reporting in the first which entities are small businesses for comments; (3) the response of the and third quarters with the reporting purposes of the RFA.35 Under agency to any comments filed by the that occurs in all four quarters. regulations issued by the SBA, the size Chief Counsel for Advocacy of the Small Estimates of the average burden hours standard to be considered a small Business Administration in response to solely for completing the FFIEC 051 Call business for banking entities subject to the proposed rule, and a detailed Report in the first or the third quarter the proposed rule is $550 million or less statement of any changes made to the would be less than the overall average in consolidated assets.36 proposed rule in the final rule as a per response. OCC: The RFA requires an agency, in result of the comments; (4) a description connection with a proposed rule, to of an estimate of the number of small Comments on the Burden Estimate prepare an Initial Regulatory Flexibility entities to which the rule will apply or The agencies received two comments Analysis describing the impact of the an explanation of why no such estimate specifically about the burden rule on small entities (defined by the is available; (5) a description of the calculation. One commenter stated that SBA for purposes of the RFA to include projected reporting, recordkeeping and the reductions in frequency would save commercial banks and savings other compliance requirements of the his institution approximately 2 hours institutions with total assets of $550 rule, including an estimate of the classes per quarter. The commenter’s estimate million or less and trust companies with of small entities which will be subject is consistent with the agencies’ estimate total revenue of $38.5 million or less) or to the requirement and type of of a savings of 1.03 hours per quarter. to certify that the proposed rule, if professional skills necessary for A second commenter stated that finalized, would not have a significant preparation of the report or record; and preparing the Call Report requires economic impact on a substantial (6) a description of the steps the agency approximately 120 hours per quarter at number of small entities. As of has taken to minimize the significant his institution. For an institution that December 31, 2018, the OCC supervised economic impact on small entities, relies primarily on manual processes to 758 small entities. The rule would including a statement for selecting or complete the Call Report, the agencies’ expand eligibility to file the FFIEC 051 rejecting the other significant supervisory experiences indicate that version of the Call Report to institutions alternatives to the rule considered by 60–80 hours may be more typical. The with total assets of between $1 billion the agency. In accordance with section agencies recognize that institutions may and less than $5 billion. None of these 604 of the RFA, the Board has reviewed use unique approaches for preparing the newly eligible institutions would be the final rule. Call Report that rely on varying degrees considered small entities as defined by Under regulations issued by the SBA, of manual and automated processes that the SBA. Therefore, the OCC certifies a small entity includes a state member are tailored to their individual that the final rule would not have a bank with total assets of $550 million or circumstances, and the burden estimate significant economic impact on a less. As of June 30, 2018, there were reflects averages that take into substantial number of OCC-supervised approximately 533 state member banks consideration such a wide range of small entities. that qualified as small entities. The practices. However, increased use of Board: In accordance with section requirement set forth in § 208.122 of the automated systems generally results in 603(a) of the RFA,37 the Board Board’s proposed rule requiring state greater efficiencies and lower manual published an initial regulatory member banks to file reports of intervention for institutions. The flexibility analysis (IRFA) for the condition applies to all state member agencies note that their estimate of proposal.38 The Board solicited public banks, regardless of size. However, approximately 40 hours per quarter is comment on the effect of the proposal § 208.122 does not establish a new consistent with an average across all on small entities and on any significant requirement, but only implements in institutions, including institutions that alternatives that would reduce the Board regulation a statutory requirement use automated systems and those that to which state member banks already do not. While in some cases the set-up 34 5 U.S.C. 601 et seq. were subject. and operating costs of integrating 35 U.S. SBA, Table of Small Business Size Section 208.123 of the Board’s final general ledger and core systems with Standards Matched to North American Industry rule allows state member banks that Call Report software as a means to Classification System Codes, available at https:// qualify as covered depository www.sba.gov/sites/default/files/files/Size_ substantially automate the Call Report Standards_Table.pdf. institutions to file reduced reporting in preparation process may be significantly 36 See 13 CFR 121.201. first and third calendar quarters of the lower than the recurring cost of 37 5 U.S.C. 603. year, which applies to approximately employees using manual or less 38 83 FR 58432 (November 19, 2018). 533 state member banks that qualify as

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small entities. However, § 208.123 and the type of professional skills Generally, the FDIC considers a allows but does not require these small necessary for preparation of the report significant effect to be a quantified effect state member banks to file reduced or record. in excess of 5 percent of total annual reporting. Accordingly, the final rule The final rule does not impose any salaries and benefits per institution, or will not have a significant economic new reporting, recordkeeping, or other 2.5 percent of total noninterest impact on a substantial number of small compliance requirements on small state expenses. The FDIC believes that effects entities. member banks. First, state member in excess of these thresholds typically Based on its analysis and for the banks are already required to file reports represent significant effects for FDIC- reasons stated below, the Board believes of condition each quarter of the calendar supervised institutions. that this final rule will not have a year in accordance with the instructions Based on December 31, 2018, Call significant economic impact on a of such reports. Second, the final rule Report data, the FDIC supervises 3,489 substantial number of small entities. allows small state member banks that insured depository institutions, of 1. Statement of the need for, and qualify as covered depository which 2,674 are considered small objectives of, the application of the final institutions to reduce their reporting, entities for the purposes of RFA. For the rule. recordkeeping, and compliance burden reasons described below, the FDIC As discussed in the SUPPLEMENTARY by filing the FFIEC 051 Call Report, the certifies that the final rule will not have INFORMATION, section 205 of EGRRCPA shortest version of the Call Report, with a significant economic impact on a requires the agencies to allow for a further reduced reporting in the first substantial number of small entities. reduced reporting requirement for a and third calendar quarters. As a result, As the agencies discussed in the ‘‘covered depository institution’’ when the Board expects that the final rule will SUPPLEMENTARY INFORMATION section an institution files the first and third reduce the reporting and associated above, the final rule implements section Call Reports for a year. The agencies’ recordkeeping and compliance costs for 205 by defining ‘‘covered depository goal is to implement section 205 and to the majority of small state member institution’’ to, among other things, reduce the reporting burden for covered banks. expand eligibility for filing the FFIEC depository institutions by offering them 6. Description of the steps taken to 051 Call Report to insured depository the option to file the FFIEC 051 Call minimize the economic impact on small institutions with $1 billion or more, but Report in the first and third quarters of entities, including a statement for less than $5 billion in total assets. a calendar year. selecting or rejecting the other Through a related PRA notice, the In connection with the significant alternatives to the rule agencies are reducing the reporting implementation of reduced reporting considered by the agency. frequency for more than 400 data items mandated by section 205, the Board is As noted, the final rule does not on the FFIEC 051 Call Report for the setting forth the general requirement impose any new requirements on small first and third reports of condition for a that all state member banks must file state member banks and instead allows year, and to add certain data items to consolidated reports of condition small state member banks that qualify as the FFIEC 051 Call Report that would pursuant to its statutory authority under covered depository institutions the apply only to covered depository section 9 of the FRA and section7(a)(3) option to reduce their reporting burden. institutions with total assets of $1 of the FDIA. In light of the foregoing, the Board does billion or more. Out of the additional 2. Significant issues raised by the not believe the final rule will have a data items, only one would be required public comments in response to the significant economic impact on small to be reported every quarter, while the IRFA, a statement of the Board’s state member banks. remaining only would be required assessment of such issues, and a FDIC: The RFA requires that, in semiannually or annually (i.e., in the statement of any changes made in the connection with a final rule, an agency second and fourth quarters, or only the rule as a result of such comments. prepare and make available for public fourth quarter). As noted above, the Board did not comment a final regulatory flexibility The FDIC estimates that under the receive any comments on the IRFA. analysis that describes the impact of the revised definition of ‘‘covered 3. Response to any comments filed by final rule on small entities.39 However, depository institution’’ in the final rule, the Chief Counsel for Advocacy of the a regulatory flexibility analysis is not 295 FDIC-supervised depository Small Business Administration in required if the agency certifies that the institutions that reported total assets of response to the proposed rule, and rule will not have a significant $1 billion or more, but less than $5 detailed statement of any changes made economic impact on a substantial billion as of June 30, 2018, could be to the proposed rule in the final rule as number of small entities, and publishes eligible to file the FFIEC 051 Call Report a result of the comments. its certification and a short explanatory assuming they meet the other non-asset- The Chief Counsel for Advocacy of statement in the Federal Register size criteria under the final rule. the Small Business Administration did together with the rule. The SBA has However, because this aspect of the not file any comments in response to the defined ‘‘small entities’’ to include final rule only affects institutions with proposal. banking organizations with total assets $1 billion or more, but less than $5 4. Description and estimate of the of less than or equal to $550 million.40 billion, in total assets, it will not affect number of small entities to which the any small, FDIC-supervised institutions. rule will apply. 39 5 U.S.C. 601 et seq. As the agencies discussed in the PRA The final rule will apply to 40 The SBA defines a small banking organization section, the FDIC and the other agencies approximately 563 state member banks, as having $550 million or less in assets, where ‘‘a are reducing the reporting frequency of of which 533 state member banks have financial institution’s assets are determined by averaging the assets reported on its four quarterly more than 400 data items on the FFIEC $550 million or less in total financial statements for the preceding year.’’ See 13 051 Call Report for the first and third consolidated assets. CFR 121.201 (as amended, effective December 2, calendar quarters. These data items are 5. Description of the projected 2014). ‘‘SBA counts the receipts, employees, or currently collected every calendar reporting, recordkeeping and other other measure of size of the concern whose size is at issue and all of its domestic and foreign quarter on the FFIEC 051 Call Report. compliance requirements of the rule, affiliates.’’ See 13 CFR 121.103. Following these including an estimate of small entities regulations, the FDIC uses a covered entity’s preceding four quarters, to determine whether the which will be subject to the requirement affiliated and acquired assets, averaged over the covered entity is ‘‘small’’ for the purposes of RFA.

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Every covered depository institution although a substantial number of small E. OCC Unfunded Mandates Reform Act with less than $5 billion in total assets entities will be affected. of 1995 that files the FFIEC 051 Call Report In the proposal, the FDIC invited The OCC analyzed the final rule would experience a reduction in comment on all aspects of the under the factors set forth in the reporting burden for the first and third supporting information provided in this Unfunded Mandates Reform Act of 1995 calendar quarters as a result of this final RFA section but did not receive any (UMRA) (2 U.S.C. 1532). Under this rule. The FDIC estimates that the comments. analysis, the OCC considered whether reduction in reporting frequency of C. Plain Language the final rule includes a Federal more than 400 data items in the FFIEC mandate that may result in the 051 Call Reports for the first and third Section 722 of the Gramm-Leach- expenditure by State, local, and Tribal calendar quarters would reduce the Bliley Act requires the Federal banking governments, in the aggregate, or by the average quarterly burden hours for agencies to use plain language in all private sector, of $100 million or more current FFIEC 051 Call Report filers by proposed and final rules published after in any one year (adjusted for inflation). 1.03 hours per institution. For the 2,158 January 1, 2000. The agencies have The OCC estimates there are 120 small, FDIC-supervised depository sought to present the final rule in a national banks and Federal savings institutions that filed the FFIEC 051 Call simple and straightforward manner, and associations with total assets between Report for the December 31, 2018, report did not receive any comments on the $1 billion and less than $5 billion that date, this represents a total estimated use of plain language. would be eligible for reduced reporting burden reduction of 2,223 hours per under the final rule. The OCC estimates quarter.41 While the reduced reporting D. Effective Date Under the Administrative Procedure Act and that each of these institutions that could affect a substantial number of switches to the FFIEC 051 could save small, FDIC-supervised depository Riegle Community Development and Regulatory Improvement Act of 1994 approximately $6,000 per year. Savings institutions, it would not result in a may be less during the first year of significant economic impact. The Administrative Procedure Act implementation due to costs associated Based on the agencies’ total estimated (APA) requires that a final rule be with updating systems and processes, hourly wage rate of $117 for Call Report published in the Federal Register no but these costs are not expected to preparation, and the reduction in less than 30 days before its effective exceed the estimated savings. Therefore, reporting hours resulting from the date unless, among other exceptions, the the OCC has determined that this final reduced reporting frequency of certain final rule relieves a restriction. rule would not result in expenditures by items in the FFIEC 051 Call Report Pursuant to section 302(a) of the State, local, and Tribal governments, or discussed in the PRA section, it is Riegle Community Development and the private sector, of $100 million or estimated that annual reporting costs Regulatory Improvement Act more in any one year. Accordingly, the could be $1,040,364 less for small, (‘‘RCDRIA’’), in determining the OCC has not prepared a written FDIC-supervised insured depository effective date and administrative statement to accompany this final rule. institutions that file the FFIEC 051 Call compliance requirements for a new Report, or 0.010 percent of total regulation that imposes additional List of Subjects annualized noninterest expenses.42 reporting, disclosure, or other 12 CFR Part 52 The final rule could pose some requirements on insured depository Banks, banking, Reporting and additional regulatory costs for small, institutions, each Federal banking recordkeeping requirements. FDIC-supervised depository institutions agency must consider, consistent with that file the FFIEC 051 Call Report that principles of safety and soundness and 12 CFR Part 208 are associated with changes to internal the public interest, any administrative Accounting, Agriculture, Banks, systems or processes. The FDIC burdens that such regulations would banking, Confidential business anticipates that costs associated with place on depository institutions, information, Consumer protection, either switching to file the FFIEC 051 including small depository institutions, Currency, Insurance, Investments, Call Report (for institutions with $1 and customers of depository Mortgages, Reporting and recordkeeping billion or more, but less than $5 billion institutions, as well as the benefits of requirements, Securities. such regulations. In addition, section in total assets), or reprogramming for 12 CFR Part 304 reduced reporting in the first and third 302(b) of RCDRIA requires new calendar quarters, would be one-time regulations and amendments to Bank deposit insurance, Banks, costs (for all covered depository regulations that impose additional banking, Freedom of information, institutions). However, these costs are reporting, disclosure, or other new Reporting and recordkeeping difficult to estimate accurately with requirements on insured depository requirements. institutions generally to take effect on available information because they OFFICE OF THE CONTROLLER OF the first day of a calendar quarter that depend upon the individual THE CURRENCY characteristics of each insured begins on or after the date on which the depository institution, their regulations are published in final form. ■ For the reasons set out in the joint recordkeeping and reporting systems, The final rule reduces reporting and preamble, the OCC is adding 12 CFR and the decisions of senior disclosure requirements on insured part 52 to read as follows: management. depository institutions. Because the PART 52—REGULATORY REPORTING Based on the information above, the final rule does not impose additional FDIC certifies that the final rule will not reporting, disclosure, or other Sec. have a significant economic impact, requirements on insured depository 52.1 Authority and purpose. institutions, section 302 of the RCDRIA 52.2 Definitions. 52.3 Reduced reporting. 41 does not apply. The agencies are 1.03 hours * 2,158 institutions. 52.4 Reservation of authority. 42 $117 per hour * 2,223 hours per quarter * 4 adopting July 22, 2019, as the effective quarters per year. Call Report Data as of December date so as to provide a minimum of 30 Authority: 12 U.S.C. 93a, 161, 1463(a), 31, 2018. days under the APA. 1464(v), and 1817(a)(12).

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§ 52.1 Authority and purpose. § 52.3 Reduced reporting. Federal Deposit Insurance Act, 12 (a) Authority. This part is issued A covered depository institution may U.S.C. 1817(a)(3) and (12), and section pursuant to 12 U.S.C. 93a, 161, 1463(a), file the FFIEC 051 version of the Call 9 of the Federal Reserve Act, 12 U.S.C. 1464(v), and 1817(a)(12). Report, or any successor thereto, to 324. (b) Purpose. This part establishes a satisfy its requirement to file a report of (b) Purpose and scope. This subpart reduced reporting requirement for a condition for the first and third calendar informs a state member bank where it covered depository institution making quarters of a year. may obtain forms and instructions for its reports of condition for the first and § 52.4 Reservation of authority. reports of conditions and implements 12 third calendar quarters of a year. U.S.C. 1817(a)(12) to allow reduced The OCC may determine that a reporting for a covered depository § 52.2 Definitions. covered depository institution shall not institution when such institution makes Covered depository institution means use the reduced reporting in § 52.3. In its reports of condition for the first and making this determination, the OCC will a national bank, Federal savings third calendar quarters of a year. association, or insured Federal branch consider whether the institution is that meets the following criteria: significantly engaged in complex, § 208.121 Definitions. (1) Has less than $5 billion in total specialized, or higher risk activities, for Covered depository institution means consolidated assets as reported in its which a reduced reporting requirement a state member bank that meets all of report of condition for the second would not provide sufficient the following criteria: information. The institution has 30 days calendar quarter of the preceding year; (1) Has less than $5 billion in total following notification from the OCC to (2) Has no foreign offices, as defined consolidated assets as reported in its inform the OCC, in writing, of why it in this section; report of condition for the second (3) Is not required to or has not should continue to be eligible to use calendar quarter of the preceding year; elected to use 12 CFR part 3, subpart E reduced reporting or cannot cease using (for advanced approaches banks), to reduced reporting in the OCC’s (2) Has no foreign offices, as defined calculate its risk-based capital proposed timeframe. The OCC will in this section; requirements; make a final decision after reviewing (3) Is not required to or has not (4) Is not a large institution or highly any response. Nothing in this part shall elected to use 12 CFR part 217, subpart complex institution, as such terms are be construed to limit the OCC’s E, to calculate its risk-based capital defined in 12 CFR 327.8, or treated as authority to obtain information from a requirements; and a large institution, as requested under covered depository institution. (4) Is not a large institution or highly complex institution, as such terms are 12 CFR 327.16(f); and FEDERAL RESERVE SYSTEM (5) Is not subject to the filing defined in 12 CFR 327.8, or treated as requirements for the FFIEC 002 report of Authority and Issuance a large institution, as requested under condition. For the reasons set forth in the joint 12 CFR 327.16(f). Foreign country refers to one or more preamble, the Board amends 12 CFR Foreign country refers to one or more foreign nations, and includes the part 208 as follows: foreign nations, and includes the overseas territories, dependencies, and overseas territories, dependencies, and insular possessions of those nations and PART 208—MEMBERSHIP OF STATE insular possessions of those nations and of the United States. BANKING INSTITUTIONS IN THE of the United States. Foreign office means: FEDERAL RESERVE SYSTEM Foreign office means: (1) A branch or consolidated (REGULATION H) (1) A branch or consolidated subsidiary in a foreign country, unless subsidiary in a foreign country, unless ■ the branch is located on a U.S. military 2. The authority citation of part 208 is the branch is located on a U.S. military facility; revised to read as follows: facility; (2) An international banking facility Authority: 12 U.S.C. 24, 36, 92a, 93a, (2) An international banking facility as such term is defined in 12 CFR 204.8; 248(a), 248(c), 321–338a, 371d, 461, 481–486, as such term is defined in 12 CFR 204.8; (3) A majority-owned Edge Act or 601, 611, 1814, 1816, 1817(a)(3), 1817(a)(12), Agreement subsidiary as defined in 12 1818, 1820(d)(9), 1833(j), 1828(o), 1831, (3) A majority-owned Edge Act or CFR 28.2, including both its U.S. and its 1831o, 1831p–1, 1831r–1, 1831w, 1831x, Agreement subsidiary including both its foreign offices; and 1835a, 1882, 2901–2907, 3105, 3310, 3331– U.S. and its foreign offices; and (4) For an institution chartered or 3351, 3905–3909, and 5371; 15 U.S.C. 78b, (4) For an institution chartered or 78I(b), 78l(i), 780–4(c)(5), 78q, 78q–1, and headquartered in any U.S. state or the headquartered in any U.S. state or the 78w, 1681s, 1681w, 6801, and 6805; 31 District of Columbia, a branch or District of Columbia, a branch or U.S.C. 5318; 42 U.S.C. 4012a, 4104a, 4104b, consolidated subsidiary located in a 4106 and 4128. consolidated subsidiary located in a U.S. territory or possession. U.S. territory or possession. ■ 3. Add subpart K to part 208 to read Report of condition means the FFIEC Report of condition means the FFIEC as follows: 031, FFIEC 041, or FFIEC 051 versions 031, FFIEC 041, or FFIEC 051 versions of the Consolidated Report of Condition Subpart K—Forms, Instructions and of the Consolidated Report of Condition and Income (Call Report) or the FFIEC Reports and Income (Call Report) or the FFIEC 002 (Report of Assets and Liabilities of 002 (Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Sec. U.S. Branches and Agencies of Foreign Banks), as applicable, and as they may 208.120 Authority, purpose, and scope. Banks), as applicable, and as they may be amended or superseded from time to 208.121 Definitions. be amended or superseded from time to 208.122 Reporting. time in accordance with the Paperwork time in accordance with the Paperwork 208.123 Reduced reporting. Reduction Act of 1995, 44 U.S.C. 208.124 Reservation of authority. Reduction Act of 1995, 44 U.S.C. chapter 35. chapter 35. Total consolidated assets means total § 208.120 Authority, purpose, and scope. Total consolidated assets means total assets as reported in an institution’s (a) Authority. This subpart is issued assets as reported in a state member report of condition. by the Board under section 7 of the bank’s report of condition.

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§ 208.122 Reporting. determination. In making this telephone: (877) 275–3342 or (703) 562– (a) A state member bank is required to determination, the Board may consider 2200), except as noted in § 304.3. In file the report of condition (Call Report) criteria including, but not limited to, addition, many forms and instructions in accordance with the instructions for whether the institution is significantly can be obtained from FDIC regional these reports. All assets and liabilities, engaged in one or more complex, offices. A list of FDIC regional offices including contingent assets and specialized, or other higher risk can be obtained from the FDIC Public liabilities, must be reported in, or activities, such as those for which Information Center, or found at the otherwise taken into account in the limited information is reported in the FDIC’s website at http://www.fdic.gov, preparation of, the Call Report. The FFIEC 051 version of the report of or in the directory of FDIC Law, Board uses Call Report data to monitor condition compared to the FFIEC 041 Regulations, Related Acts published by the condition, performance, and risk version of the report of condition. the FDIC. profile of individual state member banks Nothing in this part shall be construed § 304.3 Reports. and the banking industry. Reporting to limit the Board’s authority to obtain state member banks must also submit information from a state member bank. (a) Consolidated Reports of Condition annually such information on small (b) Nothing in this subpart limits the and Income, Forms FFIEC 031, 041, and business and small farm lending as the authority of the Board under any other 051. Pursuant to section 7(a) of the Board may need to assess the provision of law or regulation to take Federal Deposit Insurance Act (12 availability of credit to these sectors of supervisory or enforcement action, U.S.C. 1817(a)) and other applicable the economy. The report forms and including action to address unsafe or law, every insured depository instructions can be obtained from unsound practices or conditions or institution is required to file Federal Reserve District Banks or violations of law. Consolidated Reports of Condition and through the website of the Federal Income (also known as the Call Report) FEDERAL DEPOSIT INSURANCE Financial Institutions Examination in accordance with the instructions for CORPORATION Council, http://www.ffiec.gov/. these reports. All assets and liabilities, (b) Every insured U.S. branch of a 12 CFR Chapter III including contingent assets and liabilities, must be reported in, or foreign bank is required to file the Authority and Issuance FFIEC 002 version of the report of otherwise taken into account in the condition (Report of Assets and For the reasons set forth in the preparation of, the Call Report. The Liabilities of U.S. Branches and preamble, the Federal Deposit Insurance FDIC uses Call Report data from all Agencies of Foreign Banks) in Corporation revises 12 CFR part 304 to insured depository institutions to accordance with the instructions for the read as follows: calculate deposit insurance assessments report. All assets and liabilities, and monitor the condition, PART 304—FORMS, INSTRUCTIONS, including contingent assets and performance, and risk profile of AND REPORTS liabilities, must be reported in, or individual banks and the banking industry. Reporting banks must also otherwise taken into account in the Subpart A—In General preparation of the report. The Board submit annually such information on Sec. small business and small farm lending uses the reported data to monitor the 304.1 Purpose. condition, performance, and risk profile as the FDIC may need to assess the 304.2 Where to obtain forms and availability of credit to these sectors of of individual insured branches and the instructions. the economy. The report forms and banking industry. Insured branches 304.3 Reports. instructions can be obtained from the must also submit annually such 304.4–304.10 [Reserved] Division of Insurance and Research information on small business and small Subpart B—Implementation of Reduced (DIR), FDIC, 550 17th Street NW, farm lending as the Board may need to Reporting Requirement Washington, DC 20429 or through the assess the availability of credit to these 304.11 Authority, purpose, and scope. website of the Federal Financial sectors of the economy. The report 304.12 Definitions. Institutions Examination Council, forms and instructions can be obtained 304.13 Reduced reporting. http://www.ffiec.gov/. from Federal Reserve District Banks or 304.14 Reservation of authority. (b) Report of Assets and Liabilities of through the website of the Federal Authority: 5 U.S.C. 552; 12 U.S.C. 1464, U.S. Branches and Agencies of Foreign Financial Institutions Examination 1817, 1831, 1867. Banks, Form FFIEC 002. Pursuant to Council, http://www.ffiec.gov/. section 7(a) of the Federal Deposit Subpart A—In General § 208.123 Reduced reporting. Insurance Act (12 U.S.C. 1817(a)) and A covered depository institution may § 304.1 Purpose. other applicable law, every insured U.S. file the FFIEC 051 version of the report This part informs the public where it branch of a foreign bank is required to of condition, or any successor thereto, may obtain forms and instructions for file a Report of Assets and Liabilities of which shall provide for reduced reports, applications, and other U.S. Branches and Agencies of Foreign reporting for the reports of condition for submittals used by the FDIC, and also Banks in accordance with the the first and third calendar quarters for describes certain forms that are not instructions for the report. All assets a year. described elsewhere in FDIC and liabilities, including contingent regulations. assets and liabilities, must be reported § 208.124 Reservation of authority. in, or otherwise taken into account in (a) Notwithstanding § 208.123, the § 304.2 Where to obtain forms and the preparation of the report. The FDIC Board in consultation with the instructions. uses the reported data to calculate applicable state chartering authority Forms and instructions used in deposit insurance assessments and may require an otherwise eligible connection with applications, reports, monitor the condition, performance, covered depository institution to file the and other submittals used by the FDIC and risk profile of individual insured FFIEC 041 version of the report of can be obtained by contacting the FDIC branches and the banking industry. condition, or any successor thereto, Public Information Center (550 17th Insured branches must also submit based on an institution-specific Street NW, Washington, DC 20429; annually such information on small

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business and small farm lending as the section 9 (12 U.S.C. 1819 Tenth) of the (d) Report of condition means the FDIC may need to assess the availability Federal Deposit Insurance Act. FFIEC 031, FFIEC 041, or FFIEC 051 of credit to these sectors of the (b) Purpose. This subpart implements versions of the Consolidated Report of economy. Because the Board of 12 U.S.C. 1817(a)(12) to allow reduced Condition and Income (Call Report) or Governors of the Federal Reserve reporting for a covered depository the FFIEC 002 (Report of Assets and System collects and processes this institution when such institution makes Liabilities of U.S. Branches and report on behalf of the FDIC, the report its reports of condition for the first and Agencies of Foreign Banks), as forms and instructions can be obtained third calendar quarters of a year. applicable, and as they may be amended from Federal Reserve District Banks or (c) Scope. This subpart applies to an or superseded from time to time in through the website of the Federal insured depository institution, as that accordance with the Paperwork Financial Institutions Examination term is defined in section 3(c) of the Reduction Act of 1995, 44 U.S.C. Federal Deposit Insurance Act, 12 Council, http://www.ffiec.gov/. chapter 35. (c) Summary of Deposits, Form FDIC U.S.C. 1813(c), that meets the definition (e) Total consolidated assets means 8020/05. Form 8020/05 is a report on of a covered depository institution total assets as reported in an insured the amount of deposits for each under § 304.12. depository institution’s report of authorized office of an insured (d) Preservation of authority. Nothing depository institution with branches; in this subpart in any way limits the condition. authority of the Corporation under other institutions with only a main office are § 304.13 Reduced reporting. exempt from reporting. Reports as of provisions of applicable law and June 30 of each year must be submitted regulation. A covered depository institution may no later than the immediately § 304.12 Definitions. file the FFIEC 051 version of the report of condition, or any successor thereto, succeeding July 31. The report forms (a) Covered depository institution and the instructions for completing the means an insured depository institution, which shall provide for reduced reports will be furnished to all such as such term is defined in section 3 of reporting for the reports of condition for institutions by, or may be obtained upon the Federal Deposit Insurance Act, 12 the first and third calendar quarters for request from, the Division of Insurance U.S.C. 1813, for which the Corporation a year. and Research (DIR), FDIC, 550 17th is the appropriate Federal banking § 304.14 Reservation of authority. Street NW, Washington, DC 20429. agency and that meets all of the (d) Notification of Performance of following criteria: Notwithstanding § 304.13, the Bank Services, Form FDIC 6120/06. (1) Has less than $5 billion in total Corporation, in consultation with the Pursuant to section 7 of the Bank consolidated assets as reported in its applicable state chartering authority, Service Company Act (12 U.S.C. 1867), report of condition for the second may require an otherwise eligible as amended, FDIC-supervised calendar quarter of the preceding year; covered depository institution to file the institutions must notify the agency (2) Has no foreign offices, as defined FFIEC 041 version of the report of about the existence of a service in this section; condition, or any successor thereto, relationship within thirty days after the (3) Is not required to or has not based on an institution-specific making of the contract or the elected to use 12 CFR part 324, subpart determination. In making this performance of the service, whichever E, to calculate its risk-based capital determination, the Corporation may occurs first. Form FDIC 6120/06 may be requirements; consider criteria including, but not (4) Is not a large institution or highly used to satisfy the notice requirement. limited to, whether the institution is complex institution, as such terms are The form contains identification, significantly engaged in one or more defined in 12 CFR 327.8, or treated as location, and contact information for the complex, specialized, or other higher- institution, the servicer, and a a large institution, as requested under 12 CFR 327.16(f); and risk activities, such as those for which description of the services provided. In limited information is reported in the lieu of the form, notification may be (5) Is not a state-licensed insured branch of a foreign bank, as such terms FFIEC 051 version of the report of provided by letter. Either the form or the condition compared to the FFIEC 041 letter containing the notice information are defined in section 3(s) of the Federal Deposit Insurance Act, 12 U.S.C. version of the report of condition. must be submitted to the regional Nothing in this part shall be construed director—Division of Risk Management 1813(s). (b) Foreign country refers to one or to limit the Corporation’s authority to Supervision (RMS) of the region in more foreign nations, and includes the obtain information from insured which the institution’s main office is overseas territories, dependencies, and depository institutions. located. insular possessions of those nations and Dated: June 3, 2019. (Approved by the Office of Management of the United States. and Budget under control numbers 3064– (c) Foreign office means: Joseph M. Otting, 0052, 7100–0032, 3064–0061, and 3064– (1) A branch or consolidated Comptroller of the Currency. 0029, respectively) subsidiary in a foreign country, unless By order of the Board of Governors of the § § 304.4–304.10 [Reserved] the branch is located on a U.S. military Federal Reserve System, June 13, 2019. facility; Ann E. Misback, (2) An international banking facility Subpart B—Implementation of Secretary of the Board. Reduced Reporting Requirement as such term is defined in 12 CFR 204.8; (3) A majority-owned Edge Act or Federal Deposit Insurance Corporation. Authority: 12 U.S.C. 1464(v), 1817(a), and Agreement subsidiary including both its By order of the Board of Directors. 1819 Tenth. U.S. and its foreign offices; and Dated at Washington, DC, on June 7, 2019. (4) For an institution chartered or § 304.11 Authority, purpose, and scope. headquartered in any U.S. state or the Valerie J. Best, (a) Authority. This subpart is issued District of Columbia, a branch or Assistant Executive Secretary. pursuant to 12 U.S.C. 1464(v), and consolidated subsidiary located in a [FR Doc. 2019–12985 Filed 6–20–19; 8:45 am] section 7 (12 U.S.C. 1817(a)(12)) and U.S. territory or possession. BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P

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DEPARTMENT OF HEALTH AND do not wish to be made available to the FR 56469, September 18, 2015, or access HUMAN SERVICES public, submit the comment as a the information at: https://www.gpo.gov written/paper submission and in the /fdsys/pkg/FR-2015-09-18/pdf/2015- Food and Drug Administration manner detailed (see ‘‘Written/Paper 23389.pdf. Submissions’’ and ‘‘Instructions’’). Docket: For access to the docket to 21 CFR Parts 117 and 507 read background documents or the Written/Paper Submissions [Docket No. FDA–2018–D–0671] electronic and written/paper comments Submit written/paper submissions as received, go to https:// follows: www.regulations.gov and insert the Determining the Number of Employees • for Purposes of the ‘‘Small Business’’ Mail/Hand Delivery/Courier (for docket number, found in brackets in the Definition (Current Good written/paper submissions): Dockets heading of this document, into the Manufacturing Practices and Management Staff (HFA–305), Food and ‘‘Search’’ box and follow the prompts Preventive Controls Regulations for Drug Administration, 5630 Fishers and/or go to the Dockets Management Human and Animal Food): Guidance Lane, Rm. 1061, Rockville, MD 20852. Staff, 5630 Fishers Lane, Rm. 1061, • For written/paper comments for Industry; Availability Rockville, MD 20852. submitted to the Dockets Management You may submit comments on any AGENCY: Food and Drug Administration, Staff, FDA will post your comment, as guidance at any time (see 21 CFR HHS. well as any attachments, except for 10.115(g)(5)). ACTION: Notification of availability. information submitted, marked and Submit written requests for single identified, as confidential, if submitted copies of the guidance to the Center for SUMMARY: The Food and Drug as detailed in ‘‘Instructions.’’ Food Safety and Applied Nutrition, Administration (FDA or Agency) is Instructions: All submissions received Food and Drug Administration, 5001 announcing the availability of a final must include the Docket No. FDA– Campus Dr., College Park, MD 20740. guidance for industry describing the 2018–D–0671 for ‘‘Determining the Send two self-addressed adhesive labels Agency’s current thinking on how to Number of Employees for Purposes of to assist that office in processing your determine the number of employees for the ‘Small Business’ Definition in Parts request. See the SUPPLEMENTARY purposes of the ‘‘small business’’ 117 and 507 (CGMP and Preventive INFORMATION section for electronic definition in the current good Controls Regulations for Human and access to the guidance. manufacturing practice (CGMP), hazard Animal Food): Guidance for Industry.’’ analysis, and risk-based preventive Received comments will be placed in FOR FURTHER INFORMATION CONTACT: controls for human and animal food the docket and, except for those For questions relating to CGMP, rules. The guidance will help industry submitted as ‘‘Confidential Hazard Analysis, and Risk-Based subject to these rules determine the Submissions,’’ publicly viewable at Preventive Controls for Human Food: number of employees for purposes of https://www.regulations.gov or at the Jenny Scott, Center for Food Safety and the ‘‘small business’’ definition. Dockets Management Staff between 9 Applied Nutrition (HFS–300), Food and Drug Administration, 5001 Campus Dr., DATES: The announcement of the a.m. and 4 p.m., Monday through guidance is published in the Federal Friday. College Park, MD 20740, 240–402–2166. • For questions relating to CGMP, Register on June 21, 2019. Confidential Submissions—To Hazard Analysis, and Risk-Based ADDRESSES: submit a comment with confidential You may submit either Preventive Controls for Food for electronic or written comments on information that you do not wish to be made publicly available, submit your Animals: Jeanette Murphy, Center for Agency guidances at any time as Veterinary Medicine (HFV–200), Food follows: comments only as a written/paper submission. You should submit two and Drug Administration, 7519 Standish Electronic Submissions copies total. One copy will include the Pl., Rockville, MD 20855, 240–402– Submit electronic comments in the information you claim to be confidential 6246. following way: with a heading or cover note that states SUPPLEMENTARY INFORMATION: • Federal eRulemaking Portal: ‘‘THIS DOCUMENT CONTAINS https://www.regulations.gov. Follow the CONFIDENTIAL INFORMATION.’’ The I. Background instructions for submitting comments. Agency will review this copy, including We are announcing the availability of Comments submitted electronically, the claimed confidential information, in a guidance for industry entitled including attachments, to https:// its consideration of comments. The ‘‘Determining the Number of Employees www.regulations.gov will be posted to second copy, which will have the for Purposes of the ‘Small Business’ the docket unchanged. Because your claimed confidential information Definition in Parts 117 and 507 (CGMP comment will be made public, you are redacted/blacked out, will be available and Preventive Controls Regulations for solely responsible for ensuring that your for public viewing and posted on Human and Animal Food): Guidance for comment does not include any https://www.regulations.gov. Submit Industry.’’ We are issuing the guidance confidential information that you or a both copies to the Dockets Management consistent with our good guidance third party may not wish to be posted, Staff. If you do not wish your name and practices regulation (21 CFR 10.115). such as medical information, your or contact information to be made publicly The guidance represents the current anyone else’s Social Security number, or available, you can provide this thinking of FDA on this topic. It does confidential business information, such information on the cover sheet and not not establish any rights for any person as a manufacturing process. Please note in the body of your comments and you and is not binding on FDA or the public. that if you include your name, contact must identify this information as You can use an alternative approach if information, or other information that ‘‘confidential.’’ Any information marked it satisfies the requirements of the identifies you in the body of your as ‘‘confidential’’ will not be disclosed applicable statutes and regulations. This comments, that information will be except in accordance with 21 CFR 10.20 guidance is not subject to Executive posted on https://www.regulations.gov. and other applicable disclosure law. For Order 12866. • If you want to submit a comment more information about FDA’s posting This guidance concerns two with confidential information that you of comments to public dockets, see 80 regulations that we have established in

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Title 21 of the Code of Federal ACTION: Interim final rule with request for Regulatory Affairs, tel.: 202–622– Regulations (21 CFR) as part of our for comments. 4855, Assistant Director for Sanctions implementation of the FDA Food Safety Compliance & Evaluation, tel.: 202–622– Modernization Act (FSMA) (Pub. L. SUMMARY: The Department of the 2490; or the Department of the 111–353). These two regulations are part Treasury’s Office of Foreign Assets Treasury’s Office of the Chief Counsel 117 (21 CFR part 117) (September 17, Control (OFAC) is issuing this interim (Foreign Assets Control), Office of the 2015, 80 FR 55907) and part 507 (21 final rule to amend the Reporting, General Counsel, tel.: 202–622–2410. CFR part 507) (September 17, 2015, 80 Procedures and Penalties Regulations SUPPLEMENTARY INFORMATION: FR 51670). Under parts 117 and 507, (the Regulations) to provide updated whether a business is a ‘‘small instructions and incorporate new Background business’’ has two main implications. requirements for parties filing reports on The Regulations set forth standard First, certain small businesses are blocked property, unblocked property, reporting and recordkeeping exempt from the human food preventive or rejected transactions. In addition, requirements and license application controls requirements and the animal OFAC is revising the licensing and other procedures relevant to the food preventive controls requirements if procedures section of the Regulations to economic sanctions programs they are engaged only in specified low- include information regarding OFAC’s administered by OFAC. OFAC is risk activity/food combinations. Second, electronic license application updating six sections of the Regulations. small businesses have later compliance procedures and to provide additional instructions regarding applications for Reports on Blocked and Unblocked dates for parts 117 and 507 than larger Property businesses. This guidance provides the release of blocked funds. OFAC also additional information to assist is clarifying the rules governing the OFAC is revising § 501.603 of the businesses in determining their status as availability of information under the Regulations, which covers reports on a ‘‘small business.’’ Freedom of Information Act (FOIA) for blocked property, to provide greater In the Federal Register of March 20, information that is submitted to OFAC detail regarding the information 2018 (83 FR 12143), we made available pursuant to the Regulations. Finally, required to be provided to OFAC in a draft guidance for industry entitled OFAC is making numerous technical connection with blocking reports and to ‘‘Determining the Number of Employees and conforming edits throughout the expand this section to cover reports on for Purposes of the ‘Small Business’ Regulations. the release of property from blocked status (i.e., unblocked property), as well Definition in Parts 117 and 507: DATES: This interim final rule is as to make certain technical and Guidance for Industry’’ and gave effective June 21, 2019. Written interested parties an opportunity to conforming changes related thereto. As comments may be submitted on or a general matter, in the past, when a submit comments by May 21, 2018, for before July 22, 2019. us to consider before beginning work on submitter has not provided sufficient ADDRESSES: the final version of the guidance. We You may submit comments information to identify blocked or received no substantive comments on by any of the following methods: unblocked property and to determine Federal eRulemaking Portal: http:// the draft guidance and are issuing the the authority or authorities under which www.regulations.gov. Follow the guidance with editorial changes to it was blocked or unblocked, OFAC has instructions on the website for improve clarity and revision of one requested follow up information from submitting comments. Refer to Docket example to improve usefulness. The the submitter, sometimes requiring Number OFAC–2019–0003. guidance announced in this notice multiple requests. OFAC is expanding Fax: Attn: Request for Comments finalizes the draft guidance dated March the information listed in § 501.603 that (Amendments to OFAC’s Reporting, 2018. is required to be submitted in reports on Procedures and Penalties Regulations) blocked property in an effort to clarify II. Electronic Access 202–622–1759. what information is needed to reduce Persons with access to the internet Mail: Attn: Request for Comments the need for follow up requests from may obtain the guidance at either (Amendments to OFAC’s Reporting, OFAC and in order to lessen the overall https://www.fda.gov/FoodGuidances or Procedures and Penalties Regulations), reporting burden for submitters. https://www.regulations.gov. Use the Office of Foreign Assets Control, U.S. Initial blocking reports. The expanded FDA website listed in the previous Department of the Treasury, 1500 instructions for initial blocking reports sentence to find the most current Pennsylvania Avenue NW, Freedman’s require submitters to include the version of the guidance. Bank Building, Washington, DC 20220. following information: (1) The name Refer to Docket Number OFAC–2019– and address of the person holding the Dated: June 17, 2019. 0003. blocked property and a contact person Lowell J. Schiller, Instructions: All submissions received from whom additional information may Principal Associate Commissioner for Policy. must include the agency name and the be obtained; (2) a description of any [FR Doc. 2019–13223 Filed 6–20–19; 8:45 am] Federal Register Doc. number that transaction associated with the BILLING CODE 4164–01–P appears at the end of this document. All blocking, including certain identifying comments, including attachments and information; (3) the associated sanctions other supporting materials, will become target(s) whose property is blocked or a DEPARTMENT OF THE TREASURY part of the public record and subject to reference to the relevant written public disclosure. Sensitive personal communication from OFAC if there is Office of Foreign Assets Control information, such as account numbers no associated target or that target is or Social Security numbers, should not unknown; (4) a description of the 31 CFR Part 501 be included. Comments generally will property that is the subject of the not be edited to remove any identifying blocking and its location; (5) the date Reporting, Procedures and Penalties or contact information. Regulations the property was blocked; (6) the actual, FOR FURTHER INFORMATION CONTACT: or if unknown, estimated value of the AGENCY: Office of Foreign Assets OFAC: Assistant Director for Licensing, property in U.S. Dollars; (7) the legal Control, Treasury. tel.: 202–622–2480, Assistant Director authority or authorities under which the

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property is blocked and the action taken status (i.e., property that is unblocked). broadly to all rejected transactions (and with respect to the property (e.g., that These reports are only due when not only to rejected funds transfers); the property has been deposited into a specifically required by OFAC, such as provide greater detail regarding the new or existing blocked, interest-bearing when they are made a condition of a information to be provided to OFAC in account); and (8) a copy of any payment general or specific license, and must be connection with reports on rejected or transfer instructions or other relevant filed within 10 business days from the transactions; where to report such documentation. date such property is unblocked or as information; and make certain technical Annual reports of blocked property. In otherwise specified by OFAC. When a and conforming changes. the case of annual reports of blocked report is required, § 501.603(b)(3) will Clarification of scope of transactions property, § 501.603 will require now require submitters to include the to be reported. OFAC is replacing submitters to include the following following information: (1) The name references to ‘‘rejected funds transfers’’ information: (1) The name and address and address of the person holding the with references to ‘‘rejected of the person holding the blocked property immediately prior to the transactions’’ and is adding a definition property and a contact from whom property’s release from blocked status for the term ‘‘transactions’’ in order to additional information may be obtained; and a contact from whom additional provide additional clarity. Rejected (2) the number of accounts or items information may be obtained; (2) the transactions covered under this revised reported in the annual report; (3) the associated sanctions target(s) whose section include rejected transactions associated sanctions target(s) whose property had been previously blocked or related to wire transfers, trade finance, property is blocked or a reference to the a reference to the relevant written securities, checks, foreign exchange, and relevant written communication from communication from OFAC if there is goods or services. OFAC also has made OFAC if there is no associated target or no associated target or that target is a number of technical and conforming that target is unknown; (4) a description unknown; (3) a description of the changes throughout § 501.604 to clarify of the property that is the subject of the property and its location immediately that rejected transaction reporting is not blocking and its location; (5) the date prior to its release from blocked status, limited to rejected funds transfers. the property was blocked; (6) the actual, including certain required identifying Information to be included in reports. or if unknown, estimated value of the information; (4) the date the property OFAC is also revising § 501.604 to property in U.S. Dollars; and (7) the was unblocked; (5) the actual, or if provide expanded instructions on the legal authority or authorities under unknown, estimated value of the information to be submitted in reports which the property is blocked. property that was released from blocked on rejected transactions. As a general Annual report format. OFAC is status in U.S. Dollars; (6) the legal matter, in the past, when a submitter revising § 501.603(b)(2) to provide authority or authorities under which the has not provided sufficient information additional information regarding the property was unblocked; and (7) when to identify a transaction and the required format for submitting annual available, a copy of the original blocking authority or authorities under which the reports of blocked property. report filed with OFAC pursuant to transaction was rejected, OFAC has Specifically, reports must be submitted § 501.603(b)(1). OFAC is making several requested follow up information from either using the most recent version of technical and conforming changes the submitter, sometimes requiring Form TDF 90–22.50, Annual Report of throughout § 501.603 to reflect these multiple requests. OFAC is expanding Blocked Property, or by another official additional requirements. its instructions on the information to be reporting option, including electronic, Electronic submission of reports. submitted in reports on rejected as specified by OFAC on its website. OFAC is revising § 501.603 to allow for transactions in an effort to reduce the OFAC is updating Form TDF 90–22.50 the submission of all reports on blocked need for follow up requests from OFAC in connection with the amendment of or unblocked property by email, U.S. and in order to lessen the overall the Regulations to align the form with mail, or any other official reporting reporting burden for submitters. the revised requirements of the option, including electronic, as Submitters must now include the Regulations. The changes to Form TDF specified by OFAC on its website following information: (1) The name 90–22.50 are also being made in an (http://www.treasury.gov/ofac). OFAC and address of the person that rejected effort to reduce the need for follow up strongly prefers to receive reports made the transaction and a contact from requests from OFAC in order to lessen pursuant to this section by email or any whom additional information may be the overall reporting burden for other official electronic reporting obtained; (2) a description of the submitters. Requests to submit the option, as specified by OFAC on its rejected transaction, including certain information required pursuant to website (http://www.treasury.gov/ofac). required identifying information; (3) if § 501.603(b)(2) in an alternate format Rules regarding the availability of applicable, the associated sanctions will be considered by OFAC on a case- information. Finally, OFAC is adding a target(s) whose involvement in the by-case basis. OFAC is adding a new new paragraph to § 501.603 to clarify transaction has resulted in the requirement for submitters of annual the rules regarding the availability of transaction being rejected and its reports of blocked property who information, under the FOIA. location, if known; (4) the date the maintain blocked funds in omnibus Specifically, information provided to transaction was rejected; (5) the actual, accounts, requiring that annual reports OFAC pursuant to § 501.603 is subject or if unknown, estimated value of the contain a disaggregated list showing to the FOIA and, generally, will be property in U.S. Dollars; (6) the legal each blocked asset contained within the released upon the receipt of a valid authority or authorities under which the omnibus account. This new requirement FOIA request, unless OFAC determines transaction was rejected; and (7) a copy to include disaggregated information in that such information should be of any related payment or transfer the annual reports begins with the 2020 withheld in accordance with an instructions or other relevant annual reports, which are due no later applicable FOIA exemption. documentation. than September 30, 2020. Electronic submission of reports. Reports on property that is unblocked. Reports on Rejected Transactions OFAC is revising § 501.604 to allow for OFAC is incorporating into § 501.603 OFAC is revising § 501.604, which the submission of rejected transaction certain requirements regarding reports covers reports on rejected transactions, reports by email, U.S. mail, or any other on the release of property from blocked to: Clarify that this section applies official reporting option, including

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electronic, as specified by OFAC on its pursuant to § 501.602 must produce the existing Regulations have been website ((http://www.treasury.gov/ofac). documents in a usable format agreed previously approved by the Office of OFAC strongly prefers to receive reports upon by OFAC. To provide guidance as Management and Budget under control made pursuant to this section by email to what will be considered a usable number 1505–0164. This interim final or any other official electronic reporting format, OFAC is also adding a reference rule modifies certain of the collections option, as specified by OFAC on its in the regulations to newly updated of information under the Regulations. website ((http://www.treasury.gov/ofac). guidance regarding data delivery Specifically, in § 501.603, OFAC is Rules regarding the availability of standards and the submission of modifying the information to be information. Finally, OFAC is adding a documents, which is available on collected and the format and means of new paragraph to § 501.604 to clarify OFAC’s website (http:// submission for reports on blocked the rules regarding the availability of www.treasury.gov/ofac). property—both initial reports and information pursuant to the FOIA. In addition, OFAC is revising annual reports—and is adding Specifically, information provided to paragraph (a) of § 501.701, which requirements regarding the information OFAC pursuant to § 501.604 is subject describes penalties for willful violations to be collected and the format and to the FOIA and, generally, will be of the Trading with the Enemy Act means of submission for reports on released upon the receipt of a valid (TWEA). Specifically, OFAC is adjusting previously blocked property that has FOIA request, unless OFAC determines the penalties as required by Section been unblocked. In § 501.604, OFAC is that such information should be 107(a)(4) of the Comprehensive Iran modifying the information to be withheld in accordance with an Sanctions, Accountability, and collected and the format and means of applicable FOIA exemption. Divestment Act of 2010 (Pub. L. 111– submission for reports on rejected Licensing Procedures 195, 124 Stat. 1312) (CISADA). transactions. OFAC is also clarifying the Finally, OFAC is revising § 501.806, breadth of the existing requirement for OFAC is revising § 501.801, which which describes procedures for reporting on rejected funds transfers. describes licensing procedures, to unblocking funds believed to have been These modifications to the collections include information regarding OFAC’s blocked due to mistaken identity, to of information under the Regulations, electronic license application require a party who believes that funds and certain forms available as a means procedures and to make a number of have been blocked due to mistaken to report such information, have been technical and conforming changes. identity send requests to release funds submitted to the Office of Management Specifically, OFAC is revising § 501.801 to OFAC in writing either by U.S. mail and Budget (OMB) for review and to require that applications for specific or electronically to OFAC’s reports approval under control number 1505– licenses to engage in any transactions email address (OFACreport@ 0164. otherwise prohibited pursuant to 31 treasury.gov). OFAC is also making a An agency may not conduct or CFR chapter V or sanctions programs number of technical and conforming sponsor, and a person is not required to administered by OFAC be filed through changes to this section. respond to, a collection of information OFAC’s Reporting and License unless the collection of information Application Forms page (https:// Electronic Availability displays a valid control number. licensing.ofac.treas.gov/) or by mail. This document and additional The likely respondents and record- Applications for the unblocking of information concerning OFAC are keepers affected by these collections of funds must be submitted by one of these available on OFAC’s website (http:// information collections contained in means using Form TD–F 90–22.54, www.treasury.gov/ofac). part 501 are financial institutions, ‘‘Application for the Release of Blocked business organizations, nonprofit Funds,’’ or in another format that Public Participation organizations, individuals, and legal contains all of the information requested These amendments are being representatives. in Form TD–F 90–22.54. Form TD–F published as an interim final rule with Since OFAC’s last filing, OFAC has 90–22.54 may be obtained from OFAC’s an effective date of June 21, 2019. reviewed and revised its methodology to Reporting and License Application Because the amendment of the more accurately estimate the reporting Forms page. OFAC also is revising this Regulations is a rule of agency burden as set forth below. The burden section to remove the provision procedure and because it involves a of the recordkeeping requirement governing registration for non- foreign affairs function, the provisions imposed by 501.601 is minimal because governmental organizations, as this of Executive Order 12866 and the the records required to be maintained process has been phased out in favor of Administrative Procedure Act (5 U.S.C. should already be maintained under standard licensing procedures. In 553) requiring notice of proposed standard business practice. addition, OFAC is revising this section rulemaking, opportunity for public Based on a general review of its to clarify the rules governing the participation, and delay in effective databases and using OFAC’s enhanced availability, under the FOIA, of date, as well as the provisions of methodology and updated data, OFAC’s information submitted to OFAC Executive Order 13771, are estimate for the number of unique pursuant to § 501.801. inapplicable. Because no notice of reporting respondents is approximately proposed rulemaking is required for this 6,900. The estimated total annual Other Technical and Conforming rule, the Regulatory Flexibility Act (5 reporting burden is approximately Changes U.S.C. 601–612) does not apply. 14,850 hours. Accordingly, the OFAC is revising § 501.602, which Although notice and comment estimated annual hourly burden per covers reports to be furnished on procedures are not required, OFAC respondent is approximately 2.2 hours. demand, to provide additional clarity by invites comments on this interim final The estimated annual frequency of adding references to electronic rule. responses is between 1 and 3,300, documents, and adding a new paragraph varying greatly by entity depending on defining the term ‘‘document’’ for Paperwork Reduction Act the size, nature, and scope of business purposes of this section. OFAC is Pursuant to the Paperwork Reduction activities of each respondent. The adding a new requirement that any Act of 1995 (44 U.S.C. 3507), the estimated total number of responses per persons providing documents to OFAC collections of information related to the year is approximately 31,601 responses.

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OFAC assesses that there is an average 4301–4341341; Pub. L. 111–195, 124 Stat. representations of any kind, drawings, time estimate for reports associated with 1312 (22 U.S.C. 8501–8551). photographs, graphs, video or sound forms ranging from 15 minutes to 2 recordings, and motion pictures or other Subpart C—Reports hours and for reports associated with film. general licenses and other ■ 2. Revise § 501.602 to read as follows: (c) Persons providing documents to miscellaneous reports ranging from 1 to OFAC pursuant to this section must 5 hours. § 501.602 Reports to be furnished on produce documents in a usable format Comments are invited on: (a) Whether demand. agreed upon by OFAC. For guidance, this collection of information is (a) Every person is required to furnish see OFAC’s data delivery standards necessary for the proper performance of under oath, in the form of reports or available on OFAC’s website (http:// the functions of the agency, including otherwise, from time to time and at any www.treasury.gov/ofac). whether the information has practical time as may be required by the Office Note 1 to § 501.602: See subpart F of part utility; (b) the accuracy of the agency’s of Foreign Assets Control, complete 597 for the relationship between this section estimate of the burden of the collection information relative to any act or and part 597. of information; (c) ways to enhance the transaction, regardless of whether such ■ 3. Revise § 501.603 to read as follows: quality, utility, and clarity of the act or transaction is effected pursuant to information to be collected; (d) ways to license or otherwise, subject to the § 501.603 Reports on blocked and minimize the burden of the collection of provisions of this chapter or relative to unblocked property. any property in which any foreign information on respondents, including (a) Who must report—(1) Holders of country or any national thereof has or through the use of automated collection blocked property. Any U.S. person (or had any interest of any nature techniques and other forms of person subject to U.S. jurisdiction), information technology; and (e) the whatsoever, direct or indirect. The Office of Foreign Assets Control may including a financial institution, estimated capital or start-up costs of the holding property blocked pursuant to operation, maintenance, and/or require that such reports include the production of any books, contracts, this chapter or releasing property from purchase of services to provide blocked status (i.e., unblocking information. Comments concerning the letters, papers, or other hard copy or electronic documents relating to any property) pursuant to this chapter shall above information and the accuracy of such act, transaction, or property, in the submit the relevant reports described in these burden estimates, and suggestions custody or control of the persons this section to the Office of Foreign for reducing this burden, should be required to make such reports. Reports Assets Control (OFAC). This directed to OMB, Attention: Desk with respect to transactions may be requirement applies to all U.S. persons Officer for the Department of the required either before, during, or after (or persons subject to U.S. jurisdiction) Treasury, Office of Information and such transactions. Except as provided in who have or have had in their Regulatory Affairs (OIRA), Washington, parts 596 and 597, the Office of Foreign possession or control any property DC 20503 or by email to: OIRA_ Assets Control may, through any person blocked pursuant to this chapter, [email protected], with a copy or agency, conduct investigations, hold including financial institutions that to Chief of Records, Attention: Request hearings, administer oaths, examine receive and block payments or transfers. for Comments, Office of Foreign Assets witnesses, receive evidence, take (2) Primary responsibility to report. A Control, Department of the Treasury, depositions, and require by subpoena report may be filed on behalf of a holder 1500 Pennsylvania Avenue NW, the attendance and testimony of of blocked property or a releaser of Freedman’s Bank Building, Washington, witnesses and the production of any property from blocked status by an DC 20220. Any such comments should books, contracts, letters, papers, and attorney, agent, or other person. Primary be submitted not later than July 22, other hard copy or electronic documents responsibility for reporting, however, 2019. All comments on these collections relating to any matter under rests with the actual holder or releaser of information will be a matter of public investigation, regardless of whether any of the property, or the person exercising record. report has been required or filed in control over property located outside List of Subjects in 31 CFR Part 501 connection therewith. the United States, with the following (b) For purposes of paragraph (a) of exceptions: Primary responsibility for Administrative practice and this section, the term ‘‘document’’ reporting any trust assets rests with the procedure, Banks, banking, Blocking of includes any written, recorded, or trustee; and primary responsibility for assets, Foreign trade, Reporting and graphic matter or other means of reporting real property rests with any recordkeeping requirements. preserving thought or expression U.S. co-owner, legal representative, For the reasons set forth in the (including in electronic format), and all agent, or property manager in the preamble, the Department of the tangible things stored in any medium United States. No person is excused Treasury’s Office of Foreign Assets from which information can be from filing a report by reason of the fact Control amends 31 CFR part 501 to read processed, transcribed, or obtained that another person has submitted a as follows: directly or indirectly, including report with regard to the same property, correspondence, memoranda, notes, except upon actual knowledge of the PART 501—REPORTING, messages, contemporaneous report filed by such other person. PROCEDURES AND PENALTIES communications such as text and (3) Financial institution. For purposes REGULATIONS instant messages, letters, emails, of this section, the term ‘‘financial spreadsheets, metadata, contracts, institution’’ includes a banking ■ 1. The authority citation for part 501 bulletins, diaries, chronological data, institution, domestic bank, United is revised as follows: minutes, books, reports, examinations, States depository institution, financial Authority: 8 U.S.C. 1189; 18 U.S.C. 2332d, charts, ledgers, books of account, institution, or U.S. financial institution, 2339B; 19 U.S.C. 3901–3913; 21 U.S.C. 1901– invoices, air waybills, bills of lading, as those terms are defined in the 1908; 22 U.S.C. 287c; 22 U.S.C. 2370(a), worksheets, receipts, printouts, papers, applicable part of this chapter. 6009, 6032, 7205; 28 U.S.C. 2461 note; 31 schedules, affidavits, presentations, (b) What must be reported—(1) Initial U.S.C. 321(b); 50 U.S.C. 1701–1706; 50 U.S.C. transcripts, surveys, graphic blocking reports—(i) When reports are

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due. Reports shall be filed within 10 and any action taken with respect to the (E) The date the property was business days from the date that property (e.g., that the property has been blocked; property becomes blocked. deposited into a new or existing (F) The actual, or if unknown, (ii) Required information to be blocked, interest-bearing account that is estimated value of the property in U.S. reported. Initial reports on blocked labeled as such and is established in the Dollars as of June 30. If a June 30 value property shall include the following: name of, or contains a means of clearly date is not available and a value date (A) The name and address of the identifying the interest of, the person other than June 30 is reported, so person holding the property blocked subject to blocking pursuant to the indicate. If the blocked property pursuant to this chapter (i.e., the person requirements of this chapter). This may represents an outstanding loan, a credit filing the report on blocked property, include a reference to the sanctions card receivable, or other property with such as a financial institution), and the program (current programs are listed a negative balance, the amount blocked name, telephone number, and email here: www.treasury.gov/resource-center/ should be reported as $0.00 (zero) with address of a contact from whom sanctions/SDN-List/Pages/program_ the amount owed reflected in a narrative additional information may be obtained; tags.aspx), the applicable part of this description. Blocked trade finance (B) A description of any transaction chapter (e.g., 31 CFR part 515, 31 CFR documents should also be reported as associated with the blocking, including: part 544), an Executive order (E.O.) (e.g., $0.00 (zero) with the value of the The type of transaction; any persons, E.O. 13224, E.O. 13599), or a statute shipment reflected in a narrative including financial institutions, (e.g., Foreign Narcotics Kingpin description. Transactions blocked in participating in the transaction and their Designation Act). (Note: For this foreign currencies must be reported in respective locations (e.g., if relevant, purpose, the term ‘‘SDN’’ is generic and U.S. Dollars with the foreign currency customers, beneficiaries, originators, cannot be used to identify the legal amount and notional exchange rate in letter of credit applicants, and their authority for blocking property); and the narrative; and banks; intermediary banks; (H) A copy of any payment or transfer (G) The legal authority or authorities correspondent banks; issuing banks; and instructions, check, letter of credit, under which the property is blocked. advising or confirming banks); and any accompanying bill of lading, invoice, or This may include a reference to the reference numbers, dates, or other any other relevant documentation sanctions program (current programs are information necessary to identify the received in connection with any related listed here: www.treasury.gov/resource- transaction; transaction. center/sanctions/SDN-List/Pages/ (C) The associated sanctions target(s) program_tags.aspx), the applicable part (2) Annual reports of blocked whose property is blocked (such as a of this chapter (e.g., 31 CFR part 515, 31 property—(i) When reports are due. A Specially Designated National or other CFR part 544), an Executive order (E.O.) report on all blocked property held as of blocked person), the location(s) of the (e.g., E.O. 13224, E.O. 13599), or a June 30 of the current year shall be filed target(s) (if known), and, if not evident, statute (e.g., Foreign Narcotics Kingpin annually by September 30. a narrative description of the interest(s) Designation Act). (Note: For this of the target(s) in the property; if there (ii) Required information to be purpose, the term ‘‘SDN’’ is generic and is no target or the target is not known, reported. Annual reports on blocked cannot be used to identify the legal include a reference to the relevant property shall include the following: authority for blocking property). written communication from OFAC (A) The name and address of the (iii) Format of annual reports. Annual pursuant to which the blocking action person holding the property blocked reports shall be submitted to OFAC was taken; pursuant to this chapter (i.e., the person either using the most recent version of (D) A description of the property that filing the report on blocked property, Form TDF 90–22.50, Annual Report of is the subject of the blocking and its such as a financial institution), and the Blocked Property, or by another official location in the United States or name, telephone number, and email reporting option, including electronic, otherwise, including any relevant address of a contact from whom as specified by OFAC on its website account numbers and account types, additional information may be obtained; (http://www.treasury.gov/ofac). While check numbers, reference numbers, (B) The number of accounts or items blocked funds may be maintained in dates, or other information necessary to reported in the annual report; omnibus accounts, the annual reports identify the property; (C) Beginning with the annual report must contain a disaggregated list (E) The date the property was due no later than September 30, 2020, showing each blocked asset contained blocked; and for each subsequent reporting year, within the omnibus account. Form TDF (F) The actual, or if unknown, the associated sanctions target(s) whose 90–22.50 may be obtained directly from estimated value of the property in U.S. property is blocked, such as a Specially OFAC by downloading the form from Dollars. If the blocked property Designated National or other blocked the OFAC Reporting and License represents an outstanding loan, a credit person, the location(s) of the target(s), if Application Forms page on OFAC’s card receivable, or other property with known, and, if not evident, a narrative website (https://www.treasury.gov/ a negative balance, the amount blocked description of the interest(s) of the resource-center/sanctions/Pages/forms- should be reported as $0.00 (zero) with target(s) in the transaction; if there is no index.aspx). Requests to submit the the amount owed reflected in a narrative target or the target is not known, include information required pursuant to description. Blocked trade finance a reference to the relevant written § 501.603(b)(2)(ii) in an alternative documents should also be reported as communication from OFAC pursuant to format developed by the reporter are $0.00 (zero) with the value of the which the blocking action was taken; invited and will be considered by OFAC shipment reflected in a narrative (D) A description of the property that on a case-by-case basis. A copy of description. Transactions blocked in is the subject of the blocking and its reports submitted pursuant to foreign currencies must be reported in location in the United States or § 501.603(b)(2) shall be retained for the U.S. Dollars with the foreign currency otherwise, including any relevant submitter’s records. amount and notional exchange rate in account numbers and account types, (3) Unblocking reports—(i) When the narrative; check numbers, reference numbers, reports are due. These reports are only (G) The legal authority or authorities dates, or other information necessary to due when specifically required by under which the property is blocked identify the property; OFAC, such as when they are made a

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condition of a general or specific (G) A copy of the original blocking (3) Transaction. The term transaction license, and shall be filed within 10 report filed with OFAC pursuant to includes transactions related to wire business days from the date property is § 501.603(b)(1), when available. transfers, trade finance, securities, unblocked. (c) Reports on retained funds checks, foreign exchange, and goods or (ii) Required information to be pursuant to § 596.504(b) of this chapter. services. reported. Reports on the release of The reporting requirements set forth in (b) Required information to be property from blocked status (i.e., this section are applicable to any person reported. Reports on rejected property that is unblocked) shall retaining funds pursuant to § 596.504(b) transactions shall include the following: include the following: or releasing such funds. (1) The name and address of the (A) The name and address of the (d) Where to report. All reports under person that rejected the transaction person holding the property this section shall be submitted to OFAC pursuant to this chapter (i.e., the person immediately prior to the property’s using one of the following methods: filing the report on the rejected release from blocked status (i.e., the Email: [email protected]; U.S. transaction, such as a financial person filing the unblocking report, mail: Office of Foreign Assets Control, institution), and the name and such as a financial institution), and the Sanctions Compliance and Evaluation telephone number of a contact from name, telephone number, and email Division, U.S. Department of the whom additional information may be address of a contact from whom Treasury, 1500 Pennsylvania Avenue, obtained; additional information may be obtained; NW, Freedman’s Bank Building, (2) A description of the rejected (B) The associated sanctions target(s) Washington, DC 20220; or any other transaction, including the type of whose property had been previously official reporting option, including transaction; any persons, including blocked and was released from blocked electronic, as specified by OFAC on its financial institutions, participating in status, such as a Specially Designated website (http://www.treasury.gov/ofac). the transaction and their respective National or other blocked person, the OFAC strongly prefers to receive reports locations (e.g., customers, beneficiaries, location(s) of the target(s), if known, made pursuant to this section by email originators, letter of credit applicants, and, if not evident, a narrative or any other official electronic reporting and their banks; intermediary banks; description of the interest(s) of the option, as specified by OFAC on its correspondent banks; issuing banks; and target(s) in the previously blocked website. advising or confirming banks); a property or transaction; if there is no (e) Rules governing availability of description of the property that is the target or the target is not known, include information. OFAC records are made subject of the transaction; and any a reference to the relevant written available to the public in accordance reference numbers, account numbers, communication from OFAC pursuant to with the Freedom of Information Act dates, or other information necessary to which the blocking action was taken; (FOIA) (5 U.S.C. 552) and the provisions identify the transaction; of 31 CFR part 1. See 31 CFR 1.5 for (3) If applicable, the associated (C) A description of the property that provisions pertaining to business sanctions target(s) whose involvement has been unblocked and its location in information. Reports on blocked and in the transaction has resulted in the the United States or otherwise unblocked property and the information transaction being rejected, the immediately prior to its release from required to be reported to OFAC location(s) of the associated sanctions blocked status, including any relevant pursuant to this section are subject to target(s), if known, and, if not evident, account numbers and account types, the FOIA. Information provided to a narrative description of the interest(s) check numbers, reference numbers, OFAC pursuant to this section generally of the target(s) in the transaction; dates, or other information necessary to will be released upon the receipt of a (4) The date the transaction was identify the property; valid FOIA request, unless OFAC rejected; (D) The date the property was determines that such information (5) The actual, or if unknown, unblocked; should be withheld in accordance with estimated value of the property in U.S. (E) The actual value of the property an applicable FOIA exemption. Dollars. Rejected trade documents that was released from blocked status in ■ 4. Revise § 501.604 to read as follows: should be reported as $0.00 (zero) with U.S. Dollars. If the property represented the value of the shipment reflected in a an outstanding loan, a credit card § 501.604 Reports on rejected narrative description. Rejected receivable, or other property with a transactions. transactions in foreign currencies must negative balance, the amount unblocked (a) Who must report—(1) Persons be reported in U.S. Dollars with the should be reported as $0.00 (zero) with rejecting transactions. Any U.S. person foreign currency amount and notional the amount owed reflected in a narrative (or person subject to U.S. jurisdiction), exchange rate in a narrative description; description. Trade finance documents including a financial institution, that (6) The legal authority or authorities should also be reported as $0.00 (zero) rejects a transaction that is not blocked under which the transaction was with the value of the shipment reflected under the provisions of this chapter, but rejected. This may include a reference to in a narrative description. Transactions where processing or engaging in the the sanctions program (current programs that were previously blocked in foreign transaction would nonetheless violate a are listed here: www.treasury.gov/ currencies and were unblocked in a provision contained in this chapter, resource-center/sanctions/SDN-List/ foreign currency must be reported in shall submit a report to the Office of Pages/program_tags.aspx), the U.S. Dollars with the foreign currency Foreign Assets Control (OFAC). applicable part of this chapter (e.g., 31 amount and notional exchange rate in (2) Financial institution. For purposes CFR part 515, 31 CFR part 544), an the narrative; of this section, the term ‘‘financial Executive Order (E.O.) (e.g., E.O. 13224, (F) The legal authority or authorities institution’’ includes a banking E.O. 13599), or a statute (e.g., Foreign under which the property was institution, domestic bank, United Narcotics Kingpin Designation Act). unblocked. This may include, for States depository institution, financial (Note: For this purpose, the term ‘‘SDN’’ example, reference to a specific or institution, or U.S. financial institution, is generic and cannot be used to identify general license under an applicable part as those terms are defined in the the legal authority or authorities for of this chapter or an E.O.; and applicable part of this chapter. rejecting transactions); and

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(7) A copy of any related payment or Subpart E—Procedures Applications for the unblocking of transfer instructions, check, letter of funds may be submitted via OFAC’s credit, accompanying bill of lading, ■ 6. Revise § 501.801 to read as follows: Reporting and License Application invoice, or any other relevant § 501.801 Licensing. Forms page (https:// documentation received in connection licensing.ofac.treas.gov/) or, if that (a) General licenses. General licenses with the transaction. option is unavailable, by using Form may be issued authorizing, under TD–F 90–22.54, ‘‘Application for the (c) When reports are due. Reports appropriate terms and conditions, shall be filed within 10 business days of Release of Blocked Funds,’’ or via a certain types of transactions that are submission that otherwise contains all the rejected transaction prohibited by subject to the prohibitions contained in the provisions of this chapter. of the information provided for in Form this chapter. General licenses also may TD–F 90–22.54. Form TD–F 90–22.54 (d) Where to report. Reports under be issued authorizing, under may be obtained from OFAC’s Reporting this section shall be submitted to OFAC appropriate terms and conditions, and License Application Forms page, or using one of the following methods: certain types of transactions that are by mail at the address above. Email: [email protected]; U.S. subject to prohibitions contained in (i) Additional conditions. Applicants mail: Office of Foreign Assets Control, economic sanctions programs the should submit only one copy of a Sanctions Compliance and Evaluation implementation and administration of specific license application to OFAC; Division, U.S. Department of the which have been delegated to the submitting multiple copies may result Treasury, 1500 Pennsylvania Avenue, Director of the Office of Foreign Assets in processing delays. Any person having NW, Freedman’s Bank Building, Control (OFAC) but which are not yet an interest in a transaction or proposed Washington, DC 20220; or any other codified in this chapter. General transaction may file an application for a official reporting option, including licenses are set forth in subpart E of specific license authorizing such a electronic, as specified by OFAC on its each part contained in this chapter or transaction. website (http://www.treasury.gov/ofac). made available on OFAC’s website: (ii) Information to be supplied. The OFAC strongly prefers to receive reports https://www.treasury.gov/ applicant must supply all information made pursuant to this section by email resourcecenter/sanctions/Programs/ specified by relevant instructions or any other official electronic reporting Pages/Programs.aspx. It is the policy of (available on OFAC’s Reporting and option, as specified by OFAC on its OFAC not to grant applications for License Application Forms page at website. specific licenses authorizing https://licensing.ofac.treas.gov) and/or (e) Rules governing availability of transactions to which the provisions of forms, and must fully disclose the information. OFAC records are made a general license are applicable. Persons names of all parties who are concerned available to the public in accordance availing themselves of certain general with or interested in the proposed with the Freedom of Information Act licenses may be required to file reports transaction. If the application is filed by (FOIA) (5 U.S.C. 552) and the provisions and statements in accordance with the an agent, the agent must disclose the of 31 CFR part 1. See 31 CFR 1.5 for instructions specified in those licenses. name of his or her principal(s). Such provisions pertaining to business Failure to file timely all required documents as may be relevant shall be information. Reports on rejected information in such reports or attached to each application as a part of transactions and the information statements may nullify the authorization such application, whether filed required to be reported to OFAC otherwise provided by the general electronically or by mail, except that pursuant to this section are subject to license and result in apparent violations documents previously filed with OFAC the FOIA. Information provided to of the applicable prohibitions that may may, where appropriate, be OFAC pursuant to this section generally be subject to OFAC enforcement action. incorporated by reference in such (b) Specific licenses—(1) General will be released upon the receipt of a application. Applicants may be required course of procedure. Transactions valid FOIA request, unless OFAC to furnish such further information as is subject to the prohibitions contained in determines that such information deemed necessary to assist OFAC in this chapter, or to prohibitions the should be withheld in accordance with making a determination. Any applicant implementation and administration of an applicable FOIA exemption. or other party in interest desiring to which have been otherwise delegated to present additional information may do Subpart D—Trading With the Enemy the OFAC Director, that are not so at any time before or after OFAC Act (TWEA) Penalties authorized by general license may be makes its decision with respect to the effected only under specific license. application. In unique circumstances, (2) Applications for specific licenses. ■ 5. Amend § 501.701 by revising OFAC may determine that an oral Applications for specific licenses to paragraph (a)(1) to read as follows: presentation regarding a license engage in any transactions prohibited by application would assist in OFAC’s § 501.701 Penalties. or pursuant to this chapter, or sanctions review of the issues involved. Any programs that have been otherwise (a) * * * requests to make such an oral delegated to the OFAC Director for presentation must be submitted in (1) Persons who willfully violate any implementation and administration, writing to the attention of the Director, provision of TWEA or any license, rule, must be signed, either manually or but are rarely granted. or regulation issued thereunder, and electronically, and filed through OFAC’s (3) Issuance of specific license. persons who willfully violate, neglect, Reporting and License Application Specific licenses normally will be or refuse to comply with any order of Forms page (https:// issued by OFAC. Specific licenses also the President issued in compliance with licensing.ofac.treas.gov/) or, if that may be issued by the Secretary of the the provisions of TWEA shall, upon option is unavailable, by mail, Treasury acting directly or through any conviction, be fined not more than addressed to the Office of Foreign specifically designated person, agency, $1,000,000 or, if an individual, be Assets Control, Licensing Division, U.S. or instrumentality. imprisoned for not more than 20 years, Department of the Treasury, 1500 (4) Reports under specific licenses. As or both. Pennsylvania Avenue NW, Freedman’s a condition for the issuance of any * * * * * Bank Building, Washington, DC 20220. specific license, the licensee may be

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required to file reports with respect to DEPARTMENT OF DEFENSE Register to announce that it is renewing the transactions authorized by the the charter of the BOR. The BOR’s specific license in such form and at Office of the Secretary charter and contact information for the such times and places as may be BOR’s Designated Federal Officer can be prescribed in the license or otherwise. 32 CFR Part 242a found at https://www.facadatabase.gov/ Reports should be sent in accordance [Docket ID: DOD–2019–OS–0021] FACA/apex/FACAPublicAgency with the instructions provided in the Navigation. It has been determined that RIN 0790–AK36 applicable specific license. publication of this CFR part removal for public comment is impracticable, Public Meeting Procedures of the (5) Effect of denial. The denial of a unnecessary, and contrary to public Board of Regents, Uniformed Services specific license does not preclude the interest because it removes only University of the Health Sciences reconsideration of an application or the outdated and unnecessary information filing of a further application. The AGENCY: Under Secretary of Defense for from the CFR. applicant or any other party in interest Personnel and Readiness, Department of This rule is not significant under may at any time request, by written Defense. Executive Order (E.O.) 12866, correspondence, reconsideration of the ACTION: Final rule. ‘‘Regulatory Planning and Review,’’ denial of an application on the basis of therefore, E.O. 13771, ‘‘Reducing new facts or changed circumstances. SUMMARY: This final rule removes the Regulation and Controlling Regulatory Department of Defense (DoD) regulation, (6) Rules governing availability of Costs’’ does not apply. not updated since December 20, 1977, information. OFAC records are made regarding the administrative policies List of Subjects in 32 CFR Part 242a available to the public in accordance and procedures on establishing and Medical and dental schools, Sunshine with the Freedom of Information Act providing notice on advisory committee Act. (FOIA) (5 U.S.C. 552) and the provisions meetings of the Board of Regents (BOR), of 31 CFR part 1. See 31 CFR 1.5 for Uniformed Services University of the PART 242a—[REMOVED] provisions pertaining to business Health Sciences (University). This information. License applications includes definitions and instructions for ■ Accordingly, by the authority of 5 submitted to OFAC and specific licenses both open and closed meetings. The U.S.C. 301, 32 CFR part 242a is issued by OFAC are subject to the FOIA BOR is now a federal advisory removed. and generally will be released upon the committee, and its policies and Dated: June 17, 2019. receipt of a valid FOIA request, unless procedures do not require rulemaking. Shelly E. Finke, OFAC determines that such information Therefore, this rule is outdated and Alternate OSD Federal Register Liaison should be withheld in accordance with unnecessary and can be removed from Officer, Department of Defense. an applicable FOIA exemption. the Code of Federal Regulations (CFR). [FR Doc. 2019–13198 Filed 6–20–19; 8:45 am] DATES Note 1 to paragraph (b)(6): OFAC views : This rule is effective on June 21, BILLING CODE 5001–06–P information submitted in furtherance of an 2019. application for a specific license pursuant to FOR FURTHER INFORMATION CONTACT: this paragraph (b) to be required information Steven J. Weiss, Associate General DEPARTMENT OF DEFENSE for purposes of Exemption 4 of the FOIA. Counsel, Uniformed Services University of the Health Sciences, 4301 Jones Office of the Secretary ■ 7. Amend § 501.806 by revising Bridge Road, Room A–1030. Email: paragraph (b) to read as follows: [email protected]. Telephone: 32 CFR Part 242b (301) 295–3028. Facsimile: (301) 295– [Docket ID: DOD–2019–OS–0020] § 501.806 Procedures for unblocking 6681. funds believed to have been blocked due to RIN 0790–AK37 mistaken identity. SUPPLEMENTARY INFORMATION: In support of a recommendation from the DoD * * * * * General Procedures and Delegations Regulatory Reform Task Force, DoD is of the Board of Regents, Uniformed (b) Requests to release funds which a removing this regulation, which Services University of the Health party believes to have been blocked due contains public meeting procedures of Sciences to mistaken identity must be made in the BOR. This rule was first published writing and addressed to the Office of March 7, 1977 (42 FR 12853), and most AGENCY: Under Secretary of Defense for Foreign Assets Control, Sanctions recently amended on December 20, 1977 Personnel and Readiness, Department of Compliance & Evaluation Division, U.S. (42 FR 63775). Section 8091 of Public Defense. Department of the Treasury, 1500 Law 101–511 (November 5, 1990) ACTION: Final rule. Pennsylvania Avenue NW, Freedman’s transferred all authorities from the BOR Bank Building, Washington, DC 20220, to the Secretary of Defense and stated SUMMARY: This final rule removes the or sent by email to the Sanctions ‘‘. . . the Board hereafter shall be an Department of Defense (DoD) regulation, Compliance & Evaluation Division at advisory board to the Secretary of not updated since March 23, 1989, relating to the general procedures and [email protected]. Defense.’’ Since the 1990 change, the BOR complies with the Federal delegations of authority of the Board of * * * * * Advisory Committee Act (5 U.S.C. Regents (BOR), Uniformed Services Dated: June 17, 2019. App.), the General Services University of the Health Sciences’ Andrea Gacki, Administration’s Federal Advisory (University), which includes the composition of the BOR, administrative Director, Office of Foreign Assets Control. Committee Management Final Rule (41 CFR part 102–3), and 10 U.S.C. 2113a, procedures for its meetings, and voting [FR Doc. 2019–13163 Filed 6–20–19; 8:45 am] rendering this rule unnecessary. requirements. The regulation also BILLING CODE 4810–AL–P On March 28, 2019 (84 FR 11754), identifies a standing committee of the DoD published a notice in the Federal BOR, officers of the BOR and the

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University, and rules for amending the List of Subjects in 32 CFR Part 242b FR Federal Register OMB Office of Management and Budget BOR’s procedures. Because the BOR is Medical and dental schools, now a federal advisory committee, its NPRM Notice of proposed rulemaking Organization and functions (Advance, Supplemental) policies and procedures do not require (Government agencies). § Section rulemaking, and it no longer appoints U.S.C. United States Code officers of the University. Therefore, this PART 242b—[REMOVED] rule is outdated, unnecessary and can be II. Background Information and removed from the Code of Federal Accordingly, by the authority of 5 Regulatory History Regulations (CFR). U.S.C. 301, 32 CFR part 242b is On April 27, 2018, we published a removed. DATES: This rule is effective on June 21, temporary deviation entitled 2019. Dated: June 17, 2019. ‘‘Drawbridge Operation Regulation; St. Shelly E. Finke, Johns River, Putnam County, FL’’ in the FOR FURTHER INFORMATION CONTACT: Federal Register (82 FR 08866). We Steven J. Weiss, Associate General Alternate OSD Federal Register Liaison received no comments on this rule. On Counsel, Uniformed Services University Officer, Department of Defense. March 5, 2019, we published a notice of of the Health Sciences, 4301 Jones [FR Doc. 2019–13197 Filed 6–20–19; 8:45 am] proposed rulemaking entitled Bridge Road, Room A–1030. Email: BILLING CODE 5001–06–P ‘‘Drawbridge Operation Regulation; St. [email protected]. Telephone: Johns River, Putnam County, FL’’ in the (301) 295–3028. Facsimile: (301) 295– Federal Register (82 FR 03904). We 6681. DEPARTMENT OF HOMELAND SECURITY received no comments on this rule. SUPPLEMENTARY INFORMATION: In support III. Legal Authority and Need for Rule of a recommendation from the DoD Coast Guard Regulatory Reform Task Force, DoD is The bridge owner, CSX removing this regulation, which 33 CFR Part 117 Transportation, requested the Coast contains administrative procedures for Guard consider allowing remote the BOR and sets forth certain officers [Docket No. USCG–2017–0857] operation of the Buffalo Bluff CSX of the University to be appointed by the RIN 1625–AA09 Railroad Bridge across the St. Johns BOR. This rule was first published on River, mile 94.5, at Satsuma, Putnam January 19, 1978 (42 FR 63775) and last Drawbridge Operation Regulation; St. County, Florida. The Buffalo Bluff CSX updated on March 23, 1989 (54 FR Johns River, Putnam County, FL Railroad Bridge across the St. Johns 11946). Since that time, section 8091 of River, Putnam is a bascule bridge. The AGENCY: Coast Guard, DHS. Public Law 101–511 (November 5, 1990) bridge is currently manned and transferred all authorities from the BOR ACTION: Final rule. maintained in the open position. It has a vertical clearance of 7 feet at mean to the Secretary of Defense and stated SUMMARY: The Coast Guard is modifying ‘‘. . . the Board hereafter shall be an high water in the closed position and a the operating schedule that governs the horizontal clearance of 90 feet. advisory board to the Secretary of Buffalo Bluff CSX Railroad Bridge Defense.’’ Since the 1990 change, the The Coast Guard is issuing this rule across the St. Johns River, mile 94.5, at under authority 33 U.S.C. 499. BOR complies with the Federal Satsuma, Putnam County, FL. The rule Advisory Committee Act (5 U.S.C. allows the bridge to be remotely IV. Discussion of Comments, Changes App.), the General Services monitored and operated from the CSX and the Final Rule Administration’s Federal Advisory Railroad Bridge across the Ortega River The Coast Guard is modifying the Committee Management Final Rule (41 (McGirts Creek) located at mile 1.1 on operating schedule that governs the CFR part 102–3), and 10 U.S.C. 2113a. the Ortega River. The rule also allows Buffalo Bluff CSX Railroad Bridge Further, the BOR no longer appoints the draw to remain in the full, open across St. Johns River, mile 94.5, at officers of the University. Accordingly, position unless a train is in the circuit. Satsuma, Putnam County, FL. The this part is outdated and unnecessary. DATES: This rule is effective July 22, bridge is currently manned and On March 28, 2019 (84 FR 11754), 2019. maintained in the open position. DoD published a notice in the Federal This rule allows the bridge to be Register to announce that it is renewing ADDRESSES: To view documents remotely monitored and operated. the charter of the BOR. The BOR’s mentioned in this preamble as being Visual monitoring of the waterway shall charter and contact information for the available in the docket, go to http:// be maintained with the use of cameras BOR’s Designated Federal Officer can be www.regulations.gov. Type USCG– and the detection of vessels under the found at https://www.facadatabase.gov/ 2017–0857 in the ‘‘SEARCH’’ box and span shall be accomplished with FACA/apex/FACAPublicAgency click ‘‘SEARCH.’’ Click on Open Docket detection sensors. Marine radio Navigation. Folder on the line associated with this communication shall be maintained It has been determined that rulemaking. with mariners near the bridge for the publication of this CFR part removal for FOR FURTHER INFORMATION CONTACT: If safety of navigation. The remote tender public comment is impracticable, you have questions on this rule, call or may also be contacted via telephone at unnecessary, and contrary to public email LT Emily T. Sysko, Sector (386) 649–8538. The span is normally in interest since it is based on removing Jacksonville, Waterways Management the fully open position and will display outdated and unnecessary information Division, U.S. Coast Guard; telephone green lights to indicate that the span is from the CFR. 904–714–7616, email Emily.T.Sysko@ fully open. When a train approaches, This rule is not significant under uscg.mil. the remote tender shall monitor for Executive Order (E.O.) 12866, SUPPLEMENTARY INFORMATION: vessels approaching the bridge. The ‘‘Regulatory Planning and Review,’’ remote tender shall warn approaching therefore, E.O. 13771, ‘‘Reducing I. Table of Abbreviations vessels via marine radio, channel 9 VHF Regulation and Controlling Regulatory CFR Code of Federal Regulations of a bridge lowering. Provided the Costs’’ does not apply. DHS Department of Homeland Security sensors do not detect a vessel under the

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span, the tender shall initiate the span requires Federal agencies to consider analyzed this rule under that Order and lowering sequence, which includes the the potential impact of regulations on have determined that it is consistent sounding of a horn and the displaying small entities during rulemaking. The with the fundamental federalism of red lights. The span will remain in term ‘‘small entities’’ comprises small principles and preemption requirements the down position for a minimum of businesses, not-for-profit organizations described in Executive Order 13132. eight minutes or for the entire time the that are independently owned and Also, this rule does not have tribal approach track circuit is occupied. After operated and are not dominant in their implications under Executive Order the train has cleared the bridge track fields, and governmental jurisdictions 13175, Consultation and Coordination circuit, the span shall open and the with populations of less than 50,000. with Indian Tribal Governments, green lights will be displayed. This rule The Coast Guard received no comments because it does not have a substantial allows vessels to pass through the from the Small Business Administration direct effect on one or more Indian bridge while taking into account the on this rule. The Coast Guard certifies tribes, on the relationship between the reasonable needs of other modes of under 5 U.S.C. 605(b) that this rule will Federal Government and Indian tribes, transportation. not have a significant economic impact or on the distribution of power and On April 27, 2017, the Coast Guard on a substantial number of small responsibilities between the Federal published a notice of temporary entities. Government and Indian tribes. deviation from drawbridge regulation While some owners or operators of with request for comments in the vessels intending to transit the bridge E. Unfunded Mandates Reform Act Federal Register (82 FR 08886) to test may be small entities, for the reasons The Unfunded Mandates Reform Act proposed changes. The Coast Guard stated in section V.A above, this rule of 1995 (2 U.S.C. 1531–1538) requires provided a comment period of 109 days will not have a significant economic Federal agencies to assess the effects of and no comments were received during impact on any vessel owner or operator. their discretionary regulatory actions. In the test period. On March 5, 2019, we Under section 213(a) of the Small particular, the Act addresses actions published a notice of proposed Business Regulatory Enforcement that may result in the expenditure by a rulemaking entitled ‘‘Drawbridge Fairness Act of 1996 (Pub. L. 104–121), State, local, or tribal government, in the Operation Regulation; St. Johns River, we want to assist small entities in aggregate, or by the private sector of Putnam County, FL’’ in the Federal understanding this rule. If the rule $100,000,000 (adjusted for inflation) or Register (82 FR 03904). The Coast Guard would affect your small business, more in any one year. Though this rule provided a comment period of 60 days organization, or governmental will not result in such an expenditure, and no comments were received. jurisdiction and you have questions we do discuss the effects of this rule concerning its provisions or options for elsewhere in this preamble. V. Regulatory Analyses compliance, please contact the person We developed this rule after listed in the FOR FURTHER INFORMATION F. Environment considering numerous statutes and CONTACT, above. We have analyzed this rule under Small businesses may send comments Executive Orders related to rulemaking. Department of Homeland Security on the actions of Federal employees Below we summarize our analyses Management Directive 023–01 and U.S. who enforce, or otherwise determine based on a number of these statutes and Coast Guard Environmental Planning compliance with, Federal regulations to Executive Orders, and we discuss First Policy COMDTINST 5090.1 (series), the Small Business and Agriculture Amendment rights of protesters. which guides the Coast Guard in Regulatory Enforcement Ombudsman complying with the National A. Regulatory Planning and Review and the Regional Small Business Environmental Policy Act of 1969 Executive Orders 12866 and 13563 Regulatory Fairness Boards. The (NEPA) (42 U.S.C. 4321–4370f). We direct agencies to assess the costs and Ombudsman evaluates these actions have made a determination that this benefits of available regulatory annually and rates each agency’s action is one of a category of actions that alternatives and, if regulation is responsiveness to small business. If you do not individually or cumulatively necessary, to select regulatory wish to comment on actions by have a significant effect on the human approaches that maximize net benefits. employees of the Coast Guard, call 1– environment. This rule promulgates the Executive Order 13771 directs agencies 888–REG–FAIR (1–888–734–3247). The operating regulations or procedures for to control regulatory costs through a Coast Guard will not retaliate against drawbridges. This action is categorically budgeting process. This rule has not small entities that question or complain excluded from further review, under been designated a ‘‘significant about this rule or any policy or action paragraph L49, of Chapter 3, Table 3–1 regulatory action,’’ under Executive of the Coast Guard. Order 12866. Accordingly, it has not of the U.S. Coast Guard Environmental been reviewed by the Office of C. Collection of Information Planning Implementation Procedures. Management and Budget (OMB) and This rule calls for no new collection A preliminary Record of pursuant to OMB guidance it is exempt of information under the Paperwork Environmental Consideration and a from the requirements of Executive Reduction Act of 1995 (44 U.S.C. 3501– Memorandum for the Record are not Order 13771. 3520). required for this rule. This regulatory action determination D. Federalism and Indian Tribal G. Protest Activities is based on the following reasons: (1) Government The draw will remain open for vessel The Coast Guard respects the First traffic except when trains are passing; A rule has implications for federalism Amendment rights of protesters. and (2) vessels that can transit under the under Executive Order 13132, Protesters are asked to contact the bridge without an opening may do so at Federalism, if it has a substantial direct person listed in the FOR FURTHER anytime. effect on the States, on the relationship INFORMATION CONTACT section to between the national government and coordinate protest activities so that your B. Impact on Small Entities the States, or on the distribution of message can be received without The Regulatory Flexibility Act of 1980 power and responsibilities among the jeopardizing the safety or security of (RFA), 5 U.S.C. 601–612, as amended, various levels of government. We have people, places or vessels.

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List of Subjects in 33 CFR Part 117 DEPARTMENT OF HOMELAND 553(b), the Coast Guard finds that good Bridges. SECURITY cause exists for not publishing a notice of proposed rulemaking (NPRM) with For the reasons discussed in the Coast Guard respect to this rule because Veteran’s preamble, the Coast Guard amends 33 Memorial Bridge, that once required CFR part 117 as follows: 33 CFR Part 117 draw operations in 33 CFR 117.261(g), PART 117—DRAWBRIDGE [Docket No. USCG–2019–0388] was removed from the Atlantic Intracoastal Waterway (Halifax River) in OPERATION REGULATIONS RIN 1625–AA09 2018 and is being replaced with a fixed bridge. Therefore, the regulation is no ■ 1. The authority citation for part 117 Drawbridge Operation Regulation; continues to read as follows: longer applicable and shall be removed Atlantic Intracoastal Waterway (Halifax from publication. It is unnecessary to Authority: 33 U.S.C. 499; 33 CFR 1.05–1; River), Daytona Beach, FL publish an NPRM because this and Department of Homeland Security regulatory action does not purport to Delegation No. 0170.1. AGENCY: Coast Guard, DHS. place any restrictions on mariners but ACTION: Final rule. ■ 2. Amend § 117.325 by adding rather removes a restriction that has no paragraph (c) to read as follows: SUMMARY: The Coast Guard is removing further use or value. We are issuing this rule under 5 § 117.325 St. Johns River. the existing drawbridge operation regulation for the Memorial Bridge U.S.C. 553(d)(3), the Coast Guard finds * * * * * (Veteran’s Memorial/Orange Ave/CR that good cause exists for making this (c) The draw for the Buffalo Bluff CSX 4050) across the Atlantic Intracoastal rule effective in less than 30 days after automated Railroad Bridge, St. Johns Waterway (Halifax River), mile 830.6, at publication in the Federal Register. The River, mile 94.5 at Satsuma, Putnam Daytona Beach, FL. The drawbridge was bridge has been removed from the County, FL shall operate as follows: removed in 2018 and is being replaced waterway for one year and this rule (1) The bridge is not tendered locally, with a fixed bridge. The operating merely requires an administrative but will be operated and monitored by regulation is no longer applicable or change to the Federal Register, in order a remote tender. necessary. to omit a regulatory requirement that is (2) The bridge shall have local and no longer applicable or necessary. The mechanical override capabilities over DATES: This rule is effective June 21, modification has already taken place the remote operation. 2019. and the removal of the regulation will (3) Marine radio communication shall ADDRESSES: To view documents not affect mariners currently operating be maintained with mariners near the mentioned in this preamble as being on this waterway. Therefore, a delayed bridge for the safety of navigation. available in the docket, go to http:// effective date is unnecessary. Visual monitoring of the waterway shall www.regulations.gov, type USCG–2019– III. Legal Authority and Need for Rule be maintained with the use of cameras 0388. In the ‘‘SEARCH’’ box and click and the detection of vessels under the ‘‘SEARCH.’’ Click on Open Docket The Coast Guard is issuing this rule span shall be accomplished with Folder on the line associated with this under authority 33 U.S.C. 499. detection sensors. rulemaking. The Veteran’s Memorial Bridge was (4) The span is normally in the fully FOR FURTHER INFORMATION CONTACT: If removed in 2018 and is being replaced open position and will display green you have questions on this rule, call or with a fixed bridge in 2019. The lights to indicate that the span is fully email Ms. Jennifer Zercher, Bridge elimination of this drawbridge open. Administration Branch, United States necessitates the removal of the (5) When a train approaches, the Coast Guard District Seven; telephone drawbridge operation regulation, 33 remote tender shall monitor for vessels 305–415–6740, email CFR 117.261(g), pertaining to the former approaching the bridge. The remote [email protected]. drawbridge. tender shall warn approaching vessels SUPPLEMENTARY INFORMATION: IV. Discussion of Final Rule via marine radio, channel 9 VHF of a bridge lowering. The remote tender may I. Table of Abbreviations The Coast Guard is changing regulation in 33 CFR 117.261 by also be contacted via telephone at (386) CFR Code of Federal Regulations 649–8538. removing restrictions and the regulatory DHS Department of Homeland Security burden related to draw operations for a (6) Provided the sensors do not detect FL Florida a vessel under the span, the tender shall FR Federal Register bridge that is no longer a drawbridge. initiate the span lowering sequence, § Section The change removes § 117.261(g) of the which includes the sounding of a horn U.S.C. United States Code regulation governing the Veteran’s and the displaying of red lights. The Memorial Bridge, since the bridge has II. Background Information and been removed from the waterway and is span will remain in the down position Regulatory History for a minimum of eight minutes or for being replaced with a fixed bridge. This the entire time the approach track The Coast Guard is issuing this final Final Rule seeks to update the Code of circuit is occupied. rule without prior notice and Federal Regulations by removing (7) After the train has cleared the opportunity to comment pursuant to language that governs the operation of bridge track circuit, the span shall open authority under section 4(a) of the the Veteran’s Memorial Bridge, which is and the green lights will be displayed. Administrative Procedure Act (APA) (5 no longer a drawbridge. This change U.S.C. 553(b)). This provision does not affect waterway or land traffic. Dated: June 11, 2019. authorizes an agency to issue a rule This change does not affect nor does it Peter J. Brown, without prior notice and opportunity to alter the operating schedules in 33 CFR Rear Admiral, U.S. Coast Guard, Commander, comment when the agency for good 117.261 governing the remaining active Seventh Coast Guard District. cause finds that those procedures are drawbridges on the Atlantic Intracoastal [FR Doc. 2019–13205 Filed 6–20–19; 8:45 am] ‘‘impracticable, unnecessary, or contrary Waterway from St. Marys River to Key BILLING CODE 9110–04–P to the public interest.’’ Under 5 U.S.C. Largo.

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V. Regulatory Analyses Small businesses may send comments F. Environment We developed this rule after on the actions of Federal employees We have analyzed this rule under considering numerous statutes and who enforce, or otherwise determine Department of Homeland Security Executive Orders related to rulemaking. compliance with, Federal regulations to Management Directive 023–01 and Below we summarize our analyses the Small Business and Agriculture Commandant Instruction M16475.lD, based on a number of these statutes and Regulatory Enforcement Ombudsman which guides the Coast Guard in Executive Orders, and we discuss First and the Regional Small Business complying with the National Amendment rights of protesters. Regulatory Fairness Boards. The Environmental Policy Act of 1969 Ombudsman evaluates these actions (NEPA) (42 U.S.C. 4321–4370f), and A. Regulatory Planning and Review annually and rates each agency’s have made a determination that this Executive Orders 12866 and 13563 responsiveness to small business. If you action is one of a category of actions direct agencies to assess the costs and wish to comment on actions by which do not individually or benefits of available regulatory employees of the Coast Guard, call 1– cumulatively have a significant effect on alternatives and, if regulation is 888–REG–FAIR (1–888–734–3247). The the human environment. This rule necessary, to select regulatory Coast Guard will not retaliate against simply promulgates the operating approaches that maximize net benefits. small entities that question or complain regulations or procedures for Executive Order 13771 directs agencies about this rule or any policy or action drawbridges. This action is categorically to control regulatory costs through a of the Coast Guard. excluded from further review, under budgeting process. This rule has not figure 2–1, paragraph (32)(e), of the C. Collection of Information been designated a ‘‘significant Instruction. regulatory action,’’ under Executive This rule calls for no new collection A Record of Environmental Order 12866. Accordingly, it has not of information under the Paperwork Consideration and a Memorandum for been reviewed by the Office of Reduction Act of 1995 (44 U.S.C. 3501– the Record are not required for this rule. Management and Budget (OMB) and 3520). pursuant to OMB guidance it is exempt List of Subjects in 33 CFR Part 117 from the requirements of Executive D. Federalism and Indian Tribal Bridges. Order 13771. Government For the reasons discussed in the This regulatory action determination preamble, the Coast Guard amends 33 A rule has implications for federalism is based on the fact the bridge was CFR part 117 as follows: removed from the waterway and the under Executive Order 13132, replacement structure will be a fixed Federalism, if it has a substantial direct PART 117—DRAWBRIDGE bridge. The removal of the operating effect on the States, on the relationship OPERATION REGULATIONS schedule from 33 CFR 117 subpart B between the national government and will have no effect on the movement of the States, or on the distribution of ■ 1. The authority citation for part 117 waterway or land traffic. power and responsibilities among the continues to read as follows: various levels of government. We have B. Impact on Small Entities Authority: 33 U.S.C. 499; 33 CFR 1.05–1; analyzed this rule under that Order and Department of Homeland Security Delegation The Regulatory Flexibility Act of 1980 have determined that it is consistent No. 0170.1. (RFA), 5 U.S.C. 601–612, as amended, with the fundamental federalism requires federal agencies to consider the principles and preemption requirements § 117.261 [Amended] potential impact of regulations on small described in Executive Order 13132. ■ 2. Amend § 117.261 by removing and entities during rulemaking. The term Also, this rule does not have tribal reserving paragraph (g). ‘‘small entities’’ comprises small implications under Executive Order Dated: June 11, 2019. businesses, not-for-profit organizations 13175, Consultation and Coordination Peter J. Brown, that are independently owned and with Indian Tribal Governments, Rear Admiral, U.S. Coast Guard, Commander, operated and are not dominant in their because it does not have a substantial Seventh Coast Guard District. fields, and governmental jurisdictions direct effect on one or more Indian [FR Doc. 2019–13207 Filed 6–20–19; 8:45 am] with populations of less than 50,000. tribes, on the relationship between the The Coast Guard certifies under 5 U.S.C. BILLING CODE 9110–04–P Federal Government and Indian tribes, 605(b) that this rule will not have a or on the distribution of power and significant economic impact on a responsibilities between the Federal DEPARTMENT OF HOMELAND substantial number of small entities. SECURITY For the reasons stated in section IV.A Government and Indian tribes. above this final rule would not have a E. Unfunded Mandates Reform Act Coast Guard significant economic impact on any vessel owner or operator. The Unfunded Mandates Reform Act 33 CFR Part 165 Under section 213(a) of the Small of 1995 (2 U.S.C. 1531–1538) requires Business Regulatory Enforcement Federal agencies to assess the effects of [Docket No. USCG–2019–0461] their discretionary regulatory actions. In Fairness Act of 1996 (Pub. L. 104–121), Safety Zone; Chicago Harbor, Navy particular, the Act addresses actions we want to assist small entities in Pier Southeast, Chicago, IL understanding this rule. If the rule that may result in the expenditure by a would affect your small business, State, local, or tribal government, in the AGENCY: Coast Guard, DHS. organization, or governmental aggregate, or by the private sector of ACTION: Notice of enforcement of jurisdiction and you have questions $100,000,000 (adjusted for inflation) or regulation. concerning its provisions or options for more in any one year. Though this rule compliance, please contact the person will not result in such an expenditure, SUMMARY: The Coast Guard will enforce listed in the FOR FURTHER INFORMATION we do discuss the effects of this rule the Navy Pier Southeast Safety Zone CONTACT, above. elsewhere in this preamble. within the Chicago Harbor during

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specified times on October 23, 2019. DEPARTMENT OF HOMELAND zone must obey all lawful orders or This action is necessary and intended to SECURITY directions made by the Captain of the protect the safety of life and property on Port or her designated representative. navigable waters prior to, during, and Coast Guard The Captain of the Port may be immediately after firework displays. assisted by other federal, state and local During the enforcement period listed 33 CFR Part 165 law enforcement agencies in enforcing below, entry into, transiting, or [Docket No. USCG–2019–0458] this regulation. anchoring within the safety zone is In addition to this notice of prohibited unless authorized by the Safety Zone; Seafair Air Show enforcement in the Federal Register, the Captain of the Port Lake Michigan or a Performance, 2019, Seattle, WA Coast Guard will provide the maritime designated representative. community with advanced notification AGENCY: Coast Guard, DHS. of the safety zone via the Local Notice DATES: The regulation in 33 CFR ACTION: Notice of enforcement of to Mariners and marine information 165.931 will be enforced from 9:25 p.m. regulation. broadcasts on the day of the event. If the through 9:45 p.m. on October 23, 2019. COTP determines that the safety zone SUMMARY: The Coast Guard will enforce need not be enforced for the full FOR FURTHER INFORMATION CONTACT: If the annual Seafair Air Show duration stated in this notice of you have questions about this notice of Performance safety zone on Lake enforcement, she may use a Broadcast enforcement, call or email LT John Washington, Seattle, WA daily, from 8 Notice to Mariners to grant general Ramos, Waterways Management a.m. until 4 p.m., from August 1, 2019, permission to enter the regulated area. Division, Marine Safety Unit Chicago, through August 4, 2019. This action is U.S. Coast Guard; telephone (630) 986– necessary to ensure the safety of the Dated: June 18, 2019. 2155, email D09-DG-MSUChicago- public from inherent dangers associated L.A. Sturgis, [email protected]. with these annual aerial displays. Captain, U.S. Coast Guard, Captain of the During the enforcement period, no Port Puget Sound. SUPPLEMENTARY INFORMATION: The Coast person or vessel may enter or transit this [FR Doc. 2019–13274 Filed 6–20–19; 8:45 am] Guard will enforce Safety Zone; Chicago safety zone unless authorized by the BILLING CODE 9110–04–P Harbor, Navy Pier Southeast, Chicago, Captain of the Port or her designated IL listed in 33 CFR 165.931, on October representative. 23, 2019 from 9:25 p.m. through 9:45 DEPARTMENT OF HOMELAND DATES: The regulations in 33 CFR SECURITY p.m. This safety zone encompasses all 165.1319 will be enforced daily, from 8 waters of Lake Michigan within Chicago a.m. until 4 p.m., from August 1, 2019, Coast Guard Harbor bounded by coordinates through August 4, 2019. beginning at 41°53′23.3″ N, 087°36′04.5″ ° ′ ″ FOR FURTHER INFORMATION CONTACT: If 33 CFR Part 165 W; then south to 41 53 11.8 N, you have questions about this notice of 087°36′04.1″ W; then west to [Docket Number USCG–2019–0123] ° ′ ″ ° ′ ″ enforcement, call or email Lieutenant 41 53 12.1 N, 087 35 40.5 W; then Ellie Wu, Sector Puget Sound ° ′ ″ ° ′ ″ north to 41 53 23.6 N, 087 35 40.07 W; Waterways Management Division, Coast RIN 1625–AA00 then east back to the point of origin Guard; telephone (206) 217–6051, email Safety Zone; Lower Mississippi River, (NAD 83). Entry into, transiting, or [email protected]. Ohio River, and Upper Mississippi anchoring within the safety zone is SUPPLEMENTARY INFORMATION: The Coast River, Bird’s Point-New Madrid prohibited unless authorized by the Guard will enforce the Seafair Air Show Floodway Captain of the Port Lake Michigan or a Performance safety zone in 33 CFR designated on-scene representative. 165.1319 daily, from 8 a.m. until 4 p.m., AGENCY: Coast Guard, DHS. This notice of enforcement is issued from August 1, 2019, through August 4, ACTION: Final rule. under authority of 33 CFR 165.931 and 2019, unless canceled sooner by the SUMMARY: 5 U.S.C. 552 (a). In addition to this Captain of the Port. The Coast Guard is establishing a temporary safety zone for notice of enforcement in the Federal Under the provisions of 33 CFR all navigable waters of the Lower Register, the Coast Guard will provide 165.1319, the following area is Mississippi River from mile marker the maritime community with advance designated as a safety zone: All waters of Lake Washington south of the (MM) 953.8 to MM 887.0, the Upper notification of the above-specified Mississippi River from MM 0.0 to MM enforcement periods of this safety zone Interstate 90 Floating West Bound Bridge and north of the points between 3.0, and the Ohio River from MM 981.5 via Broadcast Notice to Mariners and Bailey Peninsula at 47°33′14.4″ N, to MM 978.5. This action is necessary to Local Notice to Mariners. The Captain of 122°14′47.3″ and Mercer Island at protect persons, property, and the Port Lake Michigan or a designated 47°33′24.5″ N, 122°13′52.5″ W. The infrastructure from potential damage on-scene representative may be specific boundaries of the safety zone and the safety hazards associated with contacted via Channel 16, VHF–FM or are listed in 33 CFR 165.1319(b). the demolition of federal levees on the at (414) 747–7182. In accordance with the general Lower Mississippi River and utilization Dated: June 14, 2019. regulations in 33 CFR part 165, subpart of the Bird’s Point-New Madrid Floodway. This rule prohibits the entry Thomas J. Stuhlreyer, C, no person or vessel may enter or remain in the zone except for support of vessels or persons into this temporary Captain, U.S. Coast Guard, Captain of the safety zone unless specifically Port, Lake Michigan. vessels and support personnel, vessels registered with the event organizer, or authorized by the Captain of the Port [FR Doc. 2019–13183 Filed 6–20–19; 8:45 am] other vessels authorized by the Captain Sector Ohio Valley (COTP) or a BILLING CODE 9110–04–P of the Port or Designated designated representative. Representatives. Vessels and persons DATES: This rule is effective July 22, granted authorization to enter the safety 2019.

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ADDRESSES: To view documents III. Legal Authority and Need for Rule been designated a ‘‘significant mentioned in this preamble as being The Coast Guard is issuing this rule regulatory action,’’ under Executive available in the docket, go to https:// under authority in 46 U.S.C. 70034 Order 12866. Accordingly, this rule has www.regulations.gov, type USCG–2019– (previously 33 U.S.C. 1231). The not been reviewed by the Office of 0123 in the ‘‘SEARCH’’ box and click Captain of the Port Sector Ohio Valley Management and Budget (OMB), and ‘‘SEARCH.’’ Click on Open Docket (COTP) has determined that potential pursuant to OMB guidance it is exempt Folder on the line associated with this hazards associated with the demolition from the requirements of Executive rule. of the federal levees on the Lower Order 13771. Mississippi River and re-stabilization of This regulatory action determination FOR FURTHER INFORMATION CONTACT: If the waterway is a safety concern for is based on the size, location, duration, you have questions about this proposed anyone in the vicinity of the Lower and time-of-day of the temporary safety rulemaking, call or email MST2 Dylan Mississippi River from MM 953.8 to zone. The safety zone only impacts a Caikowski, MSU Paducah, U.S. Coast MM 887.0, the Upper Mississippi River relatively small portion of the waterway Guard; telephone 270–442–1621 ext. from MM 0.0 to MM 3.0, and the Ohio and will only be in effect during the 2120, email STL-SMB-MSUPaducah- River from MM 981.5 to MM 978.5. demolition process and approximately [email protected]. 36 hours after the demolition to allow IV. Discussion of Comments, Changes, for stabilization of the waterway. After SUPPLEMENTARY INFORMATION: and the Rule approximately 36 hours, vessels would I. Table of Abbreviations As noted above, we received one be allowed to transit. Additionally, the comment on our NPRM published safety zone will be limited to the high CFR Code of Federal Regulations water event if the U.S. Army Corps of DHS Department of Homeland Security March 25, 2019. The comment affirmed the need for a safety zone during the Engineers deems it necessary to FR Federal Register demolish the federal levees on the NPRM Notice of proposed rulemaking demolition of the federal levees to protect people and vessels. There are no Lower Mississippi River and utilize the § Section Bird’s Point-New Madrid Floodway. U.S.C. United States Code changes in the regulatory text of this rule from the proposed rule in the B. Impact on Small Entities II. Background Information and NPRM. Regulatory History This rule establishes a temporary The Regulatory Flexibility Act of safety zone on all navigable waters of 1980, 5 U.S.C. 601–612, as amended, The purpose of this rule is to ensure the Lower Mississippi River from MM requires Federal agencies to consider the safety of vessels on the navigable 953.8 MM 887.0, the Upper Mississippi the potential impact of regulations on waters of the Lower Mississippi River, River from MM 0.0 to MM 3.0, and the small entities during rulemaking. The Upper Mississippi River, and Ohio Ohio River from MM 981.5 to MM term ‘‘small entities’’ comprises small River during high water event. The 978.5, in the event of the demolition of businesses, not-for-profit organizations United States Army Corps of Engineers the federal levees on the Lower that are independently owned and informed us that it might deem it Mississippi River and utilization of the operated and are not dominant in their necessary to demolish certain federal Bird’s Point-New Madrid Floodway. fields, and governmental jurisdictions levees on the Lower Mississippi River The COTP or a designated with populations of less than 50,000. and utilize the Bird’s Point-New Madrid representative will inform the public of The Coast Guard received no comments Floodway, to maintain the integrity of the enforcement date and times for this from the Small Business Administration the Lower Mississippi River, Upper safety zone, as well as any emergent on this rulemaking. The Coast Guard Mississippi River, Ohio River, and all safety concerns that may delay the certifies under 5 U.S.C. 605(b) that this associated tributaries. During this time, enforcement of the zone through Local rule will not have a significant a temporary safety zone on the Lower Notices to Mariners (LNMs), and/or economic impact on a substantial number of small entities. Mississippi River, Upper Mississippi actual notice. While some owners or operators of River, and Ohio River would be No vessels or persons are permitted to enter the proposed safety zone without vessels intending to transit the necessary to protect persons, property, temporary safety zone may be small and infrastructure from potential obtaining permission from the COTP or a designated representative. entities, for the reasons stated in section damage and safety hazards associated V.A above, this rule will not have a with the demolition of federal levees on V. Regulatory Analyses significant economic impact on any the Lower Mississippi River and We developed this rule after vessel owner or operator. utilization of the Bird’s Point-New considering numerous statutes and Under section 213(a) of the Small Madrid Floodway. In response, on Executive orders related to rulemaking. Business Regulatory Enforcement March 25, 2019, the Coast Guard Below we summarize our analyses Fairness Act of 1996 (Pub. L. 104–121), published a notice of proposed based on a number of these statutes and we want to assist small entities in rulemaking (NPRM) titled Safety Zone; Executive orders, and we discuss First understanding this rule. If the rule Lower Mississippi River, Ohio River, and Amendment rights of protestors. would affect your small business, Upper Mississippi River, Bird’s Point- organization, or governmental New Madrid Floodway (84 FR 11035). A. Regulatory Planning and Review jurisdiction and you have questions There we stated why we issued the Executive Orders 12866 and 13563 concerning its provisions or options for NPRM, and invited comments on our direct agencies to assess the costs and compliance, please contact the person proposed regulatory action related to benefits of available regulatory listed in the FOR FURTHER INFORMATION this potential demolition of the federal alternatives and, if regulation is CONTACT section. levees on the Lower Mississippi River necessary, to select regulatory Small businesses may send comments and utilization of the Bird’s Point-New approaches that maximize net benefits. on the actions of Federal employees Madrid Floodway. During the comment Executive Order 13771 directs agencies who enforce, or otherwise determine period that ended April 24, 2019, we to control regulatory costs through a compliance with, Federal regulations to received one comment. budgeting process. This rule has not the Small Business and Agriculture

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Regulatory Enforcement Ombudsman Directive 023–01 and Environmental MM 0.0 to MM 3.0, and the Ohio River and the Regional Small Business Planning COMDTINST 5090.1 (series), from MM 981.5 to MM 978.5. Regulatory Fairness Boards. The which guide the Coast Guard in (b) Regulations. (1) In accordance Ombudsman evaluates these actions complying with the National with the general regulations in § 165.23 annually and rates each agency’s Environmental Policy Act of 1969 (42 of this part, entry into, transiting, or responsiveness to small business. If you U.S.C. 4321–4370f), and have anchoring within this temporary safety wish to comment on actions by determined that this action is one of a zone is prohibited unless authorized by employees of the Coast Guard, call 1– category of actions that do not the Captain of the Port Sector Ohio 888–REG–FAIR (1–888–734–3247). The individually or cumulatively have a Valley (COTP) or a designated Coast Guard will not retaliate against significant effect on the human representative. small entities that question or complain environment. This rule involves a safety (2) To seek permission to enter, about this rule or any policy or action zone on all waters of the Lower contact the COTP or a designated of the Coast Guard. Mississippi River from MM 953.8 to representative by radio VHF–FM MM 887.0, the Upper Mississippi River Channel 16 or via phone at 502–779– C. Collection of Information from MM 0.0 to MM 3.0, and the Ohio 5422. Those in the safety zone must This rule will not call for a new River from MM 981.5 to MM 978.5, comply with all lawful orders or collection of information under the during demolition of the federal levees directions given to them by the COTP or Paperwork Reduction Act of 1995 (44 on the Lower Mississippi River and a designated representative. U.S.C. 3501–3520). utilization of the Bird’s Point-New (c) Enforcement period. The COTP or D. Federalism and Indian Tribal Madrid Floodway. It is categorically a designated representative will inform Governments excluded from further review under the public of the enforcement date and paragraph L60(a) in Table 3–1 of U.S. times for this safety zone, as well as any A rule has implications for federalism Coast Guard Environmental Planning emergent safety concerns that may delay under Executive Order 13132, Implementing Procedures 5090.1. A the enforcement of the zone through Federalism, if it has a substantial direct Record of Environmental Consideration Local Notices to Mariners (LNMs), and/ effect on the States, on the relationship supporting this determination is or actual notice. between the national government and available in the docket where indicated Dated: June 17, 2019. the States, or on the distribution of under ADDRESSES. power and responsibilities among the A.M. Beach, various levels of government. We have G. Protest Activities Captain, U.S. Coast Guard, Captain of the Port Sector Ohio Valley. analyzed this rule under that Order and The Coast Guard respects the First [FR Doc. 2019–13179 Filed 6–20–19; 8:45 am] have determined that it is consistent Amendment rights of protesters. with the fundamental federalism Protesters are asked to contact the BILLING CODE 9110–04–P principles and preemption requirements person listed in the FOR FURTHER described in Executive Order13132. INFORMATION CONTACT section to Also, this rule does not have tribal DEPARTMENT OF HOMELAND coordinate protest activities so that your implications under Executive Order SECURITY message can be received without 13175, Consultation and Coordination jeopardizing the safety or security of with Indian Tribal Governments, Coast Guard people, places or vessels. because it does not have a substantial direct effect on one or more Indian List of Subjects in 33 CFR Part 165 33 CFR Part 165 tribes, on the relationship between the Harbors, Marine safety, Navigation [Docket No. USCG–2019–0474] Federal Government and Indian tribes, (water), Reporting and record keeping or on the distribution of power and Safety Zone; Annual Events Requiring requirements, Security measures, responsibilities between the Federal Safety Zones in the Captain of the Port Waterways. Government and Indian tribes. If you Lake Michigan Zone—City of believe this rule has implications for For the reasons discussed in the Kewaunee Fireworks Display federalism or Indian tribes, please preamble, the Coast Guard amends 33 AGENCY: Coast Guard, DHS. contact the person listed in the FOR CFR part 165 as follows: FURTHER INFORMATION CONTACT section. ACTION: Notice of enforcement of PART 165—REGULATED NAVIGATION regulation. E. Unfunded Mandates Reform Act AREAS AND LIMITED ACCESS AREAS SUMMARY: The Coast Guard will enforce The Unfunded Mandates Reform Act ■ of 1995 (2 U.S.C. 1531–1538) requires 1. The authority citation for part 165 the safety zone on the Kewaunee Federal agencies to assess the effects of continues to read as follows: Harbor, Kewaunee, WI, for the City of their discretionary regulatory actions. In Authority: 46 U.S.C. 70034, 70051; 33 CFR Kewaunee Fireworks Display from 9 particular, the Act addresses actions 1.05–1, 6.04–1, 6.04–6, and 160.5; p.m. through 10 p.m. on July 3, 2019. that may result in the expenditure by a Department of Homeland Security Delegation This action is needed to better protect State, local, or tribal government, in the No. 0170.1. the safety of life on navigable waters immediately prior to, during, and after aggregate, or by the private sector of ■ 2. Add § 165.T846 to read as follows: $100,000,000 (adjusted for inflation) or the fireworks display. During the more in any one year. Though this rule § 165.T846 Safety Zone; Lower Mississippi enforcement period, entry into, will not result in such an expenditure, River, Ohio River, and Upper Mississippi transiting, or anchoring within the River, Bird’s Point-New Madrid Floodway. we do discuss the effects of this rule safety zone is prohibited unless elsewhere in this preamble. (a) Location. The temporary safety authorized by the Captain of the Port zone will encompass all navigable Lake Michigan or his or her designated F. Environment waters of the Lower Mississippi River representative. We have analyzed this rule under from mile marker (MM) 953.8 to MM DATES: The regulations in 33 CFR Department of Homeland Security 887.0, the Upper Mississippi River from 165.929 for the City of Kewaunee

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Fireworks Display, listed as item (e)(52) SUMMARY: The Coast Guard is safety hazards associated with the in Table 165.929, will be enforced from establishing a temporary safety zone for fireworks display on that date. 9 p.m. through 10 p.m. on July 3, 2019. certain waters of the Columbia River III. Legal Authority and Need for Rule FOR FURTHER INFORMATION CONTACT: If near Umatilla, OR. This action is you have questions on this notice of necessary to provide for the safety of life The Coast Guard is issuing this rule enforcement, call or email marine event on these navigable waters during a under authority in 46 U.S.C. 70034 coordinator MST1 Kaleena Carpino, fireworks display on June 22, 2019. This (previously 33 U.S.C. 1231). Captain of Prevention Department, Coast Guard regulation prohibits persons and vessels the Port Columbia River (COTP) has Sector Lake Michigan, Milwaukee, WI; from being in the safety zone unless determined that potential hazards telephone (414) 747–7148, email D09- authorized by the Captain of the Port associated with the fireworks to be used SMB-SECLakeMichigan-WWM@ Columbia River or a designated in this June 22, 2019 display will be a uscg.mil. representative. safety concern for anyone within a 450- yard radius of the barge. The purpose of SUPPLEMENTARY INFORMATION: DATES: The Coast This rule is effective from 9 p.m. this rule is to ensure safety of vessels Guard will enforce the City of to 11:15 p.m. on June 22, 2019. and the navigable waters in the safety Kewaunee Fireworks Display safety ADDRESSES: To view documents zone before, during, and after the zone listed as item (e)(52) in Table mentioned in this preamble as being scheduled event. 165.929 of 33 CFR 165.929 from 9 p.m. available in the docket, go to https:// through 10 p.m. on July 3, 2019, on all www.regulations.gov, type USCG–2019– IV. Discussion of Comments, Changes, waters of Lake Michigan and Kewaunee 0324 in the ‘‘SEARCH’’ box and click and the Rule Harbor within the arc of a circle with a ‘‘SEARCH.’’ Click on Open Docket As noted above, we received no 1,000-foot radius from the fireworks Folder on the line associated with this comments on our NPRM published May ° ′ launch site in position 44 27.481 N, rule. 17, 2019. There are no changes in the ° ′ 087 29.735 W (NAD 83). Entry into, FOR FURTHER INFORMATION CONTACT: If regulatory text of this rule from the transiting, or anchoring within the you have questions on this rule, call or proposed rule in the NPRM. safety zone is prohibited unless email LCDR Dixon Whitley, Waterways This rule establishes a safety zone authorized by the Captain of the Port Management Division, Marine Safety from 9 p.m. to 11:15 p.m. on June 22, Lake Michigan or a designated on-scene Unit Portland, U.S. Coast Guard; 2019. The safety zone would cover all representative. telephone 503–240–9319, email navigable waters of the Columbia River This notice of enforcement is issued [email protected]. within 450-yards of the discharge site under authority of 33 CFR 165.929 and ° ′ ″ ° ′ ″ SUPPLEMENTARY INFORMATION: located at 45 55 39 N, 119 19 46 W, in 5 U.S.C. 552(a). In addition to this vicinity of Umatilla, OR. The duration publication in the Federal Register, the I. Table of Abbreviations of the zone is intended to ensure the Coast Guard plans to provide the CFR Code of Federal Regulations safety of vessels and these navigable maritime community with advance DHS Department of Homeland Security waters before, during, and after the notification for the enforcement of this FR Federal Register scheduled 10 p.m. to 10:15 p.m. safety zone via Broadcast Notice to NPRM Notice of proposed rulemaking fireworks display. No vessel or person Mariners or Local Notice to Mariners. § Section would be permitted to enter the safety The Captain of the Port Lake Michigan U.S.C. United States Code zone without obtaining permission from or a designated representative will II. Background Information and the COTP or a designated inform the public through a Broadcast Regulatory History representative. Notice to Mariners of any changes in the planned schedule. The Captain of the The Umatilla Chamber of Commerce V. Regulatory Analyses Port Lake Michigan or a representative notified the Coast Guard that it will be We developed this rule after may be contacted via Channel 16, VHF– conducting a fireworks display from 10 considering numerous statutes and FM, or via telephone (414) 747–7182. p.m. to 10:15 p.m. on June 22, 2019, to Executive orders related to rulemaking. Dated: June 14, 2019. commemorate the town’s history and Below we summarize our analyses anniversary. The fireworks will launch Thomas J. Stuhlreyer, based on a number of these statutes and from a site over the Columbia River in Executive orders, and we discuss First Captain, U.S. Coast Guard, Captain of the Umatilla, OR. In response, on May 17, Port, Lake Michigan. Amendment rights of protestors. 2019, the Coast Guard published a [FR Doc. 2019–13184 Filed 6–20–19; 8:45 am] notice of proposed rulemaking (NPRM) A. Regulatory Planning and Review BILLING CODE 9110–04–P titled ‘‘Safety Zone; Columbia River, Executive Orders 12866 and 13563 Fireworks Umatilla, OR’’ (84 FR 22403). direct agencies to assess the costs and DEPARTMENT OF HOMELAND There we stated why we issued the benefits of available regulatory SECURITY NPRM, and invited comments on our alternatives and, if regulation is proposed regulatory action related to necessary, to select regulatory Coast Guard this fireworks display. During the approaches that maximize net benefits. comment period that ended June 3, Executive Order 13771 directs agencies 33 CFR Part 165 2019, we received no comments. to control regulatory costs through a Under 5 U.S.C. 553(d)(3), the Coast budgeting process. This rule has not [Docket Number USCG–2019–0324] Guard finds that good cause exists for been designated a ‘‘significant RIN 1625–AA00 making this rule effective less than 30 regulatory action,’’ under Executive days after publication in the Federal Order 12866. Accordingly, this rule has Safety Zone; Columbia River, Register. Delaying the effective date of not been reviewed by the Office of Fireworks Umatilla, OR this rule would be impracticable Management and Budget (OMB), and AGENCY: Coast Guard, DHS. because the Coast Guard needs to have pursuant to OMB guidance it is exempt a safety zone regulation in place by June from the requirements of Executive ACTION: Temporary final rule. 22, 2019, to respond to the potential Order 13771.

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This regulatory action determination about this rule or any policy or action zone lasting less than two and a half is based on the size, location, duration, of the Coast Guard. hours that would prohibit entry within and time-of-day of the safety zone. 450 yards of the fireworks discharge C. Collection of Information Vessel traffic would be able to safely site. transit around this safety zone which This rule will not call for a new It is categorically excluded from would impact a small designated area of collection of information under the further review under paragraph L60(a) the Columbia River for approximately Paperwork Reduction Act of 1995 (44 of Appendix A, Table 1 of DHS two hours during the evening when U.S.C. 3501–3520). Instruction Manual 023–01–001–01, vessel traffic is normally low. Moreover, D. Federalism and Indian Tribal Rev. 01. A Record of Environmental the Coast Guard would issue a Governments Consideration supporting this Broadcast Notice to Mariners via VHF– determination is available in the docket FM marine channel 16 about the zone, A rule has implications for federalism where indicated under ADDRESSES. and the rule would allow vessels to seek under Executive Order 13132, permission to enter the zone. Federalism, if it has a substantial direct G. Protest Activities effect on the States, on the relationship The Coast Guard respects the First B. Impact on Small Entities between the national government and Amendment rights of protesters. The Regulatory Flexibility Act of the States, or on the distribution of Protesters are asked to contact the 1980, 5 U.S.C. 601–612, as amended, power and responsibilities among the person listed in the FOR FURTHER requires Federal agencies to consider various levels of government. We have INFORMATION CONTACT section to the potential impact of regulations on analyzed this rule under that Order and coordinate protest activities so that your small entities during rulemaking. The have determined that it is consistent message can be received without term ‘‘small entities’’ comprises small with the fundamental federalism jeopardizing the safety or security of businesses, not-for-profit organizations principles and preemption requirements people, places or vessels. that are independently owned and described in Executive Order 13132. operated and are not dominant in their Also, this rule does not have tribal List of Subjects in 33 CFR Part 165 fields, and governmental jurisdictions implications under Executive Order Harbors, Marine safety, Navigation with populations of less than 50,000. 13175, Consultation and Coordination (water), Reporting and recordkeeping The Coast Guard received no comments with Indian Tribal Governments, requirements, Security measures, from the Small Business Administration because it does not have a substantial Waterways. on this rulemaking. The Coast Guard direct effect on one or more Indian For the reasons discussed in the certifies under 5 U.S.C. 605(b) that this tribes, on the relationship between the preamble, the Coast Guard amends 33 rule will not have a significant Federal Government and Indian tribes, CFR part 165 as follows: economic impact on a substantial or on the distribution of power and number of small entities. responsibilities between the Federal PART 165—REGULATED NAVIGATION While some owners or operators of Government and Indian tribes. If you AREAS AND LIMITED ACCESS AREAS vessels intending to transit the safety believe this rule has implications for zone may be small entities, for the federalism or Indian tribes, please ■ 1. The authority citation for part 165 reasons stated in section V.A above, this contact the person listed in the FOR continues to read as follows: rule will not have a significant FURTHER INFORMATION CONTACT section. Authority: 46 U.S.C. 70034, 70051; 33 CFR economic impact on any vessel owner 1.05–1, 6.04–1, 6.04–6, and 160.5; or operator. E. Unfunded Mandates Reform Act Department of Homeland Security Delegation Under section 213(a) of the Small The Unfunded Mandates Reform Act No. 0170.1. Business Regulatory Enforcement of 1995 (2 U.S.C. 1531–1538) requires ■ 2. Add § 165.T13–0324 to read as Fairness Act of 1996 (Pub. L. 104–121), Federal agencies to assess the effects of follows: we want to assist small entities in their discretionary regulatory actions. In understanding this rule. If the rule particular, the Act addresses actions § 165.T13–0324 Safety Zone; Columbia would affect your small business, that may result in the expenditure by a River, Fireworks Umatilla, OR. organization, or governmental State, local, or tribal government, in the (a) Safety zone. The following area is jurisdiction and you have questions aggregate, or by the private sector of designated a safety zone: Waters of the concerning its provisions or options for $100,000,000 (adjusted for inflation) or Columbia River, within a 450-yard compliance, please contact the person more in any one year. Though this rule radius of the fireworks discharge site listed in the FOR FURTHER INFORMATION will not result in such an expenditure, located at 45°55′39″ N, 119°19′46″ W in CONTACT section. we do discuss the effects of this rule vicinity of Umatilla, OR. Small businesses may send comments elsewhere in this preamble. (b) Regulations. Under the general on the actions of Federal employees safety zone regulations in subpart C of who enforce, or otherwise determine F. Environment this part, you may not enter the safety compliance with, Federal regulations to We have analyzed this rule under zone described in paragraph (a) of this the Small Business and Agriculture Department of Homeland Security section unless authorized by the Captain Regulatory Enforcement Ombudsman Directive 023–01 and Environmental of the Port Columbia River or his and the Regional Small Business Planning COMDTINST 5090.1 (series), designated representative. Also in Regulatory Fairness Boards. The which guide the Coast Guard in accordance with § 165.23, no person Ombudsman evaluates these actions complying with the National may bring into, or allow to remain in annually and rates each agency’s Environmental Policy Act of 1969 (42 this safety zone any vehicle, vessel, or responsiveness to small business. If you U.S.C. 4321–4370f), and have object unless authorized by the Captain wish to comment on actions by determined that this action is one of a of the Port Columbia River or his employees of the Coast Guard, call 1– category of actions that do not designated representative. 888–REG–FAIR (1–888–734–3247). The individually or cumulatively have a (c) Enforcement period. This section Coast Guard will not retaliate against significant effect on the human will be enforced from 9 p.m. to 11:15 small entities that question or complain environment. This rule involves a safety p.m. on June 22, 2019.

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Dated: June 17, 2019. then due west to the shore. This safety Week Parade of Ships. The designated J.C. Smith, zone will be enforced from 9 a.m. participating vessels are: HMCS Captain, U.S. Coast Guard, Captain of the through 4 p.m. on August 15, 2019; and NANAIMO (MM 702), HMCS Port, Sector Columbia River. from 8:30 a.m. through 5 p.m. from EDMONTON (MM 703), and USCGC [FR Doc. 2019–13191 Filed 6–20–19; 8:45 am] August 16, 2019 through August 18, ACTIVE (WMEC 618). During the BILLING CODE 9110–04–P 2019. enforcement period, no person or vessel All vessels must obtain permission may enter or remain in the security from the Captain of the Port, Lake zones without the permission of the DEPARTMENT OF HOMELAND Michigan, or his or her designated on- Captain of the Port (COTP), Puget Sound SECURITY scene representative to enter, move or her designated representative. The within, or exit this safety zone during COTP has granted general permission Coast Guard the enforcement times listed in this for vessels to enter the outer 400 yards notice of enforcement. Requests must be of the security zones as long as those 33 CFR Part 165 made in advance and approved by the vessels within the outer 400 yards of the Captain of the Port before transits will [Docket No. USCG–2019–0512] security zones operate at the minimum be authorized. Approvals will be speed necessary to maintain course Safety Zones; Annual Events granted on a case-by-case basis. Vessels unless required to maintain speed by Requiring Safety Zones in the Captain and persons granted permission to enter the navigation rules. of the Port Lake Michigan Zone— the safety zone shall obey all lawful DATES: The regulations in 33 CFR Chicago Air and Water Show orders or directions of the Captain of the 165.1333 will be enforced from 10 a.m. Port, Lake Michigan, or a designated on- July 29, 2019, through 6 p.m. on August AGENCY: Coast Guard, DHS. scene representative. 4, 2019, unless cancelled sooner by the This notice of enforcement is issued ACTION: Notice of enforcement of Captain of the Port Puget Sound or her under authority of 33 CFR 165.929, regulation. designated representative. Safety Zones; Annual events requiring SUMMARY: The Coast Guard will enforce safety zones in the Captain of the Port, FOR FURTHER INFORMATION CONTACT: If a safety zone for the Chicago Air and Lake Michigan zone, and 5 U.S.C. you have questions about this notice of Water Show on a portion of Lake 552(a). In addition to this publication in enforcement, call or email Lieutenant Michigan, from August 15, 2019 through the Federal Register, the Coast Guard Ellie Wu, Sector Puget Sound August 18, 2019. This action is intended will provide the maritime community Waterways Management Division, Coast to protect the safety of life on the with advance notification of this Guard; telephone 206–217–6051, email navigable waterway immediately before, enforcement period via Broadcast [email protected]. during, and after this event. During the Notice to Mariners and Local Notice to SUPPLEMENTARY INFORMATION: The Coast enforcement period listed below, no Mariners. The Captain of the Port, Lake Guard will enforce the security zones vessel may transit this safety zone Michigan or a designated on-scene for Seattle’s Seafair Fleet Week Moving without approval from the Captain of representative may be contacted via Vessels in 33 CFR 165.1333 from 10 the Port, Lake Michigan or a designated VHF Channel 16 or (414) 747–7182. a.m. on July 29, 2019, through 6 p.m. on representative. August 4, 2019. Dated: June 14, 2019. In accordance with the general DATES: The regulations in 33 CFR Thomas J. Stuhlreyer, regulations in 33 CFR part 165, subpart 165.929 will be enforced for the location Captain, U.S. Coast Guard, Captain of the D, no person or vessel may enter or listed in item (f)(9), Table 165.929 from Port Lake Michigan. remain in the security zones without the 9 a.m. through 4 p.m. on August 15, [FR Doc. 2019–13267 Filed 6–20–19; 8:45 am] permission of the Captain of the Port, 2019; and from 8:30 a.m. through 5 p.m. BILLING CODE 9110–04–P Puget Sound or her designated from August 16, 2019 through August representative. For 2019, the following 18, 2019. areas are § 165.1333 security zones: All FOR FURTHER INFORMATION CONTACT: If DEPARTMENT OF HOMELAND navigable waters within 500 yards of you have questions about this notice of SECURITY HMCS NANAIMO (MM 702), HMCS enforcement, call or email LT John Coast Guard EDMONTON (MM 703), and USCGC Ramos, Waterways Management ACTIVE (WMEC 618) while each such Division, Marine Safety Unit Chicago, at 33 CFR Part 165 vessel is in the Sector Puget Sound 630–986–2155, email address D09-DG- COTP Zone. [email protected]. [Docket No. USCG–2019–0432] The COTP has granted general SUPPLEMENTARY INFORMATION: The Coast permission for vessels to enter the outer Guard will enforce the Safety Zone; Security Zone; Seattle’s Seafair Fleet 400 yards of the security zones as long Chicago Air and Water Show listed as Week Moving Vessels, 2019, Puget as those vessels within the outer 400 item (f)(9) in Table 165.929 of 33 CFR Sound, WA yards of the security zones operate at 165.929. Section 165.929 lists many AGENCY: Coast Guard, DHS. the minimum speed necessary to annual events requiring safety zones in ACTION: Notice of enforcement of maintain course unless required to the Captain of the Port, Lake Michigan regulation. maintain speed by the navigation rules. zone. This safety zone encompasses all The COTP may be assisted by other waters and adjacent shoreline of Lake SUMMARY: The Coast Guard will enforce federal, state or local agencies with the Michigan and Chicago Harbor bounded Seattle’s Seafair Fleet Week Moving enforcement of the security zones. by a line drawn from 41°55.900′ N at the Vessels security zones from 10 a.m. on All vessel operators who desire to shoreline, then east to 41°55.900′ N, July 29, 2019, through 6 p.m. on August enter the inner 100 yards of the security 087°37.200′ W, then southeast to 4, 2019. These security zones are zones or transit the outer 400 yards at 41°54.000′ N, 087°36.000′ W, then necessary to help ensure the security of greater than minimum speed necessary southwestward to the northeast corner the vessels from sabotage or other to maintain course must obtain of the Jardine Water Filtration Plant, subversive acts during Seafair Fleet permission from the COTP or her

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designated representative by contacting DATES: The regulations in 33 CFR to ensure participant and spectator the on-scene patrol craft on VHF Ch 13 165.801, Table 5, Line 3 will be safety for this year’s Fleet Week or Ch 16. Requests must include the enforced from 8:30 p.m. through 9:30 Maritime Festival. During this year’s reason why movement within this area p.m. on July 4, 2019. Fleet Week Maritime Festival, entry is necessary. Vessel operators granted FOR FURTHER INFORMATION CONTACT: If into, transit through, mooring, or permission to enter the security zones you have questions about this notice of anchoring within this safety zone is will be escorted by the on-scene patrol enforcement, call or email Lieutenant authorized unless directed otherwise by craft until they are outside of the Commander Benjamin Morgan, Sector the Captain of the Port, Puget Sound, or security zones. New Orleans, U.S. Coast Guard; her designated representative. In addition to this notice of telephone 504–365–2281, email DATES: The Coast Guard does not plan enforcement, the Coast Guard will [email protected]. to enforce the regulations in 33 CFR provide the maritime community with SUPPLEMENTARY INFORMATION: The Coast 165.1330 in 2019. advanced notification of the security Guard will enforce a temporary safety zones via the Local Notice to Mariners FOR FURTHER INFORMATION CONTACT: If zone in 33 CFR 165.801, Table 5, line and marine information broadcasts on you have questions about this notice of 3, for the Riverfront Marketing Group the day of the event. In the event that non-enforcement, call or email Independence Day celebration fireworks there are changes to the participating Lieutenant Ellie Wu, Sector Puget vessels, due to operational display event. This regulation will be Sound Waterways Management requirements, the Coast Guard will enforced from 8:30 p.m. through 9:30 Division, U.S. Coast Guard; telephone provide actual notice for any additional p.m. on July 4, 2019. This action is (206) 217–6051, email designated participating vessels not needed to provide for the safety of life [email protected]. covered in this notice. on these navigable waterways during SUPPLEMENTARY INFORMATION: The Coast In addition, members of the public this event. Our regulation for marine Guard does not plan to enforce the may contact Sector Puget Sound COTP events within the Eighth Coast Guard safety zone for the Fleet Week Maritime at 206–217–6002 for an up-to-date list of District, 33 CFR 165.801, specifies the Festival in 33 CFR 165.1330 in 2019. We designated participating vessels. If the location of the regulated area on the normally enforce this regulation for the COTP determines that the security Lower Mississippi River, between Mile Parade of Ships during the festival, but zones need not be enforced for the full Marker (MM) 94.3 and MM 95.3. During do not plan to enforce it this year duration stated in this notice of the enforcement period, as reflected in because based on the Captain of the enforcement, a Broadcast Notice to § 165.801, if you are the operator of a Port’s current assessment, enforcement Mariners may be used to grant general vessel in the temporary safety zone, you of this regulation is not needed to permission to enter all portions of the must comply with directions from the ensure participant and spectator safety regulated areas. Captain of the Port Sector New Orleans for this year’s Fleet Week Maritime or a designated representative. Festival. Dated: June 18, 2019. In addition to this notice of L.A. Sturgis, In addition to this notice of non- enforcement in the Federal Register, the enforcement in the Federal Register, the Captain, U.S. Coast Guard, Captain of the Coast Guard plans to provide Port Puget Sound. Coast Guard will provide the maritime notification of this enforcement period community with advanced notification [FR Doc. 2019–13272 Filed 6–20–19; 8:45 am] via a Broadcast Notice to Mariners. via the Local Notice to Mariners and BILLING CODE 9110–04–P Dated: June 17, 2019. marine information broadcasts. If the W.E. Watson, Captain of the Port determines that the DEPARTMENT OF HOMELAND Captain, U.S. Coast Guard, Acting Captain regulated area needs to be enforced, she SECURITY of the Port Sector New Orleans. will issue a Broadcast Notice to [FR Doc. 2019–13206 Filed 6–20–19; 8:45 am] Mariners and provide actual notice of Coast Guard BILLING CODE 9110–04–P enforcement. Dated: June 18, 2019. 33 CFR Part 165 L.A. Sturgis, DEPARTMENT OF HOMELAND [Docket No. USCG–2019–0315] Captain, U.S. Coast Guard, Captain of the SECURITY Port, Puget Sound. Safety Zone; Lower Mississippi River, Coast Guard [FR Doc. 2019–13275 Filed 6–20–19; 8:45 am] New Orleans, LA BILLING CODE 9110–04–P AGENCY: Coast Guard, DHS. 33 CFR Part 165 ACTION: Notice of enforcement of [Docket No. USCG–2019–0459] DEPARTMENT OF HOMELAND regulation. SECURITY Safety Zone; Fleet Week Maritime SUMMARY: The Coast Guard will enforce Festival, Pier 66, Elliot Bay, Seattle, a temporary safety zone for a fireworks Coast Guard Washington display located on the navigable waters 33 CFR Part 165 of the Lower Mississippi River between AGENCY: Coast Guard, DHS. Mile Marker (MM) 94.3 and MM 95.3. ACTION: Notice of non-enforcement of [Docket Number USCG–2019–0211] This action is needed to provide for the regulation. safety of life on these navigable RIN 1625–AA00 waterways during this event. During the SUMMARY: The Coast Guard does not enforcement period, the operator of any plan to enforce the Fleet Week Maritime Safety Zone; Cuyahoga 50th Parade of vessel in the safety zone must comply Festival’s Pier 66 Safety Zone in Elliott Lights; Cuyahoga River, Cleveland, OH with directions from the Captain of the Bay, WA in 2019. The Captain of the AGENCY: Coast Guard, DHS. Port Sector New Orleans or a designated Port has determined that enforcement of ACTION: Temporary final rule. representative. this regulation is not presently needed

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SUMMARY: The Coast Guard is Under 5 U.S.C. 553(d)(3), the Coast V. Regulatory Analyses establishing a moving safety zone to Guard finds that good cause exists for provide for the safety of life on these making this rule effective less than 30 We developed this rule after considering numerous statutes and navigable waters in the Cuyahoga River, days after publication in the Federal Executive orders related to rulemaking. Cleveland, OH, during the Cuyahoga Register. Delaying the effective date Below we summarize our analyses 50th Parade of Lights on June 22, 2019. would be contrary to the rule’s based on a number of these statutes and This temporary safety zone is necessary objectives of ensuring safety of life on to protect personnel, vessels, and the Executive orders, and we discuss First the navigable waters and protection of Amendment rights of protestors. marine environment from the potential persons and vessels near the boat hazards created by 125 vessels transiting parade. A. Regulatory Planning and Review in the river with decorative lights not normally used as navigation lights. III. Legal Authority and Need for Rule Executive Orders 12866 and 13563 Entry of vessels or persons into this direct agencies to assess the costs and zone is prohibited unless specifically The Coast Guard is issuing this rule benefits of available regulatory authorized by the Captain of the Port under authority in 46 U.S.C. 70034 alternatives and, if regulation is Sector Buffalo. (previously 33 U.S.C. 1231). The necessary, to select regulatory Captain of the Port Buffalo determined approaches that maximize net benefits. DATES: This rule is effective from 9:15 that potential hazards associated with Executive Order 13771 directs agencies p.m. until 11:15 p.m. on June 22, 2019. 125 vessels displaying decorative lights to control regulatory costs through a ADDRESSES: To view documents that are not used for navigation will be budgeting process. This rule has not mentioned in this preamble as being a safety concern for other vessels been designated a ‘‘significant available in the docket, go to http:// underway. This rule is needed to protect regulatory action,’’ under Executive www.regulations.gov, type USCG–2019– personnel, vessels, and the marine Order 12866. Accordingly, this rule has 0211 in the ‘‘SEARCH’’ box and click environment in the navigable waters not been reviewed by the Office of ‘‘SEARCH.’’ Click on Open Docket within the safety zone during the Management and Budget (OMB), and Folder on the line associated with this Cuyahoga 50th Parade of Lights. pursuant to OMB guidance it is exempt rule. from the requirements of Executive IV. Discussion of Comments, Changes, FOR FURTHER INFORMATION CONTACT: Order 13771. If and the Rule you have questions on this rule, call or This regulatory action determination email LT Ryan Junod, Chief of We received one comment on our is based on this rule not being a Waterways Management, U.S. Coast NPRM published April 26, 2019. The significant regulatory action because we Guard Marine Safety Unit Cleveland; comment requested information on how anticipate that it will have minimal telephone 216–937–0124, email the rule will be enforced, and how local impact on the economy, will not [email protected]. communities are being notified. The interfere with other agencies, will not SUPPLEMENTARY INFORMATION: rule will be enforced by U.S. Coast adversely alter the budget of any grant Guard Station personnel on behalf of the or loan recipients, and will not raise any I. Table of Abbreviations Captain of the Port Buffalo, the event novel legal or policy issues. The safety CFR Code of Federal Regulations was published in the Local Notice to zone created by this rule will be DHS Department of Homeland Security Mariners and there will be a Broadcast relatively small and enforced for a FR Federal Register Notice to Mariners for notification to the relatively short time. Also, the safety NPRM Notice of proposed rulemaking public. There are no changes in the zone is designed to minimize its impact § Section on navigable waters. Furthermore, the U.S.C. United States Code regulatory text of this temporary final rule from the proposed rule in the safety zone is designed to allow vessels NPRM due to the comments. to transit around it. Thus, restrictions on II. Background Information and vessel movement within that particular Regulatory History This rule establishes a safety zone area are expected to be minimal. Under On January 30, 2019, the Lake Erie from 9:30 p.m. through 11:15 p.m. on certain conditions, moreover, vessels Marine Trades Association notified the June 22, 2019. The moving safety zone may still transit through the safety zone Coast Guard that it will be conducting will encompass all waters within 25 feet when permitted by the Captain of the a Boat Parade from 9:30 to 11:00 p.m. of the vessels participating in the Port. Cuyahoga 50th Parade of Lights in the on June 22, 2019, to commemorate the B. Impact on Small Entities 50th Anniversary of the Burning River. Cuyahoga River. The safety zone will The boat parade will begin in Cleveland move with participating vessels as they The Regulatory Flexibility Act of Harbor west basin and proceed upriver transit from the mouth of the Cuyahoga 1980, 5 U.S.C. 601–612, as amended, to Merwin’s Wharf where they will turn River in the vicinity of position requires Federal agencies to consider ° ′ ″ ° ′ ″ around and head back down river to 41 29 59 N, 081 43 31 W, to Merwin’s the potential impact of regulations on ° ′ ″ Lake Erie. In response, on April 26, Wharf in the vicinity of 41 29 23 N, small entities during rulemaking. The 2019, the Coast Guard published a 081°42′16″ W, and returning to the term ‘‘small entities’’ comprises small notice of proposed rulemaking (NPRM) mouth of the Cuyahoga River in the businesses, not-for-profit organizations titled Safety Zone; Cuyahoga 50th vicinity of 41°29′59″ N, 081°43′31″ W that are independently owned and Parade of Lights; Cuyahoga River, (NAD 83). Entry into, transiting, or operated and are not dominant in their Cleveland, OH (84 FR 17760). We stated anchoring within the safety zone is fields, and governmental jurisdictions why we proposed this rulemaking, and prohibited unless authorized by the with populations of less than 50,000. invited comments on our regulatory Captain of the Port or a designated on- The Coast Guard received no comments action related to this Boat Parade. scene representative. The Captain of the from the Small Business Administration During the comment period that ended Port or a designated on-scene on this rulemaking. The Coast Guard May 28, 2019, we received one representative may be contacted via certifies under 5 U.S.C. 605(b) that this comment. VHF Channel 16. rule will not have a significant

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economic impact on a substantial or on the distribution of power and For the reasons discussed in the number of small entities. responsibilities between the Federal preamble, the Coast Guard amends 33 While some owners or operators of Government and Indian tribes. If you CFR part 165 as follows: vessels intending to transit the safety believe this rule has implications for zone may be small entities, for the federalism or Indian tribes, please PART 165—REGULATED NAVIGATION reasons stated in section V.A above, this contact the person listed in the FOR AREAS AND LIMITED ACCESS AREAS rule will not have a significant FURTHER INFORMATION CONTACT section. economic impact on any vessel owner ■ 1. The authority citation for part 165 or operator. E. Unfunded Mandates Reform Act continues to read as follows: Under section 213(a) of the Small The Unfunded Mandates Reform Act Authority: 46 U.S.C. 70034, 70051; 33 CFR Business Regulatory Enforcement of 1995 (2 U.S.C. 1531–1538) requires 1.05–1, 6.04–1, 6.04–6, and 160.5; Fairness Act of 1996 (Pub. L. 104–121), Department of Homeland Security Delegation Federal agencies to assess the effects of we want to assist small entities in No. 0170.1. their discretionary regulatory actions. In understanding this rule. If the rule particular, the Act addresses actions ■ 2. Add § 165.T09–0211 to read as would affect your small business, that may result in the expenditure by a follows: organization, or governmental State, local, or tribal government, in the jurisdiction and you have questions § 165.T09–0211 Safety Zone; Cuyahoga aggregate, or by the private sector of concerning its provisions or options for 50th Parade of Lights; Cuyahoga River, $100,000,000 (adjusted for inflation) or compliance, please contact the person Cleveland, OH. more in any one year. Though this rule listed in the FOR FURTHER INFORMATION (a) Location. The moving safety zone will not result in such an expenditure, CONTACT section. will encompass all waters within 25 feet we do discuss the effects of this rule Small businesses may send comments of the vessels participating in the elsewhere in this preamble. on the actions of Federal employees Cleveland 50th Parade of Lights in the who enforce, or otherwise determine F. Environment Cuyahoga River. The safety zone will compliance with, Federal regulations to move with participating vessels as they the Small Business and Agriculture We have analyzed this rule under transit from the mouth of the Cuyahoga Regulatory Enforcement Ombudsman Department of Homeland Security River in the vicinity of position and the Regional Small Business Directive 023–01 and Environmental 41°29′59″ N, 081°43′31″ W, to Merwin’s Regulatory Fairness Boards. The Planning COMDTINST 5090.1 (series), Wharf in the vicinity of 41°29′23″ N, Ombudsman evaluates these actions which guide the Coast Guard in 081°42′16″ W, and returning to the annually and rates each agency’s complying with the National mouth of the Cuyahoga River in the responsiveness to small business. If you Environmental Policy Act of 1969 (42 vicinity of 41°29′59″ N, 081°43′31″ W wish to comment on actions by U.S.C. 4321–4370f), and have (NAD 83). employees of the Coast Guard, call 1– determined that this action is one of a (b) Effective and enforcement period. 888–REG–FAIR (1–888–734–3247). The category of actions that do not This regulation is effective and will be Coast Guard will not retaliate against individually or cumulatively have a enforced on June 22, 2019, from 9:15 small entities that question or complain significant effect on the human p.m. until 11:15 p.m. about this rule or any policy or action environment. This rule involves a safety (c) Regulations. (1) In accordance with of the Coast Guard. zone lasting two hours that will the general regulations in § 165.23, encompass all waters within 25 feet of C. Collection of Information entry into, transiting, or anchoring the vessels participating in the within this safety zone is prohibited This rule will not call for a new Cleveland 50th Parade of Lights in the unless authorized by the Captain of the collection of information under the Cuyahoga River. It is categorically Port Buffalo or a designated on-scene Paperwork Reduction Act of 1995 (44 excluded from further review under representative. U.S.C. 3501–3520). paragraph L60(a) in Table 3–1 of U.S. (2) This safety zone is closed to all Coast Guard Environmental Planning D. Federalism and Indian Tribal vessel traffic, except as may be Implementing Procedures 5090.1. A Governments permitted by the Captain of the Port Record of Environmental Consideration Buffalo or a designated on-scene A rule has implications for federalism supporting this determination is representative. under Executive Order 13132, available in the docket where indicated (3) The ‘‘on-scene representative’’ of Federalism, if it has a substantial direct under ADDRESSES. effect on the States, on the relationship the Captain of the Port Buffalo is any between the national government and G. Protest Activities Coast Guard commissioned, warrant or the States, or on the distribution of petty officer who is designated by the power and responsibilities among the The Coast Guard respects the First Captain of the Port Buffalo to act on various levels of government. We have Amendment rights of protesters. their behalf. analyzed this rule under that Order and Protesters are asked to contact the (4) Vessel operators desiring to enter have determined that it is consistent person listed in the FOR FURTHER or operate within the safety zone shall with the fundamental federalism INFORMATION CONTACT section to contact the Captain of the Port Buffalo principles and preemption requirements coordinate protest activities so that your or an on-scene representative to obtain described in Executive Order13132. message can be received without permission to do so. The Captain of the Also, this rule does not have tribal jeopardizing the safety or security of Port Buffalo or an on-scene implications under Executive Order people, places or vessels. representative may be contacted via 13175, Consultation and Coordination List of Subjects in 33 CFR Part 165 VHF Channel 16 or at 716–843–9525. with Indian Tribal Governments, Vessel operators given permission to because it does not have a substantial Harbors, Marine safety, Navigation enter or operate in the safety zone must direct effect on one or more Indian (water), Reporting and recordkeeping comply with all directions given to tribes, on the relationship between the requirements, Security measures, them by the Captain of the Port Buffalo, Federal Government and Indian tribes, Waterways. or their on-scene representative.

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Dated: June 18, 2019. opportunity to comment pursuant to 087°53′34.9″ W (NAD 83) continuing Joseph S. Dufresne, authority under section 4(a) of the East across Milwaukee Harbor to Captain, U.S. Coast Guard, Captain of the Administrative Procedure Act (APA) (5 43°02′42.0″ N 087°53′06.0″ W (NAD 83) Port Buffalo. U.S.C. 553(b)). This provision then South to 43°02′00.00″ N [FR Doc. 2019–13261 Filed 6–20–19; 8:45 am] authorizes an agency to issue a rule 087°53′06.0″ W (NAD 83) then West BILLING CODE 9110–04–P without prior notice and opportunity to across the Milwaukee Harbor to comment when the agency for good 43°02′00.00″ N 087°53′41.0″ W (NAD cause finds that those procedures are 83) then North returning to the point of DEPARTMENT OF HOMELAND ‘‘impracticable, unnecessary, or contrary origin on Lake Michigan in Milwaukee, SECURITY to the public interest.’’ Under 5 U.S.C. WI. 553(b)(B), the Coast Guard finds that Entry into, transiting, or anchoring Coast Guard good cause exists for not publishing a within the safety zone is prohibited notice of proposed rulemaking (NPRM) unless authorized by the Captain of the 33 CFR Part 165 with respect to this rule because doing Port Lake Michigan or his or her [Docket Number USCG–2019–0472] so would be impracticable and contrary designated on-scene representative. The to the public interest. The final details Captain of the Port or his or her RIN 1625–AA00 for this event were not known to the designated on-scene representative may Coast Guard until there was insufficient be contacted via VHF Channel 16. Safety Zones; Milwaukee’s July 3rd time remaining before the event to V. Regulatory Analyses Fireworks, Milwaukee Harbor, publish an NPRM. Delaying the effective Milwaukee, WI date of this rule to wait for a comment We developed this rule after considering numerous statutes and AGENCY: Coast Guard, DHS. period to run would be both impracticable and contrary to the public Executive orders related to rulemaking. ACTION: Temporary final rule. interest because it would inhibit the Below we summarize our analyses based on a number of these statutes and SUMMARY: The Coast Guard is Coast Guard’s ability to protect the establishing a temporary safety zone public, vessels, mariners, and property Executive orders, and we discuss First around three barges moored in from the hazards associated with the Amendment rights of protestors. Milwaukee Harbor in the vicinity of Pier fireworks display on July 3, 2019. A. Regulatory Planning and Review Wisconsin. The safety zone is needed to Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for Executive Orders 12866 and 13563 protect personnel and vessels from making this rule effective less than 30 direct agencies to assess the costs and potential hazards created by the outfall days after publication in the Federal benefits of available regulatory of the fireworks display. Entry of vessels Register for the same reasons discussed alternatives and, if regulation is or persons into this zone is prohibited in the preceding paragraph, waiting for necessary, to select regulatory unless specifically authorized by the a 30 day notice period to run would be approaches that maximize net benefits. Captain of the Port Lake Michigan or a impracticable and contrary to the public Executive Order 13771 directs agencies designated representative. interest. to control regulatory costs through a DATES: This rule is effective from 8 p.m. budgeting process. This rule has not through 11 p.m. July 3, 2019. III. Legal Authority and Need for Rule been designated a ‘‘significant ADDRESSES: To view documents The Coast Guard is issuing this rule regulatory action,’’ under Executive mentioned in this preamble as being under authority in 46 U.S.C. 70034 Order 12866. Accordingly, this rule has available in the docket, go to https:// (previously 33 U.S.C. 1231). The not been reviewed by the Office of www.regulations.gov, type USCG–2019– Captain of the Port Lake Michigan will Management and Budget (OMB), and 0472 in the ‘‘SEARCH’’ box and click enforce a safety zone from 8 p.m. pursuant to OMB guidance it is exempt ‘‘SEARCH.’’ Click on Open Docket through 11 p.m. on July 3, 2019, for a from the requirements of Executive Folder on the line associated with this fireworks display on Lake Michigan in Order 13771. rule. Milwaukee, WI. The Captain of the Port This regulatory action determination FOR FURTHER INFORMATION CONTACT: If Lake Michigan has determined that this is based on the size, location, duration, you have questions on this rule, call or fireworks display will pose a significant and time-of-year of the safety zone. The email the marine event coordinator, risk to public safety and property. Such safety zone created by this rule will be MSTC Kaleena Carpino, Prevention hazards include premature and relatively small and enforced for only Department, Coast Guard Sector Lake accidental detonations, falling and three hours. Under certain conditions, Michigan, Milwaukee, WI at (414) 747– burning debris, and collisions among vessels may still transit through the 7148, email D09-SMB- spectator vessels. safety zone when permitted by the Captain of the Port. Moreover, the Coast [email protected]. IV. Discussion of the Rule Guard will issue Broadcast Notice to SUPPLEMENTARY INFORMATION: With the aforementioned hazards in Mariners via VHF–FM marine channel I. Table of Abbreviations mind, the Captain of the Port Lake 16 about the zone. Michigan has determined that this CFR Code of Federal Regulations temporary safety zone is necessary to B. Impact on Small Entities DHS Department of Homeland Security FR Federal Register protect persons and vessels during the The Regulatory Flexibility Act of NPRM Notice of proposed rulemaking fireworks display in the waters of 1980, 5 U.S.C. 601–612, as amended, § Section Milwaukee Harbor, on Lake Michigan. requires Federal agencies to consider U.S.C. United States Code This zone is effective and will be the potential impact of regulations on enforced from 8 p.m. through 11 p.m. on small entities during rulemaking. The II. Background Information and July 3, 2019. The safety zone will be term ‘‘small entities’’ comprises small Regulatory History enforced for all navigable waters within businesses, not-for-profit organizations The Coast Guard is issuing this an area bounded by the following that are independently owned and temporary rule without prior notice and coordinates; at 43°02′32.9″ N operated and are not dominant in their

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fields, and governmental jurisdictions because it does not have a substantial requirements, Security measures, with populations of less than 50,000. direct effect on one or more Indian Waterways. The Coast Guard certifies under 5 U.S.C. tribes, on the relationship between the For the reasons discussed in the 605(b) that this rule will not have a Federal Government and Indian tribes, preamble, the Coast Guard amends 33 significant economic impact on a or on the distribution of power and CFR part 165 as follows: substantial number of small entities. responsibilities between the Federal While some owners or operators of Government and Indian tribes. If you PART 165—REGULATED NAVIGATION vessels intending to transit the safety believe this rule has implications for AREAS AND LIMITED ACCESS AREAS zone may be small entities, for the federalism or Indian tribes, please ■ reasons stated in section V.A above, this contact the person listed in the FOR 1. The authority citation for part 165 rule will not have a significant FURTHER INFORMATION CONTACT section continues to read as follows: economic impact on any vessel owner above. Authority: 46 U.S.C. 70034, 70051; 33 CFR or operator. 1.05–1, 6.04–1, 6.04–6, and 160.5; Under section 213(a) of the Small E. Unfunded Mandates Reform Act Department of Homeland Security Delegation Business Regulatory Enforcement The Unfunded Mandates Reform Act No. 0170.1. Fairness Act of 1996 (Pub. L. 104–121), of 1995 (2 U.S.C. 1531–1538) requires ■ 2. ADD § 165.T09–0472 to read as we want to assist small entities in Federal agencies to assess the effects of follows: understanding this rule. If the rule their discretionary regulatory actions. In would affect your small business, particular, the Act addresses actions § 165.T09–0472 Safety Zone; Milwaukee’s organization, or governmental that may result in the expenditure by a July 3rd Fireworks, Milwaukee Harbor, jurisdiction and you have questions State, local, or tribal government, in the Milwaukee WI. concerning its provisions or options for aggregate, or by the private sector of (a) Location. All navigable waters compliance, please contact the person $100,000,000 (adjusted for inflation) or bounded by the following coordinates; ° ′ ″ ° ′ ″ listed in the FOR FURTHER INFORMATION more in any one year. Though this rule at 43 02 32.9 N 087 53 34.9 W (NAD CONTACT section. will not result in such an expenditure, 83) continuing East across Milwaukee ° ′ ″ ° ′ ″ Small businesses may send comments we do discuss the effects of this rule Harbor to 43 02 42.0 N 087 53 06.0 W ° ′ ″ on the actions of Federal employees elsewhere in this preamble. (NAD 83) then South to 43 02 00.00 N who enforce, or otherwise determine 087°53′06.0″ W (NAD 83) then West compliance with, Federal regulations to F. Environment across the Milwaukee Harbor to the Small Business and Agriculture We have analyzed this rule under 43°02′00.00″ N 087°53′41.0″ W (NAD Regulatory Enforcement Ombudsman Department of Homeland Security 83) then North returning to the point of and the Regional Small Business Directive 023–01 and Environmental origin on Lake Michigan in Milwaukee, Regulatory Fairness Boards. The Planning COMDTINST 5090.1 (series), WI. Ombudsman evaluates these actions which guide the Coast Guard in (b) Effective and enforcement period. annually and rates each agency’s complying with the National This rule is effective and will be responsiveness to small business. If you Environmental Policy Act of 1969 (42 enforced from 8 p.m. through 11 p.m. on wish to comment on actions by U.S.C. 4321–4370f), and have July 3, 2019. employees of the Coast Guard, call 1– determined that this action is one of a (c) Regulations. (1) In accordance with 888–REG–FAIR (1–888–734–3247). The category of actions that do not the general regulations in § 165.23 of Coast Guard will not retaliate against individually or cumulatively have a this part, entry into, transiting, or small entities that question or complain significant effect on the human anchoring within this safety zone is about this rule or any policy or action environment. This rule involves a safety prohibited unless authorized by the of the Coast Guard. zone lasting only three hours that will Captain of the Port Lake Michigan or a prohibit entry within the established designated on-scene representative. C. Collection of Information safety zone for the firework display. It (2) This safety zone is closed to all This rule will not call for a new is categorically excluded from further vessel traffic, except as may be collection of information under the review under paragraph L[60](a) in permitted by the Captain of the Port Paperwork Reduction Act of 1995 (44 Table 3–1 of U.S. Coast Guard Lake Michigan or a designated on-scene U.S.C. 3501–3520). Environmental Planning Implementing representative. Procedures 5090.1. A Record of (3) The ‘‘on-scene representative’’ of D. Federalism and Indian Tribal the Captain of the Port Lake Michigan Governments Environmental Consideration supporting this determination is is any Coast Guard commissioned, A rule has implications for federalism available in the docket where indicated warrant or petty officer who has been under Executive Order 13132, under ADDRESSES. designated by the Captain of the Port Federalism, if it has a substantial direct Lake Michigan to act on his or her effect on the States, on the relationship G. Protest Activities behalf. between the national government and The Coast Guard respects the First (4) Vessel operators desiring to enter the States, or on the distribution of Amendment rights of protesters. or operate within the safety zone must power and responsibilities among the Protesters are asked to contact the contact the Captain of the Port Lake various levels of government. We have person listed in the FOR FURTHER Michigan or an on-scene representative analyzed this rule under that Order and INFORMATION CONTACT section to to obtain permission to do so. The have determined that it is consistent coordinate protest activities so that your Captain of the Port Lake Michigan or an with the fundamental federalism message can be received without on-scene representative may be principles and preemption requirements jeopardizing the safety or security of contacted via VHF Channel 16. Vessel described in Executive Order 13132. people, places or vessels. operators given permission to enter or Also, this rule does not have tribal operate in the safety zone must comply implications under Executive Order List of Subjects in 33 CFR Part 165 with all directions given to them by the 13175, Consultation and Coordination Harbors, Marine safety, Navigation Captain of the Port Lake Michigan or an with Indian Tribal Governments, (water), Reporting and recordkeeping on-scene representative.

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Dated: June 14, 2019. Lake Michigan or a designated on-scene SUPPLEMENTARY INFORMATION: Thomas J. Stuhlreyer, representative. I. Table of Abbreviations Captain, U.S. Coast Guard, Captain of the This notice of enforcement is issued Port, Lake Michigan. under authority of 33 CFR 165.931 and CFR Code of Federal Regulations [FR Doc. 2019–13185 Filed 6–20–19; 8:45 am] 5 U.S.C. 552 (a). In addition to this DHS Department of Homeland Security BILLING CODE 9110–04–P notice in the Federal Register, the Coast FR Federal Register Guard will provide the maritime NPRM Notice of proposed rulemaking community with advance notification of § Section DEPARTMENT OF HOMELAND the above-specified enforcement periods U.S.C. United States Code SECURITY of this safety zone via Broadcast Notice II. Background Information and to Mariners and Local Notice to Regulatory History Coast Guard Mariners. The Captain of the Port Lake Michigan or a designated on-scene The Coast Guard is issuing this 33 CFR Part 165 representative may be contacted via temporary rule without prior notice and [Docket No. USCG–2019–0412] Channel 16, VHF–FM or at (414) 747– opportunity to comment pursuant to 7182. authority under section 4(a) of the Administrative Procedure Act (APA) (5 Safety Zone; Chicago Harbor, Navy Dated: June 14, 2019. Pier Southeast, Chicago, IL U.S.C. 553(b)). This provision Thomas J. Stuhlreyer, authorizes an agency to issue a rule AGENCY: Coast Guard, DHS. Captain, U.S. Coast Guard, Captain of the without prior notice and opportunity to ACTION: Notice of enforcement of Port, Lake Michigan. comment when the agency for good regulation. [FR Doc. 2019–13180 Filed 6–20–19; 8:45 am] cause finds that those procedures are BILLING CODE 9110–04–P ‘‘impracticable, unnecessary, or contrary SUMMARY: The Coast Guard will enforce to the public interest.’’ Under 5 U.S.C. the Navy Pier Southeast Safety Zone 553(b)(B), the Coast Guard finds that within the Chicago Harbor during DEPARTMENT OF HOMELAND good cause exists for not publishing a specified times on September 6, 2019 SECURITY notice of proposed rulemaking (NPRM) and September 7, 2019. This action is with respect to this rule because it is Coast Guard necessary and intended to protect the impracticable. It is impracticable to safety of life and property on navigable complete the full NPRM process for this 33 CFR Part 165 waters prior to, during, and immediately safety zone because we must establish after firework displays. During the [Docket Number USCG–2019–0421] the safety zone by June 22, 2019 and enforcement periods listed below, entry lack sufficient time to provide a into, transiting, or anchoring within the RIN 1625–AA00 reasonable comment period and then safety zone is prohibited unless Safety Zone; Ohio River, Miles 90.7 to consider those comments before issuing authorized by the Captain of the Port, 91.2, Wheeling, WV the rule. Lake Michigan or a designated Under 5 U.S.C. 553(d)(3), the Coast representative. AGENCY: Coast Guard, DHS. Guard finds that good cause exists for DATES: The regulation in 33 CFR ACTION: Temporary final rule. making this rule effective less than 30 165.931 will be enforced from 9:25 p.m. days after publication in the Federal through 9:45 p.m. on September 6, 2019, SUMMARY: The Coast Guard is Register. Delaying this rule would be and September 7, 2019. establishing a temporary safety zone for contrary to the public interest because navigable waters of the Ohio River from immediate action is necessary to FOR FURTHER INFORMATION CONTACT: If you have questions about this notice of mile 90.7 to mile 91.2. The safety zone respond to the safety hazards associated enforcement, call or email LT John is needed to protect personnel, vessels, with the fireworks display. and the marine environment from Ramos, Waterways Management III. Legal Authority and Need for Rule potential hazards created by a land Division, Marine Safety Unit Chicago, The Coast Guard is issuing this rule U.S. Coast Guard; telephone (630) 986– based fireworks display. Entry of vessels or persons into this zone is prohibited under authority in 46 U.S.C. 70034 2155, email D09-DG-MSUChicago- (previously 33 U.S.C. 1231). The [email protected]. unless specifically authorized by Captain of the Port Marine Safety Unit Captain of the Port Marine Safety Unit SUPPLEMENTARY INFORMATION: The Coast Pittsburgh. Pittsburgh (COTP) has determined that Guard will enforce Safety Zone; Chicago a safety zone is needed to protect Harbor, Navy Pier Southeast, Chicago, DATES: This rule is effective from 9 p.m. through 10:30 p.m. on June 22, 2019. personnel, vessels, and the marine IL listed in 33 CFR 165.931, on environment from potential hazards September 06, 2019 and September 07, ADDRESSES: To view documents created from a land based firework 2019 from 9:25 p.m. through 9:45 p.m. mentioned in this preamble as being display. This safety zone encompasses all waters available in the docket, go to http:// of Lake Michigan within Chicago Harbor www.regulations.gov, type USCG–2019– IV. Discussion of the Rule bounded by coordinates beginning at 0421 in the ‘‘SEARCH’’ box and click This rule establishes a safety zone on 41°53′23.3″ N, 087°36′04.5″ W; then ‘‘SEARCH.’’ Click on Open Docket June 22, 2019, from 9 p.m. through south to 41°53′11.8″ N, 087°36′04.1″ W; Folder on the line associated with this 10:30 p.m. The safety zone will cover all then west to 41°53′12.1″ N, 087°35′40.5″ rule. navigable waters on the Ohio River from W; then north to 41°53′23.6″ N, FOR FURTHER INFORMATION CONTACT: If mile 90.7 to mile 91.2. The duration of 087°35′40.07″ W; then east back to the you have questions on this rule, call or the safety zone is intended to protect point of origin (NAD 83). Entry into, email MST1 Jennifer Haggins, Marine personnel, vessels, and the marine transiting, or anchoring within the Safety Unit Pittsburgh, U.S. Coast environment from potential hazards safety zone is prohibited unless Guard, at telephone 412–221–0807, created by a land based firework authorized by the Captain of the Port, email [email protected]. display.

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No vessel or person is permitted to B. Impact on Small Entities power and responsibilities among the enter the safety zone without obtaining The Regulatory Flexibility Act of various levels of government. We have permission from the COTP or a 1980, 5 U.S.C. 601–612, as amended, analyzed this rule under that Order and designated representative. A designated requires Federal agencies to consider have determined that it is consistent representative is a commissioned, the potential impact of regulations on with the fundamental federalism warrant, or petty officer of the U.S. small entities during rulemaking. The principles and preemption requirements Coast Guard (USCG) assigned to units term ‘‘small entities’’ comprises small described in Executive Order 13132. Also, this rule does not have tribal under the operational control of the businesses, not-for-profit organizations implications under Executive Order COTP. To seek permission to enter, that are independently owned and contact the COTP or a designated 13175, Consultation and Coordination operated and are not dominant in their with Indian Tribal Governments, representative via VHF–FM channel 16, fields, and governmental jurisdictions because it does not have a substantial or through Marine Safety Unit with populations of less than 50,000. direct effect on one or more Indian Pittsburgh at 412–221–0807. Persons The Coast Guard certifies under 5 U.S.C. tribes, on the relationship between the and vessels permitted to enter the safety 605(b) that this rule will not have a Federal Government and Indian tribes, zone must comply with all lawful orders significant economic impact on a or on the distribution of power and or directions issued by the COTP or substantial number of small entities. responsibilities between the Federal designated representative. The COTP or While some owners or operators of Government and Indian tribes. If you a designated representative will inform vessels intending to transit the believe this rule has implications for the public of the effective period for the temporary safety zone may be small federalism or Indian tribes, please entities, for the reasons stated in section safety zone as well as any changes in the contact the person listed in the FOR V.A above, this rule will not have a dates and times of enforcement through FURTHER INFORMATION CONTACT section Local Notice to Mariners (LNMs), significant economic impact on any above. Broadcast Notices to Mariners (BNMs), vessel owner or operator. and/or Marine Safety Information Under section 213(a) of the Small E. Unfunded Mandates Reform Act Bulletins (MSIBs), as appropriate. Business Regulatory Enforcement The Unfunded Mandates Reform Act Fairness Act of 1996 (Pub. L. 104–121), of 1995 (2 U.S.C. 1531–1538) requires V. Regulatory Analyses we want to assist small entities in Federal agencies to assess the effects of understanding this rule. If the rule We developed this rule after their discretionary regulatory actions. In would affect your small business, considering numerous statutes and particular, the Act addresses actions organization, or governmental Executive orders related to rulemaking. that may result in the expenditure by a jurisdiction and you have questions State, local, or tribal government, in the Below we summarize our analyses concerning its provisions or options for based on a number of these statutes and aggregate, or by the private sector of compliance, please contact the person $100,000,000 (adjusted for inflation) or Executive orders, and we discuss First listed in the FOR FURTHER INFORMATION Amendment rights of protestors. more in any one year. Though this rule CONTACT section. will not result in such an expenditure, A. Regulatory Planning and Review Small businesses may send comments we do discuss the effects of this rule on the actions of Federal employees elsewhere in this preamble. Executive Orders 12866 and 13563 who enforce, or otherwise determine direct agencies to assess the costs and compliance with, Federal regulations to F. Environment benefits of available regulatory the Small Business and Agriculture We have analyzed this rule under alternatives and, if regulation is Regulatory Enforcement Ombudsman Department of Homeland Security necessary, to select regulatory and the Regional Small Business Directive 023–01 and Environmental approaches that maximize net benefits. Regulatory Fairness Boards. The Planning COMDTINST 5090.1 (series), Executive Order 13771 directs agencies Ombudsman evaluates these actions which guide the Coast Guard in to control regulatory costs through a annually and rates each agency’s complying with the National budgeting process. This rule has not responsiveness to small business. If you Environmental Policy Act of 1969 (42 been designated a ‘‘significant wish to comment on actions by U.S.C. 4321–4370f), and have regulatory action,’’ under Executive employees of the Coast Guard, call 1– determined that this action is one of a Order 12866. Accordingly, this rule has 888–REG–FAIR (1–888–734–3247). The category of actions that do not not been reviewed by the Office of Coast Guard will not retaliate against individually or cumulatively have a Management and Budget (OMB), and small entities that question or complain significant effect on the human pursuant to OMB guidance it is exempt about this rule or any policy or action environment. This rule involves a safety from the requirements of Executive of the Coast Guard. zone lasting less than two hours that will prohibit entry on the Ohio River Order 13771. C. Collection of Information from mile 90.7 to mile 91.2 during a This regulatory action determination This rule will not call for a new land based firework event. It is is based on the size, location, and collection of information under the categorically excluded from further duration of the safety zone. This safety Paperwork Reduction Act of 1995 (44 review under paragraph L60(a) of Table zone impacts a one mile stretch of the U.S.C. 3501–3520). 3–1 of U.S. Coast Guard Environmental Ohio River for a limited duration of less Planning Implementing Procedures than two hours. Vessel traffic will be D. Federalism and Indian Tribal Governments 5090.1. A Record of Environmental informed about the safety zone through Consideration supporting this local notices to mariners. Moreover, the A rule has implications for federalism determination is available in the docket Coast Guard will issue LNMs, MSIBs, under Executive Order 13132, where indicated under ADDRESSES. and BNMs via VHF–FM marine channel Federalism, if it has a substantial direct 16 about the zone and the rule allows effect on the States, on the relationship G. Protest Activities vessels to seek permission to transit the between the national government and The Coast Guard respects the First zone. the States, or on the distribution of Amendment rights of protesters.

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Protesters are asked to contact the Pittsburgh (COTP) or a designated ACTION: Notice of enforcement of person listed in the FOR FURTHER representative. regulation. INFORMATION CONTACT section to (2) Persons or vessels requiring entry coordinate protest activities so that your into or passage through the zone must SUMMARY: The Coast Guard will enforce message can be received without request permission from the COTP or a safety zones for six of the fireworks jeopardizing the safety or security of designated representative. The COTP’s displays as described in the table to 33 people, places or vessels. representative may be contacted at 412– CFR 165.506 on various dates on and 221–0807. List of Subjects in 33 CFR Part 165 (3) All persons and vessels shall around July 4, 2019. This action is necessary to ensure safety of life on the Harbors, Marine safety, Navigation comply with the instructions of the (water), Reporting and recordkeeping COTP or a designated representative. navigable waters of the United States requirements, Security measures, Designated COTP representatives immediately prior to, during, and Waterways. include United States Coast Guard immediately after the fireworks displays. During the enforcement For the reasons discussed in the commissioned, warrant, and petty periods, vessels may not enter, remain preamble, the Coast Guard amends 33 officer. CFR part 165 as follows: (d) Information broadcasts. The in, or transit through the safety zones Captain COTP or a designated during these enforcement periods unless PART 165—REGULATED NAVIGATION representative will inform the public authorized by the Captain of the Port or AREAS AND LIMITED ACCESS AREAS through Local Notice to Mariners designated Coast Guard patrol personnel (LNMs), Broadcast Notices to Mariners on scene. ■ 1. The authority citation for part 165 (BNMs), and/or Marine Safety continues to read as follows: Information Bulletins (MSIBs), as DATES: The regulation in 33 CFR 165.506 will be enforced for the safety Authority: 46 U.S.C. 70034, 70051; 33 CFR appropriate. zones identified in the SUPPLEMENTARY 1.05–1, 6.04–1, 6.04–6, and 160.5; A.W. Demo, Department of Homeland Security Delegation INFORMATION section below for the dates Commander, U.S. Coast Guard, Captain of No. 0170.1. and times specified. the Port Marine Safety Unit Pittsburgh. ■ 2. Add § 165.T08–0421 to read as [FR Doc. 2019–13208 Filed 6–20–19; 8:45 am] FOR FURTHER INFORMATION CONTACT: If follows: BILLING CODE 9110–04–P you have questions about this notice of enforcement, you may call or email § 165.T08–0421 Safety Zone; Ohio River, Miles 90.7—91.2, Wheeling, WV. Petty Officer Thomas Welker, U.S. Coast DEPARTMENT OF HOMELAND Guard, Sector Delaware Bay, Waterways (a) Location. The following area is a SECURITY Management Division, telephone 215– safety zone: all navigable waters of the 271–4814, email Thomas.J.Welker@ Ohio River from mile 90.7 to mile 91.2 Coast Guard (b) Effective period. This section is uscg.mil. effective from 9p.m. through 10:30 p.m. 33 CFR Part 165 SUPPLEMENTARY INFORMATION: The Coast on June 22, 2019. Guard will enforce safety zones (c) Regulations. (1) In accordance with [Docket No. USCG–2019–0438] established in 33 CFR 165.506 for the the general regulations in § 165.23, entry Safety Zones; Fireworks Displays in following six fireworks displays during of persons and vessels into this zone is the Fifth Coast Guard District prohibited unless authorized by the the dates, times, and at the locations Captain of the Port Marine Safety Unit AGENCY: Coast Guard, DHS. listed in the following table:

DATES AND TIMES OF ENFORCEMENT OF CERTAIN 33 CFR 165.506 SAFETY ZONES FOR FIREWORKS DISPLAYS IN THE COAST GUARD SECTOR DELAWARE BAY COTP ZONE IN JULY 2019

Entry in the table to § 165.506 Date Time Location Safety zone

(a)5 ...... July 3, 2019 or rain 9 p.m. to 10 p.m ...... Barnegat Bay, Bar- The waters of Barnegat Bay within a 500 date of July 5, 2019. negat Township, NJ. yard radius of the fireworks barge in approximate position latitude 39°44′50″ N, longitude 074°11′21″ W, approximately 500 yards north of Conklin Island, NJ. (a)7 ...... July 3, 2019 or rain 9:15 p.m. to 10:15 Delaware Bay, North All waters of the Delaware Bay within a 360 date of July 5, 2019. p.m. Cape May, NJ. yard radius of the fireworks barge in approximate position latitude 38°58′00″ N, longitude 074°58′30″ W. (a)4 ...... July 4, 2019 or rain 8:45 p.m. to 9:30 p.m North Atlantic Ocean, The waters of the North Atlantic Ocean with- date of July 5, 2019. Avalon, NJ. in a 500 yard radius of the fireworks barge in approximate location latitude 39°06′19.5″ N, longitude 074°42′02.15″ W, in the vicinity of the shoreline at Avalon, NJ. (a)11 ...... July 4, 2019 or rain 9:30 p.m. to 10:30 North Atlantic Ocean, The waters of the North Atlantic Ocean with- date of July 5, 2019. p.m. Ocean City, NJ. in a 500 yard radius of the fireworks barge in approximate location latitude 39°16′22″ N, longitude 074°33′54″ W, in the vicinity of the shoreline at Ocean City, NJ.

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DATES AND TIMES OF ENFORCEMENT OF CERTAIN 33 CFR 165.506 SAFETY ZONES FOR FIREWORKS DISPLAYS IN THE COAST GUARD SECTOR DELAWARE BAY COTP ZONE IN JULY 2019—Continued

Entry in the table to § 165.506 Date Time Location Safety zone

(a)13 ...... July 4, 2019 ...... 9:15 p.m. to 9:45 p.m Little Egg Harbor, All waters of Little Egg Harbor within a 500 Parker Island, NJ. yard radius of the fireworks barge in approximate position latitude 39°34′18″ N, longitude 074°14′43″ W, approximately 50 yards north of Parkers Island. (a)16 ...... July 4, 2019 or rain 9 p.m. to 10:30 p.m ... Penn′s Landing, Dela- All waters of Delaware River, adjacent to date of July 5, 2019. ware River, Phila- Penn’s Landing, Philadelphia, PA, within delphia PA. 500 yards of a fireworks barge at approximate position latitude 39°56′49″ N, longitude 075°08′11″ W.

In addition to this notice of natural areas in the metropolitan for implementing this initiative, the enforcement in the Federal Register, the corridor extending from Washington, NPS is reviewing its regulations in order Coast Guard will provide notification of DC, to Boston, MA. Located near the to identify those that should be the enforcement periods via the Local New York City and Philadelphia repealed, replaced, or modified. These Notice to Mariners and marine metropolitan areas, and easily accessible include regulations that are outdated or information broadcasts. by private vehicle, the recreation area unnecessary. Dated: June 11, 2019. offers a variety of recreational Final Rule Scott E. Anderson, opportunities. These include hiking, swimming, fishing, hunting, boating, The NPS has identified several special Captain, U.S. Coast Guard, Captain of the regulations applicable to the recreation Port, Delaware Bay. pleasure driving, and sight-seeing; learning about natural and cultural area that are outdated and no longer [FR Doc. 2019–13182 Filed 6–20–19; 8:45 am] history; and enjoying the solitude of a enforced by the NPS. The NPS is BILLING CODE 9110–04–P rural environment and a change of pace. removing these regulations to reduce a The waters of the Middle Delaware potential source of confusion for the National Scenic & Recreational River are public about what activities are allowed DEPARTMENT OF THE INTERIOR of exceptional quality. The 125 miles of within the recreation area. These the Delaware River that includes the regulations are codified in 36 CFR National Park Service Upper Delaware National Scenic & 7.71(c)–(e) and address rock climbing Recreational River, Delaware Gap and commercial vehicles. 36 CFR Part 7 National Recreation Area (Middle Paragraph (c) requires visitors to [NPS–DEWA–25798; GPO Deposit Account Delaware), and the Lower Delaware register with the Superintendent prior to technical rock climbing. For the 4311H2] National Wild & Scenic River are program to function properly climbers classified as Special Protection Waters RIN 1024–AE46 would register with the NPS prior to a which have exceptionally high scenic, climb, and then notify the NPS when Delaware Water Gap National recreational and ecological values. The the climb had safely concluded. The Recreation Area; Removal of Outdated free-flowing Delaware River cuts NPS found that the registration Regulations through a narrow valley, and the requirement triggered search missions adjacent lands contain streams and that often were unfounded or AGENCY: National Park Service, Interior. waterfalls, geologic features, a variety of unnecessary, because this registration ACTION: Final rule. plants and wildlife, and cultural system was not used properly by the resources. The National Park Service SUMMARY: This rule removes special public. As a result, the NPS determined (NPS) administers the lands and waters regulations for Delaware Water Gap that the costs associated with the within the recreation area to provide National Recreation Area about rock program outweighed any potential outdoor recreation opportunities while climbing and commercial vehicles that benefits to public safety from its conserving the natural, cultural and are no longer necessary. implementation. The registration scenic resources of the recreation area. requirement for technical rock climbing DATES: This rule is effective June 21, In so doing, the NPS works 2019. was operationally eliminated more than cooperatively with surrounding 25 years ago and has not been enforced FOR FURTHER INFORMATION CONTACT: Eric communities and the public to achieve since. Lisnik, Chief Ranger, Delaware Water the conservation goals of the Delaware Paragraphs (d) and (e) identify the Gap National Recreation Area, 1978 River region. types of commercial vehicles that may River Road, Bushkill, PA 18324; (570) Regulatory Reform Initiative be operated within DEWA and establish 426–2414; [email protected]. a fee schedule for those vehicles. The SUPPLEMENTARY INFORMATION: On February 24, 2017, President legislation authorizing the regulations Trump issued Executive Order 13777, about commercial vehicles has expired Background ‘‘Enforcing the Regulatory Reform and was replaced in 2018 with a new Delaware Water Gap National Agenda.’’ This Executive Order Congressional authorization, Public Law Recreation Area (the recreation area) is established a regulatory reform initiative 115–101 (January 8, 2018), that the largest natural area in the National to alleviate unnecessary burdens placed authorized the Superintendent to Park System between Virginia and on the American people. As part of the establish a fee and permit program. Maine and one of the largest protected Department of the Interior’s approach Commercial vehicle rules will now be

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published in the Superintendent’s impact on a substantial number of small Federal Register and the agency must Compendium, which is available on the entities. The RFA applies only to rules give interested parties an opportunity to park’s website at www.nps.gov/dewa. In for which an agency is required to first submit their views and comments. We order to reduce ambiguity in NPS publish a proposed rule. See 5 U.S.C. have determined under 5 U.S.C. 553(b) regulations about the use of commercial 603(a) and 604(a). The RFA does not and 318 DM HB 5.3, however, that vehicles within DEWA, this rule will apply to this final rule because the notice and public comment for this rule state that, notwithstanding the general National Park Service is not required to are not required. We find good cause to prohibition of commercial vehicles in publish a proposed rule for the reasons treat notice and comment as 36 CFR 5.6, commercial vehicles are explained below with regard to the unnecessary. As discussed above, the allowed in DEWA in accordance with Administrative Procedure Act. regulatory provisions being removed are applicable law. This rule will also state outdated, unnecessary, and no longer Small Business Regulatory Enforcement that the Superintendent will notify the enforced by the NPS. Maintaining these Fairness Act public about rules related to commercial regulations is potentially confusing for vehicles, including the requirements of This rule is not a major rule under 5 the public. These regulatory changes the fee and permit program, using the U.S.C. 804(2). This rule: will not benefit from public comment, methods set forth in 36 CFR 1.7. (a) Does not have an annual effect on and further delaying them is contrary to the economy of $100 million or more. the public interest. Compliance With Other Laws, (b) Will not cause a major increase in We also recognize that rules Executive Orders and Department costs or prices for consumers, ordinarily do not become effective until Policy individual industries, Federal, State, or at least 30 days after their publication in Regulatory Planning and Review local government agencies, or the Federal Register. We have (Executive Orders 12866 and 13563) geographic regions. determined, however, that good cause (c) Does not have significant adverse exists for this rule to be effective Executive Order 12866 provides that effects on competition, employment, immediately upon publication for the the Office of Information and Regulatory investment, productivity, innovation, or reasons stated above. Affairs in the Office of Management and the ability of U.S.-based enterprises to Budget will review all significant rules. compete with foreign-based enterprises. Civil Justice Reform (Executive Order The Office of Information and 12988) Unfunded Mandates Reform Act Regulatory Affairs has determined that This rule complies with the this rule is not significant. This rule does not impose an requirements of Executive Order 12988. Executive Order 13563 reaffirms the unfunded mandate on State, local, or This rule: principles of Executive Order 12866 tribal governments or the private sector (a) Meets the criteria of section 3(a) while calling for improvements in the of more than $100 million per year. The requiring that all regulations be nation’s regulatory system to promote rule does not have a significant or reviewed to eliminate errors and predictability, to reduce uncertainty, unique effect on State, local or tribal ambiguity and be written to minimize and to use the best, most innovative, governments or the private sector. It litigation; and and least burdensome tools for addresses public use of national park (b) Meets the criteria of section 3(b)(2) achieving regulatory ends. The lands, and imposes no requirements on requiring that all regulations be written executive order directs agencies to other agencies or governments. A in clear language and contain clear legal consider regulatory approaches that statement containing the information standards. reduce burdens and maintain flexibility required by the Unfunded Mandates Consultation With Indian Tribes and freedom of choice for the public Reform Act (2 U.S.C. 1531 et seq.) is not (Executive Order 13175 and Department where these approaches are relevant, required. feasible, and consistent with regulatory Policy) objectives. Executive Order 13563 Takings (Executive Order 12630) The Department of the Interior strives emphasizes further that regulations This rule does not effect a taking of to strengthen its government-to- must be based on the best available private property or otherwise have government relationship with Indian science and that the rulemaking process takings implications under Executive Tribes through a commitment to must allow for public participation and Order 12630. A takings implication consultation with Indian tribes and an open exchange of ideas. The NPS has assessment is not required. recognition of their right to self- developed this rule in a manner governance and tribal sovereignty. The consistent with these requirements. Federalism (Executive Order 13132) NPS has evaluated this rule under the Under the criteria in section 1 of criteria in Executive Order 13175 and Reducing Regulation and Controlling Executive Order 13132, the rule does under the Department’s tribal Regulatory Costs (Executive Order not have sufficient federalism consultation policy and have 13771) implications to warrant the preparation determined that tribal consultation is This rule is not an E.O. 13771 of a Federalism summary impact not required because the rule will have (‘‘Reducing Regulation and Controlling statement. This rule only affects use of no substantial direct effect on federally Regulatory Costs’’) (82 FR 9339, federally-administered lands and recognized Indian tribes. February 3, 2017) regulatory action waters. It has no outside effects on other Paperwork Reduction Act because this rule is not significant under areas. A Federalism summary impact E.O. 12866. statement is not required. This rule does not contain information collection requirements, Regulatory Flexibility Act Administrative Procedure Act (Notice of and a submission to the Office of The Regulatory Flexibility Act (RFA) Proposed Rulemaking and Effective Management and Budget under the requires an agency to prepare a Date) Paperwork Reduction Act is not regulatory flexibility analysis for rules We recognize that under 5 U.S.C. required. The NPS may not conduct or unless the agency certifies that the rule 553(b) and (c), notice of proposed rules sponsor and you are not required to will not have a significant economic ordinarily must be published in the respond to a collection of information

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unless it displays a currently valid OMB permit program, using the methods set SUPPLEMENTARY INFORMATION: This control number. forth in § 1.7 of this chapter. document announces that, OMB approved the information collection National Environmental Policy Act * * * * * requirement in § 90.175(e) on December This rule does not constitute a major Andrea Travnicek, 3, 2018, and approved the information Federal action significantly affecting the Principal Deputy Assistant Secretary for Fish collection requirements in §§ 90.175(b) quality of the human environment. A and Wildlife and Parks Exercising the and 90.621(d)(4) on April 15, 2019. Each detailed statement under the National Authority of the Assistant Secretary for Fish of these rules was modified in Report Environmental Policy Act of 1969 and Wildlife and Parks. and Order and Order FCC 18–143, (NEPA) is not required because the rule [FR Doc. 2019–12999 Filed 6–20–19; 8:45 am] published at 83 FR 61072, November 27, is covered by a categorical exclusion. BILLING CODE 4312–52–P 2018. The OMB Control Number for the We have determined the rule is information collection requirement in categorically excluded under 43 CFR § 90.175(b) is 3060–0984. The OMB 46.210(i) because it is administrative, FEDERAL COMMUNICATIONS Control Number for the information legal, and technical in nature. We also COMMISSION collection requirement in § 90.175(e) is have determined the rule does not 3060–0798. The OMB Control Number involve any of the extraordinary 47 CFR Part 90 for the information collection circumstances listed in 43 CFR 46.215 [WP Docket Nos. 15–32, 16–261, RM–11572, requirement in § 90.621(d)(4) is 3060– that would require further analysis RM–11719, RM–11722, FCC 18–143] 1261. The Commission publishes this under NEPA. document as an announcement of the Creation of Interstitial 12.5 Kilohertz compliance date of the rules. The other Effects on the Energy Supply (Executive Channels in the 800 MHz Band rule amendments adopted in the Report Order 13211) Between 809–817/854–862 MHz; and Order and Order, which did not This rule is not a significant energy Improve Access to PLMR Spectrum; require OMB approval, became effective action under the definition in Executive Land Mobile Communications Council on December 27, 2018. Order 13211. A Statement of Energy If you have any comments on the AGENCY: Effects in not required. Federal Communications burden estimates listed below, or how Commission. the Commission can improve the List of Subjects in 36 CFR Part 7 ACTION: Final rule; announcement of collections and reduce any burdens District of Columbia, National parks, compliance date. caused thereby, please contact Cathy Reporting and Recordkeeping SUMMARY: In this document, the Williams, Federal Communications requirements. Commission announces that the Office Commission, Room 1–C823, 445 12th In consideration of the foregoing, the of Management and Budget (OMB) has Street SW, Washington, DC 20554, National Park Service amends 36 CFR approved the information collections regarding OMB Control Numbers 3060– part 7 as set forth below: associated with the rules for central 0798 and 3060–0984; and contact Nicole station alarm channels and 800 MHz Ongele, Federal Communications PART 7—SPECIAL REGULATIONS, interstitial channels contained in the Commission, Room 1–A620, 445 12th AREAS OF THE NATIONAL PARK Street SW, Washington, DC 20554, Commission’s Report and Order and SYSTEM regarding OMB Control Number 3060– Order FCC 18–143, and that compliance 1261. Please include the applicable with the modified rules is now required. ■ 1. The authority citation for part 7 OMB Control Number in your It removes paragraphs advising that continues to read as follows: correspondence. The Commission will compliance was not required until OMB Authority: 54 U.S.C. 100101, 100751, also accept your comments via email at approval was obtained. This document 320102; Sec. 7.96 also issued under DC Code [email protected]. is consistent with Report and Order and 10–137 and DC Code 50–2201.07. To request materials in accessible Order FCC 18–143, which states the formats for people with disabilities ■ 2. Amend § 7.71 by: Commission will publish a document in ■ (Braille, large print, electronic files, a. Revising paragraph (c) the Federal Register announcing a ■ audio format), send an email to fcc504@ b. Removing paragraphs (d), and (e). compliance date for the modified rule ■ fcc.gov or call the Consumer and c. Redesignating paragraph (f) as sections and revise the rules Governmental Affairs Bureau at (202) paragraph (a). accordingly. ■ d. Redesignating paragraph (g) as 418–0530 (voice), (202) 418–0432 paragraph (d). DATES: (TTY). The revisions to read as follows: Effective date: This rule is effective This document also removes June 21, 2019. §§ 90.175(k) and 90.621(d)(5) of the § 7.71 Delaware Water Gap National Compliance date: Compliance with 47 Commission’s rules, which advised that Recreation Area. CFR 90.175(b) and (e) and 90.621(d)(4), compliance was not required until OMB * * * * * published at 83 FR 61072 on November approval was obtained. (c) Commercial vehicles. 27, 2018, is required as of June 21, 2019. Synopsis Notwithstanding the prohibition of FOR FURTHER INFORMATION CONTACT: commercial vehicles set forth in § 5.6 of Public Safety licensee information: As required by the Paperwork this chapter, commercial vehicles are Brian Marenco, Policy and Licensing Reduction Act of 1995 (44 U.S.C. 3507), authorized to use the portions of U.S. Division, Public Safety and Homeland the FCC is notifying the public that it Highway 209 located within the Security Bureau, at (202) 418–0838, or received final OMB approval on Delaware Water Gap National email: [email protected]. December 3, 2018, for the information Recreation Area in accordance with Industrial/Business licensee collection requirement contained in the applicable law. The Superintendent will information: Melvin Spann, Mobility modification to § 90.175(e), and it provide notice to the public about rules Division, Wireless Telecommunications received final OMB approval on April related to commercial vehicles, Bureau, (202) 418–1333, melvin.spann@ 15, 2019 for the information collection including the requirements of a fee and fcc.gov. requirements contained in the

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modifications to §§ 90.175(b) and RM–11719 and RM–11722, which station alarm frequency coordinator in 90.621(d)(4). revises the text to § 90.175(e) of the order to use the channels for uses other Under 5 CFR part 1320, an agency Commission’s rules. The updated rule than central station alarm operations. may not conduct or sponsor a collection section requires applicants seeking to This requirement is similar to existing of information unless it displays a license newly available 12.5 kHz requirements pertaining to certain other current, valid OMB Control Number. bandwidth interstitial channels in the channels. The Report and Order and No person shall be subject to any 809–817 MHz/854–862 MHz segment of Order did not revise any of the penalty for failing to comply with a the 800 MHz band (800 MHz Mid-Band) information collection requirements that collection of information subject to the to include a showing of frequency are contained in this collection but Paperwork Reduction Act that does not coordination with their application for rather added additional frequencies to display a current, valid OMB Control license. Applicants include a showing the list. Therefore, this essentially is Number. The OMB Control Number for of frequency coordination by adding an additional 200 respondents to the information collection requirement completing Schedule H of FCC Form this collection. in § 90.175(b) is 3060–0984. The OMB 601. Applicants indicate on Schedule H OMB Control Number: 3060–1261. Control Number for the information whether their application was OMB Approval Date: April 15, 2019. collection requirement in § 90.175(e) is successfully coordinated before it was OMB Expiration Date: April 30, 2022. 3060–0798. The OMB Control Number filed with the Commission and, if so, Title: Creation of Interstitial 12.5 for the information collection which Commission-approved frequency Kilohertz Channels in the 800 MHz requirement in § 90.621(d)(4) is 3060– coordinator performed the coordination. Band Between 809–817/854–862 MHz. 1261. The Commission now has approval Form Number: N/A. The foregoing notice is required by under OMB Control Number 3060–0798 Respondents: Business or other for- the Paperwork Reduction Act of 1995, to collect frequency coordination profit; Not-for-profit institutions; State, Public Law 104–13, October 1, 1995, information from applicants seeking to Local or Tribal Government. and 44 U.S.C. 3507. license the newly available 12.5 kHz Number of Respondents and The total annual reporting burdens bandwidth interstitial channels in the Responses: 700 respondents, 350 and costs for the respondents are as 800 MHz Mid-Band. responses. follows: OMB Control Number: 3060–0984. Estimated Time per Response: 2 OMB Control Number: 3060–0798. OMB Approval Date: April 15, 2019. hours. OMB Approval Date: December 3, OMB Expiration Date: April 30, 2022. Frequency of Response: One-time 2018. Title: 90.175(b)(1), Frequency reporting requirement. OMB Expiration Date: October 31, Coordinator Requirements, Industrial/ Obligation to Respond: Required to 2020. Title: FCC Application for Radio Business Pool frequencies. obtain or retain benefits. Statutory Service Authorization Wireless Form Number: N/A. authority for this collection is contained Telecommunications Bureau; Public Respondents: Business or other for- in 47 U.S.C. 151, 154, 301, 303, and 332 Safety and Homeland Security Bureau. profit entities, and State, local, or tribal of the Communications Act of 1934. Form Number: FCC Form 601. government. Total Annual Burden: 700 hours. Respondents: Individuals and Number of Respondents and Total Annual Cost: No cost. households; Business or other for profit Responses: 2,700 respondents; 2,700 Nature and Extent of Confidentiality: entities; Not for profit institutions; and responses. There is no need for applicants filing State, local or tribal governments. Estimated Time per Response: 1 hour. applications to license channels in the Number of Respondents and Frequency of Response: One-time 809–817/854–862 MHz band segment Responses: 255,352 respondents; reporting requirement, and third party (800 MHz Mid-Band) to include 255,352 responses. disclosure requirement. confidential information with their Estimated Time per Response: .50– Obligation to Respond: Required to application. Nonetheless, there is a need 1.25 hours. obtain or retain benefits. Statutory for confidentiality with respect to all Frequency of Response: On-occasion authority for this collection of applications filed with the Commission or periodic reporting requirement. information is contained in Sections through its Universal Licensing System Obligation to Respond: Required to 4(i), 11, 303(g), 303(r), and 332(c)(7) of (ULS). Although ULS stores all obtain or retain benefits. The statutory the Communications Act of 1934, as information pertaining to the individual authority for this information collection amended, 47 U.S.C. 154(i), 161, 301, license via an FCC Registration Number is contained in 47 U.S.C. 151, 152, 154, 302(a), 303(g), 303(r), 309, 332(c)(7), 336 (FRN), confidential information is 154(i), 155(c), 157, 201, 202, 208, 214, and 337. accessible only by persons or entities 301, 302a, 303, 307, 308, 309, 310, 311, Total Annual Burden: 2,700 hours. that hold the password for each account, 314, 316, 319, 324, 331, 332, 333, 336, Total Annual Cost: No cost. and the Commission’s licensing staff. 534, 535 and 554. Nature and Extent of Confidentiality: Information on private land mobile Total Annual Burden: 223,833 hours. There is no need for confidentiality with radio licensees is maintained in the Total Annual Cost: $ 71,877,750. this collection of information. Commission’s system of records, FCC/ Nature and Extent of Confidentiality: Privacy Act: No impact(s). WTB–1, ‘‘Wireless Services Licensing Respondents may request that materials Needs and Uses: On October 22, 2018, Records.’’ The licensee records will be or information submitted to the the Commission issued a Report and publicly available and routinely used in Commission be withheld from public Order and Order, FCC 18–143, in WP accordance with subsection (b) of the inspection under 47 CFR 0.459 of the Docket No. 15–32, RM–11572, WP Privacy Act. TIN Numbers and material FCC rules. Docket No. 16–261, RM–11719 and RM– which is afforded confidential treatment Privacy Act: Yes. 11722 (800/PLMR Access Order), in pursuant to a request made under 47 Needs and Uses: On October 22, 2018, which it revised certain rules to require CFR 0.459 will not be available for the Commission released a Report and applicants for channels currently Public inspection. Any personally Order and Order in WP Docket No. 15– designated for central station alarm use identifiable information (PII) that 32, RM–11572, WP Docket No. 16–261, to obtain the concurrence of the central individual applicants provide is covered

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by a system of records, FCC/WTB–1, PART 90—PRIVATE LAND MOBILE appointed by the Administrator of ‘‘Wireless Services Licensing Records,’’ RADIO SERVICES General Services under 41 U.S.C. and these and all other records may be 7105(b)(2). The FAA Reauthorization disclosed pursuant to the Routine Uses ■ 1. The authority citation for part 90 Act of 2018, Public Law 115–254, as stated in this system of records continues to read as follows. amended the Robert T. Stafford Disaster notice. Authority: 47 U.S.C. 154(i), 161, 303(g), Relief and Emergency Assistance Act 303(r), 332(c)(7), 1401–1473. (Stafford Act), 42 U.S.C. 5189a(d), to Privacy Act: No impact(s). authorize the Board to arbitrate certain Needs and Uses: On October 22, 2018, § 90.175 [Amended] disputes between FEMA and applicants the Commission released a Report and ■ 2. Amend § 90.175 by removing for public assistance disaster grants. Order and Order in WP Docket No. 15– paragraph (k). The Board published in the Federal 32, RM–11572, WP Docket No. 16–261, Register at 84 FR 7861, March 5, 2019, RM–11719 and RM–11722WP Docket § 90.621 [Amended] proposed rules of procedure for such No. 15–32 which adds new rule ■ 3. Amend § 90.621 by removing arbitration. The notice invited § 90.621(d)(4) to the Commission’s paragraph (d)(5). comments on the proposed rules and rules. The new rule section requires announced the Board’s intention to [FR Doc. 2019–12984 Filed 6–20–19; 8:45 am] promulgate final rules after reviewing applicants seeking to license newly BILLING CODE 6712–01–P available 12.5 kHz bandwidth and considering comments. The comment period closed on May 6, interstitial channels in the 809–817 2019. The Board received one set of MHz/854–862 MHz segment of the 800 GENERAL SERVICES comments. The Board has considered MHz band (800 MHz Mid-Band) to ADMINISTRATION those comments and revised the include a letter of concurrence from an proposed rules as explained in part B incumbent licensee if the applicant files 48 CFR Part 6106 below. The Board now promulgates an application which causes contour [CBCA Case 2019–61–01; Docket No. GSA– final rules of procedure. These rules overlap under a forward analysis or GSABCA–2019–0005; Sequence No. 1] facilitate the efficient assembly of a receives contour overlap under a record that will allow each arbitration reciprocal analysis when the applicant RIN 3090–AK07 panel to issue a just and reasoned seeks to license channels in the 800 decision resolving the dispute before it Civilian Board of Contract Appeals; MHz Mid-Band. In the case of the at the speedy pace that parties expect in Rules of Procedure of the Civilian forward analysis, the incumbent arbitration. Board of Contract Appeals licensee must agree in its concurrence B. Comments and Changes letter to accept any interference that AGENCY: Civilian Board of Contract occurs as a result of the contour overlap. Appeals; General Services FEMA was the only commenter. In the case of the reciprocal analysis, the Administration (GSA). FEMA suggested specific changes to five proposed rules (Rules 603, 604, 606, incumbent licensee must state in its ACTION: Final rule. 608, and 612). The Board addresses the concurrence letter that it does not object SUMMARY: The Civilian Board of comments as follows. to the applicant receiving contour Comment: In proposed Rule 603, overlap from the incumbent’s facility. Contract Appeals (Board) amends its rules of procedure to include arbitration FEMA suggested replacing the words The purpose of requiring applicants to ‘‘final agency action’’ with ‘‘final agency obtain letters of concurrence if their of disputes between applicants for public assistance grants and the Federal determination’’ and adding the words application causes contour overlap ‘‘on an applicant’s eligibility for public under a forward analysis or receives Emergency Management Agency (FEMA) regarding disasters after January assistance’’ to the end of the rule after contour overlap under a reciprocal 1, 2016. The Board is promulgating a the word ‘‘decision.’’ analysis is to ensure incumbents in the final regulation after considering the Response: The Board does not adopt 800 MHz Mid-Band are aware of the one set of comments received on the these suggestions. ‘‘Agency action’’ is a contour overlap before an application is proposed rules. term of art for an administrative granted. decision that is reviewable in court DATE: Effective July 22, 2019. under the Administrative Procedure List of Subjects in 47 CFR Part 90 FOR FURTHER INFORMATION CONTACT: Mr. Act, 5 U.S.C. 702. The statement in Rule James Johnson, Co-Chief Counsel, Administrative practice and 603 that covered disputes ‘‘come to the Civilian Board of Contract Appeals, Board prior to final agency action’’ is procedure, Business and industry, Civil 1800 M Street NW, Suite 600, defense, Common carriers, correct regardless of the terminology Washington, DC 20036; at 202–606– that FEMA may use for such actions. Communications equipment, Emergency 8788; or email at jamesa.johnson@ Adding words to the end of the rule also medical services, Individuals with cbca.gov, for clarification of content. For would not enhance clarity, as the first disabilities, Radio, Reporting and information on status or publication sentence already specifies ‘‘public recordkeeping requirements. schedules, contact the Regulatory assistance eligibility and repayment Federal Communications Commission. Secretariat Division at 202–501–4755. disputes’’ as the subject matter of Katura Jackson, Please cite CBCA Case 2019–61–01. arbitration. Comment: In proposed Rule 604, Federal Register Liaison Officer. SUPPLEMENTARY INFORMATION: FEMA suggested incorporating ‘‘nearly Final Rules A. Background all of the content of 44 CFR 206.209(e)– The Board was established within (m),’’ FEMA’s regulation for arbitration For the reasons discussed in the GSA by section 847 of the National of public assistance disputes involving preamble, the Federal Communications Defense Authorization Act for Fiscal Hurricanes Katrina and Rita, excluding Commission amends 47 CFR part 90 as Year 2006, Public Law 109–163. Board paragraphs (e)(2) and (h)(3) of the FEMA follows. members are administrative judges regulation. FEMA identified no

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substantive conflicts (as distinct from Response: The language at issue is E. Congressional Review Act wording differences) between proposed important because the Stafford Act The final rule is exempt from Rule 604 and FEMA’s Katrina/Rita directs arbitrators to ‘‘consider from the Congressional review under Public Law arbitration regulation. FEMA noted that applicant’’ (not from FEMA) supporting 104–121 because it relates solely to the proposed rules omit ‘‘a time to file evidence submitted ‘‘at any time during agency organization, procedure, and an arbitration request.’’ arbitration.’’ 42 U.S.C. 5189a(d)(2). practice and does not substantially Response: The proposed rules are Panels cannot necessarily obtain affect the rights or obligations of non- already substantially consistent with responses to all new evidence, up to and agency parties. FEMA’s regulation, which states, ‘‘The including the last day of arbitration. arbitration will be conducted pursuant That is why the last sentence of Rule F. Executive Orders 12866 and 13563 to procedure established by the 608 warns that a panel may discount the Executive Orders (E.O.s) 12866 and arbitration panel.’’ 44 CFR 206.209(c). ‘‘significance, weight, or probative 13563 direct agencies to assess all costs As the designated arbitrator under 42 value’’ of delayed or surprise evidence. and benefits of available regulatory U.S.C. 5189a(d) of certain disputes As noted above, the final rule sets a time alternatives and, if regulation is regarding disasters after January 1, 2016, for FEMA’s response to an arbitration necessary, to select regulatory the Board is now adopting uniform request. The Board retains the limiting approaches that maximize net benefits panel procedures. phrase ‘‘to the extent practicable’’ in (including potential economic, The omission of a time to file an Rule 608 for responses to later-offered environmental, public health and safety arbitration request is intentional. The evidence. Panels will decide effects, distributive impacts, and amended Stafford Act states that to practicability case by case. equity). E.O. 13563 emphasizes the request arbitration, an applicant for Comment: In Rule 612, FEMA importance of quantifying both costs relief ‘‘shall submit the dispute to the suggested deleting the first sentence, and benefits, of reducing costs, of arbitration process established’’ by regarding statutory intent. harmonizing rules, and of promoting FEMA for Katrina and Rita disputes. 42 Response: The Board agrees and flexibility. This is not a significant U.S.C. 5189a(d)(5). The Board interprets removes this sentence from Rule 612, regulatory action and, therefore, was not the statutory term ‘‘process’’ to mean the adding the words ‘‘of streamlining’’ to subject to review under Section 6(b) of steps established by FEMA for the second sentence for clarity. E.O. 12866, Regulatory Planning and submitting a dispute to arbitration, Review, dated September 30, 1993, or including the timing and content of an The final regulation includes changes E.O. 13563, Improving Regulation and arbitration request. The proposed rule discussed above as well as minor, non- Regulatory Review, dated January 18, thus defers to FEMA’s current and substantive corrections of the proposed 2011. This final rule is not a major rule future published guidance on those rules. The corrections are as follows. under 5 U.S.C. 804. processing matters. After submittal, In Rule 604, a citation to 44 CFR G. Executive Order 13771 consistent with ‘‘the arbitration 206.209(e) is deleted from the first process’’ to which the Act refers, ‘‘[t]he sentence, and the second sentence is This final rule is not an E.O. 13771 arbitration will be conducted pursuant deleted, as unnecessary. In Rule 605, the regulatory action because this rule is not to procedure established by the second ‘‘by’’ is deleted from the third significant under E.O. 12866. sentence as unnecessary. In the sixth arbitration panel.’’ 44 CFR 206.209(c). List of Subjects in 48 CFR Part 6106 The Act does not direct the Board to use sentence of Rule 608, ‘‘before the close arbitration procedures directly from of arbitration’’ is shortened to ‘‘before Administrative practice and FEMA’s Katrina/Rita regulation. arbitration closes.’’ In the fourth procedure; Disaster relief. The Board has carefully and sentence of Rule 610, a comma is Dated: June 14, 2019. independently considered the content of deleted and the word ‘‘involuntary’’ is Jeri Kaylene Somers, 44 CFR 206.209 in response to FEMA’s inserted before ‘‘prehearing’’ for clarity. Chair, Civilian Board of Contract Appeals, comment. The Board agrees that its In the seventh and eighth sentences of General Services Administration. Rule 611, the word ‘‘to’’ is inserted in procedural rules should address the ■ ‘‘or [to] make,’’ and ‘‘made’’ is inserted Therefore, GSA adds 48 CFR part timing of a response by FEMA to an 6106 to read as follows: arbitration request, and ex parte before ‘‘subject to.’’ contacts. The Board adds sentences to C. Regulatory Flexibility Act PART 6106—RULES OF PROCEDURE Rules 608 and 609 that track the FOR ARBITRATION OF PUBLIC substance of 44 CFR 206.209(e)(4) and GSA certifies that this final rule will ASSISTANCE ELIGIBILITY OR (j). The Board also adds language to not have a significant economic impact REPAYMENT Rule 606 to clarify that the parties do on a substantial number of small entities not pay the Board for arbitration within the meaning of the Regulatory Sec. services. Flexibility Act, 5 U.S.C. 602 et seq., and 6106.601 Scope [Rule 601]. Comment: To proposed Rule 606, the Small Business Regulatory 6106.602 Authority [Rule 602]. 6106.603 Purpose [Rule 603]. FEMA proposed adding, ‘‘For each Enforcement Fairness Act of 1996, 6106.604 Arbitration request [Rule 604]. request, a decision under Rule 613 will Public Law 104–121, because the final 6106.605 Parties; representation; email be issued by the panel.’’ rule does not impose any additional service [Rule 605]. Response: The Board agrees that this costs on small or large businesses. 6106.606 Arbitrators; panels; costs [Rule 606]. sentence clarifies its intent, and D. Paperwork Reduction Act includes it, slightly altered, in Rule 606. 6106.607 Initial conference [Rule 607]. Comment: In proposed Rule 608, The Paperwork Reduction Act, 44 6106.608 Evidence; timing [Rule 608]. 6106.609 Other materials considered; ex FEMA objected to the statement that a U.S.C. 3501 et seq., does not apply parte communications [Rule 609]. panel will receive a response to new because this final rule does not impose 6106.610 Motions [Rule 610]. evidence ‘‘to the extent practicable.’’ any information collection requirements 6106.611 Hearing; live or paper [Rule 611]. FEMA argued that it should ‘‘always’’ be that require the approval of the Office of 6106.612 Streamlined procedures [Rule entitled to file a response. Management and Budget. 612].

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6106.613 Decision; finality [Rule 613]. Unless otherwise advised, the Board presented as scheduled by the panel and Authority: 42 U.S.C. 5189a(d). deems the person who signed the may be subject to page, word, or time arbitration request to be the applicant’s limits. By the close of arbitration under 6106.601 Scope [Rule 601]. primary representative. Any other Rule 613, parties should provide the The rules in this part establish primary representative or other party panel with everything it needs to make procedures for arbitration by the Board representative shall promptly efile a a decision. Documents written by a at the request of an applicant for public notice of appearance complying with party for the panel during arbitration assistance from the Federal Emergency Board Rule 5(b) (48 CFR 6101.5(b)). shall comply with Board Rules 1(b) Management Agency (FEMA) for a Unless otherwise directed by the panel, (‘‘Efiles; efiling’’), 7, and 23 (48 CFR disaster that occurred after January 1, a party shall email its efilings to every 6101.1(b), 6101.7, and 6101.23). No 2016. other party’s primary representative at member of a panel or of the Board’s staff the time of filing. 6106.602 Authority [Rule 602]. will communicate with a party about The Board is authorized by section 6106.606 Arbitrators; panels; costs [Rule any material issue in arbitration outside 423 of the Robert T. Stafford Disaster 606]. of the presence of the other party or Relief and Emergency Assistance Act The Board assigns three judges as the parties, and no one shall attempt such (Stafford Act), 42 U.S.C. 5189a(d), to panel of arbitrators for each request. A communications on behalf of a party. arbitrate disputes between applicants single arbitrator may act on behalf of a and FEMA as to eligibility for public panel under Rules 607 and 611. A full 6106.610 Motions [Rule 610]. assistance (or repayment of past public panel issues any decision under Rule Motions are strictly limited and assistance) for a disaster post-dating 613. The Board arbitrates at no cost to should ordinarily be made orally during January 1, 2016, when the disputed the parties, who bear their own costs of the initial conference under Rule 607. A amount exceeds $500,000 or, for an participation. later motion may be efiled. A party may applicant in a rural area, is at least make a procedural motion, such as to $100,000. 6106.607 Initial conference [Rule 607]. The panel will hold a telephonic extend time. An applicant may move for 6106.603 Purpose [Rule 603]. scheduling conference with all parties voluntary dismissal. No party may move Under the Stafford Act, the Board acts as soon as practicable, ordinarily within for a prehearing merits decision (e.g., for the United States Government to 14 calendar days after the Clerk dockets summary judgment or dismissal for resolve public assistance eligibility and an arbitration request. Each primary failure to state a claim) or for repayment disputes by arbitration, a party representative shall participate in involuntary prehearing dismissal other speedy and flexible method of impartial the conference. At least one panel than on the merits except on the dispute resolution. Eligibility and member will preside. The panel will grounds that an arbitration request is repayment disputes come to the Board promptly issue to the parties a written untimely. A panel ordinarily issues one prior to final agency action by FEMA. summary of the conference and the decision per arbitration. An arbitration decision under these schedule. A party has 5 calendar days rules is the final action by the Executive from receipt of the panel’s conference 6106.611 Hearing; live or paper [Rule 611]. Branch in a dispute. These rules summary to efile any objection to it. The Parties may conclude arbitration by facilitate the creation of an arbitration panel may hold and summarize other presenting their positions in a hearing. record sufficient to allow the Board to conferences as necessary. A hearing may be live or, if agreed by issue a prompt, just, and reasoned all parties, on a written record (a ‘‘paper decision. 6106.608 Evidence; timing [Rule 608]. No party is required to provide hearing’’) or a combination of the two. 6106.604 Arbitration request [Rule 604]. additional evidence. An applicant or The panel will begin a hearing within (a) An applicant for public assistance grantee may, but need not, supplement 60 calendar days after the initial may request arbitration by following materials it previously provided to conference under Rule 607 unless the applicable FEMA guidance FEMA regarding the dispute. A party Board Chair approves a later date. All implementing section 423 of the may elect to present additional panel members will attend a live Stafford Act. evidence, i.e., documents, things, or hearing in Washington, DC. A single (b) Applicants shall efile arbitration testimony tending to make a factual panel member may conduct a live requests with the Board as prescribed by contention appear more or less likely to hearing elsewhere. Hearing procedures Board Rule 1 (48 CFR 6101.1). be true. If a party so elects, the panel are at the panel’s discretion, with the Voluminous attachments may be filed will to the extent practicable allow a goal of promptly, justly, and finally separately in electronic media as if response. FEMA shall efile its response resolving the dispute, and need not under Board Rule 4(b)(1) and (3) (48 to an arbitration request within 30 involve traditional witness examination CFR 6101.4(b)(1) and (3)). The Clerk of calendar days after receiving the or cross-examination. Parties should not the Board will acknowledge an docketing notice. A panel may not offer fact witnesses to read legal arbitration request by emailing the exclude as untimely evidence proffered materials or to make legal arguments. parties a docketing notice. before arbitration closes under Rule 613. Statements of fact in a hearing need not A panel may consider the timing or be sworn but are made subject to 6106.605 Parties; representation; email surprise nature of evidence when service [Rule 605]. penalty for violation of 18 U.S.C. 1001. assessing the significance, credibility, or Live hearings are not public and may The parties to an arbitration are the probative value of the evidence. applicant, the grantee (if not the not be recorded by any means without applicant), and FEMA. Each party shall 6106.609 Other materials considered; ex the Board’s permission. The Board may have one primary representative. This parte communications [Rule 609]. have a live hearing transcribed for the person need not be an attorney but must Written or oral arguments or panel’s use. If a transcript is made, a be authorized by law, formal delegation, statements of experts as to how a panel party may purchase a copy and has 7 or permission of the arbitrators to speak should understand evidence or apply calendar days after a copy is available and act for the party in the arbitration. the law are not evidence but may be to efile proposed corrections.

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6106.612 Streamlined procedures [Rule SUMMARY: NMFS is adjusting the reasonable opportunity to harvest the 612]. Swordfish General Commercial permit ICCAT-recommended quota. The Board encourages parties to focus retention limits for the Northwest In 2017, ICCAT Recommendation 17– on providing only the information a Atlantic, Gulf of Mexico, and U.S. 02 specified that the overall North panel needs to resolve an eligibility or Caribbean regions for July through Atlantic swordfish total allowable catch repayment dispute. Examples of December of the 2019 fishing year, (TAC) be set at 9,925 metric tons (mt) streamlining may include without unless otherwise later noticed. The dressed weight (dw) (13,200 mt whole limitation— Swordfish General Commercial permit weight (ww)) through 2021. Consistent (a) Electing not to supplement the retention limits in each of these regions with scientific advice, this was a materials already provided to FEMA, if are increased from the regulatory default reduction of 500 mt ww (375.9 mt dw) (or to the extent) the existing record limits (either two or three fish) to six from previous ICCAT-recommended adequately frames the dispute; swordfish per vessel per trip. The TACs. However, the United States’ (b) Relying when possible on Swordfish General Commercial permit baseline quota remained at 2,937.6 mt documents over other types of evidence; retention limit in the Florida Swordfish dw (3,907 mt ww) per year. The (c) Simplifying live hearings by efiling Management Area will remain Recommendation (17–02) also in advance written testimony, reports, unchanged at the default limit of zero continued to limit underharvest or opening statements by some swordfish per vessel per trip, as carryover to 15 percent of a contracting witnesses or party representatives; discussed in more detail below. These party’s baseline quota. Thus, the United (d) Refraining from objecting to adjustments apply to Swordfish General States may carry over a maximum of evidence without good cause; and Commercial permitted vessels and to 440.6 mt dw (586.0 mt ww) of (e) Omitting duplicative and Highly Migratory Species (HMS) underharvest. Absent adjustments, the immaterial evidence and arguments. Charter/Headboat permitted vessels codified baseline quota is 2,937.6 mt dw 6106.613 Decision; finality [Rule 613]. with a commercial endorsement when for 2019. At this time, given the extent of underharvest in 2018, NMFS The panel will advise the parties on a non-for-hire trip. This action is anticipates carrying over the maximum when the arbitration is closed. The based upon consideration of the allowable 15 percent (440.6 mt dw), panel will resolve a dispute within 60 applicable inseason regional retention limit adjustment criteria. which would result in a final adjusted calendar days thereafter unless the North Atlantic swordfish quota for the panel advises the parties that the Board DATES: The adjusted Swordfish General 2019 fishing year equal to 3,378.2 mt dw Chair approves a later date. The panel’s Commercial permit retention limits in (2,937.6 + 440.6 = 3,378.2 mt dw). As in decision may be issued in writing or the Northwest Atlantic, Gulf of Mexico, past years we anticipate allocating 50 mt orally with transcription. A decision is and U.S. Caribbean regions are effective dw from the adjusted quota to the primarily for the parties, is not from July 1, 2019, through December 31, Reserve category for inseason precedential, and should concisely 2019. adjustments/research and allocating 300 resolve the dispute. The decision of a FOR FURTHER INFORMATION CONTACT: Rick mt dw to the Incidental category, which panel majority is the final includes recreational landings and administrative action on the arbitrated Pearson or Randy Blankinship, 727– 824–5399. landings by incidental swordfish permit dispute and is judicially reviewable holders, consistent with only to the limited extent provided by SUPPLEMENTARY INFORMATION: § 635.27(c)(1)(i)(D) and (B). This would the Federal Arbitration Act (9 U.S.C. Regulations implemented under the result in an adjusted quota of 3,028.2 mt 10). Within 30 calendar days after authority of the Atlantic Tunas dw for the directed fishery, which issuing a decision, a panel may correct Convention Act (ATCA; 16 U.S.C. 971 et would be split equally (1,514.1 mt dw) clerical, typographical, technical, or seq.) and the Magnuson-Stevens Fishery between the two semi-annual periods in arithmetic errors. A panel may not Conservation and Management Act 2019 (January through June, and July reconsider the merits of its decision (Magnuson-Stevens Act; 16 U.S.C. 1801 through December). resolving an eligibility or repayment et seq.) governing the harvest of North dispute. Atlantic swordfish by persons and Adjustment of Swordfish General Commercial Permit Vessel Retention [FR Doc. 2019–13081 Filed 6–20–19; 8:45 am] vessels subject to U.S. jurisdiction are Limits BILLING CODE 6820–AL–P found at 50 CFR part 635. Section 635.27 subdivides the U.S. North The 2019 North Atlantic swordfish Atlantic swordfish quota recommended fishing year, which is managed on a DEPARTMENT OF COMMERCE by the International Commission for the calendar-year basis and divided into Conservation of Atlantic Tunas (ICCAT) two equal semi-annual quotas for the National Oceanic and Atmospheric and implemented by the United States directed fishery, began on January 1, Administration into two equal semi-annual directed 2019. Landings attributable to the fishery quotas; an annual incidental Swordfish General Commercial permit 50 CFR Part 635 catch quota for fishermen targeting other count against the applicable semi- species or catching swordfish annual directed fishery quota. Regional [Docket No. 120627194–3657–02] recreationally, and a reserve category, default retention limits for this permit RIN 0648–XT002 according to the allocations established have been established and are in the 2006 Consolidated Atlantic automatically effective from January 1 Atlantic Highly Migratory Species; Highly Migratory Species Fishery through December 31 each year, unless North Atlantic Swordfish Fishery Management Plan (2006 Consolidated changed based on the inseason regional AGENCY: National Marine Fisheries Atlantic HMS FMP) (71 FR 58058, retention limit adjustment criteria at Service (NMFS), National Oceanic and October 2, 2006), as amended, and in § 635.24(b)(4)(iv). The default retention Atmospheric Administration (NOAA), accordance with implementing limits established for the Swordfish Commerce. regulations. NMFS is required under General Commercial permit are: (1) ATCA and the Magnuson-Stevens Act to Northwest Atlantic region—three ACTION: Temporary rule. provide U.S. fishing vessels with a swordfish per vessel per trip; (2) Gulf of

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Mexico region—three swordfish per same limits that were implemented estimated ability of vessels participating vessel per trip; (3) U.S. Caribbean through an inseason adjustment for the in the fishery to land the amount of region—two swordfish per vessel per period January 1 through June 31, 2019 swordfish quota available before the end trip; and, (4) Florida Swordfish (83 FR 65571, December 21, 2018). of the fishing year, § 635.24(b)(4)(iv)(B), Management Area—zero swordfish per Given the rebuilt status of the stock and NMFS reviewed electronic dealer vessel per trip. The default retention the availability of quota, increasing the landings data, which indicates that limits apply to Swordfish General Swordfish General Commercial permit sufficient directed swordfish quota will Commercial permitted vessels and to retention limits in three regions to six be available for the July through HMS Charter/Headboat permitted fish per vessel per trip will increase the December 2019 semi-annual quota vessels with a commercial endorsement likelihood that directed swordfish period if recent swordfish landing when fishing on non-for-hire trips. As a landings will approach, but not exceed, trends continue. The directed swordfish condition of these permits, vessels may the available annual swordfish quota, quota has not been harvested for several not possess, retain, or land any more and increase the opportunity for years and, based upon current landing swordfish than is specified for the catching swordfish during the 2019 trends, is not likely to be harvested or region in which the vessel is located. fishing year. exceeded in 2019. As of April 30, 2019, Under § 635.24(b)(4)(iii), NMFS may In 2018, a six swordfish per vessel approximately 8.5 percent (258.9 mt increase or decrease the Swordfish trip limit was in effect for Swordfish ww) of the anticipated 3,028.2 mt dw General Commercial permit vessel General Commercial permit holders in annual adjusted directed swordfish retention limit in any region within a the Northwest Atlantic, Gulf of Mexico, quota for 2019 had been harvested range from zero to a maximum of six and U.S. Caribbean regions for the entire during the first semi-annual quota swordfish per vessel per trip. Any fishing season. As of December 31, period. Based upon recent landings adjustments to the retention limits must 2018, total annual directed swordfish rates from dealer reports, an increase in be based upon a consideration of the landings were approximately 901.0 mt the vessel retention limits to six fish for relevant criteria provided in dw, or 29.8 percent of the 3,028.2 mt dw Swordfish General Commercial permit § 635.24(b)(4)(iv), which include: (A) annual adjusted directed quota for 2018, holders and Charter/Headboat permit The usefulness of information obtained which includes landings under the six holders with a commercial endorsement from biological sampling and fish trip limit. (when on a non-for-hire trip) in three monitoring of the North Atlantic Among the regulatory criteria for regions is not likely to cause quotas for swordfish stock; (B) the estimated inseason adjustments to retention limits, other categories of the fishery to be ability of vessels participating in the and given the rebuilt status of the stock exceeded. See § 635.24(b)(4)(iv)(C). fishery to land the amount of swordfish and availability of quota, is the Similarly, regarding the criteria about quota available before the end of the requirement that NMFS consider the the effects of catch rates in one region ‘‘effects of the adjustment on fishing year; (C) the estimated amounts precluding vessels in another region accomplishing the objectives of the by which quotas for other categories of from having a reasonable opportunity to fishery management plan and its the fishery might be exceeded; (D) harvest a portion of the overall amendments.’’ See § 635.24(b)(4)(iv)(D). effects of the adjustment on swordfish quota, § 635.24(b)(4)(iv)(F), A consideration in deciding whether to accomplishing the objectives of the we expect there to be sufficient increase the retention limit, in this case, fishery management plan and its swordfish quota for the entirety of the is the objective of providing amendments; (E) variations in seasonal 2019 fishing year. Thus, increased catch distribution, abundance, or migration opportunities to harvest the full North rates in these three regions as a result of patterns of swordfish; (F) effects of catch Atlantic directed swordfish quota this action would not be expected to rates in one region precluding vessels in without exceeding it based upon the preclude vessels in the other region another region from having a reasonable 2006 Consolidated Atlantic HMS FMP (e.g., the buoy gear fishery in the Florida opportunity to harvest a portion of the goal to, consistent with other objectives Swordfish Management Area) from overall swordfish quota; and, (G) review of this FMP, ‘‘manage Atlantic HMS having a reasonable opportunity to of dealer reports, landing trends, and fisheries for continuing optimum yield harvest a portion of the overall the availability of swordfish on the so as to provide the greatest overall swordfish quota. fishing grounds. benefit to the Nation, particularly with NMFS has considered these criteria as respect to food production, providing In making adjustments to the discussed below and their applicability recreational opportunities, preserving retention limits NMFS must also to the Swordfish General Commercial traditional fisheries, and taking into consider variations in seasonal permit retention limit in all regions for account the protection of marine distribution, abundance, or migration July through December of the 2019 ecosystems.’’ This action will help patterns of swordfish, and the North Atlantic swordfish fishing year. preserve a traditional swordfish availability of swordfish on the fishing We have determined that the Swordfish handgear fishery (rod and reel, grounds. See § 635.24(b)(4)(iv)(G). With General Commercial permit retention handline, harpoon, bandit gear, and regard to swordfish abundance, the 2018 limits in the Northwest Atlantic, Gulf of green-stick). Although this action does report by ICCAT’s Standing Committee Mexico, and U.S. Caribbean regions not specifically provide recreational on Research and Statistics indicated that applicable to persons issued a fishing opportunities, it will have a the North Atlantic swordfish stock is Swordfish General Commercial permit minimal impact on the recreational not overfished (B2015/Bmsy = 1.04), and or HMS Charter/Headboat permit with a sector because recreational landings are overfishing is not occurring (F2015/Fmsy = commercial endorsement (when on a counted against a separate incidental 0.78). Increasing retention limits for the non-for-hire trip) should be increased swordfish quota. General Commercial directed fishery is from the default levels that would NMFS has examined dealer reports not expected to affect the swordfish otherwise automatically become and landing trends and determined that stock status determination because any effective on July 1, 2019, to six the information obtained from biological additional landings would be within the swordfish per vessel per trip from July sampling and monitoring of the North ICCAT-recommended U.S. North 1 through December 31, 2019, unless Atlantic swordfish stock is useful. See Atlantic swordfish quota allocation, otherwise later noticed. These are the § 635.24(b)(4)(iv)(A). Regarding the which is consistent with conservation

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and management measures to prevent December 31, 2019, at the higher subscribed to the Atlantic HMS News overfishing on the stock. Increasing retention levels, within the limits of the electronic newsletter, and updating the opportunities by increasing retention scientifically-supported TAC and information posted on the ‘‘News and limits from the default levels beginning consistent with the goals of the 2006 Announcements’’ website at https:// on July 1, 2019, is also important Consolidated Atlantic HMS FMP as www.fisheries.noaa.gov/news-and- because of the migratory nature and amended, ATCA, and the Magnuson- announcements (filter by ‘‘Atlantic seasonal distribution of swordfish. In a Stevens Act, and are not expected to Highly Migratory Species’’ under particular geographic region, or waters negatively impact stock health. ‘‘Topic’’). Delays in temporarily accessible from a particular port, the Monitoring and Reporting increasing these retention limits caused amount of fishing opportunity for by the time required to publish a swordfish may be constrained by the NMFS will continue to monitor the proposed rule and accept public short amount of time that the swordfish swordfish fishery closely during 2019 are present in the area as they migrate. through mandatory landings and catch comment would adversely and Finally, another consideration, reports. Dealers are required to submit unnecessarily affect those Swordfish consistent with the FMP and its landing reports and negative reports (if General Commercial permit holders and amendments, is to continue to provide no swordfish were purchased) on a HMS Charter/Headboat permit holders protection to important swordfish weekly basis. with a commercial endorsement (when nursery areas and migratory corridors. Depending upon the level of fishing on a non-for-hire trip) that would Therefore, NMFS has determined that effort and catch rates of swordfish, otherwise have an opportunity to the retention limit for the Swordfish NMFS may determine that additional harvest more than the otherwise General Commercial permit will remain retention limit adjustments or closures applicable lower default retention limits at zero swordfish per vessel per trip in are necessary to ensure that the of three swordfish per vessel per trip in the Florida Swordfish Management Area available quota is not exceeded or to the Northwest Atlantic and Gulf of at this time. As discussed above, NMFS enhance fishing opportunities. Mexico regions, and two swordfish per considered consistency with the 2006 Subsequent actions, if any, will be vessel per trip in the U.S. Caribbean HMS FMP and its amendments, and the published in the Federal Register. In region. Limiting opportunities to harvest importance for NMFS to continue to addition, fishermen may access https:// available directed swordfish quota may www.fisheries.noaa.gov/atlantic-highly- provide protection to important have negative social and economic migratory-species/2019-atlantic- swordfish nursery areas and migratory impacts for U.S. fishermen. Adjustment corridors. As described in Amendment swordfish-landings-updates for updates of the retention limits needs to be 8 to the 2006 Consolidated Atlantic on quota monitoring. effective on July 1, 2019, to allow HMS FMP (78 FR 52011, August 21, Classification 2013), the area off the southeastern coast Swordfish General Commercial permit of Florida, particularly the Florida The Assistant Administrator for holders and HMS Charter/Headboat Straits, contains oceanographic features NMFS (AA) finds that it is impracticable permit holders with a commercial that make the area biologically unique. and contrary to the public interest to endorsement (when on a non-for-hire It provides important juvenile swordfish provide prior notice of, and an trip) to benefit from the adjustment habitat, and is essentially a narrow opportunity for public comment on, this during the relevant time period, which migratory corridor containing high action for the following reasons: could pass by for some fishermen who concentrations of swordfish located in The regulations implementing the have access to the fishery during a short close proximity to high concentrations 2006 Consolidated Atlantic HMS FMP, time period because of seasonal fish of people who may fish for them. Public as amended, provide for inseason migration, if the action is delayed for comment on Amendment 8, including retention limit adjustments to respond notice and public comment. from the Florida Fish and Wildlife to changes in swordfish landings, the Furthermore, the public was given an Conservation Commission, indicated availability of swordfish on the fishing opportunity to comment on the concern about the resultant high grounds, the migratory nature of this underlying rulemakings, including the species, and regional variations in the potential for the improper rapid growth adoption of the North Atlantic fishery. Based on available swordfish of a commercial fishery, increased swordfish U.S. quota, and the retention quota, stock abundance, fishery catches of undersized swordfish, the limit adjustments in this action would performance in recent years, and the potential for larger numbers of not have any additional effects or fishermen in the area, and the potential availability of swordfish on the fishing impacts since the retention limit does for crowding of fishermen, which could grounds, among other considerations, not affect the overall quota. Thus, there lead to gear and user conflicts. These adjustment to the Swordfish General concerns remain valid. NMFS will Commercial permit retention limits would be little opportunity for continue to collect information to from the default levels of two or three meaningful input and review with evaluate the appropriateness of the fish to six swordfish per vessel per trip public comment on this action. retention limit in the Florida Swordfish as discussed above is warranted, while Therefore, the AA finds good cause Management Area and other regional maintaining the default limit of zero- under 5 U.S.C. 553(b)(B) to waive prior retention limits. This action therefore fish retention in the Florida Swordfish notice and the opportunity for public maintains a zero-fish retention limit in Management Area. Analysis of available comment. For all of the above reasons, the Florida Swordfish Management data shows that adjustment to the there is also good cause under 5 U.S.C. Area. swordfish retention limit from the 553(d) to waive the 30-day delay in The directed swordfish quota has not default levels would result in minimal effectiveness. been harvested for several years and, risk of exceeding the ICCAT-allocated This action is being taken under 50 based upon current landing trends, is quota. CFR 635.24(b)(4) and is exempt from not likely to be harvested or exceeded NMFS provides notification of review under Executive Order 12866. during 2019. This information indicates retention limit adjustments by that sufficient directed swordfish quota publishing the notice in the Federal Authority: 16 U.S.C. 971 et seq. and 1801 should be available from July 1 through Register, emailing individuals who have et seq.

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Dated: June 18, 2019. SUPPLEMENTARY INFORMATION: NMFS Classification Jennifer M. Wallace, manages the groundfish fishery in the This action responds to the best Acting Director, Office of Sustainable BSAI according to the Fishery available information recently obtained Fisheries, National Marine Fisheries Service. Management Plan for Groundfish of the from the fishery. The Assistant [FR Doc. 2019–13222 Filed 6–20–19; 8:45 am] Bering Sea and Aleutian Islands Administrator for Fisheries, NOAA BILLING CODE 3510–22–P Management Area (FMP) prepared by (AA), finds good cause to waive the the North Pacific Fishery Management requirement to provide prior notice and Council under authority of the opportunity for public comment DEPARTMENT OF COMMERCE Magnuson-Stevens Fishery pursuant to the authority set forth at 5 Conservation and Management Act. U.S.C. 553(b)(B) as such requirement is National Oceanic and Atmospheric Regulations governing fishing by U.S. Administration impracticable and contrary to the public vessels in accordance with the FMP interest. This requirement is appear at subpart H of 50 CFR part 600 50 CFR Part 679 impracticable and contrary to the public and 50 CFR part 679. interest as it would prevent NMFS from [Docket No. 180713633–9174–02] The 2019 Kamchatka flounder ITAC responding to the most recent fisheries RIN 0648–XH066 in the BSAI is 4,250 metric tons (mt) as data in a timely fashion and would established by the final 2019 and 2020 delay the closure of Kamchatka flounder Fisheries of the Exclusive Economic harvest specifications for groundfish in to directed fishing in the BSAI. NMFS Zone Off Alaska; Kamchatka Flounder the BSAI (84 FR 9000, March 13, 2019). was unable to publish a notice in the Bering Sea and Aleutian Islands In accordance with § 679.20(d)(1)(i), the providing time for public comment Management Area Administrator, Alaska Region, NMFS because the most recent, relevant data (Regional Administrator), has only became available as of June 14, AGENCY: National Marine Fisheries 2019. Service (NMFS), National Oceanic and determined that the 2019 Kamchatka flounder ITAC in the BSAI will soon be The AA also finds good cause to Atmospheric Administration (NOAA), waive the 30-day delay in the effective Commerce. reached. Therefore, the Regional Administrator is establishing a directed date of this action under 5 U.S.C. ACTION: Temporary rule; closure. fishing allowance of 2,000 mt, and is 553(d)(3). This finding is based upon the reasons provided above for waiver of SUMMARY: NMFS is prohibiting directed setting aside the remaining 2,250 mt as incidental catch to support other prior notice and opportunity for public fishing for Kamchatka flounder in the comment. Bering Sea and Aleutian Islands anticipated groundfish fisheries. In This action is required by § 679.20 management area (BSAI). This action is accordance with § 679.20(d)(1)(iii), the and is exempt from review under necessary to prevent exceeding the 2019 Regional Administrator finds that this Executive Order 12866. Kamchatka flounder initial total directed fishing allowance has been allowable catch (ITAC) in the BSAI. reached. Consequently, NMFS is Authority: 16 U.S.C. 1801 et seq. DATES: Effective 1200 hours, Alaska prohibiting directed fishing for Dated: June 17, 2019. local time (A.l.t.), June 18, 2019, Kamchatka flounder in the BSAI. Jennifer M. Wallace, through 2400 hours, A.l.t., December 31, While this closure is effective the Acting Director, Office of Sustainable 2019. maximum retainable amounts at Fisheries, National Marine Fisheries Service. FOR FURTHER INFORMATION CONTACT: § 679.20(e) and (f) apply at any time [FR Doc. 2019–13192 Filed 6–18–19; 4:15 pm] Steve Whitney, 907–586–7228. during a trip. BILLING CODE 3510–22–P

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Proposed Rules Federal Register Vol. 84, No. 120

Friday, June 21, 2019

This section of the FEDERAL REGISTER User Notice at https:// authority to take formal enforcement contains notices to the public of the proposed www.regulations.gov, please submit the actions against 7(a) Lenders. Those issuance of rules and regulations. The information to Office of Credit Risk actions currently include, but are not purpose of these notices is to give interested Management, Office of Capital Access, limited to, portfolio guaranty dollar persons an opportunity to participate in the Small Business Administration, 409 limits, delegated authority suspensions, rule making prior to the adoption of the final rules. Third Street SW, Washington, DC program suspensions, and program 20416. You are requested to highlight revocations. To further strengthen 7(a) the information that you consider to be Loan Program supervision, the Act SMALL BUSINESS ADMINISTRATION CBI and explain why you believe SBA provided authority for SBA to assess should hold this information as civil monetary penalties (‘‘CMPs’’) 13 CFR Parts 120 and 134 confidential. SBA will review the against 7(a) Lenders. The Act also RIN 3245–AH05 information and make the final provided several other provisions that determination on whether it will support SBA’s ability to perform Implementation of the Small Business publish the information. effective 7(a) Loan Program supervision. 7(a) Lending Oversight Reform Act of FOR FURTHER INFORMATION CONTACT: SBA’s lender oversight regulations are 2018 Bethany Shana, Office of Credit Risk codified in 13 CFR part 120, subpart I Management, Office of Capital Access, (13 CFR 120.1000 through 120.1600). AGENCY: U.S. Small Business Small Business Administration, 409 3rd The recent legislation required SBA to Administration. Street SW, Washington, DC 20416; promulgate regulations to implement ACTION: Proposed rule. telephone: (202) 205–6402; email: certain provisions in the Act. [email protected]. Accordingly, SBA is publishing this SUMMARY: On June 21, 2018, Congress SUPPLEMENTARY INFORMATION: notice of proposed rulemaking to enacted the Small Business 7(a) Lending implement the legislation and is also Oversight Reform Act of 2018, (‘‘Act’’). I. Background and History proposing to update its lender oversight The purpose of the legislation was to SBA is authorized under Sections 7(a) regulations. The updates would include increase the Small Business and 7(m) of the Small Business Act and technical corrections and clarifications Administration’s (‘‘SBA’’ or ‘‘Agency’’) Title V of the Small Business to better inform lenders and to oversight capabilities and to ensure the Investment Act of 1958 to conduct small strengthen enforcement. In keeping with integrity of the 7(a) Loan Program. The business loan programs. 15 U.S.C. the purpose of the Act to increase SBA’s Act contains several new and 636(a) and (m) and 695 et seq. SBA’s oversight capabilities to ensure the strengthened authorities. Section 3 of business loan programs provide critical integrity of the business loan programs the Act requires SBA to promulgate access to credit for America’s small while protecting taxpayer dollars, and regulations to implement certain of the businesses, bridging the lending gap because SBA’s 7(a) oversight framework Act’s provisions. SBA is proposing this that exists in the market for our nation’s is generally interwoven with that of the rule to implement the Act and to update smallest companies. Along with the 504 Loan Program and Microloan the Agency’s regulations on supervision authority to offer government Program, SBA is proposing to extend of all lenders participating in SBA’s guarantees, Congress provided SBA the some of the updates to Certified business loan programs. authority to supervise lenders Development Companies (‘‘CDCs’’) in DATES: SBA must receive comments to participating in these programs. 15 the 504 Loan Program and Microloan the proposed rule on or before August U.S.C. 634, 636, 650, and 697. Intermediaries (‘‘Intermediaries’’) in the 20, 2019. Growth in SBA 7(a) lending prompted Microloan Program. A summary of key ADDRESSES: You may submit comments, Congress to undertake a thorough aspects of the proposed rule and a identified by RIN: 3245–AH05, by any examination of the tools available at section-by-section analysis follows. of the following methods: SBA to ensure that comprehensive II. Summary of Key Aspects of the • Federal eRulemaking Portal: oversight is accomplished.1 Following Proposal https://www.regulations.gov. Follow the that review, Congress enacted the Small instructions for submitting comments. Business 7(a) Lending Oversight Reform The following is a summary of key • Mail: Bethany Shana, Office of Act of 2018, Public Law 115–189 (June provisions in the proposed rule. For a Credit Risk Management, Office of 21, 2018) (the ‘‘Act’’). The Act more detailed discussion of the proposal Capital Access, Small Business strengthened SBA’s 7(a) Lender and each regulation, see the section-by- Administration, 409 Third Street SW, supervision authorities and the office section analysis. Washington, DC 20416. charged with that responsibility, SBA’s A. Codification of Informal • Hand Delivery/Courier: Bethany Office of Credit Risk Management Enforcement Tools (7(a) Lenders). Shana, Office of Credit Risk (‘‘OCRM’’). The legislation codified Public Law 115–189 requires SBA to Management, Office of Capital Access, SBA’s authority to take informal incorporate into SBA regulations SBA’s Small Business Administration, 409 enforcement actions against 7(a) informal enforcement tools for 7(a) Third Street SW, Washington, DC Lenders, which currently includes, for Lenders. Such enforcement tools or 20416. example, supervisory letters, Board of actions currently include, for example, SBA will post all comments on Directors (‘‘Board’’) resolutions, and supervisory letters and agreements (e.g., https://www.regulations.gov. If you wish agreements. It also codified SBA’s broad voluntary withdrawal agreements and to submit confidential business voluntary agreements for immediate information (‘‘CBI’’), as defined in the 1 H. Rep. No. 115–655 at 6 (2018). suspension of secondary market sales).

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Proposed § 120.1300 would set forth formal enforcement action would therefore, codified in the legislation a SBA’s proposed regulation on informal remain in effect pending resolution of new definition of credit elsewhere, enforcement actions for 7(a) Lenders. It the appeal, which is consistent with the clarifying many of the factors utilized in would identify the key informal effect of appeals of secondary market the definition. The new definition of enforcement actions that SBA may suspension or revocation actions under credit elsewhere realigns the test to undertake. While most of the actions current § 120.660. The proposed rule ensure it is based on a borrower’s ability listed are not new and are currently in would also amend affected provisions in to obtain credit, rather than a lender’s SBA’s Standard Operating Procedure 13 CFR 134.102 and 134.205. Any ability to offer credit. The proposed rule (‘‘SOP’’) 50 53, Lender Supervision and further revision to part 134, if needed, would update 13 CFR 120.101 to Enforcement,2 the proposed rule would be contained in a separate conform the section to changes in the includes a few changes to the list as rulemaking. definition of credit elsewhere contained further discussed in the section-by- D. Microloan Intermediary in the new legislation. section analysis. Proposed § 120.1300 Enforcement (Intermediaries). Under F. Other Technical Amendments, would also include the circumstances SBA’s Microloan Program, SBA makes Updates, and Clarifications (SBA that SBA would consider in choosing to direct loans to Intermediaries, the Lenders and Intermediaries). The take informal action instead of formal proceeds of which are used to fund proposed rule would contain other action. The circumstances proposed loans to small business microloan technical amendments, updates, and would be largely the same as those that borrowers. The lending arrangement clarifications: for example, the 13 CFR are currently in SOP 50 53. between SBA and the Intermediary is 120.10 definition for ‘‘Federal Financial B. Civil Monetary Penalties (7(a) memorialized in a Loan Authorization Institution Regulator’’ would be updated Lenders). Congress reviewed the types and Agreement, Promissory Note, to delete reference to the Office of Thrift of actions that SBA could take and Security Agreement, and related Supervision as this agency has been found that ‘‘missing from OCRM’s documents. SBA can take action against abolished and merged into the Office of toolbox is the ability to apply a civil an Intermediary under the Promissory the Comptroller of the Currency and monetary penalty’’ against all 7(a) Note and against SBA’s collateral for other Federal banking agencies. 12 Lenders.3 Congress, therefore, defaults, including but not limited to, U.S.C. 5412 and 5413. The definition for established in the legislation general non-compliance with SBA loan program ‘‘Loan Program Requirements’’ would be authority to impose civil monetary requirements. SBA also makes grants to clarified to apply to Intermediaries. In penalties (‘‘CMPs’’) against 7(a) Lenders. Intermediaries and can take action addition, SBA would delete reference to This authority is in addition to the against Intermediaries under applicable Non-lending Technical Assistance limited authority that Congress granted grant law. In addition, SBA may take Providers (‘‘NTAPs’’) throughout SBA’s SBA in 2004 to assess CMPs against formal enforcement action against oversight regulations, as SBA has not SBA Supervised Lenders for reporting Intermediaries under § 120.1540. The issued technical assistance grants to failures.4 The general authority granted grounds for formal enforcement action NTAPs in many years and technical by the new legislation authorizes SBA to against Intermediaries are set forth in 13 assistance grants are currently made to assess CMPs against a 7(a) Lender of up CFR 120.1425. The proposed rule would Intermediaries. SBA would also clarify to $250,000. Proposed § 120.1500(b)(2) clarify § 120.1425 by regrouping some of in § 120.1000 that risk-based oversight would set forth SBA’s general authority the grounds and specifying other includes monitoring. In addition, SBA to impose CMPs against 7(a) Lenders. grounds consistent with those would update and clarify proposed Under the proposed regulation, CMPs applicable to 7(a) Lenders and CDCs § 120.1400(c)(9) to better inform SBA would be assessed in an amount not to (together, ‘‘SBA Lenders’’). It would also Lenders that their failure to properly exceed the maximum published in the clarify § 120.1540, which covers types of oversee the activity of their respective Federal Register from time to time, to formal enforcement actions against Agents increases SBA’s financial risk. allow for annual inflation adjustments Intermediaries. In particular, the Supervisory concern with lender failure as required by section 701 of the Federal proposed § 120.1540 update would to effectively monitor third-party Civil Penalties Inflation Adjustment Act specify that SBA can undertake activities has been increasing as Improvements Act of 2015, Public Law immediate suspension against an financial institutions rely more heavily 114–74 (November 2, 2015).5 Intermediary, which may include but is on third-party assistance. not limited to the authority to make, Assessment of CMPs would assist in III. Section-by-Section Analysis protecting the integrity of the 7(a) Loan service, liquidate, and/or litigate SBA Program. microloans and to freeze an A. Section 120.10—Definitions. C. OHA Appeals (7(a) Lenders). The Intermediary’s Microloan Revolving Proposed § 120.10 would update the new legislation also provided 7(a) Fund and Loan Loss Reserve Fund definition of ‘‘Federal Financial Lenders the ability to appeal most accounts. It would also clarify that Institution Regulator’’ to reflect enforcement actions to either Federal program revocations may include elimination of the Office of Thrift district court or SBA’s Office of portfolio surrender. In addition, the Supervision. SBA would also update the Hearings and Appeals (‘‘OHA’’). This proposed rule would remove a few definition of the ‘‘Lender Oversight provision is contained in proposed provisions that are covered elsewhere Committee’’ to reference that §§ 120.1300(c) and 120.1600(a)(5). for Intermediaries. membership and duties are derived SBA’s decision on the informal or E. Credit Elsewhere (SBA Lenders). from the Small Business Act, that the Congress in the new legislation sought committee meets quarterly, and that it 2 Available at https://www.sba.gov/document/ to update and modernize SBA’s votes on formal enforcement action sop-50-53-lender-supervision-and-enforcement. ‘‘foundational test’’ of eligibility (i.e., recommendations. In addition, SBA 3 H. Rep. No. 115–655 at 14 (2018). that the small business applicant cannot would clarify that the term ‘‘Loan 4 See, 15 U.S.C. 650(j). obtain the credit elsewhere on Program Requirements’’ may also be 5 CMP maximums for SBA Supervised Lender reasonable terms without the referred to as ‘‘SBA Loan Program reporting failures also would be published in the 6 Federal Register to allow for the required annual government guaranty). Congress, Requirements’’, would include Federal inflation adjustments. See proposed Register notices and applicable § 120.1500(c)(4). 6 H. Rep. No. 115–655 at 15 (2018). government-wide regulations in the

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definition, and would extend the that Intermediaries, in addition to 7(a) rule would update this section to definition to Intermediaries. Lenders and CDCs, are expected to remove references to NTAPs, as SBA B. Section 120.101—Credit Not comply with Loan Program has not issued technical assistance Available Elsewhere. One of the primary Requirements and are covered by this grants to NTAPs in many years. goals of the new legislation is to ensure regulation. Technical assistance in the Microloan that the credit elsewhere test is being D. Section 120.1000—Risk-Based Program is being administered directly applied correctly and consistently by Lender Oversight; § 120.1010—SBA by Intermediaries. lenders and that it is being Access to SBA Lender and Intermediary G. Section 120.1300—Informal appropriately verified by SBA.7 The Files; § 120.1015—Risk Rating System; Enforcement Actions—7(a) Lenders. The proposed rule would codify in SBA’s § 120.1025—Monitoring; § 120.1050— proposed rule would create a new credit elsewhere regulation the new Reviews and Examinations; and section, § 120.1300, to codify SBA’s definition for credit elsewhere as § 120.1051—Frequency of Reviews and informal enforcement actions for 7(a) contained in the legislation. Under Exams. The proposed rule would Lenders as required by the Act. § 120.101 as proposed, credit elsewhere update these sections to remove Proposed new § 120.1300 would include would mean that credit is unavailable to references to NTAPs, as SBA has not a list of informal enforcement actions. the small business applicant on issued technical assistance grants to The proposed list would be similar to reasonable terms and conditions from NTAPs in many years. Technical that currently contained in SOP 50 53, non-Federal, non-State, and non-local assistance in the Microloan Program is with the addition of mandatory training government sources without SBA being administered directly by and the removal of the headquarters assistance, taking into consideration Intermediaries. meeting. SBA believes mandatory factors associated with conventional E. Section 120.1055—Review and training would be a good addition to its lending practices, including: (i) The Examination Results. The Act provides informal tools, one that could assist business industry of the loan applicant; that a 7(a) Lender’s response to an exam lenders to efficiently and effectively (ii) whether the loan applicant has been or review is due no later than 45 resolve deficiencies and compliance in operation 2 years or less; (iii) the business days after receiving the report issues. While SBA has found that a adequacy of collateral available to from SBA. Currently, 13 CFR 120.1055 headquarters meeting can be a very secure the loan; (iv) the loan term provides 7(a) Lenders, CDCs, and effective oversight tool, such meetings necessary to reasonably assure Intermediaries 30 calendar days to are generally conducted during (and repayment of the loan from business respond. Legislative history indicates more aligned with) the earlier cash flow; and (v) any other factor that this provision was intended to supervision phases of Monitoring or relating to the particular loan extend the response timeframe. Increased Supervision. Accordingly, the application that cannot be overcome Proposed § 120.1055 would revise the proposed regulation on informal except through obtaining a Federal loan timeframe from 30 calendar days to 45 enforcement actions would not include guarantee under prudent lending calendar days. The revision would a headquarters meeting. If this change standards. Examples of ‘‘other factors extend the time consistent with the becomes final, SBA would amend SOP relating to the particular loan statute and would be based on calendar 50 53 to move headquarters meetings to application’’ may include, but would days for ease of calculation. If a lender the Monitoring/Increased Supervision not be limited to, management needs additional time, the lender may chapters. In addition, proposed experience, leverage ratio, global request the time and SBA could § 120.1300 would describe the types of cashflow, loan size relative to the age of authorize it, as warranted. The proposed informal enforcement actions listed. the business, or the personal resources rule would clarify when a lender Finally, it would discuss the of the owners of the business, and must receives a report for purposes of this circumstances in which SBA is likely to be specifically explained and regulation (i.e., it is considered received take informal enforcement action (e.g., documented with relevant supporting on the date it is emailed to the last when problems are narrow in scope, are documentation in the lender’s credit known email address for the SBA correctible, and SBA is confident of the memorandum. Section 120.101 as Lender or Intermediary, unless the SBA 7(a) Lender’s Board and management revised would continue to apply to all Lender or Intermediary can provide commitment and ability to correct such SBA Lenders, including CDCs. compelling evidence that it was problems; where violations are less C. Section 120.180—Compliance with received on a different date). Proposed frequent or less severe but still warrant Loan Program Requirements. Sections 3 revisions to § 120.1055 would also enforcement; or while SBA more fully and 4 of the Act provide that SBA is to codify SBA’s 90-day timeframe for assesses risk). These proposed oversee compliance with SBA Loan lenders to implement corrective actions. circumstances are, for the most part, set Program Requirements, including credit The proposed rule would include forth in SBA’s current procedures. elsewhere. SBA is proposing revisions flexibility to allow for a longer or Finally, § 120.1300 would implement to 13 CFR 120.180 to facilitate this shorter timeframe, as warranted. the new legislation providing that 7(a) oversight. The revisions would codify in Codification would provide lenders Lenders could appeal informal § 120.180 SBA’s requirement that SBA notice in addition to that contained in enforcement actions to Federal district Lenders maintain documentation to the report transmittal letter and would court or OHA. The informal support that Loan Program strengthen compliance and consistency. enforcement action would remain in Requirements, which would include The proposed rule would also clarify effect pending resolution of the appeal, credit elsewhere (as applicable), have that the response must address (in if any. SBA would not be precluded been satisfied. SBA examines these addition to findings and corrective from taking other action, including but documents during reviews and exams. actions) SBA recommendations, if any. not limited to, a formal enforcement This documentation would facilitate In addition, proposed § 120.1055 would action under § 120.1500, or as other prudent lending and is a practice that be updated to remove reference to otherwise authorized by law, while the all prudent lenders already undertake. NTAPs. appeal is pending. The proposed rule would also clarify F. Section 120.1060—Confidentiality H. Section 120.1400—Grounds for of Reports, Risk Ratings and Related Enforcement Actions—SBA Lenders. 7 S. Rep. No. 115–265 at 3 (2018). Confidential Information. The proposed Section 120.1400 sets forth the grounds

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for SBA’s enforcement actions for SBA of the Federal Government (such as paragraph (c)(7), for other grounds Lenders. The proposed rule would where there is risk of immediate harm otherwise authorized by law. amend 13 CFR 120.1400 to implement or loss, a significant program integrity J. Section 120.1500—Types of Formal several provisions of the new legislation concern, or clear evidence of conduct Enforcement Actions—SBA Lenders. and to provide clarifications. First, the indicating a lack of business integrity). Proposed revisions to § 120.1500 would proposed rule would amend Situations that may warrant immediate implement the new legislative provision § 120.1400(b) to explicitly state, and suspension may include, but are not on civil monetary penalties as an thereby formally recognize, that limited to, where there are significant enforcement tool for 7(a) Lenders. CMPs § 120.1400 grounds extend to both findings relating to the SBA Lender’s create a monetary incentive for 7(a) informal and formal enforcement determination of eligibility (e.g., credit Lenders to comply with SBA Loan actions. Second, in accordance with the elsewhere, etc.) or on the credit review, Program Requirements. This tool could new legislation, the proposed rule underwriting, approval, loan servicing be particularly effective as a deterrent would state that SBA would consider and/or liquidation process; evidence of against financial related non- the severity or frequency of a violation fraud; significant concerns as to the SBA compliance (e.g., nonpayment or delay in determining the type of enforcement Lender’s financial condition, capital in payment of amounts owed to SBA for action to take. Third, § 120.1400(c)(6) levels, or solvency; or where an SBA borrower payments, recoveries received, would clarify that an action Lender is no longer licensed or lacks or fees owed). CMPs may also be ‘‘detrimental to an SBA program’’ means staff capable of making, servicing, or warranted in certain critical an action detrimental to ‘‘the integrity or liquidating loans, as determined by SBA circumstances (e.g., where there is reputation of’’ an SBA program. Further, in its discretion. In addition, the violation of an order, directive, or the proposed rule would also clarify revisions to paragraphs (d)(1)(iii) and agreement, or fraud). SBA might also paragraph (c)(9) to further inform the (d)(3)(i) and (ii) would clarify that an use CMPs where there are reporting public that SBA considers an SBA SBA Supervised Lender’s violation of failures or delays (other than those Lender’s failure to properly oversee ‘‘the Small Business Act’’ or ‘‘SBA provided for in 13 CFR 120.465). These Agent activity to be an example of SBA regulations’’ is a violation of ‘‘Loan examples are not all inclusive. The Lender action/inaction that increases Program Requirements’’. This is proposed provision would include a list SBA’s financial risk. While Agents can consistent with SBA’s use of this term of considerations for SBA in be helpful in assisting SBA Lenders in in § 120.1400(c)(2) on noncompliance as determining whether and in what making, servicing, liquidating, and a ground for enforcement action against amount to assess a CMP. Those litigating SBA loans, an SBA Lender SBA Lenders. In conjunction with this considerations are the same as those in must prudently oversee third-party conforming change, SBA proposes 13 CFR 120.465(b) governing CMPs for activity.8 SBA’s policy of lender deleting the word ‘‘agreement’’ from reporting failures against SBA responsibility for third-party activity is paragraph (d)(1)(iv) as it would be Supervised Lenders. The neither new to the program nor unusual redundant with paragraph (d)(1)(iii) as considerations/factors would include, for regulated lenders. For purposes of revised. but are not limited to, the following: The gravity (e.g., severity and this section, the term ‘‘Agent’’ means all I. Section 120.1425—Grounds for parties included in the definition of frequency) of the violation; history of Enforcement Actions—Intermediaries violations; financial resources and good ‘‘Agent’’ in 13 CFR part 103 that assist Participating in the Microloan Program. the 7(a) Lender or CDC with making, faith of the 7(a) Lender; and such other The proposed rule would update factors as justice may require. The list servicing, liquidating, or litigating their § 120.1425 to remove references to SBA business loans (e.g., lender service of considerations is also very similar to NTAPs. Paragraph (c)(1) and (c)(2)(vii) those in the CMP structures of other providers, consultants, brokers/referral on violations of law and Loan Program agents). Federal agencies, including regulators Requirements would be clarified and with broad authority, such as the Office SBA would also clarify paragraphs harmonized with the corresponding (c)(11) and (12) of this section, which of Comptroller of the Currency and the provision for SBA Lenders. In addition, Federal Deposit Insurance Corporation, cover grounds for immediate suspension SBA would reorder some of the grounds of delegated authority and program as well as regulators with a narrower within the regulation and provide for purview over loan guarantee programs, authority. Currently, these paragraphs more logical grouping. SBA would also provide for immediate action where it is such as the Department of Housing and add an additional performance-related Urban Development’s Mortgagee Review needed to prevent significant ground for enforcement action: A failure impairment of the 7(a) or 504 Loan Board. SBA assessment of CMPs, as to ‘‘[m]aintain the financial ability to with SBA’s other enforcement tools, Program. The proposed rule would sustain the Intermediary’s operations revise these paragraphs to better define would help to protect the integrity of (including, but not limited to, adequate the 7(a) Loan Program. In addition to the the applicable circumstances. The capital), as determined by SBA’’. incorporation of CMPs, proposed proposed paragraph would state that Maintenance of financial condition is § 120.1500 would reference the Lender SBA may take such immediate action important to an Intermediary’s ability to Oversight Committee’s role in formal upon a determination that: (i) One of the continue to make small business loans enforcement actions, with their grounds in ‘‘(c)’’ or ‘‘(f)’’ of that section, and repay its Promissory Note(s) to responsibilities set forth in Delegations as applicable, exists; and (ii) immediate SBA. Consistent with equivalent of Authority and as authorized by the action is needed to protect the interests provisions for SBA Lenders, SBA would Act. Finally, § 120.1500 would include add two general grounds to the a technical amendment to include the 8 In accordance with SOP 50 10 5 (K), Subpart A, Chpt. 1, Para. II.E.1.i, SBA expects lenders to Microloan Program regulations: (i) term ‘‘formal’’ before ‘‘enforcement exercise due diligence and oversight of their third- Failure to take corrective actions and (ii) action’’ to distinguish the section from party vendors (e.g., Lender Service Providers and engaging in uncooperative or new § 120.1300 on informal other loan agents), including having written detrimental behavior; as well as a enforcement actions. policies governing such relationships and K. Section 120.1540—Types of Formal monitoring the performance of their vendors. SBA specific ground for immediate will review such due diligence when conducting suspension of Intermediaries. Finally, Enforcement Actions—Intermediaries. lender oversight activities. SBA would add a catch-all provision, The proposed rule would update

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§ 120.1540 to delete references to M. Section 134.102—Jurisdiction of 2. What are the potential benefits and NTAPs. It would also include a OHA. The proposed rule would amend costs of this regulatory action? technical amendment to include the § 134.102(d), which is currently The benefits of the proposed rule term ‘‘formal’’ before ‘‘enforcement reserved, to provide OHA jurisdiction to would be improved lender oversight action’’ to distinguish the actions under hear appeals of enforcement actions that could help reduce unnecessary this section from informal enforcement against 7(a) Lenders, as contemplated by losses for SBA, SBA Lenders, and actions for Intermediaries set forth in the new legislation. Such jurisdiction Intermediaries. With effective SOP 50 53. The proposed regulation does not include appeals for certain supervision, lenders are provided would revise the provision on actions against SBA Supervised Lenders feedback to assist them in complying suspension and pre-revocation under § 120.1600(b) or (c) and § 120.465 with SBA Loan Program Requirements (including, but not limited to, Cease and sanctions to more closely conform with and to promote prudent lending. The Desist Orders, Suspensions, and the suspension provision for SBA updates and clarifications in this Revocations) as those procedures are Lenders. Specifically, proposed proposed rule are intended to reduce provided for separately in 15 U.S.C. 650 § 120.1540 would provide that uncertainties in order to help avoid as discussed above. suspension may include, but is not unnecessary costs. limited to, suspension of the authority N. Section 134.205—The appeal file, confidential information, and protective SBA does not anticipate any to make, service, liquidate, and/or additional costs or impact on the litigate SBA microloans. It may also orders. Title 13 CFR 134.205 governs the appeal file, confidential information, subsidy to operate the business loan include a freeze on an Intermediary’s programs under the proposed rule. Most Microloan Revolving Fund (‘‘MRF’’) and and protective orders when an action is appealed to OHA. Paragraph (c) lists of the revisions codify current practices. Loan Loss Reserve Fund (‘‘LLRF’’) Further, the Agency also does not, apart accounts. Finally, proposed § 120.1540 types of information in the appeal file that are exempt from public access. The from the civil monetary penalties, would specify that SBA may undertake expect additional costs to lenders from an ‘‘immediate’’ suspension action 9 exempt information includes, but is not limited to, sensitive, confidential and the provisions that implement the (i.e., a suspension that is effective legislation. Regarding the CMPs for 7(a) immediately), and that revocation other exempt information. The proposed rule would add to the list of exempt Lenders, the CMPs are statutorily actions may include a portfolio authorized and limited to $250,000, surrender. information, documents and related information covered under 13 CFR subject to annual adjustments in L. Section 120.1600—General 120.1060. accordance with section 701 of the Procedures for Formal Enforcement Federal Civil Penalties Inflation Actions Against SBA Lenders, SBA Compliance With Executive Orders Adjustment Act Improvements Act of Supervised Lenders, Other Regulated 12866, 13563, 12988, 13132, 13771, the 2015, Public Law 114–74 (November 2, SBLCs, Management Officials, Other Paperwork Reduction Act (44 U.S.C. 2015). SBA anticipates that 7(a) Lenders Persons, and Intermediaries. Proposed Chapter 35) and the Regulatory will take corrective actions changes to § 120.1600 would include a Flexibility Act (5 U.S.C. 601–612) expeditiously, and as a result, few CMPs technical amendment to add the term Executive Order 12866 may need to be administered. SBA does ‘‘formal’’ before enforcement action in not anticipate any additional costs from this section. It would also include a The Office of Management and Budget the technical corrections or technical amendment that references (OMB) has determined that this clarifications as these specify actions alternate procedures under law, proposed rule is not a ‘‘significant’’ that lenders should already be taking including but not limited to, those regulatory action for the purposes of (e.g., implementing corrective actions under current § 120.465 governing Executive Order 12866. In the interest of required within the requisite 90 days, procedures for assessing CMPs against transparency, however, SBA has drafted adequately training staff, maintaining SBA Supervised Lenders for reporting a Regulatory Impact Analysis for the loan file documentation consistent with failures. Section 120.1600 would be public’s information in the next section. prudent lending, and adhering to all updated further to remove NTAPs from This is not a major rule under the other SBA requirements). the regulation. In addition, the proposed Congressional Review Act, 5 U.S.C. 801, 3. What alternatives have been rule would implement new legislation et seq. considered? on enforcement action appeals. Regulatory Impact Analysis Specifically, 7(a) Lenders could appeal Since the proposed rule would most formal enforcement actions to 1. Is there a need for this regulatory primarily implement statutory OHA or proceed directly to the action? provisions, the Agency is somewhat appropriate Federal district court. Public Law 115–189, the Small limited in its alternatives. Regarding Excluded are those formal enforcement Business 7(a) Lending Oversight Reform CMPs for 7(a) Lenders, the Agency actions against SBA Supervised Lenders Act of 2018, requires that SBA issue researched the CMP structures of other under §§ 120.1500(c) and (d) and regulations to carry out certain agencies, including the banking 120.465 because the statutory provisions provisions contained therein. This rule agencies and other Federal guaranteed in 15 U.S.C. 650 provide for separate includes proposed regulations that loan programs. We found that these procedures, which are covered in would implement the Act. In addition, CMP structures are typically very § 120.1600(b) or (c) and § 120.465. Any the rule would update and clarify complex and may be tiered due to available OHA appeal would have to be certain lender oversight regulations detailed statutory schemes, with the submitted within 20 calendar days of (e.g., remove reference to NTAPs and potential for maximum CMPs that are the decision. The enforcement action include some clarifications to better several times larger than SBA’s. This is would remain in effect pending inform the public). The proposed lender very different from the general CMP resolution of any appeal. oversight rule would strengthen SBA authority that Congress provided to supervision of SBA Lenders, especially SBA. Therefore, SBA did not opt for a 9 Intermediary suspensions, like those for SBA 7(a) Lenders, and protect the integrity of complex cumbersome structure. SBA, Lenders, may be ‘‘proposed’’ or ‘‘immediate’’. SBA’s business loan programs. however, included in its proposal

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factors similar to those in the banking levels of government. Therefore, for the for public comment an initial regulatory agencies’ CMP regulations, the purposes of Executive Order 13132, analysis’’ which will ‘‘describe the Department of Housing and Urban SBA has determined that this proposed impact of the proposed rule on small Development’s CMP regulations,10 and rule has no federalism implications entities.’’ Section 605 of the RFA allows current § 120.465 that allow for warranting preparation of a federalism an agency to certify a rule, in lieu of consideration of the facts and assessment. preparing an analysis, if the proposed circumstances of the underlying rulemaking is not expected to have a Executive Order 13771 activity. Under the proposed rule, SBA significant economic impact on a would consider the following factors in This proposed rule is not expected to substantial number of small entities. determining whether and in what be an Executive Order 13771 regulatory The changes in the proposed rule amount SBA would assess CMPs against action because this proposed rule is not would generally fall into one of two 7(a) Lenders: The gravity (e.g., severity significant under Executive Order categories: (i) Technical amendments/ and frequency) of the violations; history 12866. clarifications or (ii) codifications of the of violations; financial resources and Paperwork Reduction Act, 44 U.S.C., new legislation or existing practices. good faith of the 7(a) Lender; and such Ch. 35 Examples of the technical amendments other factors as justice may require. The and clarifications would include the Agency will also consider alternatives SBA has determined that this proposed change to: The § 120.10 proposed in public comments and proposed rule would not impose definition for Federal Financial suggestions on how SBA can otherwise additional recordkeeping or reporting Institution Regulator to delete reference implement the statutory provisions requirements under the Paperwork to the Office of Thrift Supervision, responsibly without compromising the Reduction Act (PRA). The only which was merged into other Federal improvements to supervision intended provision relating to recordkeeping is banking agencies; the proposed removal by the legislation. the proposed revision to § 120.180, in of references to NTAPs in 120.1000, which SBA would clarify that SBA 120.1010, 120.1015, 120.1025, 120.1050, Executive Order 13563 Lenders and Intermediaries must 120.1051, 120.1055, 120.1060, 120.1425, Executive Order 13563 supplements maintain documentation to support 120.1540, and 120.1600 as SBA has not and reaffirms the principles and compliance with SBA Loan Program issued technical assistance grants to requirements of Executive Order 12866, Requirements. Recordkeeping and NTAPs in many years and such including providing the public notice reporting associated with this provision assistance is being administered directly and an opportunity to comment on would be covered by currently approved by Microloan Intermediaries; and the regulatory changes. Consistent with the information collections for SBA’s proposed incorporation into § 120.180 requirements of that executive order, a business loan programs, including but of the current requirement that description of the need for this not limited to, collections under OMB Intermediaries must comply with the regulatory action and the benefits and Control Numbers 3245–0071, Microloan Program requirements. costs associated with this action— Application for section 504 Loan (SBA Although the technical corrections/ including distributional impacts—if Forms 1244 and 2450); 3245–0074, clarifications portion of the proposed any, are contained above in the Certified Development Company (CDC) rule might affect some of the Regulatory Impact Analysis provided for Annual Report Guide (SBA Form 1253); approximately 3,500 7(a) Lenders Executive Order 12866. The Agency has 3245–0080 and 0178, Statement of (approximately 2,000 of which are participated in public forums and Personal History (SBA Forms 1081 and small); 213 CDCs (all of which are meetings that have included outreach to 912); 3245–0131, Transaction Report on small); and 147 Microloan hundreds of its lending partners to seek Loans Serviced by Lender (SBA Form Intermediaries (all of which are small), valuable insight and suggestions for the 172); 3245–0132, Lender’s Transcript of SBA does not believe it would have a program. These forums include, but are Account (SBA Form 1149); 3245–0201, significant economic impact on those not limited to, the National Association Compensation Agreement (SBA Form small entities. Rather, the clarifications of Government Guaranteed Lenders 159); 3245–0346, PCLP Quarterly Loan to some extent might even reduce the Technical Conference; the Southeast Loss Reserve Report and PCLP burdens by better informing SBA Regional Lenders’ Conference; and the Guarantee Request (SBA Forms 2233 Lenders and Intermediaries of how the Mid-America Lenders’ Conference. and 2234 A, B, and C); 3245–0348, Agency may apply a regulation or Borrower Information Form (SBA Form requirement. As such, SBA Lenders and Executive Order 12988 1919), Lenders Application for Guaranty Intermediaries may potentially avoid This action meets applicable (SBA Form 1920), Religious Eligibility the need to spend extra time and standards set forth in sections 3(a) and Worksheet (SBA Form 1971), 7(a) Loan resources interpreting the regulations. 3(b)(2) of Executive Order 12988, Civil Post Approval Action Checklist (SBA The second category consists of Justice Reform, to minimize litigation, Form 2237); 3245–0352, Microloan regulation changes in the rule that eliminate ambiguity, and reduce Program Electronic Reporting System would codify or implement the new burden. The action would not have (MPERS) (MPERsystem); and 3245– legislation or existing practices. retroactive or preemptive effect. 0365, SBA Lender, Microloan Examples of the regulations and their Intermediary and NTAP Reporting changes that would codify or implement Executive Order 13132 Requirements. Prudent lenders should the new legislation include: The SBA has determined that this already be maintaining such § 120.101 incorporation of the new proposed rule would not have documentation. statutory definition for credit elsewhere; substantial, direct effects on the States, the § 120.1055 revision to the timeframe on the relationship between the national Regulatory Flexibility Act, 5 U.S.C. 601– from 30 to 45 days for an SBA Lender government and the States, or on the 612 or Intermediary to respond to findings distribution of power and When an agency issues a rulemaking and corrective actions; the §§ 120.1300, responsibilities among the various proposal, the Regulatory Flexibility Act 120.1600, and 134.102 inclusion of an (RFA), 5 U.S.C. 601–612, requires the OHA appeal for a 7(a) Lender 10 See, 24 CFR 30.80. agency to ‘‘prepare and make available enforcement action; and the

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§ 120.1500(b) addition of CMPs for a substantial number of small 7(a) include, but are not limited to, 7(a) Lender. Examples of regulations Lenders, as most 7(a) Lenders generally reviewing and voting on formal and their changes that would codify comply with SBA Loan Program enforcement action recommendations. current practices and procedures Requirements. In fact, only five * * * * * include: The § 120.1055 (90 day) enforcement actions in FY 2018 were Loan Program Requirements or SBA addition of a timeframe for taken against 7(a) Lenders. Therefore, Loan Program Requirements are implementation of corrective actions; we do not anticipate that SBA would requirements imposed upon Lenders, the § 120.1300 inclusion of voluntary need to assess CMPs with any CDCs, or Intermediaries by statute; SBA agreements and Board Resolutions as frequency. Further, given the flexibility and applicable government-wide informal enforcement actions; and the in determining the amount of the regulations; any agreement the Lender, application in § 120.1400 of the same penalty, even if imposed, the proposed CDC, or Intermediary has executed with grounds for informal as formal penalty could be assessed in an amount SBA; SBA SOPs; Federal Register enforcement actions for an SBA Lender. much less than $250,000. notices; official SBA notices and forms While a few of the codifying For the reasons stated above, SBA applicable to the 7(a) Loan Program, 504 provisions might have the potential of a certifies that this action would not have Loan Program or Microloan Program; significant economic impact, SBA does a significant economic impact on a and loan authorizations, as such not expect that it would impact a substantial number of small entities. requirements are issued and revised by substantial number of small businesses. SBA invites comment from members of SBA from time to time. For CDCs, this In particular, SBA does not anticipate the public. term also includes requirements that any changes to the enforcement imposed by Debentures, as that term is List of Subjects. regulations, including the incorporation defined in § 120.802. For Intermediaries, of a CMP for 7(a) Lenders in proposed 13 CFR Part 120 this term also includes requirements § 120.1500(b), would be burdensome to imposed by promissory notes, collateral a substantial number of small lenders. Community development, Loan programs—business, Small businesses. documents, and grant agreements. This is because SBA has historically * * * * * taken only a small number of 13 CFR Part 134 ■ 3. Amend § 120.101 by revising the enforcement actions. The Agency seeks Appeal Procedures, Confidential first and second sentences to read as to educate and work with SBA Lenders follows: and Intermediaries using graduated business information. processes for the entity to reduce risk For the reasons stated in the § 120.101 Credit not available elsewhere. and come into compliance. Specifically, preamble, SBA proposes to amend 13 SBA provides business loan SBA educates SBA Lenders and CFR parts 120 and 134 as follows: assistance only to applicants for whom Intermediaries on SBA Loan Program the desired credit is not otherwise PART 120—BUSINESS LOANS Requirements through notices, webinar available on reasonable terms from non- and teleconference training venues, and ■ 1. The authority citation for part 120 Federal, non-State, and non-local at conferences. When SBA identifies is revised to read as follows: government sources. SBA requires the risk or noncompliance through Lender or CDC to certify or otherwise monitoring or reviews, SBA generally Authority: 15 U.S.C. 634(b) (6), (b) (7), (b) show that the desired credit is seeks to work with the SBA Lender or (14), (h), and note, 636(a), (h) and (m), and note, 650, 657t, and note, 657u, and note, unavailable to the applicant on Intermediary through the corrective 687(f), 696(3) and (7), and note, and 697(a) reasonable terms and conditions from action process or increased supervision and (e); and note. non-Federal, non-State, and non-local to address SBA concerns. As a result, ■ government sources without SBA most SBA Lenders and Intermediaries 2. Amend § 120.10 by revising the assistance, taking into consideration come into compliance and avoid facing definitions for ‘‘Federal Financial factors associated with conventional enforcement actions. Institution Regulator’’, ‘‘Lender lending practices, including: The SBA generally takes enforcement Oversight Committee’’, and ‘‘Loan business industry of the loan applicant; action only when the entity cannot Program Requirements’’ to read as whether the loan applicant has been in sufficiently reduce risk, cannot correct follows: operation two years or less; the serious noncompliance, or where the § 120.10 Definitions. adequacy of collateral available to entity does not have the willingness or secure the loan; the loan term necessary ability to correct. In FY 2018, SBA took * * * * * Federal Financial Institution to reasonably assure repayment of the nine enforcement actions against SBA loan from business cash flow; and any Lenders and Intermediaries, which is Regulator is the Federal banking regulator of a 7(a) Lender and may other factor relating to the particular not a substantial number. loan application that cannot be One of the proposed rule changes to include the Federal Deposit Insurance Corporation, the Federal Reserve Board, overcome except through obtaining a SBA’s enforcement regulations would Federal loan guarantee under prudent be the CMP provisions. The CMP the Office of the Comptroller of the Currency, the National Credit Union lending standards. * * * provisions would be applicable only to ■ 4. Revise § 120.180 to read as follows: 7(a) Lenders and by statute could be Administration, and the Farm Credit assessed in an enforcement action up to Administration. § 120.180 Compliance with Loan Program $250,000. As proposed, the CMP * * * * * Requirements. provisions would provide flexibility to Lender Oversight Committee (‘‘LOC’’) SBA Lenders and Intermediaries must allow SBA to take into account factors, is a committee established within SBA comply and maintain familiarity with including the financial resources of a by legislation, which meets at least Loan Program Requirements for the 7(a) 7(a) Lender (especially for small quarterly, and which has the Loan Program, 504 Loan Program, and lenders), in determining whether and in membership and duties set forth in the the Microloan Program, as applicable, what amount to assess a CMP. Small Business Act as further outlined and as such requirements are revised SBA believes these provisions would in Delegations of Authority published in from time to time. Loan Program not have a significant impact on a the Federal Register. The LOC’s duties Requirements in effect at the time that

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an SBA Lender or Intermediary takes an (a) Results of monitoring, including received, unless SBA provides written action in connection with a particular an SBA Lender’s or Intermediary’s Risk notice of another timeframe. For loan govern that specific action. For Rating; purposes of this paragraph, a Report example, although loan closing * * * * * will be deemed to have been received requirements in effect when an SBA ■ 11. Amend § 120.1055 by: on the date it was emailed to the last Lender closes a loan will govern the ■ a. Revising paragraphs (a) and (b); and known email address of the SBA Lender closing actions, an SBA Lender’s ■ b. In paragraph (d): or Intermediary unless the SBA Lender liquidation actions on the same loan are ■ i. Removing the phrase ‘‘SBA Lender, or Intermediary can provide compelling subject to the liquidation requirements Intermediary, or NTAP’’ wherever it evidence to the contrary. in effect at the time that a liquidation appears and adding in its place the * * * * * action is taken. An SBA Lender or phrase ‘‘SBA Lender or Intermediary’’; Intermediary must maintain sufficient ■ ii. Removing ‘‘Subpart I’’ and adding § 120.1060 [Amended] documentation to demonstrate that Loan in its place ‘‘this subpart’’; and ■ 12. Amend § 120.1060 by: ■ Program Requirements have been iii. Removing the reference ■ i. Removing the phrase ‘‘SBA Lender, satisfied. ‘‘§ 120.1500 through § 120.1540’’ Intermediary, and NTAP’’ wherever it wherever it appears and adding in its ■ 5. Revise § 120.1000 to read as appears and adding in its place the place the phrase ‘‘this subpart’’. phrase ‘‘SBA Lender and Intermediary’’; follows: The revisions to read as follows: ■ ii. Removing the phrase ‘‘SBA § 120.1000 Risk-Based Lender Oversight. § 120.1055 Review and examination Lenders, Intermediaries, and NTAPs’’ (a) Risk-Based Lender Oversight. SBA results. and adding in its place the phrase ‘‘SBA monitors, supervises, examines, (a) Written Reports. SBA will provide Lenders and Intermediaries’’; regulates, and enforces laws against, an SBA Lender and Intermediary a copy ■ iii. Removing the phrase ‘‘SBA SBA Supervised Lenders and the SBA of SBA’s written report prepared as a Lender’s, Intermediary’s, or NTAP’s’’ operations of SBA Lenders and result of the SBA Lender or and adding in its place the phrase ‘‘SBA Intermediaries. Intermediary review or examination Lender’s or Intermediary’s’’; (b) Scope. Most rules and standards (‘‘Report’’). The Report may contain ■ iv. Removing the phrase ‘‘SBA set forth in this subpart apply to SBA findings, conclusions, corrective actions Lender, Intermediary, or NTAP’’ and Lenders as well as Intermediaries; and recommendations. Each director (or adding in its place the phrase ‘‘SBA however, SBA has separate regulations manager, in the absence of a Board of Lender or Intermediary’’. for enforcement grounds and formal Directors) of the SBA Lender or ■ 13. Add § 120.1300 immediately enforcement actions for Intermediaries Intermediary, in keeping with his or her following the undesignated center at §§ 120.1425 and 120.1540. responsibilities, must become fully heading ‘‘Enforcement Actions’’ to read informed regarding the contents of the as follows: § 120.1010 [Amended] Report. (b) Response to review and § 120.1300 Informal enforcement actions— ■ 6. Amend § 120.1010 by removing the 7(a) Lenders. phrase ‘‘SBA Lender, Intermediary, and examination Reports. SBA Lenders and (a) Upon a determination that the NTAP’’ and adding in its place the Intermediaries must respond to Report grounds in § 120.1400 exist, SBA may phrase ‘‘SBA Lender and Intermediary’’. findings, recommendations, and corrective actions, if any, in writing to undertake, in SBA’s discretion, one or § 120.1015 [Amended] SBA and, if requested, submit proposed more of the informal enforcement corrective actions and/or a capital actions listed in this section. SBA will ■ 7. Amend § 120.1015 by removing the restoration plan. An SBA Lender or consider the severity or frequency of the phrase ‘‘SBA Lenders, Intermediaries, Intermediary must respond within 45 violation or action triggering the ground and NTAPs’’ wherever it appears and calendar days from the date the Report and the circumstances in determining adding in its place the phrase ‘‘SBA is received unless SBA notifies the SBA whether and what type of informal Lenders and Intermediaries’’. Lender or Intermediary in writing that action to take. Circumstances that may ■ 8. Revise § 120.1025 to read as the response, proposed corrective lead to SBA taking informal follows: actions or capital restoration plan is to enforcement action rather than formal § 120.1025 Monitoring. be filed within a different time period. enforcement action include, for The SBA Lender or Intermediary example, when problems are narrow in SBA may conduct monitoring of SBA response must address each finding, scope and are correctible and SBA is Lenders and Intermediaries including, recommendation, and corrective action. confident of a 7(a) Lender’s Board of but not limited to, SBA Lenders’ or In proposing a corrective action or Directors (‘‘Board’’) and management Intermediaries’ self-assessments. capital restoration plan, the SBA Lender commitment and ability to correct; where violations are less frequent or less § 120.1050 [Amended] or Intermediary must detail: The steps it will take to correct the finding(s); the severe but warrant enforcement; or ■ 9. In § 120.1050(c), remove the phrase time within which each step will be while more fully assessing risk. ‘‘and NTAPs’’ wherever it appears. taken; the timeframe for accomplishing (b) Informal enforcement actions ■ 10. In § 120.1051, revise the first the entire corrective action plan; and the include, but are not limited to: sentence of the introductory text and person(s) or department at the SBA (1) An SBA supervisory letter. The paragraph (a) to read as follows: Lender or Intermediary charged with letter may discuss serious or persistent carrying out the corrective action or supervisory concerns, as determined by § 120.1051 Frequency of reviews and capital restoration plan, as applicable. SBA, and expected corrective action by examinations. In addition, SBA Lenders and the 7(a) Lender. Supervisory letters SBA may conduct reviews and Intermediaries must implement include, for example, Notices of examinations of SBA Lenders and corrective actions within 90 calendar Material Non-Compliance; Intermediaries on a periodic basis. days from the date the Report or SBA’s (2) Mandatory training. SBA may *** letter requiring corrective action is require a 7(a) Lender to complete

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training to address certain findings, (6) Engaging in a pattern of to engage in any acts or practices that weaknesses, and deficiencies; uncooperative behavior or taking an will violate SBA Loan Program (3) A commitment letter or Board action that SBA determines is Requirements. resolution. SBA may require a 7(a) detrimental to the integrity or reputation * * * * * Lender to submit a commitment letter or of an SBA program, that undermines ■ 15. Amend § 120.1425 by: Board resolution, satisfactory to SBA, management or administration of a ■ a. Revising the section heading and signed by the 7(a) Lender’s Board on program, or that is not consistent with paragraphs (a), and (b); behalf of the entity that may: standards of good conduct. * * * ■ b. In paragraph (c) introductory text: (i) Include specific written * * * * * ■ i. Removing the dash after the commitments to take corrective actions (9) Any other reason that SBA paragraph heading and adding a period in response to the 7(a) Lender’s determines may increase SBA’s in its place; and acknowledged deficiencies; financial risk (for example, repeated ■ ii. Removing the phrase ‘‘Intermediary (ii) Identify the person(s) responsible Less Than Acceptable Risk Ratings or NTAP’’ wherever it appears and for taking the corrective action; and (generally in conjunction with other adding in its place the phrase (iii) Set forth the timeframe for taking indicators of increased financial risk); ‘‘Intermediary’’; the corrective action. The document failure to properly oversee Agent ■ c. Revising paragraph (c)(1); may be drafted by SBA or the 7(a) activity (‘‘Agent’’ as defined in part 103 ■ d. Removing the phrase Lender; of this title); or, indictment on felony or ‘‘Intermediaries and NTAPs’’ and (4) Agreements. SBA may request that fraud charges of an officer, key adding in its place the phrase a 7(a) Lender enter into a written employee, or loan agent involved with ‘‘Intermediaries’’ in paragraph (c)(2)(i); agreement with, and drafted by, SBA to SBA loans for the SBA Lender); ■ e. Revising paragraphs (c)(2)(vii) and address and correct identified (viii); * * * * * ■ weaknesses and/or limit or mitigate risk. (11) For immediate suspension of all f. Adding paragraphs (c)(2)(ix) and (x) The agreement may provide, for and (c)(3) through (7); SBA Lenders from delegated ■ example, that a 7(a) Lender take certain authorities—upon a determination by g. Removing paragraphs (d) and (e). The revisions and additions read as actions or refrain from certain actions; SBA that: and (i) One or more of the grounds in follows: (5) Other informal enforcement paragraph (c) or (f) of this section, as § 120.1425 Grounds for formal actions. Others as SBA determines applicable, exists; and enforcement actions—Intermediaries appropriate on a case by case basis. (ii) Immediate action is needed to participating in the Microloan Program. (c) A 7(a) Lender may appeal informal protect the interests of the Federal (a) Agreement. By participating in the enforcement actions to the appropriate Government (such as where there is risk SBA Microloan Program, Intermediaries Federal district court or SBA’s Office of of immediate harm or loss, a significant automatically agree to the terms, Hearings and Appeals (OHA) within 20 program integrity concern, or clear conditions, and remedies in this part as calendar days of the date of the evidence of conduct indicating a lack of if fully set forth in their participation decision, and in the event of an OHA business integrity). agreement and all other agreements appeal, OHA will issue its decision in (12) For immediate suspension of all jointly executed by the Intermediary accordance with part 134 of this title. SBA Lenders (except SBA Supervised and SBA. The enforcement action will remain in Lenders, which are covered under (b) Scope. SBA may undertake one or effect pending resolution of the appeal, § 120.1400(d)(2)) from the authority to more of the formal enforcement actions if any. SBA is not precluded from taking participate in the SBA loan program, listed in § 120.1540, or as otherwise one or more formal enforcement actions including the authority to make, service, authorized by law, if SBA determines under § 120.1500, or as otherwise liquidate, or litigate 7(a) or 504 loans— that any of the grounds listed in authorized by law, while an appeal of upon a determination by SBA that: paragraph (c) of this section exist. an informal enforcement action is (i) One or more of the grounds in (c) * * * pending. paragraph (c) or (f) of this section, as (1) Failure to comply materially with ■ 14. Amend § 120.1400 by revising the applicable, exists; and any requirement imposed by Loan first sentence and adding a sixth (ii) Immediate action is needed to Program Requirements; sentence in paragraph (b) and revising protect the interests of the Federal (2) * * * the first sentence in paragraph (c)(6) and Government (such as where there is risk (vii) Maintain a staff trained in paragraphs (c)(9), (11), and (12), of immediate harm or loss, a significant Microloan Program issues and Loan (d)(1)(iii) and (iv), and (d)(3)(i) and (ii) program integrity concern, or clear Program Requirements; to read as follows: evidence of conduct indicating a lack of (viii) Maintain the financial ability to business integrity). sustain the Intermediary’s operations § 120.1400 Grounds for enforcement (d) * * * (including, but not limited to, adequate actions—SBA Lenders. (1) * * * capital), as determined by SBA; * * * * * (iii) A willful or repeated violation of (ix) Satisfactorily provide in-house (b) Scope. SBA may undertake one or SBA Loan Program Requirements; or technical assistance to Microloan more of the enforcement actions listed (iv) A willful or repeated violation of borrowers and prospective Microloan in §§ 120.1300 and 120.1500, or as any condition imposed by SBA with borrowers; or otherwise authorized by law, if SBA respect to any application or request (x) Close and fund the required determines that the grounds applicable with SBA; or number of microloans per year under to the enforcement action exist. * * * * * * * * § 120.716; SBA considers the severity or frequency (3) * * * (3) Failure within the time period of a violation in determining whether to (i) A violation of SBA Loan Program specified to correct an underwriting, take an enforcement action and the type Requirements; or closing, disbursing, servicing, of enforcement action to take. (ii) Where an SBA Supervised Lender liquidation, litigation, or reporting (c) * * * or Other Person engages in or is about deficiency, or failure in any material

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respect to take other corrective action, consistent with its assigned (e) Formal enforcement actions after receiving notice from SBA of a responsibilities), one or more of the specific to CDCs. *** deficiency and the need to take following formal enforcement actions ■ 17. Revise § 120.1540 to read as corrective action; for each of the types of SBA Lender follows: (4) Engaging in a pattern of listed. SBA will consider the severity or uncooperative behavior or taking an frequency of the violation or action and § 120.1540 Types of formal enforcement actions—Intermediaries participating in the action that SBA determines is the circumstances triggering the ground Microloan Program. detrimental to the integrity or reputation in determining whether and what type Upon a determination that any ground of the Microloan Program, that of enforcement action to take. SBA will set out in § 120.1425 exists, the SBA undermines management or take formal enforcement action in may take, in its discretion, one or more administration of the program, or that is accordance with procedures set forth in of the following formal enforcement not consistent with standards of good § 120.1600. If formal enforcement action actions against an Intermediary: conduct. Prior to issuing a notice of a is taken under this section and the SBA (a) Suspension. SBA may suspend an proposed formal enforcement action or Lender fails to implement required Intermediary’s authority to participate immediate suspension under § 120.1540 corrective action in any material respect in the Microloan Program, which may based upon the grounds discussed in within the required timeframe in include, but is not limited to, the this paragraph, SBA must send prior response to the formal enforcement authority to make, service, liquidate, written notice to the Intermediary action, SBA may take further and/or litigate SBA microloans, and the explaining why the Intermediary’s enforcement action, as authorized by imposition of a freeze on the actions were uncooperative, detrimental law. SBA’s decision to take a formal Intermediary’s MRF and LLRF accounts. to the program, undermined SBA’s enforcement action will not, by itself, (b) Immediate suspension. SBA may management of the program, or were not invalidate a guaranty previously suspend, effective immediately, an consistent with standards of good provided by SBA. Intermediary’s authority to participate conduct. The prior notice must also (a) Formal enforcement actions for all in the Microloan Program, which may state that the Intermediary’s actions SBA Lenders. *** include, but is not limited to, the could give rise to a specified formal (b) Formal enforcement actions enforcement action, and provide the authority to make, service, liquidate, specific to 7(a) Lenders. In addition to and/or litigate SBA microloans, and the Intermediary with a reasonable time to those formal enforcement actions cure the deficiency before any further imposition of an immediate freeze on applicable to all SBA Lenders, SBA may the Intermediary’s MRF and LLRF action is taken; take the following actions: (5) Any other reason that SBA accounts. Section 120.1425(c)(6) sets (1) Secondary market suspension or forth the grounds for SBA Microloan determines may increase SBA’s revocation (other than temporary financial or program risk (for example, Program immediate suspension of an suspension and revocation under Intermediary. repeated Less Than Acceptable Risk § 120.660). SBA may suspend or revoke Ratings (generally in conjunction with (c) Revocation. SBA may revoke an a 7(a) Lender’s authority to sell or Intermediary’s authority to participate other indicators of increased risk) or purchase loans or certificates in the indictment on felony or fraud charges of in the Microloan Program which may Secondary Market; or include, but is not limited to: an officer, key employee, or loan agent (2) Civil monetary penalty (other than involved with SBA programs for the (1) Removal from the program; SBA Supervised Lender civil monetary (2) Liquidation of the Intermediary’s Intermediary); penalty under § 120.465). SBA may (6) For immediate suspension of an MRF and LLRF accounts by SBA, and assess a civil monetary penalty against application of the liquidated funds to Intermediary—upon a determination by a 7(a) Lender. The civil monetary SBA that: any outstanding balance owed to SBA; penalty will be in an amount not to (3) Payment of outstanding debt to (i) One or more of the grounds in exceed the maximum published in the paragraph (c) of this section exists; and SBA by the Intermediary; Federal Register from time to time. In (4) Forfeiture or repayment of any (ii) Immediate action is needed to determining whether to assess a civil protect the interests of the Federal unused grant funds by the Intermediary; monetary penalty and, if so, in what (5) Debarment of the organization Government (such as where there is risk amount, SBA may consider, for of immediate harm or loss, a significant from receipt of Federal funds until loan example, the following: The gravity and grant repayments are met; and program integrity concern, or clear (e.g., severity and frequency) of the evidence of conduct indicating a lack of (6) Surrender of possession of violation; the history of previous Intermediary’s SBA microloan portfolio business integrity); and violations; the financial resources and (7) As otherwise authorized by law. to SBA, with the microloan portfolio ■ 16. Amend § 120.1500 by revising the good faith of the 7(a) Lender; and any and all associated rights transferred on section heading, the introductory text, other matters as justice may require. a permanent basis to SBA, in paragraph (a) heading, paragraph (b), (c) Formal enforcement actions accordance with SBA’s rights as a paragraph (c) introductory text heading, specific to SBA Supervised Lenders and secured creditor. paragraph (c)(4), paragraph (d) Other Persons (except Other Regulated (d) Other actions. Such other actions introductory text heading, and SBLCs). *** available under law. paragraph (e) introductory text heading (4) Civil monetary penalties for report ■ 18. Amend § 120.1600 by: ■ to read as follows: filing failure under § 120.465. SBA may a. Removing the phrase ‘‘SBA Lender, seek civil penalties, in accordance with Intermediary, or NTAP’’ wherever it § 120.1500 Types of formal enforcement § 120.465, against an SBA Supervised appears and adding in its place the actions—SBA Lenders. Lender that fails to file any regular or phrase ‘‘SBA Lender or Intermediary’’; Upon a determination that the special report by its due date as ■ b. Removing the phrase ‘‘SBA Lender, grounds set forth in § 120.1400 exist, specified by regulation or SBA written Intermediary, or NTAP’s’’ wherever it SBA may undertake, in SBA’s discretion directive. appears and adding in its place the (and with the involvement of the Lender (d) Formal enforcement actions phrase ‘‘SBA Lender’s or Oversight Committee as appropriate and specific to SBLCs. *** Intermediary’s’’;

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■ c. Revising the section heading and Authority: 5 U.S.C. 504; 15 U.S.C. 632, fuselage frame web at body station introductory text to paragraph (a); 634(b)(6), 634(i), 637(a), 648(l), 656(i), 657t, (STA) 1640. This proposed AD would ■ d. Adding the word ‘‘formal’’ before and 687(c); 38 U.S.C. 8127(f); E.O. 12549, 51 require, depending on configuration, a the word ‘‘enforcement’’ wherever it FR 6370, 3 CFR, 1986 Comp., p. 189. general visual inspection for any Subpart J issued under 38 U.S.C. appears in paragraphs (a)(1) through (4). 8127(f)(8)(B). previous repair, such as any reinforcing ■ e. Removing the phrase ‘‘SBA Lender, Subpart K issued under 38 U.S.C. repair or local frame replacement repair, Intermediary, NTAP or SBA,’’ and 8127(f)(8)(A). repetitive open hole high frequency adding in its place the phrase ‘‘SBA eddy current (HFEC) inspections for any ■ Lender, Intermediary, or SBA,’’ in 20. Amend § 134.102 by adding crack of the fuselage frame web fastener paragraph (a)(1)(ii); paragraph (d) to read as follows: holes, on the left and right side of the ■ f. Removing the phrase ‘‘final § 134.102 Jurisdiction of OHA. airplane, and applicable on-condition decision’’ wherever it appears and * * * * * actions. The FAA is proposing this AD adding in its place the phrase ‘‘final (d) Appeals from informal and formal to address the unsafe condition on these agency decision’’ in paragraphs (a)(2) enforcement actions against 7(a) products. through (4); Lenders, and any other appeal that is DATES: The FAA must receive comments ■ g. Revising the headings for specifically authorized by part 120 of on this proposed AD by August 5, 2019. paragraphs (a)(3) and (4) and paragraph this title, but not including appeals of ADDRESSES: You may send comments, (a)(5); and actions against SBA Supervised Lenders using the procedures found in 14 CFR ■ h. Adding the word ‘‘formal’’ before under § 120.1600(b) or (c) or under 11.43 and 11.45, by any of the following the word ‘‘enforcement’’ in the headings § 120.465; methods: for paragraphs (b) and (c). • Federal eRulemaking Portal: Go to The revisions read as follows: * * * * * ■ 21. Amend § 134.205 by revising http://www.regulations.gov. Follow the § 120.1600 General procedures for formal paragraph (c) to read as follows: instructions for submitting comments. enforcement actions against SBA Lenders, • Fax: 202–493–2251. SBA Supervised Lenders, Other Regulated § 134.205 The appeal file, confidential • Mail: U.S. Department of SBLCs, Management Officials, Other information, and protective orders. Transportation, Docket Operations, M– Persons, and Intermediaries. * * * * * 30, West Building Ground Floor, Room (a) In general. Except as otherwise set (c) Public access. Except for W12–140, 1200 New Jersey Avenue SE, forth for the formal enforcement actions confidential business and financial Washington, DC 20590. listed in paragraphs (a)(6), (b), and (c) of information; source selection sensitive • Hand Delivery: Deliver to Mail this section and in § 120.465, SBA will information; income tax returns; address above between 9 a.m. and 5 follow the procedures listed in this documents and information covered p.m., Monday through Friday, except section. under § 120.1060 of this title; and other Federal holidays. * * * * * exempt information, the appeal file is For Boeing service information (3) SBA’s notice of final agency available to the public pursuant to the identified in this NPRM, contact Boeing decision on a formal enforcement action Freedom of Information Act (FOIA), 5 Commercial Airplanes, Attention: where an SBA Lender or Intermediary U.S.C. 552. Contractual & Data Services (C&DS), filed objection to the proposed action or * * * * * 2600 Westminster Blvd., MC 110–SK57, Seal Beach, CA 90740–5600; phone: immediate suspension. *** Christopher Pilkerton, (4) SBA’s notice of final agency 562–797–1717; internet: https:// Acting Administrator. decision on a formal enforcement action www.myboeingfleet.com. where no filed objection or untimely [FR Doc. 2019–12631 Filed 6–20–19; 8:45 am] For Aviation Partners Boeing service objection not considered. *** BILLING CODE 8025–01–P information identified in this NPRM, (5) Appeals. An SBA Lender or contact Aviation Partners Boeing, 2811 Intermediary may appeal the final South 102nd St., Suite 200, Seattle, WA agency decision to the appropriate DEPARTMENT OF TRANSPORTATION 98168; phone: 206–830–7699; fax: 206– Federal district court. Alternatively, 7(a) 767–0535; email: leng@ Federal Aviation Administration Lenders may appeal such actions aviationpartners.com; internet: http:// (except for actions against SBA www.aviationpartnersboeing.com. 14 CFR Part 39 Supervised Lenders that are covered by You may view this referenced service procedures in § 120.1600(b) or (c) or [Docket No. FAA–2019–0437; Product information at the FAA, Transport § 120.465), to SBA’s Office of Hearings Identifier 2019–NM–074–AD] Standards Branch, 2200 South 216th St., Des Moines, WA. For information on the and Appeals (‘‘OHA’’) within 20 RIN 2120–AA64 calendar days of the date of the availability of this material at the FAA, decision, and in the event of such an Airworthiness Directives; The Boeing call 206–231–3195. Boeing Alert appeal, OHA will issue its decision in Company Airplanes Requirements Bulletin 757–53A0112 accordance with part 134 of this title. RB, dated November 16, 2018, is also The enforcement action will remain in AGENCY: Federal Aviation available on the internet at http:// effect pending resolution of the appeal, Administration (FAA), DOT. www.regulations.gov by searching for if any. ACTION: Notice of proposed rulemaking and locating Docket No. FAA–2019– 0437. * * * * * (NPRM). Examining the AD Docket PART 134—RULES OF PROCEDURE SUMMARY: The FAA proposes to adopt a GOVERNING CASES BEFORE THE new airworthiness directive (AD) for You may examine the AD docket on OFFICE OF HEARINGS AND APPEALS certain The Boeing Company Model the internet at http:// 757–200, –200CB, and –300 series www.regulations.gov by searching for ■ 19. The authority citation for part 134 airplanes. This proposed AD was and locating Docket No. FAA–2019– is revised to read as follows: prompted by reports of cracks in the 0437; or in person at Docket Operations

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between 9 a.m. and 5 p.m., Monday fuselage frame web and intercostal tee compliance) in the Accomplishment through Friday, except Federal holidays. clip at stringer 14, on the left side. The Instructions of APB Alert Service The AD docket contains this NPRM, the fuselage frame web cracking is Bulletin AP757–53–002, Revision 2, regulatory evaluation, any comments attributed to fatigue caused by flight dated April 11, 2019, described received, and other information. The loads and fuselage pressurization with previously, except for any differences street address for Docket Operations is higher than predicted stresses. This identified as exceptions in the listed above. Comments will be condition, if not addressed, could result regulatory text of this proposed AD. available in the AD docket shortly after in reduced structural integrity of the Please note that the initial compliance receipt. airplane. times for the airplanes identified in APB FOR FURTHER INFORMATION CONTACT: Related Service Information Under 1 Alert Service Bulletin AP757–53–002, Peter Jarzomb, Aerospace Engineer, CFR Part 51 Revision 2, dated April 11, 2019, range Airframe Section, FAA, Los Angeles from within 500 flight cycles after the ACO Branch, 3960 Paramount The FAA reviewed the following effective date of this AD, to within Boulevard, Lakewood, CA 90712–4137; service information. 16,000 flight cycles after the installation • Aviation Partners Boeing (APB) phone: 562–627–5234; fax: 562–627– of the local frame replacement or before Alert Service Bulletin AP757–53–002, 5210; email: [email protected]. 50,000 total flight cycles, whichever Revision 2, dated April 11, 2019. occurs first depending on configuration. SUPPLEMENTARY INFORMATION: • Boeing Alert Requirements Bulletin The repetitive intervals range from 757–53A0112 RB, dated November 16, Comments Invited 5,200 flight cycles to 9,900 flight cycles, 2018. depending on configuration. The FAA invites you to send any The service information describes written relevant data, views, or procedures for, depending on For information on the procedures arguments about this proposal. Send configuration, a general visual and compliance times, see Boeing Alert your comments to an address listed inspection for any previous repair, such Requirements Bulletin 757–53A0112 under the ADDRESSES section. Include as any reinforcing repair or local frame RB, dated November 16, 2018, at http:// ‘‘Docket No. FAA–2019–0437; Product replacement repair, repetitive open hole www.regulations.gov by searching for Identifier 2019–NM–074–AD’’ at the HFEC inspections for any crack of the and locating Docket No. FAA–2019– beginning of your comments. The FAA fuselage frame web fastener holes, on 0437. specifically invites comments on the the left and right side of the airplane, Explanation of Requirements Bulletin overall regulatory, economic, and applicable on-condition actions. environmental, and energy aspects of On-condition actions include The FAA worked in conjunction with this NPRM. The FAA will consider all installation of fasteners and repair. industry, under the Airworthiness comments received by the closing date These documents are distinct since they Directive Implementation Aviation and may amend this NPRM because of apply to different airplane models in Rulemaking Committee (AD ARC), to those comments. different configurations. enhance the AD system. One The FAA will post all comments, This service information is reasonably enhancement is a process for annotating without change, to http:// available because the interested parties which steps in the service information www.regulations.gov, including any have access to it through their normal are RC with an AD. Boeing has personal information you provide. The course of business or by the means implemented this RC concept into FAA will also post a report identified in the ADDRESSES section. Boeing service bulletins. summarizing each substantive verbal contact the agency receives about this FAA’s Determination In an effort to further improve the quality of ADs and AD-related Boeing proposed AD. The FAA is proposing this AD service information, a joint process because the FAA evaluated all the Discussion improvement initiative was worked relevant information and determined between the FAA and Boeing. The The FAA has received reports of the unsafe condition described initiative resulted in the development of cracks found on several airplanes while previously is likely to exist or develop a new process in which the service performing inspections in an area in other products of the same type information more clearly identifies the adjacent to the inspection areas design. specified in Boeing Alert Service actions needed to address the unsafe Bulletin 757–53A0108. The cracks Proposed AD Requirements condition in the ‘‘Accomplishment reported were not considered in the This proposed AD would require Instructions.’’ The new process results inspections specified in Boeing Alert accomplishment of the actions in a Boeing Requirements Bulletin, Service Bulletin 757–53A0108 because identified in Boeing Alert Requirements which contains only the actions needed the crack initiation sites, at issue here, Bulletin 757–53A0112 RB, dated to address the unsafe condition (i.e., were discovered after the release of November 16, 2018, described only the RC actions). Boeing Alert Service Bulletin 757– previously, except for any differences Costs of Compliance 53A0108. The airplanes had between identified as exceptions in the 20,536 and 39,850 total flight cycles at regulatory text of this proposed AD. The FAA estimates that this proposed the time of reporting. Three of the This proposed AD would also require AD affects 475 airplanes of U.S. registry. cracks were confirmed to have initiated accomplishment of the actions The FAA estimates the following costs at a fastener common to the STA 1640 identified as ‘‘RC’’ (required for to comply with this proposed AD:

ESTIMATED COSTS FOR REQUIRED ACTIONS

Cost per Action Labor cost Parts cost product Cost on U.S. operators

General Visual Inspection 35 work-hours × $85 per hour = $2,975 $0 $2,975 ...... $1,413,125.

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ESTIMATED COSTS FOR REQUIRED ACTIONS—Continued

Cost per Action Labor cost Parts cost product Cost on U.S. operators

Open Hole HFEC Inspec- 35 work-hours × $85 per hour = $2,975 0 $2,975 per inspection $1,413,125 per inspection tion. per inspection cycle. cycle. cycle.

The FAA estimates the following fastener installations that would be determining the number of aircraft that costs to do any necessary on-condition required. The FAA has no way of might need these on-condition actions:

ESTIMATED COSTS OF ON-CONDITION FASTENER INSTALLATIONS

Cost per Labor cost Parts cost product

1 work-hour × $85 per hour = $85 ...... $* $85 * * The FAA has received no definitive data that would enable the agency to provide cost estimates for the parts cost of the on-condition fastener installation specified in this proposed AD.

The FAA has received no definitive implications under Executive Order (b) Affected ADs data that would enable the agency to 13132. This proposed AD would not None. provide cost estimates for the on- have a substantial direct effect on the (c) Applicability condition repair specified in this States, on the relationship between the proposed AD. national Government and the States, or This AD applies to The Boeing Company Model 757–200, –200CB, and –300 series on the distribution of power and Authority for This Rulemaking airplanes, certificated in any category, as responsibilities among the various identified in Boeing Alert Requirements Title 49 of the United States Code levels of government. Bulletin 757–53A0112 RB, dated November specifies the FAA’s authority to issue For the reasons discussed above, I 16, 2018. rules on aviation safety. Subtitle I, certify this proposed regulation: section 106, describes the authority of (1) Is not a ‘‘significant regulatory (d) Subject the FAA Administrator. Subtitle VII: action’’ under Executive Order 12866, Air Transport Association (ATA) of Aviation Programs, describes in more (2) Will not affect intrastate aviation America Code 53, Fuselage. detail the scope of the Agency’s in Alaska, and (e) Unsafe Condition authority. (3) Will not have a significant This AD was prompted by reports of cracks The FAA is issuing this rulemaking economic impact, positive or negative, in the fuselage frame web at body station under the authority described in on a substantial number of small entities (STA) 1640. The FAA is issuing this AD to Subtitle VII, Part A, Subpart III, Section under the criteria of the Regulatory address cracks in the fuselage frame web at 44701: ‘‘General requirements.’’ Under Flexibility Act. STA 1640, which could result in reduced that section, Congress charges the FAA structural integrity of the airplane. List of Subjects in 14 CFR Part 39 with promoting safe flight of civil (f) Compliance aircraft in air commerce by prescribing Air transportation, Aircraft, Aviation Comply with this AD within the regulations for practices, methods, and safety, Incorporation by reference, compliance times specified, unless already procedures the Administrator finds Safety. done. necessary for safety in air commerce. The Proposed Amendment This regulation is within the scope of (g) Required Actions that authority because it addresses an Accordingly, under the authority (1) For all airplanes except those identified unsafe condition that is likely to exist or delegated to me by the Administrator, in paragraph (g)(2) of this AD: Except as develop on products identified in this the FAA proposes to amend 14 CFR part specified by paragraph (h) of this AD, at the 39 as follows: applicable times specified in the rulemaking action. ‘‘Compliance’’ paragraph of Boeing Alert This proposed AD is issued in Requirements Bulletin 757–53A0112 RB, accordance with authority delegated by PART 39—AIRWORTHINESS DIRECTIVES dated November 16, 2018, do all applicable the Executive Director, Aircraft actions identified in, and in accordance with, Certification Service, as authorized by ■ 1. The authority citation for part 39 the Accomplishment Instructions of Boeing FAA Order 8000.51C. In accordance continues to read as follows: Alert Requirements Bulletin 757–53A0112 with that order, issuance of ADs is RB, dated November 16, 2018. normally a function of the Compliance Authority: 49 U.S.C. 106(g), 40113, 44701. Note 1 to paragraphs (g)(1) and (g)(2): and Airworthiness Division, but during § 39.13 [Amended] Guidance for accomplishing the actions required by this AD can be found in Boeing this transition period, the Executive ■ 2. The FAA amends § 39.13 by adding Director has delegated the authority to Alert Service Bulletin 757–53A0112, dated the following new airworthiness November 16, 2018, which is referred to in issue ADs applicable to transport directive (AD): Boeing Alert Requirements Bulletin 757– category airplanes and associated 53A0112 RB, dated November 16, 2018. appliances to the Director of the System The Boeing Company: Docket No. FAA– 2019–0437; Product Identifier 2019– (2) For airplanes on which Aviation Oversight Division. NM–074–AD. Partners Boeing (APB) blended or scimitar Regulatory Findings winglets are installed in accordance with (a) Comments Due Date Supplemental Type Certificate (STC) The FAA determined that this The FAA must receive comments by ST01518SE: Except as specified by paragraph proposed AD would not have federalism August 5, 2019. (h) of this AD, at the applicable times

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specified in paragraph 1.E., ‘‘Compliance’’ of modification, or alteration required by this DEPARTMENT OF TRANSPORTATION APB Alert Service Bulletin AP757–53–002, AD if it is approved by The Boeing Company Revision 2, dated April 11, 2019, do all Organization Designation Authorization Federal Aviation Administration applicable actions identified in, and in (ODA) that has been authorized by the accordance with, the Accomplishment Manager, Los Angeles ACO Branch, FAA, to 14 CFR Part 39 Instructions of Boeing Alert Requirements make those findings. To be approved, the Bulletin 757–53A0112 RB, dated November [Docket No. FAA–2019–0406; Product repair method, modification deviation, or 16, 2018. Identifier 2019–NM–059–AD] alteration deviation must meet the (h) Exceptions to Service Information certification basis of the airplane, and the RIN 2120–AA64 Specifications approval must specifically refer to this AD. (1) For purposes of determining (4) Except as specified by paragraph (h) of Airworthiness Directives; The Boeing compliance with the requirements of this AD: this AD: For service information that Company Airplanes Where Boeing Alert Requirements Bulletin contains steps that are labeled as Required 757–53A0112 RB, dated November 16, 2018, AGENCY: Federal Aviation for Compliance (RC), the provisions of Administration (FAA), DOT. uses the phrase ‘‘the original issue date of paragraphs (i)(4)(i) and (i)(4)(ii) of this AD Requirements Bulletin 757–53A0112 RB,’’ ACTION: apply. Notice of proposed rulemaking this AD requires using ‘‘the effective date of (i) The steps labeled as RC, including (NPRM). this AD,’’ except where Boeing Alert Requirements Bulletin 757–53A0112 RB, substeps under an RC step and any figures SUMMARY: The FAA proposes to adopt a dated November 16, 2018, uses the phrase identified in an RC step, must be done to new airworthiness directive (AD) for all ‘‘the original issue date of Requirements comply with the AD. If a step or substep is The Boeing Company Model MD–90–30 Bulletin 757–53A0112 RB’’ in a note or flag labeled ‘‘RC Exempt,’’ then the RC airplanes. This proposed AD was note. requirement is removed from that step or prompted by reports indicating that (2) Where Boeing Alert Requirements substep. An AMOC is required for any certain center wing stringers and skins Bulletin 757–53A0112 RB, dated November deviations to RC steps, including substeps 16, 2018, specifies contacting Boeing for have been identified to potentially be and identified figures. susceptible to cracking. This proposed repair instructions or for alternative (ii) Steps not labeled as RC may be AD would require repetitive eddy inspections: This AD requires doing the deviated from using accepted methods in repair, or doing the alternative inspections current, low frequency (ETLF) accordance with the operator’s maintenance and applicable on-condition actions using a inspections of the left and right side or inspection program without obtaining method approved in accordance with the fastener holes for any crack; repetitive procedures specified in paragraph (i) of this approval of an AMOC, provided the RC steps, including substeps and identified figures, can eddy current, high frequency (ETHF) AD. inspections of the lower skin for any (3) For purposes of determining still be done as specified, and the airplane compliance with the requirements of this AD: can be put back in an airworthy condition. crack; and repair if any crack is found. Where APB Alert Service Bulletin AP757– The FAA is proposing this AD to 53–002, Revision 2, dated April 11, 2019, (j) Related Information address the unsafe condition on these uses the phrase ‘‘the original issue date of (1) For more information about this AD, products. this service bulletin,’’ this AD requires using contact Peter Jarzomb, Aerospace Engineer, DATES: The FAA must receive comments ‘‘the effective date of this AD,’’ except where Airframe Section, FAA, Los Angeles ACO on this proposed AD by August 5, 2019. APB Alert Service Bulletin AP757–53–002, Branch, 3960 Paramount Boulevard, ADDRESSES: You may send comments, Revision 2, dated April 11, 2019, uses the Lakewood, CA 90712–4137; phone: 562–627– phrase ‘‘the original issue date of this Service using the procedures found in 14 CFR 5234; fax: 562–627–5210; email: Bulletin’’ in a note or flag note. 11.43 and 11.45, by any of the following [email protected]. (4) Where APB Alert Service Bulletin methods: (2) For Boeing service information AP757–53–002, Revision 2, dated April 11, • Federal eRulemaking Portal: Go to identified in this AD, contact Boeing 2019, specifies contacting Boeing for repair http://www.regulations.gov. Follow the Commercial Airplanes, Attention: instructions or for alternative inspections: instructions for submitting comments. Contractual & Data Services (C&DS), 2600 This AD requires doing the repair, or doing • Fax: 202–493–2251. the alternative inspections and applicable on- Westminster Blvd., MC 110–SK57, Seal • Mail: U.S. Department of condition actions using a method approved Beach, CA 90740–5600; telephone 562–797– Transportation, Docket Operations, M– in accordance with the procedures specified 1717; internet https:// 30, West Building Ground Floor, Room in paragraph (i) of this AD. www.myboeingfleet.com. (3) For Aviation Partners Boeing service W12–140, 1200 New Jersey Avenue SE, (i) Alternative Methods of Compliance Washington, DC 20590. (AMOCs) information identified in this AD, contact • Aviation Partners Boeing, 2811 South 102nd Hand Delivery: Deliver to Mail (1) The Manager, Los Angeles ACO Branch, address above between 9 a.m. and 5 FAA, has the authority to approve AMOCs St., Suite 200, Seattle, WA 98168; phone: 206–830–7699; fax: 206–767–3355; email: p.m., Monday through Friday, except for this AD, if requested using the procedures Federal holidays. found in 14 CFR 39.19. In accordance with [email protected]; internet: http:// 14 CFR 39.19, send your request to your www.aviationpartnersboeing.com. For service information identified in principal inspector or local Flight Standards (4) You may view this referenced service this NPRM, contact Boeing Commercial District Office, as appropriate. If sending information at the FAA, Transport Standards Airplanes, Attention: Contractual & Data information directly to the manager of the Branch, 2200 South 216th St., Des Moines, Services (C&DS), 2600 Westminster certification office, send it to the attention of WA. For information on the availability of Blvd., MC 110–SK57, Seal Beach, CA the person identified in paragraph (j)(1) of this material at the FAA, call 206–231–3195. 90740 5600; telephone 562–797–1717; this AD. Information may be emailed to: 9- internet https:// Issued in Des Moines, Washington, on June [email protected]. www.myboeingfleet.com. You may view 10, 2019. (2) Before using any approved AMOC, this service information at the FAA, notify your appropriate principal inspector, Michael Kaszycki, or lacking a principal inspector, the manager Transport Standards Branch, 2200 Acting Director, System Oversight Division, of the local flight standards district office/ South 216th St., Des Moines, WA. For Aircraft Certification Service. certificate holding district office. information on the availability of this (3) An AMOC that provides an acceptable [FR Doc. 2019–13047 Filed 6–20–19; 8:45 am] material at the FAA, call 206–231–3195. level of safety may be used for any repair, BILLING CODE 4910–13–P It is also available on the internet at

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http://www.regulations.gov by searching common to stringers (S) S–11 through or Boeing Alert Service Bulletin MD80– for and locating Docket No. FAA–2019– S–22, and around the external bracket 57A244, dated March 3, 2016, which is 0406. angle at S–18 and S–19 have been the service information operators are identified to potentially be susceptible required to follow to complete the Examining the AD Docket to cracking on the Model MD–90 actions required by AD 2016–07–28. You may examine the AD docket on airplanes. This determination is based Boeing is developing new service the internet at http:// on Model MD–80 airplane service information for Model MD–80 airplanes www.regulations.gov by searching for experience. The Model MD–80 and to address these additional areas where and locating Docket No. FAA–2019– Model MD–90 wings share the same cracking was found. The FAA will 0406; or in person at Docket Operations basic design and have similar stresses. consider further rulemaking to address between 9 a.m. and 5 p.m., Monday Operators of Model MD–80 airplanes the identified unsafe condition for through Friday, except Federal holidays. have reported finding cracks in the Model MD–80 airplanes once this The AD docket contains this NPRM, the center wing lower stringers, lower service information is approved. regulatory evaluation, any comments stringer end fittings, and lower forward received, and other information. The and aft skins. The cracks in stringers Related Service Information Under 1 street address for Docket Operations is occur at the inboard end where they are CFR Part 51 listed above. Comments will be joined to the airplane centerline by end The FAA reviewed Boeing Alert available in the AD docket shortly after fittings. Cracks in the end fittings occur Service Bulletin MD90–57A031, dated receipt. at the outboard end where they attach March 19, 2019. This service FOR FURTHER INFORMATION CONTACT: to stringers. The wing skin cracks occur information describes procedures for David Truong, Aerospace Engineer, underneath a cracked stringer. The repetitive ETLF inspections of the left Airframe Section, FAA, Los Angeles cause of the cracks has been determined and right side fastener holes for any ACO Branch, 3960 Paramount to be from fatigue. The Boeing Company crack, repetitive ETHF inspections of Boulevard, Lakewood, CA 90712–4137; has not received any reports of cracks the lower skin for any crack, and repair phone: 562–627–5224; fax: 562–627– on Model MD–90 airplanes; however, if any crack is found. the similarities with the Model MD–80 5210; email: [email protected]. This service information is reasonably wings require agency action. If not SUPPLEMENTARY INFORMATION: available because the interested parties addressed, cracking of the center wing have access to it through their normal Comments Invited stringers and skins could result in the course of business or by the means The FAA invites you to send any inability of the structure to sustain limit identified in the ADDRESSES section. written relevant data, views, or loads, and adversely affect the structural arguments about this proposal. Send integrity of the airplane. FAA’s Determination your comments to an address listed Other Relevant Rulemaking The FAA is proposing this AD under the ADDRESSES section. Include ‘‘Docket No. FAA–2019–0406; Product The FAA issued AD 2016–07–28 (81 because we evaluated all the relevant Identifier 2019–NM–059–AD’’ at the FR 21253, April 11, 2016) for all The information and determined the unsafe beginning of your comments. The FAA Boeing Company Model DC–9–81 (MD– condition described previously is likely specifically invites comments on the 81), DC–9–82 (MD–82), DC–9–83 (MD– to exist or develop in other products of overall regulatory, economic, 83), and DC–9–87 (MD–87) airplanes, the same type design. environmental, and energy aspects of and Model MD–88 airplanes. That AD Proposed AD Requirements this NPRM. The FAA will consider all requires repetitive ETHF inspections for comments received by the closing date any cracking in the left and right side This proposed AD would require and may amend this NPRM because of center wing lower skin, and corrective accomplishing the actions specified in those comments. actions if necessary. That AD addresses the service information described The FAA will post all comments, cracks at S–15, S–16, or S–17, previously. For information on the without change, to http:// associated end fittings, and skins in the procedures and compliance times, see www.regulations.gov, including any center wing fuel tank where the this service information at http:// personal information you provide. The stringers meet the end fittings near www.regulations.gov by searching for FAA will also post a report Xcw=13 and Xcw=15. Such cracking and locating Docket No. FAA–2019– summarizing each substantive verbal could cause structural failure of the 0406. contact the agency receives about this wings. Since that AD was issued, Costs of Compliance NPRM. cracking has been found at fastener holes common to stringers S–11 through The FAA estimates that this proposed Discussion S–22, and around the external bracket AD affects 43 airplanes of U.S. registry. The FAA has received reports angle at S–18 and S–19. These areas The FAA estimates the following costs indicating that the fastener holes were not addressed in AD 2016–07–28 to comply with this proposed AD:

ESTIMATED COSTS

Cost per Cost on U.S. Action Labor cost Parts cost product operators

Inspection ...... 30 work-hours × $85 per hour = $2,550 per inspec- $0 $2,550 per inspection $109,650 per inspection tion cycle. cycle. cycle.

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The FAA has received no definitive List of Subjects in 14 CFR Part 39 Where Boeing Alert Service Bulletin MD90– data that would enable the agency to 57A031, dated March 19, 2019, uses the Air transportation, Aircraft, Aviation phrase ‘‘the original issue date of this service provide cost estimates for the on- safety, Incorporation by reference, condition actions specified in this bulletin,’’ this AD requires using ‘‘the Safety. effective date of this AD.’’ proposed AD. The Proposed Amendment (2) Where Boeing Alert Service Bulletin Authority for This Rulemaking MD90–57A031, dated March 19, 2019, Accordingly, under the authority specifies contacting Boeing for repair Title 49 of the United States Code delegated to me by the Administrator, instructions and doing the repair: This AD specifies the FAA’s authority to issue the FAA proposes to amend 14 CFR part requires doing the repair using a method rules on aviation safety. Subtitle I, 39 as follows: approved in accordance with the procedures section 106, describes the authority of specified in paragraph (i) of this AD. the FAA Administrator. Subtitle VII: PART 39—AIRWORTHINESS (i) Alternative Methods of Compliance Aviation Programs, describes in more DIRECTIVES (AMOCs) detail the scope of the Agency’s ■ 1. The authority citation for part 39 (1) The Manager, Los Angeles ACO Branch, authority. FAA, has the authority to approve AMOCs continues to read as follows: The FAA is issuing this rulemaking for this AD, if requested using the procedures under the authority described in Authority: 49 U.S.C. 106(g), 40113, 44701. found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your Subtitle VII, Part A, Subpart III, Section § 39.13 [Amended] 44701: ‘‘General requirements.’’ Under principal inspector or local Flight Standards ■ 2. The FAA amends § 39.13 by adding District Office, as appropriate. If sending that section, Congress charges the FAA the following new airworthiness information directly to the manager of the with promoting safe flight of civil directive (AD): certification office, send it to the attention of aircraft in air commerce by prescribing the person identified in paragraph (j)(1) of regulations for practices, methods, and The Boeing Company: Docket No. FAA– this AD. Information may be emailed to 9- procedures the Administrator finds 2019–0406; Product Identifier 2019– [email protected]. necessary for safety in air commerce. NM–059–AD. (2) Before using any approved AMOC, This regulation is within the scope of (a) Comments Due Date notify your appropriate principal inspector, or lacking a principal inspector, the manager that authority because it addresses an The FAA must receive comments by unsafe condition that is likely to exist or of the local flight standards district office/ August 5, 2019. certificate holding district office. develop on products identified in this (b) Affected ADs (3) An AMOC that provides an acceptable rulemaking action. level of safety may be used for any repair, None. This proposed AD is issued in modification, or alteration required by this accordance with authority delegated by (c) Applicability AD if it is approved by The Boeing Company the Executive Director, Aircraft This AD applies to all The Boeing Organization Designation Authorization Certification Service, as authorized by Company Model MD–90–30 airplanes, (ODA) that has been authorized by the FAA Order 8000.51C. In accordance certificated in any category. Manager, Los Angeles ACO Branch, FAA, to make those findings. To be approved, the with that order, issuance of ADs is (d) Subject repair method, modification deviation, or normally a function of the Compliance alteration deviation must meet the and Airworthiness Division, but during Air Transport Association (ATA) of America Code 57, Wings. certification basis of the airplane, and the this transition period, the Executive approval must specifically refer to this AD. Director has delegated the authority to (e) Unsafe Condition (4) Except as specified by paragraph (h) of issue ADs applicable to transport This AD was prompted by reports this AD: For service information that category airplanes and associated indicating that certain center wing stringers contains steps that are labeled as Required appliances to the Director of the System and skins have been identified to potentially for Compliance (RC), the provisions of Oversight Division. be susceptible to cracking. The FAA is paragraphs (i)(4)(i) and (i)(4)(ii) of this AD issuing this AD to address cracking of the apply. Regulatory Findings center wing stringers and skins, which could (i) The steps labeled as RC, including result in the inability of the structure to substeps under an RC step and any figures The FAA determined that this sustain limit loads, and adversely affect the identified in an RC step, must be done to proposed AD would not have federalism structural integrity of the airplane. comply with the AD. If a step or substep is implications under Executive Order labeled ‘‘RC Exempt,’’ then the RC 13132. This proposed AD would not (f) Compliance requirement is removed from that step or have a substantial direct effect on the Comply with this AD within the substep. An AMOC is required for any States, on the relationship between the compliance times specified, unless already deviations to RC steps, including substeps done. and identified figures. national Government and the States, or (ii) Steps not labeled as RC may be on the distribution of power and (g) Required Actions deviated from using accepted methods in responsibilities among the various Except as specified in paragraph (h) of this accordance with the operator’s maintenance levels of government. AD: At the applicable times specified in or inspection program without obtaining For the reasons discussed above, I paragraph 1.E., ‘‘Compliance,’’ of Boeing approval of an AMOC, provided the RC steps, certify this proposed regulation: Alert Service Bulletin MD90–57A031, dated including substeps and identified figures, can March 19, 2019, do all applicable actions still be done as specified, and the airplane (1) Is not a ‘‘significant regulatory identified as ‘‘RC’’ (required for compliance) can be put back in an airworthy condition. action’’ under Executive Order 12866, in, and in accordance with, the (2) Will not affect intrastate aviation Accomplishment Instructions of Boeing Alert (j) Related Information in Alaska, and Service Bulletin MD90–57A031, dated March (1) For more information about this AD, 19, 2019. contact David Truong, Aerospace Engineer, (3) Will not have a significant Airframe Section, FAA, Los Angeles ACO economic impact, positive or negative, (h) Exceptions to Service Information Branch, 3960 Paramount Boulevard, on a substantial number of small entities Specifications Lakewood, CA 90712–4137; phone: 562–627– under the criteria of the Regulatory (1) For purposes of determining 5224; fax: 562–627–5210; email: Flexibility Act. compliance with the requirements of this AD: [email protected].

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(2) For service information identified in • Federal eRulemaking Portal: Go to and may amend this NPRM because of this AD, contact Boeing Commercial http://www.regulations.gov. Follow the those comments. Airplanes, Attention: Contractual & Data instructions for submitting comments. The FAA will post all comments the Services (C&DS), 2600 Westminster Blvd., • Fax: 202–493–2251. agency receives, without change, to MC 110–SK57, Seal Beach, CA 90740 5600; • http://www.regulations.gov, including telephone 562 797 1717; internet https:// Mail: U.S. Department of www.myboeingfleet.com. You may view this Transportation, Docket Operations, M– any personal information you provide. service information at the FAA, Transport 30, West Building Ground Floor, Room The FAA will also post a report Standards Branch, 2200 South 216th St., Des W12–140, 1200 New Jersey Avenue SE, summarizing each substantive verbal Moines, WA. For information on the Washington, DC 20590. contact the agency receives about this availability of this material at the FAA, call • Hand Delivery: Deliver to Mail NPRM. 206–231–3195. address above between 9 a.m. and 5 Discussion Issued in Des Moines, Washington, on June p.m., Monday through Friday, except 4, 2019. Federal holidays. Transport Canada Civil Aviation (TCCA), which is the aviation authority Michael Kaszycki, For service information identified in this NPRM, contact Bombardier, Inc., for Canada, has issued Canadian AD Acting Director, System Oversight Division, CF–2018–29, dated November 2, 2018 Aircraft Certification Service. 400 Coˆte-Vertu Road West, Dorval, Que´bec H4S 1Y9, Canada; Widebody (referred to after this as the Mandatory [FR Doc. 2019–13057 Filed 6–20–19; 8:45 am] Continuing Airworthiness Information, BILLING CODE 4910–13–P Customer Response Center North America toll-free telephone 1–866–538– or ‘‘the MCAI’’), to correct an unsafe 1247 or direct-dial telephone 1–514– condition for certain Bombardier, Inc., Model CL–600–2B19 (Regional Jet DEPARTMENT OF TRANSPORTATION 855–2999; fax 514–855–7401; email [email protected]; internet Series 100 & 440), CL–600–2C10 (Regional Jet Series 700, 701 & 702), CL– Federal Aviation Administration http://www.bombardier.com. You may 600–2D15 (Regional Jet Series 705), CL– view this service information at the 600–2D24 (Regional Jet Series 900), and 14 CFR Part 39 FAA, Transport Standards Branch, 2200 CL–600–2E25 (Regional Jet Series 1000) South 216th St., Des Moines, WA. For [Docket No. FAA–2019–0436; Product airplanes. The MCAI states: Identifier 2019–NM–014–AD] information on the availability of this material at the FAA, call 206–231–3195. There have been several in-service reports RIN 2120–AA64 of Power Control Unit (PCU) rod end Examining the AD Docket fractures due to pitting corrosion. Airworthiness Directives; Bombardier, You may examine the AD docket on Investigation revealed that the PCU rod end Inc., Airplanes spherical bearing could seize which, in turn, the internet at http:// could induce a bending moment on the PCU AGENCY: Federal Aviation www.regulations.gov by searching for output rod. This bending moment will Administration (FAA), DOT. and locating Docket No. FAA–2019– eventually fracture the rod end. It was also ACTION: Notice of proposed rulemaking 0436; or in person at Docket Operations noted that this failure mode typically occurs within the first 6000 hours of aeroplane (NPRM). between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. operation. This condition, if not corrected, could lead SUMMARY: The FAA proposes to adopt a The AD docket contains this NPRM, the to a disconnect between the PCU and the new airworthiness directive (AD) for regulatory evaluation, any comments control surface, potential loss of the control certain Bombardier, Inc., Model CL– received, and other information. The surface function or inadequate flutter 600–2B19 (Regional Jet Series 100 & street address for Docket Operations is suppression. 440), CL–600–2C10 (Regional Jet Series listed above. Comments will be This [Canadian] AD mandates 700, 701 & 702), CL–600–2D15 available in the AD docket shortly after incorporation of revised tasks into the (Regional Jet Series 705), CL–600–2D24 receipt. maintenance manuals for detailed (Regional Jet Series 900), and CL–600– inspections of the PCU rod ends in order to FOR FURTHER INFORMATION CONTACT: allow timely detection of pitting corrosion 2E25 (Regional Jet Series 1000) Darren Gassetto, Aerospace Engineer, [and would prohibit using certain aircraft airplanes. This proposed AD was Mechanical Systems and Admin maintenance manual tasks]. prompted by reports of power control Services Section, FAA, New York ACO You may examine the MCAI in the unit (PCU) rod end fractures due to Branch, 1600 Stewart Avenue, Suite pitting corrosion. This proposed AD AD docket on the internet at http:// 410, Westbury, NY 11590; telephone www.regulations.gov by searching for would require revising the existing 516–228–7323; fax 516–794–5531; email maintenance or inspection program, as and locating Docket No. FAA–2019– [email protected]. 0436. applicable, to incorporate new or more SUPPLEMENTARY INFORMATION: restrictive airworthiness limitations. Related Service Information Under 1 This proposed AD would also require Comments Invited CFR Part 51 detailed inspections of the elevator PCU The FAA invites you to send any Bombardier, Inc., has issued the rod ends and applicable corrective written relevant data, views, or following service information. actions. This proposed AD would also arguments about this proposal. Send Bombardier Service Bulletin 670BA– prohibit using certain aircraft your comments to an address listed 27–074, dated June 22, 2017. This maintenance manual tasks. The FAA is under the ADDRESSES section. Include service information describes proposing this AD to address the unsafe ‘‘Docket No. FAA–2019–0436; Product procedures for detailed inspections for condition on these products. Identifier 2019–NM–014–AD’’ at the pitting and corrosion of the left and DATES: The FAA must receive comments beginning of your comments. The FAA right rod ends of the elevator PCUs and on this proposed AD by August 5, 2019. specifically invites comments on the to make sure that the spherical ball and ADDRESSES: You may send comments, overall regulatory, economic, inner race of the rod ends move freely, using the procedures found in 14 CFR environmental, and energy aspects of and applicable corrective actions. 11.43 and 11.45, by any of the following this NPRM. The FAA will consider all Corrective actions include installing a methods: comments received by the closing date new PCU.

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The following tasks describe • Task 27–31–00–05, Operational course of business or by the means operational checks of the elevator and Test of the Elevator Control System, of identified in the ADDRESSES section. rudder control systems, and a detailed MRLUMP–002, Revision 37. FAA’s Determination inspection of the rudder PCU rod end The following tasks describe spherical ball. operational tests of the elevator and This product has been approved by • Task 27–20–00–13, Operational rudder PCUs, and a detailed inspection the aviation authority of another Check of the Rudder Control System of of the elevator PCU rod end spherical country, and is approved for operation Section 3—Systems and Powerplant ball. in the United States. Pursuant to the Program, of the Bombardier Model CL– • Task 27–20–00–106, Operational FAA’s bilateral agreement with the State 600–2B19 Series 100/200/440 Test of the Rudder PCUs (Duplicate of Design Authority, the FAA has been Maintenance Planning Manual, Low CMR 27–20–00–106), of Section 3— notified of the unsafe condition Utilization Maintenance Program Systems/Power Plant Tasks, of the described in the MCAI and service (MRLUMP–001), CSP A–054–009, Bombardier Model CL–600–2C10, CL– information referenced above. The FAA Revision 37, dated July 10, 2018 600–2D15, CL–600–2D24, Series 700/ is proposing this AD because the FAA (‘‘MRLUMP–001, Revision 37’’). 705/900 Maintenance Planning Manual, evaluated all the relevant information • Task 27–23–01–01, Detailed Low Utilization Maintenance Program and determined the unsafe condition Inspection of the Rudder PCU Rod End (LUMP), CSP BC–116, Revision 15, described previously is likely to exist or Spherical Ball, of MRLUMP–001, dated May 25, 2017 (‘‘LUMP, Revision develop on other products of the same Revision 37. 15’’). type design. • Task 27–31–00–05, Operational • Task 273000–207, Operational Test Proposed Requirements of This NPRM of the Elevator Power-Control Units Check of the Elevator Control System, of This proposed AD would require MRLUMP–001, Revision 37. (PCUs), of LUMP, Revision 15. • revising the existing maintenance or The following tasks describe Task 273000–215, Detailed inspection program, as applicable, to operational tests of the elevator and Inspection of the Elevator PCU Rod End incorporate new or more restrictive rudder control systems, and a detailed Spherical Ball, of LUMP, Revision 15. airworthiness limitations and to inspection of the rudder PCU rod end The following task describes an prohibit using certain aircraft spherical ball. operational check of each elevator PCU. maintenance manual tasks. • Task 27–20–00–13, Operational • Task 273000–207, Operational Additionally, this proposed AD would Test of the Rudder Control System, of Check of each Elevator PCU, of Subject require detailed inspections for pitting Section 3—Systems and Powerplant 1–27, of Section 1, Systems and and corrosion of the left and right rod Program, of the Bombardier Model CL– Powerplant Program, Volume 1 of Part ends of the elevator PCUs and to make 600–2B19 Series 100/200/440 1, Maintenance Review Board Report, sure that the spherical ball and inner Maintenance Planning Manual, Low Revision 18, dated July 25, 2018, of the race of the rod ends move freely, and Utilization Maintenance Program Bombardier Model CL–600–2C10, CL– applicable corrective actions. (MRLUMP–002), CSP A–054–060, 600–2D15, CL–600–2D24, and CL–600– Revision 37, dated July 10, 2018 2E25 Series 700/705/900/1000 Costs of Compliance (‘‘MRLUMP–002, Revision 37’’). Maintenance Requirements Manual, The FAA estimates that this proposed • Task 27–23–01–01, Detailed CSP B–053. AD affects 1,008 airplanes of U.S. Inspection of the Rudder PCU Rod End This service information is reasonably registry. The FAA estimates the Spherical Ball, of MRLUMP–002, available because the interested parties following costs to comply with this Revision 37. have access to it through their normal proposed AD:

ESTIMATED COSTS FOR REQUIRED ACTIONS *

Cost per Cost on U.S. Labor cost Parts cost product operators

9 work-hours × $85 per hour = $765 ...... $0 $765 $771,120 * Table does not include estimated costs for revising the maintenance or inspection program.

The FAA has determined that revising The FAA has received no definitive Subtitle VII, Part A, Subpart III, Section the existing maintenance or inspection data that would enable the agency to 44701: ‘‘General requirements.’’ Under program takes an average of 90 work- provide cost estimates for the on- that section, Congress charges the FAA hours per operator, although the FAA condition actions specified in this with promoting safe flight of civil recognizes that this number may vary proposed AD. aircraft in air commerce by prescribing regulations for practices, methods, and from operator to operator. In the past, Authority for This Rulemaking the FAA has estimated that this action procedures the Administrator finds takes 1 work-hour per airplane. Since Title 49 of the United States Code necessary for safety in air commerce. operators incorporate maintenance or specifies the FAA’s authority to issue This regulation is within the scope of inspection program changes for their rules on aviation safety. Subtitle I, that authority because it addresses an affected fleet(s), the FAA has section 106, describes the authority of unsafe condition that is likely to exist or the FAA Administrator. Subtitle VII: determined that a per-operator estimate develop on products identified in this Aviation Programs, describes in more rulemaking action. is more accurate than a per-airplane detail the scope of the Agency’s This proposed AD is issued in estimate. Therefore, the FAA estimates authority. accordance with authority delegated by the total cost per operator to be $7,650 The FAA is issuing this rulemaking the Executive Director, Aircraft (90 work-hours × $85 per work-hour). under the authority described in Certification Service, as authorized by

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FAA Order 8000.51C. In accordance identified in paragraphs (c)(1) through (c)(4) (v) Task 27–23–01–01, Detailed Inspection with that order, issuance of ADs is of this AD. of the Rudder PCU Rod End Spherical Ball, normally a function of the Compliance (1) Model CL–600–2B19 (Regional Jet of MRLUMP–002, Revision 37. (vi) Task 27–31–00–05, Operational Test of and Airworthiness Division, but during Series 100 & 440) airplanes, serial numbers 7003 and subsequent. the Elevator Control System, of MRLUMP– this transition period, the Executive (2) Model CL–600–2C10 (Regional Jet 002, Revision 37. Director has delegated the authority to Series 700, 701 & 702) airplanes, serial (2) For Model CL–600–2C10 airplanes issue ADs applicable to transport numbers 10002 through 10999 inclusive. having serial numbers 10004, 10040, 10043, category airplanes and associated (3) Model CL–600–2D15 (Regional Jet 10052, 10100, 10164, 10183, 10187, 10204, appliances to the Director of the System Series 705) and CL–600–2D24 (Regional Jet 10206, 10217, 10247, 10289, 10332, and Oversight Division. Series 900) airplanes, serial numbers 15001 10343 operating under the LUMP; and Model through 15990 inclusive. CL–600–2D15 and CL–600–2D24 airplanes Regulatory Findings (4) Model CL–600–2E25 (Regional Jet having serial numbers 15158, 15278, and Series 1000) airplanes, serial numbers 19001 15370 operating under the LUMP: Within 30 The FAA determined that this through 19990 inclusive. days from the effective date of this AD, revise proposed AD would not have federalism the existing maintenance or inspection implications under Executive Order (d) Subject program, as applicable, to incorporate the 13132. This proposed AD would not Air Transport Association (ATA) of information specified in paragraphs (g)(2)(i) have a substantial direct effect on the America Code 27, Flight controls. through (g)(2)(iii) of this AD. The initial compliance time for accomplishing the States, on the relationship between the (e) Reason national Government and the States, or actions is within 30 days after the effective This AD was prompted by reports of power date of this AD; or within the applicable on the distribution of power and control unit (PCU) rod end fractures due to interval specified in Section 3—Systems/ responsibilities among the various pitting corrosion. The FAA is issuing this AD Power Plant Tasks, of the Bombardier Model levels of government. to address this condition, which, if not CL–600–2C10, CL–600–2D15, CL–600–2D24, For the reasons discussed above, I detected and corrected, could lead to a Series 700/705/900 Maintenance Planning certify this proposed regulation: disconnect between the PCU and the control Manual, Low Utilization Maintenance 1. Is not a ‘‘significant regulatory surface, resulting in potential loss of the Program (LUMP), CSP BC–116, Revision 15, action’’ under Executive Order 12866; control surface function or inadequate flutter dated May 25, 2017 (‘‘LUMP, Revision 15’’), 2. Will not affect intrastate aviation in suppression. after the effective date of this AD; whichever occurs later. Alaska; and (f) Compliance (i) Task 27–20–00–106, Operational Test of 3. Will not have a significant Comply with this AD within the the Rudder PCUs (Duplicate CMR 27–20–00– economic impact, positive or negative, compliance times specified, unless already 106), of LUMP, Revision 15. on a substantial number of small entities done. (ii) Task 273000–207, Operational Test of the Elevator Power-Control Units (PCUs), of under the criteria of the Regulatory (g) Maintenance or Inspection Program LUMP, Revision 15. Flexibility Act. Revision for Certain Airplanes Operating (iii) Task 273000–215, Detailed Inspection Under the Low Utilization Maintenance List of Subjects in 14 CFR Part 39 of the Elevator PCU Rod End Spherical Ball, Program (LUMP) of LUMP, Revision 15. Air transportation, Aircraft, Aviation (1) For Model CL–600–2B19 airplanes safety, Incorporation by reference, operating under the LUMP: Within 90 days (h) Maintenance or Inspection Program Safety. after the effective date of this AD, revise the Revision for Certain Airplanes That Are Not existing maintenance or inspection program, Operating Under the LUMP The Proposed Amendment as applicable, to incorporate the information For Model CL–600–2C10, CL–600–2D15, Accordingly, under the authority specified in paragraphs (g)(1)(i) through CL–600–2D24, and CL–600–2E25 airplanes delegated to me by the Administrator, (g)(1)(vi) of this AD. The initial compliance that are not operating under the LUMP: the FAA proposes to amend 14 CFR part time for accomplishing the actions is within Within 30 days from the effective date of this 90 days after the effective date of this AD; or 39 as follows: AD, revise the existing maintenance or within the applicable interval specified in inspection program, as applicable, to Section 3—Systems and Powerplant Program, PART 39—AIRWORTHINESS incorporate the information specified in task of the Bombardier Model CL–600–2B19 273000–207, Operational Check of each DIRECTIVES Series 100/200/440 Maintenance Planning Elevator PCU, of Subject 1–27, of Section 1, Manual, Low Utilization Maintenance Systems and Powerplant Program, Volume 1 ■ 1. The authority citation for part 39 Program (MRLUMP–001), CSP A–054–009, of Part 1, Maintenance Review Board Report, continues to read as follows: Revision 37, dated July 10, 2018 Revision 18, dated July 25, 2018, of the Authority: 49 U.S.C. 106(g), 40113, 44701. (‘‘MRLUMP–001, Revision 37’’); or Section Bombardier Model CL–600–2C10, CL–600– 3—Systems and Powerplant Program, of the 2D15, CL–600–2D24, and CL–600–2E25 § 39.13 [Amended] Bombardier Model CL–600–2B19 Series 100/ Series 700/705/900/1000 Maintenance ■ 2. The FAA amends § 39.13 by adding 200/440 Maintenance Planning Manual, Low Requirements Manual, CSP B–053, (‘‘CSP B– Utilization Maintenance Program (MRLUMP– 053, Revision 18’’). The initial compliance the following new airworthiness 002), CSP A–054–060, Revision 37, dated time for accomplishing the actions is within directive (AD): July 10, 2018 (‘‘MRLUMP–002, Revision 30 days after the effective date of this AD; or Bombardier, Inc.: Docket No. FAA–2019– 37’’), after the effective date of this AD; within the applicable interval specified in 0436; Product Identifier 2019–NM–014– whichever occurs later. CSP B–053, Revision 18, after the effective AD. (i) Task 27–20–00–13, Operational Check date of this AD; whichever occurs later. of the Rudder Control System, of MRLUMP– (a) Comments Due Date 001, Revision 37. (i) No Alternative Actions or Intervals The FAA must receive comments by (ii) Task 27–23–01–01, Detailed Inspection After the existing maintenance or August 5, 2019. of the Rudder PCU Rod End Spherical Ball, inspection program has been revised as of MRLUMP–001, Revision 37. required by paragraph (g) or (h) of this AD, (b) Affected ADs (iii) Task 27–31–00–05, Operational Check no alternative actions (e.g., inspections) or None. of the Elevator Control System, of MRLUMP– intervals may be used unless the actions and 001, Revision 37. intervals are approved as an alternative (c) Applicability (iv) Task 27–20–00–13, Operational Test of method of compliance (AMOC) in This AD applies to Bombardier, Inc., the Rudder Control System, of MRLUMP– accordance with the procedures specified in airplanes, certificated in any category, as 002, Revision 37. paragraph (n)(1) of this AD.

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(j) First Inspection of the Elevator PCU Rod flight hours as of the effective date of this move freely, and do all applicable corrective End for Certain Airplanes AD: Within the compliance time indicated in actions, in accordance with paragraph 2.B. of figure 1 to paragraph (j) of this AD, perform For Model CL–600–2C10, CL–600–2D15, the Accomplishment Instructions of a detailed inspection for pitting and CL–600–2D24, and CL–600–2E25 airplanes Bombardier Service Bulletin 670BA–27–074, corrosion of the left and right rod ends of the dated June 22, 2017. Do all applicable that are not operating under the LUMP, and elevator PCUs and to make sure that the corrective actions before further flight. that have accumulated less than 6,000 total spherical ball and inner race of the rod ends

(k) Second Inspection of the Elevator PCU Spherical Ball, of the Bombardier CL–600– AD CF–2018–29, dated November 2, 2018, Rod End for Certain Airplanes 2B19 Series 100/200/440 AMM, CSP A–001, for related information. This MCAI may be (1) For Model CL–600–2C10, CL–600– Revision 54, dated October 10, 2016, or found in the AD docket on the internet at 2D15, CL–600–2D24, and CL–600–2E25 earlier revisions of this task. http://www.regulations.gov by searching for airplanes that are not operating under the (3) Task 27–33–01–220–801, Detailed and locating Docket No. FAA–2019–0436. Inspection of the Elevator PCU Rod End LUMP, and that have accumulated 2,600 total (2) For more information about this AD, flight hours or less at the time of the Spherical Ball, of the Bombardier CL–600– 2B19 Series 100/200/440 AMM, CSP A–001, contact Darren Gassetto, Aerospace Engineer, inspection required by paragraph (j) of this Mechanical Systems and Admin Services AD: Before the accumulation of 3,400 total Revision 54, dated October 10, 2016, or Section, FAA, New York ACO Branch, 1600 flight hours, perform an additional detailed earlier revisions of this task. Stewart Avenue, Suite 410, Westbury, NY inspection for pitting and corrosion of the left (n) Other FAA AD Provisions and right rod ends of the elevator PCUs and 11590; telephone 516–228–7323; fax 516– to make sure that the spherical ball and inner The following provisions also apply to this 794–5531; email [email protected]. race of the rod ends move freely, and do all AD: (3) For service information identified in applicable corrective actions, in accordance (1) Alternative Methods of Compliance this AD, contact Bombardier, Inc., 400 Coˆte- (AMOCs): The Manager, New York ACO with paragraph 2.B. of the Accomplishment Vertu Road West, Dorval, Que´bec H4S 1Y9, Instructions of Bombardier Service Bulletin Branch, FAA, has the authority to approve AMOCs for this AD, if requested using the Canada; Widebody Customer Response 670BA–27–074, dated June 22, 2017. Do all Center North America toll-free telephone 1– applicable corrective actions before further procedures found in 14 CFR 39.19. In 866–538–1247 or direct-dial telephone 1– flight. accordance with 14 CFR 39.19, send your (2) For airplanes that have accumulated request to your principal inspector or local 514–855–2999; fax 514–855–7401; email more than 2,600 total flight hours at the time Flight Standards District Office, as [email protected]; internet http:// of the inspection required by paragraph (j) of appropriate. If sending information directly www.bombardier.com. You may view this this AD: A second inspection is not to the manager of the certification office, service information at the FAA, Transport applicable. send it to ATTN: Program Manager, Standards Branch, 2200 South 216th St., Des Continuing Operational Safety, FAA, New Moines, WA. For information on the (l) No Inspection for Certain Airplanes York ACO Branch, 1600 Stewart Avenue, availability of this material at the FAA, call The requirements of paragraphs (j) and (k) Suite 410, Westbury, NY 11590; telephone 206–231–3195. are not applicable to airplanes that have 516–228–7300; fax 516–794–5531. Before accumulated 6,000 total flight hours or more using any approved AMOC, notify your Issued in Des Moines, Washington, on June as of the effective date of this AD. appropriate principal inspector, or lacking a 12, 2019. principal inspector, the manager of the local (m) Service Information Prohibition for flight standards district office/certificate Michael Kaszycki, Certain Airplanes holding district office. Acting Director, System Oversight Division, For all Model CL–600–2B19 airplanes: (2) Contacting the Manufacturer: For any Aircraft Certification Service. After 30 days from the effective date of this requirement in this AD to obtain corrective [FR Doc. 2019–13051 Filed 6–20–19; 8:45 am] AD, this AD prohibits the use of the aircraft actions from a manufacturer, the action must maintenance manual (AMM) tasks specified be accomplished using a method approved BILLING CODE 4910–13–P in paragraphs (m)(1) through (m)(3) of this by the Manager, New York ACO Branch, AD. FAA; or Transport Canada Civil Aviation (1) Task 10–12–00–550–804, Short-Term (TCCA); or Bombardier, Inc.’s TCCA Design Storage Return-to-Service Maintenance Approval Organization (DAO). If approved by Checks, of the Bombardier CL–600–2B19 the DAO, the approval must include the Series 100/200/440 AMM, CSP A–001, DAO-authorized signature. Revision 55, dated April 10, 2017, or earlier revisions of this task. (o) Related Information (2) Task 27–23–01–220–801, Detailed (1) Refer to Mandatory Continuing Inspection of the Rudder PCU Rod End Airworthiness Information (MCAI) Canadian

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DEPARTMENT OF HEALTH AND WorkingatFDA/BuildingsandFacilities/ 2019–N–2514 for ‘‘Standards for Future HUMAN SERVICES WhiteOakCampusInformation/ Opioid Analgesic Approvals and ucm241740.htm. Incentives for New Therapeutics to Food and Drug Administration You may submit comments as Treat Pain and Addiction; Public follows. Please note that late, untimely Hearing.’’ Received comments will be 21 CFR Part 15 filed comments will not be considered. placed in the docket and, except for [Docket No. FDA–2019–N–2514] Electronic comments must be submitted those submitted as ‘‘Confidential on or before November 18, 2019. The Submissions,’’ publicly viewable at Standards for Future Opioid Analgesic https://www.regulations.gov electronic https://www.regulations.gov or at the Approvals and Incentives for New filing system will accept comments Dockets Management Staff between 9 Therapeutics To Treat Pain and until 11:59 p.m. Eastern Time at the end a.m. and 4 p.m., Monday through Addiction; Public Hearing of November 18, 2019. Comments Friday. received by mail/hand delivery/courier • Confidential Submissions—To AGENCY: Food and Drug Administration, (for written/paper submissions) will be submit a comment with confidential HHS. considered timely if they are information that you do not wish to be ACTION: Notification of public hearing; postmarked or the delivery service made publicly available, submit your request for comments. acceptance receipt is on or before that comments only as a written/paper date. You may submit comments as submission. You should submit two SUMMARY: The Food and Drug follows: Administration (FDA, Agency, we) is copies total. One copy will include the holding a public hearing on September Electronic Submissions information you claim to be confidential with a heading or cover note that states 17, 2019, entitled ‘‘Standards for Future Submit electronic comments in the ‘‘THIS DOCUMENT CONTAINS Opioid Analgesic Approvals and following way: CONFIDENTIAL INFORMATION.’’ The Incentives for New Therapeutics to • Federal eRulemaking Portal: Agency will review this copy, including Treat Pain and Addiction.’’ The Agency https://www.regulations.gov. Follow the the claimed confidential information, in today is issuing a draft guidance on the instructions for submitting comments. its consideration of comments. The application of FDA’s existing benefit- Comments submitted electronically, second copy, which will have the risk assessment framework to including attachments, to https:// claimed confidential information applications for approval of opioid www.regulations.gov will be posted to redacted/blacked out, will be available analgesic drugs. This public hearing is the docket unchanged. Because your for public viewing and posted on intended to receive stakeholder input on comment will be made public, you are https://www.regulations.gov. Submit the approval process for new opioids solely responsible for ensuring that your both copies to the Dockets Management and how FDA might best consider the comment does not include any Staff. If you do not wish your name and existing armamentarium of therapies, confidential information that you or a contact information to be made publicly among other factors, in reviewing third party may not wish to be posted, available, you can provide this applications for new opioids to treat such as medical information, your or information on the cover sheet and not pain. FDA also seeks input on potential anyone else’s Social Security number, or in the body of your comments and you new preapproval incentives aimed at confidential business information, such must identify this information as fostering the development of new as a manufacturing process. Please note ‘‘confidential.’’ Any information marked therapeutics to treat pain, as well as that if you include your name, contact as ‘‘confidential’’ will not be disclosed new treatments for addiction. information, or other information that except in accordance with 21 CFR 10.20 identifies you in the body of your DATES: The public hearing will be held and other applicable disclosure law. For comments, that information will be on September 17, 2019, from 9 a.m. to more information about FDA’s posting 5 p.m. The public hearing may be posted on https://www.regulations.gov. • of comments to public dockets, see 80 extended or may end early depending If you want to submit a comment with confidential information that you FR 56469, September 18, 2015, or access on the level of public participation. the information at: https://www.fda.gov/ Persons can attend the event in person do not wish to be made available to the public, submit the comment as a regulatoryinformation/dockets/ or via webcast. In-person attendees can default.htm. also request to give a formal written/paper submission and in the presentation or to speak during the open manner detailed (see ‘‘Written/Paper Docket: For access to the docket to public comment portion of the hearing. Submissions’’ and ‘‘Instructions’’). read background documents or the received electronic and written/paper Section II provides attendance and Written/Paper Submissions registration information. Electronic or comments, go to https:// written comments will be accepted after Submit written/paper submissions as www.regulations.gov and insert the the public hearing until November 18, follows: docket number, found in brackets in the • Mail/Hand delivery/Courier (for 2019. heading of this document, into the written/paper submissions): Dockets ‘‘Search’’ box and follow the prompts ADDRESSES: The public hearing will be Management Staff (HFA–305), Food and and/or go to the Dockets Management held at the FDA White Oak Campus, Drug Administration, 5630 Fishers Staff, 5630 Fishers Lane, Rm. 1061, 10903 New Hampshire Ave., Building Lane, Rm. 1061, Rockville, MD 20852. Rockville, MD 20852. 31 Conference Center, the Great Room • For written/paper comments FOR FURTHER INFORMATION CONTACT: (Rm. 1503 B/C), Silver Spring, MD submitted to the Dockets Management Nicole Zelenak, Center for Drug 20993–0002. Entrance for public hearing Staff, FDA will post your comment, as Evaluation and Research, Food and participants (non-FDA employees) is well as any attachments, except for Drug Administration, 10903 New through Building 1, where routine information submitted, marked, and Hampshire Ave., Bldg. 22, Rm. 6249, security check procedures will be identified as confidential if submitted as Silver Spring, MD 20993, 301–796– performed. For parking and security detailed in ‘‘Instructions.’’ information, please refer to https:// Instructions: All submissions received 9030; [email protected]. www.fda.gov/AboutFDA/ must include the Docket No. FDA– SUPPLEMENTARY INFORMATION:

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I. Background assessment framework to applications commitment to hold a series of meetings The Substance Use-Disorder for approval of opioid analgesic drugs and provide written feedback at various Prevention that Promotes Opioid entitled ‘‘Opioid Analgesic Drugs: stages of product development, with a Recovery and Treatment for Patients Considerations for Benefit-Risk firm seeking approval of a product with and Communities Act (or SUPPORT for Assessment Framework—Guidance for the potential to offer an advantage Patients and Communities Act) 1 was Industry.’’ This draft guidance discusses relative to existing products indicated to signed into law on October 24, 2018. the Agency’s application of the existing treat pain or addiction. We invite One provision of this law requires FDA benefit-risk assessment framework, comment on potential new incentives as to hold not less than one public meeting which takes into account not only the discussed below. to address the challenges and barriers of benefits and risks of a proposed new opioid to patients when used as II. Topics for Discussion at the Public developing non-addictive medical Hearing products intended to treat acute or prescribed, but also the effectiveness chronic pain or addiction, which may and safety of the proposed product FDA is seeking feedback from a broad include the manner in which the risks relative to currently available analgesics group of stakeholders, both private and of abuse or misuse of a controlled as well as the public health impact of public, who are working on the substance may be incorporated into the anticipated inappropriate use. challenges of improving pain benefit-risk assessment for new drug Comments on that draft guidance may management and addressing the opioid approvals under section 505(d) and (e) be submitted to the docket number for crisis. Some questions for consideration of the Federal Food, Drug, and Cosmetic the draft guidance, FDA–2019–D–1536. at the public hearing are provided Act (21 U.S.C. 355(d) and (e)).2 Comments are requested to be submitted below. We welcome input on other All opioids approved to treat pain are by [enter DATE that is 60 days after relevant issues as well. controlled substances. They are a issuance of the draft guidance] to ensure 1. Does the current statutory and crucial component of the that your comments will be considered regulatory framework, including the armamentarium available for treatment before finalization of the guidance. benefit-risk assessment described in the of pain, but they carry serious risks of The existing benefit-risk assessment recently issued draft guidance, allow for addiction, overdose, and death. Potent process has been, and continues to be, an adequate evaluation of applications novel analgesics that do not carry these a comprehensive and effective for new opioid analgesics, or are new risks could significantly reduce or even mechanism for evaluating all new drug authorities required? If new authorities obviate the need for opioid analgesics, approvals, including new opioid are required, please expand on what but development of such drugs has approvals. Given the current opioid should be added to the existing remained elusive. FDA is optimistic that crisis, however, it is critical that FDA statutory and regulatory paradigm. the enormous societal need, and the explore every possible option for 2. Should sponsors of new opioid efforts of all stakeholders to meet that effectively responding to opioid misuse analgesics be required to demonstrate need, will drive scientific advances in and abuse. To this end, the Agency is some comparative advantage relative to the development of novel, safer announcing this public hearing to gather existing analgesics? If so, what new analgesics. In the meantime, however, input on additional factors the Agency authorities would be necessary to opioid analgesics are likely to remain a could consider during the approval impose a comparative advantage necessary part of medical practice process for new opioid therapies. For requirement for opioid analgesics? despite their risks. FDA’s goal is to example, should a new opioid analgesic 3. If so, how should that comparative regulate opioid analgesics in such a way be required to demonstrate an advantage advantage be defined? as to reduce their serious risks to the over existing drugs to justify its addition a. Can it be quantified? greatest extent possible, while ensuring to the market? If so, what new b. Should the assessment encompass their continued availability to the authorities would FDA need to impose any potential comparative advantage, patients who need them. such a requirement? What other new including, e.g., safety advantages that Under our existing authorities, FDA authorities might FDA need to fully reduce the prevalence or consequences determines whether each new drug assess candidate opioid analgesics given of abuse or misuse by non-patient application—including each new opioid their serious risks and the societal populations? drug application—meets applicable impact of opioids overall? c. For any given application, to which standards for safety and effectiveness. In As noted above, potent novel existing products should the proposed applying these standards, FDA evaluates analgesics that do not carry the serious new product be required to demonstrate whether the benefits of the drug risks of existing opioids could greatly comparative advantage? Any other outweigh its risks. Benefit-risk reduce or even eliminate the need for opioid approved for the same analgesic assessment is the foundation of FDA’s opioid analgesics in the armamentarium indication(s) for which approval is regulatory review of human drugs and of drugs available to treat serious pain. sought? What are the implications if the biologics. It reflects the Agency’s In addition, there is an urgent need for new product only offers a comparative consideration of the evidence, new and better treatment options for advantage over some of the other opioid identification of uncertainties, and the opioid use disorder. Accordingly, FDA products approved for the same reasoning the Agency uses to make is also considering whether new indication(s)? specific regulatory decisions, including preapproval incentives (in addition to 4. If a showing of comparative product approvals. Additionally, the existing incentives, such as advantage were made a requirement for benefit-risk assessment for a particular breakthrough designation) are needed to approval of new opioid analgesics, medical product serves as a tool for better support and encourage could a proposed product meet this communicating the Agency’s findings development of all therapeutics (opioid standard even if the product also carried about the product. or non-opioid drugs, biological additional or novel risks compared to FDA today issued a draft guidance on products, or devices) intended to treat existing products? the application of FDA’s benefit-risk pain or addiction. Such new incentives 5. If a showing of comparative could be tailored to the development of advantage were made a requirement for 1 Public Law 115–271. novel analgesics and could include, approval of new opioid analgesics, 2 Id., section 3001(a). among other things, an FDA should there be any exceptions, for

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example with regard to medically shall not have presentation materials or III. Notice of Hearing Under 21 CFR necessary drugs in shortage? a question and answer period with the Part 15 6. If a showing of comparative panel. Commenters must register no The Commissioner of Food and Drugs advantage were made a requirement for later than September 10, 2019. is announcing that the public hearing approval of new opioid analgesics, what • In-Person Attendee—In-person will be held in accordance with 21 CFR would be the impact on development of attendees will attend the meeting at the part 15. The hearing will be conducted such products? 7. If a showing of comparative FDA White Oak facility. by a presiding officer, who will be advantage were made a requirement for • Webcast Attendee—For those accompanied by FDA senior approval of new opioid analgesics, what unable to attend in person, FDA will management from the Office of the would be the impact on patients, provide a live webcast of the hearing. Commissioner, the Center for Drug providers, and on the public health Webcast attendees will be provided Evaluation and Research, Center for generally? Please consider that the with a link via email to use to view the Biologics Evaluation and Research, and existing opioid market consists largely streaming webcast of the public hearing. the Center for Devices and Radiological Health. Under § 15.30(f), the hearing is of relatively inexpensive generic drugs. Attendees shall register for only one 8. In what other ways should FDA be informal and the rules of evidence do person. Those without internet or email not apply. No participant may interrupt considering the existing armamentarium access can register and/or request to of therapies to treat pain when the presentation of another participant. participate as an open public hearing reviewing an application for the Only the presiding officer and panel speaker or a formal presenter by approval of a new opioid analgesic? To members can pose questions; they can contacting Nicole Zelenak by the above what extent would new authorities be question any person during or at the dates (see FOR FURTHER INFORMATION required? conclusion of each presentation. Public 9. Please comment on whether new CONTACT). hearings under part 15 are subject to pre-approval incentives are needed to FDA will try to accommodate all FDA’s policy and procedures for better support and encourage persons who wish to register. electronic media coverage of FDA’s development of therapeutics intended to Registration may close early if slots are public administrative proceedings (21 treat pain or addiction. If so, what new full. Individuals and organizations with CFR part 10, subpart C). Under § 10.205, incentives would be most effective, and common interests may consolidate or representatives of the media may be what new authorities might FDA need coordinate their presentations and permitted, subject to certain limitations, to offer them? If the new incentives are request time for a joint presentation. to videotape, film, or otherwise record offered through a designation process Individual organizations are limited to a FDA’s public administrative (analogous to breakthrough single presentation slot. FDA will notify proceedings, including presentations by designation), what should be the criteria registered Presenters of their scheduled participants. Persons attending FDA’s for designation? presentation times no later than 1 week public hearings are advised that FDA is Registration and Requests for Oral prior to the meeting. The time allotted not responsible for providing access to Presentations: The FDA Conference for each presentation will depend on the electrical outlets. The hearing will be Center at the White Oak location is a number of individuals who wish to transcribed as stipulated in § 15.30(b) Federal facility with security procedures speak. Persons registered to present are (see Transcripts). To the extent that the and limited seating. Attendees can encouraged to arrive at the hearing room conditions for the hearing, as described register at https://www.eventbrite.com/ early and check in at the onsite in this notice, conflict with any e/fda-standards-for-future-opioid- registration table to confirm their provisions set out in part 15, this notice therapy-approvals-part-15-meeting- designated presentation time. Actual acts as a waiver of those provisions as tickets-60645674846. Attendees have presentation times, however, may vary specified in § 15.30(h). the following options: based on how the meeting progresses in Dated: June 17, 2019. • Presenter—Presenters will give a real time. An agenda for the hearing and Lowell J. Schiller, timed presentation followed by a timed any other background materials will be Principal Associate Commissioner for Policy. question and answer period by the made available 5 days before the hearing [FR Doc. 2019–13219 Filed 6–20–19; 8:45 am] panel. The presentation time allotted at https://www.fda.gov/drugs/ will be approximately 10 minutes, but development-approval-process-drugs/ BILLING CODE 4164–01–P this is subject to change based on the standards-future-opioid-therapy- number of presenters who register. approvals-09172019-09172019. Presenters can opt to use a presentation DEPARTMENT OF THE TREASURY slide deck. Presenters must register no If you need special accommodations because of a disability, please contact later than August 9, 2019. Slide decks Internal Revenue Service are due to CDER-PublicMeeting@ Nicole Zelenak (see FOR FURTHER INFORMATION CONTACT) at least 7 days fda.hhs.gov in PDF or PowerPoint 26 CFR Part 1 format no later than August 23, 2019. If before the hearing. presenters choose to not use a slide Transcripts: Please be advised that as [REG–101828–19] deck, they are requested to submit a soon as a transcript is available, it will single slide with name of presentation be accessible at https:// RIN 1545–BP15 and contact information by September www.regulations.gov. It may be viewed 6, 2019. at the Dockets Management Staff (see Guidance Under Section 958 (Rules for • Open Public Commenter—Open Comments). A transcript will also be Determining Stock Ownership) and public commenters will provide a timed available in either hard copy or on CD– Section 951A (Global Intangible Low- oral testimony. The comment time ROM, after submission of a Freedom of Taxed Income) allotted will be approximately 3 Information request. The Freedom of AGENCY: Internal Revenue Service (IRS), minutes, but this is subject to change Information office address is available Treasury. based on the number or commenters on the Agency’s website at https:// ACTION: Notice of proposed rulemaking. who register. Open public commenters www.fda.gov.

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SUMMARY: This document contains of obtaining indefinite deferral of U.S. rules of section 318(a) apply, with proposed regulations regarding the tax on certain earnings—generally certain modifications, for purposes of treatment of domestic partnerships for earnings that are passive or highly determining whether any U.S. person is purposes of determining amounts mobile—that would otherwise be a U.S. shareholder or any foreign included in the gross income of their subject to Federal income tax. H.R. Rep. corporation is a CFC. These rules apply partners with respect to foreign No. 1447 at 57–58 (1962); S. Rep. No. to treat a person as owning the stock corporations. In addition, this document 1881 at 78–80 (1962). Subpart F owned, directly or indirectly, by another contains proposed regulations under the generally requires a United States person, generally without regard to global intangible low-taxed income shareholder (as defined in section whether the person to or from which provisions regarding gross income that 951(b)) (‘‘U.S. shareholder’’) to include stock is attributed is domestic or is subject to a high rate of foreign tax. in its gross income (‘‘subpart F foreign. In particular, section The proposed regulations would affect inclusion’’) its pro rata share of subpart 318(a)(2)(A) provides in relevant part United States persons that own stock of F income (as defined in section 952) that stock owned, directly or indirectly, foreign corporations through domestic earned by a controlled foreign by or for a partnership is considered as partnerships and United States corporation (‘‘CFC’’) (as defined in owned proportionately by its partners, shareholders of foreign corporations. section 957(a)) and its pro rata share of and section 318(a)(3)(A) provides that DATES: Written or electronic comments earnings and profits (‘‘E&P’’) invested in stock owned, directly or indirectly, by and requests for a public hearing must certain United States property by the or for a partner is considered as owned be received by September 19, 2019. CFC. See section 951(a)(1)(A) and (B) by the partnership. Further, in ADDRESSES: Send submissions to: and section 956(a). For purposes of both determining stock treated as owned by Internal Revenue Service, section 951(a)(1)(A) and (B), the partners of a partnership under section CC:PA:LPD:PR (REG–101828–19), Room determination of a U.S. shareholder’s 318(a)(2)(A), section 958(b)(2) provides 5203, Post Office Box 7604, Ben pro rata share of any amount with in relevant part that a partnership that Franklin Station, Washington, DC respect to a CFC is determined by owns, directly or indirectly, more than 20044. Submissions may be hand- reference to the stock of the CFC that the 50 percent of the voting power of a delivered Monday through Friday shareholder owns (within the meaning corporation is considered as owning all between the hours of 8 a.m. and 4 p.m. of section 958(a)). See sections 951(a)(1) the stock entitled to vote. However, a to CC:PA:LPD:PR (REG–101828–19), and (2) and 956(a). U.S. person that is a U.S. shareholder of Courier’s Desk, Internal Revenue Section 957(a) defines a CFC as any a CFC by reason of constructive Service, 1111 Constitution Avenue NW, foreign corporation if U.S. shareholders ownership under section 958(b), but Washington, DC 20024, or sent own (within the meaning of section that does not own stock in the CFC electronically, via the Federal 958(a)), or are considered as owning by within the meaning of section 958(a), eRulemaking Portal at applying the ownership rules of section does not have a subpart F inclusion www.regulations.gov (indicate IRS and 958(b), more than 50 percent of the total with respect to the CFC. REG–101828–19). combined voting power or value of stock of such corporation on any day II. Treatment of Domestic Partnerships FOR FURTHER INFORMATION CONTACT: during the taxable year of such foreign as Entities or Aggregates of Their Concerning the proposed regulations corporation. Section 951(b) defines a Partners, in General under §§ 1.951–1, 1.956–1, and 1.958–1, U.S. shareholder of a foreign For purposes of applying a particular Joshua P. Roffenbender at (202) 317– corporation as a United States person provision of the Code, a partnership 6934; concerning the proposed (‘‘U.S. person’’) that owns (within the may be treated as either an entity regulations under §§ 1.951A–0, 1.951A– meaning of section 958(a)), or is separate from its partners or as an 2, 1.951A–7, and 1.954–1, Jorge M. considered as owning by applying the aggregate of its partners. Under an Oben at (202) 317–6934; concerning the ownership rules of section 958(b), at aggregate approach, the partners of a proposed regulations under § 1.1502–51, least 10 percent of the total combined partnership, and not the partnership, are Katherine H. Zhang at (202) 317–6848 or voting power or value of stock of the treated as owning the partnership’s Kevin M. Jacobs at (202) 317–5332; foreign corporation. Section 957(c) assets and conducting the partnership’s concerning submissions of comments or generally defines a U.S. person by operations. Under an entity approach, requests for a public hearing, Regina reference to section 7701(a)(30), which the partnership is respected as separate Johnson at (202) 317–6901 (not toll free defines a U.S. person as a citizen or and distinct from its partners, and numbers). resident of the United States, a domestic therefore the partnership, and not the SUPPLEMENTARY INFORMATION: partnership, a domestic corporation, partners, is treated as owning the Background and certain estates and trusts. partnership’s assets and conducting the Stock owned within the meaning of partnership’s operations. Based upon I. Subpart F Before Enactment of section 958(a) is stock owned directly the authority of subchapter K and the Section 951A and stock owned indirectly under policies underlying a particular The Revenue Act of 1962 (the ‘‘1962 section 958(a)(2). Section 958(a)(2) provision of the Code, a partnership is Act’’), Public Law 87–834, sec. 12, 76 provides that stock owned, directly or treated as an aggregate of its partners or Stat. at 1006, enacted subpart F of part indirectly, by or for a foreign as an entity separate from its partners, III, subchapter N, chapter 1 of the 1954 corporation, foreign partnership, foreign depending on which characterization is Internal Revenue Code (‘‘subpart F’’), as trust, or foreign estate is considered to more appropriate to carry out the scope amended. See sections 951 through 965 be owned proportionately by its and purpose of the Code provision. See of the Internal Revenue Code (‘‘Code’’).1 shareholders, partners, or beneficiaries. H.R. Rep. No. 83–2543, at 59 (1954) Congress created the subpart F regime to Section 958(a)(2) does not provide rules (Conf. Rep.) (‘‘Both the House limit the use of corporations organized addressing stock owned by domestic provisions and the Senate amendment in low-tax jurisdictions for the purposes entities, including domestic provide for the use of the ‘entity’ partnerships. approach in the treatment of 1 Except as otherwise stated, all section references Section 958(b) provides in relevant transactions between a partner and a in this preamble are to the Internal Revenue Code. part that the constructive ownership partnership .... No inference is

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intended, however, that a partnership is expense, by reference to the partner’s In contrast to the historical treatment to be considered as a separate entity for assets). of domestic partnerships as entities for the purpose of applying other purposes of subpart F, foreign III. Treatment of Domestic Partnerships provisions of the internal revenue laws partnerships are generally treated as as Entities or Aggregates for Purposes of if the concept of the partnership as a aggregates of their partners for purposes Subpart F Before the Tax Cuts and Jobs collection of individuals is more of determining stock ownership under Act appropriate for such provisions.’’). See section 958(a). See section 958(a)(2). also Casel v. Commissioner, 79 T.C. 424, Since the enactment of subpart F, Accordingly, whether a foreign 433 (1982) (‘‘When the 1954 Code was domestic partnerships have generally corporation owned by a foreign adopted by Congress, the conference been treated as entities, rather than as partnership is a CFC is determined report . . . clearly stated that whether aggregates of their partners, for purposes based on the proportionate amount of an aggregate or entity theory of of determining whether U.S. stock owned by domestic partners of the partnerships should be applied to a shareholders own more than 50 percent partnership and, if the foreign particular Code section depends upon of the stock (by voting power or value) corporation is a CFC, partners that are which theory is more appropriate to of a foreign corporation and thus U.S. shareholders have the subpart F such section.’’); Holiday Village whether a foreign corporation is a CFC. inclusion with respect to the CFC. Shopping Center v. United States, 5 Cl. See § 1.701–2(f), Example 3 (concluding IV. Section 951A Ct. 566, 570 (1984), aff’d 773 F.2d 276 that a foreign corporation wholly owned (Fed. Cir. 1985) (‘‘[T]he proper inquiry by a domestic partnership is a CFC for A. In general is not whether a partnership is an entity purposes of applying the look-through The Tax Cuts and Jobs Act, Public or an aggregate for purposes of applying rules of section 904(d)(3)). In addition, Law 115–97 (the ‘‘Act’’) established a the internal revenue laws generally, but domestic partnerships have generally participation exemption system for the rather which is the more appropriate been treated as entities for purposes of taxation of certain foreign income by and more consistent with Congressional treating a domestic partnership as the allowing a domestic corporation a 100 intent with respect to the operation of U.S. shareholder that has the subpart F percent dividends received deduction the particular provision of the Internal inclusion with respect to such foreign for the foreign-source portion of a Revenue Code at issue.’’); § 1.701– corporation. But cf. §§ 1.951–1(h) and dividend received from a specified 10 2(e)(1) (‘‘The Commissioner can treat a 1.965–1(e) (treating certain domestic percent-owned foreign corporation. See partnership as an aggregate of its partnerships owned by CFCs as foreign section 14101(a) of the Act and section partners in whole or in part as partnerships for purposes of 245A. The Act’s legislative history appropriate to carry out the purpose of determining the U.S. shareholder that expresses concern that the new any provision of the Internal Revenue has the subpart F inclusion with respect participation exemption could heighten Code . . . .’’). to CFCs owned by such domestic the incentive to shift profits to low-tax Consistent with this authority under partnerships). If a domestic partnership foreign jurisdictions or tax havens subchapter K, the Treasury Department is treated as the U.S. shareholder with absent base erosion protections. See S. and the IRS have adopted an aggregate the subpart F inclusion, then each Comm. on the Budget, Reconciliation approach to partnerships to carry out partner of the partnership has a Recommendations Pursuant to H. Con. the purpose of various provisions, distributive share of the partnership’s Res. 71, S. Print No. 115–20, at 370 including international provisions, of subpart F inclusion, regardless of (2017) (‘‘Senate Explanation’’). For the Code. For example, regulations whether the partner itself is a U.S. example, without appropriate limits, under section 871 treat domestic and shareholder. See section 702. domestic corporations might be foreign partnerships as aggregates of This entity treatment is consistent incentivized to shift income to low- their partners in applying the 10 percent with the inclusion of a domestic taxed foreign affiliates, and the income shareholder test of section 871(h)(3) to partnership in the definition of a U.S. could potentially be distributed back to determine whether interest paid to a person in section 7701(a)(30), which domestic corporate shareholders partnership would be considered term is used in the definition of U.S. without the imposition of any U.S. tax. portfolio interest under section shareholder by reference to section See id. To prevent base erosion, the Act 871(h)(2). See § 1.871–14(g)(3)(i). An 957(c). It is also consistent with the retained the subpart F regime and aggregate approach to partnerships was legislative history to section 951, which enacted section 951A, which applies to also adopted in regulations issued under describes domestic partnerships as taxable years of foreign corporations section 367(a) to address the transfer of being included within the definition of beginning after December 31, 2017, and property by a domestic or foreign a U.S. person and, therefore, a U.S. to taxable years of U.S. shareholders in partnership to a foreign corporation in shareholder. See, for example, S. Rep. which or with which such taxable years an exchange described in section No. 1881 at 80 n.1 (1962) (‘‘U.S. of foreign corporations end. 367(a)(1). See § 1.367(a)–1T(c)(3)(i)(A). shareholders are defined in the bill as Section 951A requires a U.S. Similarly, the Treasury Department and ‘U.S. persons’ with 10-percent shareholder of any CFC for any taxable the IRS adopted an aggregate approach stockholding. U.S. persons, in general, year to include in gross income the to foreign partnerships for purposes of are U.S. citizens and residents and shareholder’s global intangible low- applying the regulations under section domestic corporations, partnerships and taxed income (‘‘GILTI inclusion’’) for 367(b). See § 1.367(b)–2(k); see also estates or trusts.’’). Furthermore, entity such taxable year in a manner similar to §§ 1.367(e)–1(b)(2) (treating stock and treatment is consistent with sections a subpart F inclusion for many purposes securities of a distributing corporation 958(b) and 318(a)(3)(A), which treat a of the Code. See sections 951A(a) and owned by or for a partnership (domestic partnership (including a domestic (f)(1)(A); H.R. Rep. No. 115–466, at 641 or foreign) as owned proportionately by partnership) as owning the stock owned (2017) (Conf. Rep.) (‘‘[A] U.S. its partners) and 1.861–9(e)(2) (requiring by its partners for purposes of shareholder of any CFC must include in certain corporate partners to apportion determining whether the foreign gross income for a taxable year its interest expense, including the partner’s corporation is owned more than 50 [GILTI] in a manner generally similar to distributive share of partnership interest percent by U.S. shareholders. inclusions of subpart F income.’’).

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Similar to a subpart F inclusion, the section 951A, because treating a taxable years of foreign corporations determination of a U.S. shareholder’s domestic partnership as the section beginning after December 31, 2017, and GILTI inclusion begins with the 958(a) owner of stock in all cases would to taxable years of U.S. shareholders in calculation of relevant items—such as frustrate the GILTI framework by which or with which such taxable years tested income, tested loss, and qualified creating unintended planning of foreign corporations end. business asset investment—of each CFC opportunities for well advised taxpayers Some comments also recommended owned by the shareholder (‘‘tested and traps for the unwary. However, the adopting an aggregate approach for items’’). See section 951A(c)(2) and (d) Treasury Department and the IRS also purposes of section 951, especially if the and §§ 1.951A–2 through –4. A U.S. did not adopt a pure aggregate approach GILTI final regulations adopt an shareholder then determines its pro rata to domestic partnerships for GILTI aggregate approach. These comments share of each of these CFC-level tested because such an approach would be generally asserted that there is items in a manner similar to a U.S. inconsistent with the existing treatment insufficient policy justification for shareholder’s pro rata share of subpart of domestic partnerships as entities for treating domestic partnerships F income under section 951(a)(2). See purposes of subpart F. differently than foreign partnerships for section 951A(e)(1) and § 1.951A–1(d). The Treasury Department and the IRS purposes of U.S. shareholder and CFC In contrast to a subpart F inclusion, received many comments in response to determinations because the choice of however, a U.S. shareholder’s pro rata the hybrid approach of the GILTI law under which a partnership is shares of the tested items of a CFC are proposed regulations. The comments organized should be irrelevant. In this not amounts included in gross income, generally advised against adopting the regard, these comments criticized entity but rather are amounts taken into hybrid approach due primarily to treatment of domestic partnerships account by the U.S. shareholder in concerns with complexity and because it results in each partner determining the amount of its GILTI administrability arising from the including in income its distributive inclusion for the taxable year. Section treatment of a partnership as an entity share of a domestic partnership’s 951A(b) and § 1.951A–1(c). Thus, a U.S. with respect to some partners but as an subpart F inclusion with respect to a shareholder does not compute a aggregate with respect to other partners. CFC, even if that partner is not a U.S. separate GILTI inclusion amount under The comments also generally advised shareholder itself and thus would not section 951A(a) with respect to each against adopting a pure entity approach have had a subpart F inclusion with CFC for a taxable year, but rather because such an approach would result respect to such CFC if the domestic computes a single GILTI inclusion in different treatment for similarly partnership were instead foreign. amount by reference to all of its CFCs. situated taxpayers depending on B. High-Tax Gross Tested Income Section 951A itself does not contain whether a U.S. shareholder owned stock specific rules regarding the treatment of of a foreign corporation through a Section 951A(c)(2)(A)(i) provides that domestic partnerships and their domestic partnership or a foreign the gross tested income of a CFC for a partners for purposes of GILTI. partnership, which is treated as an taxable year is all the gross income of However, proposed regulations under aggregate of its partners for purposes of the CFC for the year, determined section 951A that were published in the determining CFC status and section without regard to certain items. See also Federal Register on October 10, 2018, 958(a) ownership. The majority of § 1.951A–2(c)(1). In particular, section (REG–104390–18, 83 FR 51072) (‘‘GILTI comments on this issue recommended 951A(c)(2)(A)(i)(III) excludes from gross proposed regulations’’) reflect a hybrid at least some form of aggregate approach tested income any gross income approach that treats a domestic for domestic partnerships for purposes excluded from foreign base company partnership that is a U.S. shareholder of the GILTI regime; some of these income (as defined in section 954) with respect to a CFC (‘‘U.S. shareholder comments suggested that an aggregate (‘‘FBCI’’) or insurance income (as partnership’’) as an entity with respect approach is supported by analogy to defined in section 953) of a CFC by to some partners but as an aggregate of other situations where regulations apply reason of the exception under section its partners with respect to others. an aggregate approach to partnerships. 954(b)(4) (the ‘‘GILTI high tax Under the hybrid approach, with See, for example, §§ 1.954–1(g)(1) and exclusion’’). respect to partners that are not U.S. 1.871–14(g)(3)(i). The GILTI proposed regulations shareholders of a CFC owned by a In response to these comments, the clarified that the GILTI high tax domestic partnership, a U.S. Treasury Department and the IRS are exclusion applies only to income that is shareholder partnership calculates a issuing final regulations under section excluded from FBCI and insurance GILTI inclusion amount and its partners 951A in the Rules and Regulations income solely by reason of an election have a distributive share of such amount section of this issue of the Federal made to exclude the income under the (if any). See proposed § 1.951A–5(b)(1). Register (‘‘GILTI final regulations’’) that high tax exception of section 954(b)(4) However, with respect to partners that treat stock owned by a domestic and § 1.954–1(d)(5). See proposed are themselves U.S. shareholders of a partnership as owned within the § 1.951A–2(c)(1)(iii). CFC owned by a domestic partnership meaning of section 958(a) by its partners Numerous comments requested that (‘‘U.S. shareholder partners’’), the for purposes of determining a partner’s the scope of the GILTI high tax partnership is treated in the same GILTI inclusion amount under section exclusion be expanded in the final manner as a foreign partnership, with 951A. The Treasury Department and the regulations. These comments asserted the result that the U.S. shareholder IRS concluded that applying an that the legislative history to section partners are treated as proportionately aggregate approach for purposes of 951A indicates that Congress intended owning, within the meaning of section determining a partner’s GILTI inclusion that income of a CFC should be taxed 958(a), stock owned by the domestic amount under section 951A is necessary as GILTI only if it is subject to a low rate partnership for purposes of determining to ensure that, consistent with the of foreign tax, regardless of whether the their own GILTI inclusion amounts. See purpose and operation of section 951A, income is active or passive. Comments proposed § 1.951A–5(c). In the preamble a single GILTI inclusion amount is also suggested that the GILTI high tax to the GILTI proposed regulations, the determined for each taxpayer based on exclusion does not require that income Treasury Department and the IRS its economic interests in all of its CFCs. be excluded ‘‘solely’’ by reason of rejected a pure entity approach to The GILTI final regulations apply to section 954(b)(4). The comments argued

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that the GILTI high tax exclusion could determining stock owned under section enactment of the GILTI regime, it is no be interpreted to exclude any item of 958(a) for purposes of section 951. longer appropriate to treat domestic income that would be FBCI or insurance Therefore, the proposed regulations partnerships as entities that are separate income, but for another exception to provide that, for purposes of sections from their owners for purposes of FBCI (for instance, the active financing 951 and 951A, and for purposes of any determining whether, and to what exception under section 954(h) and the provision that applies by reference to extent, a partner has an inclusion under active insurance exception under sections 951 and 951A (for example, section 951. Congress intended for the section 954(i)). Of the comments sections 959, 960, and 961), a domestic subpart F and GILTI regimes to work in recommending an expansion of the partnership is not treated as owning tandem by providing that both regimes GILTI high tax exclusion, some stock of a foreign corporation within the apply to U.S. shareholders of CFCs, that recommended that the GILTI high tax meaning of section 958(a). See proposed GILTI is included in a U.S. exclusion apply to income taxed at a § 1.958–1(d)(1). Furthermore, the shareholder’s gross income in a manner rate above 13.125 percent, while others proposed regulations provide that, for similar to a subpart F inclusion for recommended that the GILTI high tax purposes of determining the stock many purposes of the Code, and that exclusion apply to income taxed at a owned under section 958(a) by a partner gross income taken into account in rate above 90 percent of the maximum of a domestic partnership, a domestic determining the subpart F income of a rate of tax specified in section 11, or partnership is treated in the same CFC is not taken into account in 18.9 percent. The comments manner as a foreign partnership. See id. determining the tested income of such recommended that the GILTI high tax This rule does not apply, however, for CFC (and, therefore, in determining the exclusion be applied either on a CFC- purposes of determining whether any GILTI inclusion amount of a U.S. by-CFC basis or an item-by-item basis. U.S. person is a U.S. shareholder, shareholder of such CFC). See section Alternatively, comments whether a U.S. shareholder is a 951A(c)(2)(i)(II) and 951A(f); see also recommended that the scope of the controlling domestic shareholder (as Senate Explanation at 373 (‘‘Although GILTI high tax exclusion be expanded defined in § 1.964–1(c)(5)), or whether a GILTI inclusions do not constitute under section 951A(f) by treating, on an foreign corporation is a CFC. See subpart F income, GILTI inclusions are elective basis, a GILTI inclusion as a proposed § 1.958–1(d)(2). Accordingly, generally treated similarly to subpart F subpart F inclusion that is potentially under the proposed regulations, a inclusions.’’). As a result, treating excludible from FBCI or insurance domestic partnership that owns a domestic partnerships inconsistently for income under section 954(b)(4), or by foreign corporation is treated as an subpart F and GILTI purposes would be modifying the GILTI high tax exclusion entity for purposes of determining inconsistent with legislative intent. to exclude any item of income subject whether the partnership and its partners Furthermore, inconsistent approaches to a sufficiently high effective foreign are U.S. shareholders, whether the to the treatment of domestic tax rate such that it would be excludible partnership is a controlling domestic partnerships for purposes of subpart F under section 954(b)(4) if it were FBCI shareholder, and whether the foreign and GILTI would introduce substantial or insurance income. Other comments corporation is a CFC, but the complexity and uncertainty, particularly recommended the creation of a partnership is treated as an aggregate of rebuttable presumption that all income its partners for purposes of determining with respect to foreign tax credits, of a CFC is subpart F income, regardless whether, and to what extent, its partners previously taxed earnings and profits of whether such income is of a character have inclusions under sections 951 and (‘‘PTEP’’) and related basis rules, or any included in FBCI or insurance income, 951A and for purposes of any other other provision the application of which and therefore, if the taxpayer chose not provision that applies by reference to turns on the owner of stock under to rebut the presumption, the income sections 951 and 951A. section 958(a) and, thus, the U.S. person would be excluded from gross tested For purposes of subpart F, a foreign that has the relevant inclusion. For income either because it is included in partnership is explicitly treated as an example, if a domestic partnership were subpart F income (and thus excluded aggregate of its partners, and rules treated as an aggregate of its partners for from gross tested income by reason of regarding this aggregate treatment are purposes of GILTI but as an entity for the subpart F exclusion under section relatively well-developed and purposes of subpart F, regulations 951A(c)(2)(A)(i)(II)) or because the understood. Therefore, rather than would need to address separately the income is excluded from subpart F developing a new standard for the maintenance of PTEP accounts at the income by reason of section 954(b)(4) treatment of a domestic partnership as domestic partnership level for subpart F (and thus excluded from gross tested an aggregate of its partners, the Treasury and the maintenance of PTEP accounts income by reason of the GILTI high tax Department and the IRS have at the partner level for GILTI. Similarly, exclusion). determined that it would be simpler and regulations would need to provide The GILTI final regulations adopt the more administrable to adopt, by separate rules for basis adjustments GILTI high tax exclusion of the reference, the rules related to foreign under section 961 with respect to a proposed regulations without change. partnerships for this limited purpose. domestic partnership and its CFCs The GILTI final regulations adopt the depending on whether an amount was Explanation of Provisions same approach for purposes of section included under section 951 or section I. Partnerships 951A. See § 1.951A–1(e). As a result, 951A. The increased complexity of under the proposed regulations, stock regulations resulting from treating A. Adoption of Aggregate Treatment for owned directly or indirectly by or for a domestic partnerships differently for Purposes of Section 951 domestic partnership will generally be purposes of subpart F and GILTI would, After considering the alternatives, the treated as owned proportionately by its in turn, increase the burden on Treasury Department and the IRS have partners for purposes of sections 951(a) taxpayers to comply with, and on the concluded that, to be consistent with and 951A and any provision that IRS to administer, such regulations. the treatment of domestic partnerships applies by reference to sections 951 and Conversely, aggregate treatment of under section 951A, a domestic 951A. domestic partnerships in determining partnership should also generally be The Treasury Department and the IRS section 958(a) stock ownership for treated as an aggregate of its partners in have determined that, as a result of the purposes of determining a partner’s

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inclusion under both the GILTI and In this regard, the Treasury Department regulations, for taxable years of a foreign subpart F regimes will result in and the IRS have determined that corporation beginning after December substantial simplification, as compared treating a domestic partnership as an 31, 2017, and for taxable years of a to disparate treatment, and will aggregate for purposes of sections 951 domestic partnership in which or with harmonize the two regimes. and 951A is appropriate because the which such taxable years of the foreign The Treasury Department and the IRS partners of the partnership generally are corporation end (the ‘‘applicable also considered extending aggregate the ultimate taxable owners of the CFC years’’), provided that the partnership, treatment for all purposes of subpart F, and thus their inclusions under sections domestic partnerships that are related including for purposes of determining 951 and 951A are properly computed at (within the meaning of section 267 or whether a foreign corporation is a CFC the partner level regardless of whether 707) to the partnership, and certain under section 957(a). However, the the partnership is foreign or domestic. partners consistently apply § 1.958–1(d) Treasury Department and the IRS Based on the foregoing, the Treasury with respect to all foreign corporations determined that an approach that treats Department and the IRS have whose stock they own within the a domestic partnership as an aggregate determined that a domestic partnership meaning of section 958(a) (generally for purposes of determining CFC status should be treated consistently as an determined without regard to § 1.958– is inconsistent with relevant statutory aggregate of its partners in determining 1(d)). See proposed § 1.958–1(d)(4). A provisions. As discussed in part III of the ownership of stock within the domestic partnership may rely on the Background section of this meaning of section 958(a) for purposes proposed § 1.958–1(d) with respect to preamble, the Code clearly contemplates of sections 951 and 951A, and any taxable years beginning after December that a domestic partnership can be a provision that applies by reference to 31, 2017, and beginning before the date U.S. shareholder under section 951(b), section 951 or section 951A, except for that these regulations are published as including by attribution from its purposes of determining whether a U.S. final regulations in the Federal Register, partners. See sections 7701(a)(30), person is a U.S. shareholder, whether a provided that the partnership, domestic 957(c), 951(b), 958(b), 318(a)(2)(A), and U.S. shareholder is a controlling partnerships that are related (within the 318(a)(3)(A). An approach that treats a domestic shareholder (as defined in meaning of section 267 or 707) to the domestic partnership as an aggregate for § 1.964–1(c)(5)), and whether a foreign partnership, and certain partners purposes of determining CFC status corporation is a CFC. See proposed consistently apply proposed § 1.958– would not give effect to the statutory § 1.958–1(d). This aggregate treatment 1(d) with respect to all foreign treatment of a domestic partnership as does not apply for any other purposes corporations whose stock they own a U.S. shareholder. of the Code, including for purposes of within the meaning of section 958(a) By contrast, neither section 958(a) nor section 1248. However, the Treasury (generally determined without regard to any other provision of the Code Department and the IRS request proposed § 1.958–1(d)). See id. specifies whether and to what extent a comments on other provisions in the Once proposed § 1.958–1(d) applies as domestic partnership should be treated Code that apply by reference to a final regulation, § 1.951A–1(e) and as an entity or an aggregate for purposes ownership within the meaning of § 1.951–1(h) (providing an aggregate of determining stock ownership under section 958(a) for which aggregate treatment of domestic partnerships, but section 958(a) for purposes of sections treatment for domestic partnerships only for purposes of section 951A and 951 and 951A. According to the would be appropriate. The Treasury limited subpart F purposes, legislative history to the 1962 Act, Department and the IRS also request respectively) would be unnecessary section 958(a) is a ‘‘limited rule of stock comments on whether, and for which because the scope of those regulations ownership for determining the amount purposes, the aggregate treatment for would effectively be subsumed by taxable to a United States person,’’ domestic partnerships should be § 1.958–1(d). Therefore, the proposed whereas section 958(b) is ‘‘a broader set extended to the determination of the regulations would revise the of constructive rules of ownership for controlling domestic shareholders (as applicability dates of § 1.951A–1(e) and determining whether the requisite defined in § 1.964–1(c)(5)) of a CFC, § 1.951–1(h), so that those provisions do ownership by United States persons such that some or all of the partners not apply once the final regulations exists so as to make a corporation a who are U.S. shareholders of the CFC, under section 958 apply. controlled foreign corporation or a rather than the partnership, make any Historically, domestic partnerships United States person has the requisite elections applicable to the CFC for have been treated as owning stock ownership to be liable for tax under purposes of sections 951 and 951A. within the meaning of section 958(a) for section 951(a).’’ S. Rep. No. 1881 at 254 purposes of determining their subpart F (1962). In light of the changes adopted B. Applicability Date and Comment inclusions, and thus PTEP accounts in the Act (including the introduction of Request With Respect to Transition were maintained, and related basis the GILTI regime), it is consistent with The proposed regulations are adjustments were made, at the the intent of the Act to provide that proposed to apply to taxable years of partnership level. Upon the finalization domestic partnerships are treated in the foreign corporations beginning on or of the proposed regulations, domestic same manner as foreign partnerships after the date of publication of the partnerships will cease to be treated as under section 958(a)(2) for purposes of Treasury decision adopting these rules owning stock of foreign corporations sections 951(a) and 951A and any as final regulations in the Federal under section 958(a) for purposes of provision that applies by reference to Register (the ‘‘finalization date’’), and to determining a subpart F inclusion, and sections 951 and 951A. As discussed in taxable years of a U.S. person in which instead their partners will be treated as parts II and IV.A. of the Background or with which such taxable years of owning stock under section 958(a). The section of this preamble, a domestic foreign corporations end. See proposed Treasury Department and the IRS partnership may be treated as an § 1.958–1(d)(4). With respect to taxable request comments on appropriate rules aggregate of its partners or as an entity years of foreign corporations beginning for the transition to the aggregate separate from its partners for purposes before the finalization date, the approach to domestic partnerships of a provision, depending on which proposed regulations provide that a described in the proposed regulations. characterization is more appropriate to domestic partnership may apply Comments are specifically requested as carry out the purpose of the provision. § 1.958–1(d), as included in the final to necessary adjustments to PTEP and

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related basis amounts and capital if the provision is one of the reasons for § 1.951A–2(c)(6)(iii) and is binding on accounts after finalization. In addition, such exclusion, even if the exception all the U.S. shareholders of the CFC. See comments are requested as to whether under section 954(b)(4) is not the sole proposed § 1.951A–2(c)(6)(v)(B). The aggregate treatment of domestic reason. Any item thus excluded from election is effective for a CFC for the partnerships should be extended to FBCI or insurance income by reason of CFC inclusion year for which it is made other ‘‘pass-through’’ entities, such as section 954(b)(4) would then also be and all subsequent CFC inclusion years certain trusts or estates. excluded from gross tested income of the CFC unless revoked by the Comments are also requested with under the GILTI high tax exclusion, as controlling domestic shareholders of the respect to the application of the PFIC modified in these proposed regulations. CFC. See proposed § 1.951A– regime after finalization, and whether The legislative history evidences an 2(c)(6)(v)(C). elections (including elections under intent to exclude high-taxed income An election may generally be revoked sections 1295 and 1296) and income from gross tested income. See Senate by the controlling domestic inclusions under the PFIC rules are Explanation at 371 (‘‘The Committee shareholders of the CFC for any CFC more appropriately made at the level of believes that certain items of income inclusion year. See proposed § 1.951A– the domestic partnership or at the level earned by CFCs should be excluded 2(c)(6)(v)(D)(1). However, upon of the partners. Specifically, the from the GILTI, either because they revocation for a CFC inclusion year, a Treasury Department and the IRS are should be exempt from U.S. tax—as new election generally cannot be made considering the operation of the PFIC they are generally not the type of for any CFC inclusion year of the CFC regime where U.S. persons are partners income that is the source of base erosion that begins within sixty months after the of a domestic partnership that owns concerns—or are already taxed currently close of the CFC inclusion year for stock of a foreign corporation that is a by the United States. Items of income which the election was revoked, and PFIC, some of those partners might excluded from GILTI because they are that subsequent election cannot be themselves be U.S. shareholders of the exempt from U.S. tax under the bill revoked for a CFC inclusion year that foreign corporation, and the foreign include foreign oil and gas extraction begins within sixty months after the corporation might not be treated as a income (which is generally immobile) close of the CFC inclusion year for PFIC with respect to such U.S. and income subject to high levels of which the subsequent election was shareholders under section 1297(d) if foreign tax.’’). The proposed regulations, made. See proposed § 1.951A– the foreign corporation is also a CFC. which permit taxpayers to electively 2(c)(6)(v)(D)(2)(i). An exception to this Comments should consider how any exclude a CFC’s high-taxed income from 60-month limitation may be permitted recommended approach would interact gross tested income, are consistent, by the Commissioner with respect to a with the determinations of a partner’s therefore, with this legislative history. CFC if the CFC undergoes a change of basis in its interest and capital accounts Furthermore, an election to exclude a control. See proposed § 1.951A– determined and maintained in CFC’s high-taxed income from gross 2(c)(6)(v)(D)(2)(ii). accordance with § 1.704–1(b)(2). tested income allows a U.S. shareholder Finally, if a CFC is a member of a to ensure that its high-taxed non-subpart controlling domestic shareholder group, II. GILTI High Tax Exclusion F income is eligible for the same the election applies with respect to each A. Expansion To Exclude Other High- treatment as its high-taxed FBCI and member of the controlling domestic Taxed Income insurance income, and thus eliminates shareholder group. See proposed an incentive for taxpayers to restructure § 1.951A–2(c)(6)(v)(E)(1). A ‘‘controlling In response to comments, the their CFC operations in order to convert domestic shareholder group’’ is defined Treasury Department and the IRS have gross tested income into FBCI for the as two or more CFCs if more than 50 determined that the GILTI high tax sole purpose of availing themselves of percent of the stock (by voting power) exclusion should be expanded (on an section 954(b)(4) and, thus, the GILTI of each CFC is owned (within the elective basis) to include certain high- high tax exclusion. meaning of section 958(a)) by the same taxed income even if that income would For the foregoing reasons, the controlling domestic shareholder (or not otherwise be FBCI or insurance proposed regulations provide that an persons related to such controlling income. In particular, the Treasury election may be made for a CFC to domestic shareholder) or, if no single Department and the IRS have exclude under section 954(b)(4), and controlling domestic shareholder owns determined that taxpayers should be thus to exclude from gross tested (within the meaning of section 958(a)) permitted to elect to apply the exception income, gross income subject to foreign more than 50 percent of the stock (by under section 954(b)(4) with respect to income tax at an effective rate that is voting power) of each corporation, more certain classes of income that are subject greater than 90 percent of the rate that than 50 percent of the stock (by voting to high foreign taxes within the meaning would apply if the income were subject power) of each corporation is owned of that provision. Before the Act, such to the maximum rate of tax specified in (within the meaning of section 958(a)) an election would have had no effect section 11 (18.9 percent based on the in the aggregate by the same controlling with respect to items of income that current rate of 21 percent). See proposed domestic shareholders and each were excluded from FBCI or insurance § 1.951A–2(c)(6)(i). The election is made controlling domestic shareholder owns income for other reasons. Nevertheless, by the CFC’s controlling domestic (within the meaning of section 958(a)) section 954(b)(4) is not explicitly shareholders with respect to the CFC for the same percentage of stock in each restricted in its application to an item of a CFC inclusion year by attaching a CFC. See proposed § 1.951A– income that first qualifies as FBCI or statement to an amended or filed return 2(c)(6)(v)(E)(2). Accordingly, an election insurance income; rather, the provision in accordance with forms, instructions, made under proposed § 1.951A– applies to ‘‘any item of income received or administrative pronouncements. See 2(c)(6)(v) applies with respect to each by a controlled foreign corporation.’’ proposed § 1.951A–2(c)(6)(v)(A). If an item of income of each CFC in a group Therefore, any item of gross income, election is made with respect to a CFC, of commonly controlled CFCs that including an item that would otherwise the election applies to exclude from meets the effective rate test in proposed be gross tested income, could be gross tested income all the CFC’s items § 1.951A–2(c)(6)(iii). The Treasury excluded from FBCI or insurance of income for the taxable year that meet Department and the IRS request income ‘‘by reason of’’ section 954(b)(4) the effective rate test in proposed comments on the manner and terms of

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the election for the exception from gross foreign income taxes that would be beginning on or after the date that final tested income, including whether the deemed paid under section 960 if the regulations are published in the Federal limitations with respect to revocations item of income were included by the Register, and to taxable years of U.S. and the consistency requirements U.S. shareholder under section shareholders in which or with which should be modified, such as by allowing 951(a)(1)(A). Calculating the effective such taxable years of foreign the election to be made on an item-by- tax rate for purposes of the election corporations end. item or a CFC-by-CFC basis. under section 954(b)(4) with respect to Special Analyses In general, the relevant items of gross tested income by reference to income for purposes of the election section 960(d) would not be consistent I. Regulatory Planning and Review— under section 954(b)(4) pursuant to with the aggregate nature of the Economic Analysis proposed § 1.951A–2(c)(6) are all items computation under section 960(d). Executive Orders 13771, 13563, and of gross tested income attributable to a Furthermore, the Treasury Department 12866 direct agencies to assess costs and qualified business unit (‘‘QBU’’). See and the IRS have determined that the benefits of available regulatory proposed § 1.951A–2(c)(6)(ii)(A)(1). For Act’s change to section 960(a) from a alternatives and, if regulation is example, a CFC that owns a disregarded pooling based approach to an annual necessary, to select regulatory entity that qualifies as a QBU may have attribution of taxes to income requires approaches that maximize net benefits, one item of income with respect to the revising § 1.954–1(d)(3). Therefore, the including potential economic, CFC itself (which is a per se QBU) and proposed regulations provide that for environmental, public health and safety another item of income with respect to purposes of both the exception under effects, distributive impacts, and equity. the disregarded entity. The proposed section 954(b)(4) and the GILTI high tax Executive Order 13563 emphasizes the regulations provide that the gross exclusion, the effective rate of foreign importance of quantifying both costs income attributable to a QBU is tax imposed on an item of income is and benefits, reducing costs, determined by reference to the items of determined solely at the CFC level by harmonizing rules, and promoting gross income reflected on the books and allocating and apportioning the foreign flexibility. The Executive Order 13771 records of the QBU, determined under income taxes paid or accrued by the designation for any final rule resulting Federal income tax principles, except CFC in the current year to the CFC’s from the proposed regulation will be that income attributable to a QBU must gross income in that year based on the informed by comments received. The be adjusted to account for certain rules described in the regulations under preliminary Executive Order 13771 disregarded payments. See proposed section 960 for determining foreign designation for this proposed rule is § 1.951A–2(c)(6)(ii)(A)(2). The proposed income taxes ‘‘properly attributable’’ to regulatory. regulations provide an example to income. See § 1.960–1(d), as proposed to The proposed regulation has been illustrate the application of this rule. be amended in 83 FR 63257 (December designated by the Office of Information See proposed § 1.951A–2(c)(6)(vi). 7, 2018). and Regulatory Affairs (OIRA) as subject Comments are requested on whether To the extent foreign income taxes are to review under Executive Order 12866 additional rules are needed to properly allocated and apportioned to items of pursuant to the Memorandum of account for other instances in which the income that are excluded from gross Agreement (MOA, April 11, 2018) income base upon which foreign tax is tested income by the GILTI high tax between the Treasury Department and imposed does not match the items of exclusion, none of those foreign income the Office of Management and Budget income reflected on the books and taxes are properly attributable to tested regarding review of tax regulations. records of the QBU determined under income and thus none are allowed as a OIRA has designated this proposed Federal income tax principles. For deemed paid credit under section 960. regulation as economically significant example, comments are requested on See § 1.960–1(e), as proposed to be under section 1(c) of the MOA. whether special rules are needed for amended in 83 FR 63259 (December 7, Accordingly, these proposed regulations associating taxes with income with 2018). In addition, if an item of income have been reviewed by the Office of respect to partnerships (including is excluded from gross tested income by Management and Budget. For more hybrid partnerships), disregarded reason of the GILTI high tax exclusion, detail on the economic analysis, please entities, or reverse hybrid entities, and the property used to produce that refer to the following analysis. how to address circumstances in which income, because not used in the QBUs are permitted to share losses or production of gross tested income, does A. Need for the Proposed Regulations determine tax liability based on not qualify as specified tangible The proposed regulations are required combined income for foreign tax property, in whole or in part, and to provide a mechanism by which purposes. Comments are also requested therefore the adjusted basis in the taxpayers can elect the high tax as to whether all of a CFC’s QBUs property is not taken into account in exception of section 954(b)(4) in order located within a single foreign country determining qualified business asset to exclude certain high-taxed income or possession should be combined for investment. See § 1.951A–3(b) and from taxation under section 951A and to purposes of performing the effective rate (c)(1). conform the treatment of domestic test in proposed § 1.951A–2(c)(6)(iii) The proposed regulations also clarify partnerships for purposes of the subpart and whether the definition of QBU the scope of each item of income under F regime with the treatment of domestic should be modified for purposes of the § 1.954–1(c)(1)(iii), consistent with the partnerships for purposes of section GILTI high tax exclusion in respect of rules under § 1.960–1(d)(2)(ii)(B), as 951A. the requirement to have a trade or proposed to be amended in 83 FR 63257 B. Background business, maintain books and records, (December 7, 2018). or other rules relating to QBUs. The Tax Cuts and Jobs Act (the ‘‘Act’’) Under § 1.954–1(d)(3), the B. Applicability Date established a system under which determination of taxes paid or accrued The changes related to the election to certain earnings of a foreign corporation with respect to an item of income for exclude a CFC’s gross income subject to can be repatriated to a corporate U.S. purposes of the exception under section high foreign income taxes under section shareholder without U.S. tax. See 954(b)(4) is determined for each U.S. 954(b)(4) are proposed to apply to section 14101(a) of the Act and section shareholder based on the amount of taxable years of foreign corporations 245A. However, Congress recognized

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that, without any base protection taxpayers would be incentivized to the treatment of domestic partnerships measures, this system, known as a affirmatively plan into subpart F income for purposes of section 951A. participation exemption system, could to permit such taxpayers to elect the C. Economic Analysis incentivize taxpayers to allocate high tax exception under section income—in particular, mobile income 954(b)(4) with respect to such income or 1. Baseline from intangible property that would to allow taxpayers to carry foreign tax The Treasury Department and the IRS otherwise be subject to the full U.S. credits attributable to such income to have assessed the benefits and costs of corporate tax rate—to controlled foreign another taxable year under section the proposed regulations relative to a corporations (‘‘CFCs’’) operating in low- 904(c). However, restructuring activities no-action baseline reflecting anticipated or zero-tax jurisdictions. See Senate to convert gross tested income into Federal income tax-related behavior in Explanation at 365. Therefore, Congress subpart F income may cost significant the absence of these proposed enacted section 951A in order to subject time and money and is economically regulations. intangible income earned by a CFC to inefficient. The GILTI final regulations U.S. tax on a current basis, similar to the adopt this narrower application. See 2. Summary of Economic Effects treatment of a CFC’s subpart F income proposed § 1.951A–2(c)(1)(iii). However, To assess the economic effects of the under section 951(a)(1)(A). However, in the preamble to the GILTI final proposed regulations, the Treasury order to not harm the competitive regulations indicated that proposed Department and the IRS considered position of U.S. corporations relative to regulations would be issued to propose economic effects arising from two their foreign peers, the global intangible a framework under which taxpayers provisions of the proposed regulations. low tax income (‘‘GILTI’’) of a corporate would be permitted to make an election These are (i) effects arising from the U.S. shareholder is effectively taxed at to apply the high tax exception of provision that provides substance and a reduced rate by reason of the section 954(b)(4) with respect to income clarity regarding the application of the deduction under section 250 (with the that would otherwise be gross tested GILTI high tax exclusion in resulting U.S. tax further reduced by a income in order to exclude that income 951A(c)(2)(A)(i)(III) and (ii) portion of foreign tax credits under from gross tested income by reason of simplification and coordination effects section 960(d)). Id. the GILTI high tax exclusion. arising from conforming the treatment of The GILTI final regulations generally domestic partnerships for purposes of The second of these issues pertains to provide structure and clarity for the subpart F with their treatment for the treatment of domestic partnerships implementation of section 951A. purposes of section 951A. for purposes of the subpart F regime. A However, the Treasury Department and The Treasury Department and the IRS U.S. shareholder of a CFC is required to the IRS determined that there remained have not undertaken quantitative include in gross income its pro rata two outstanding issues pertinent to the estimates of these effects because any implementation of GILTI. The first of share of the CFC’s subpart F income such quantitative estimates would be these issues pertains to the GILTI high under section 951(a)(1)(A), the amount highly uncertain. For example, the tax exclusion under section determined under section 956, under proposed regulations include provisions 951A(c)(2)(A)(i)(III), which excludes section 951(a)(1)(B), and its GILTI that permit controlling domestic from gross tested income any gross inclusion amount under section shareholders of CFCs to elect to apply income excluded from foreign base 951A(a). Since the enactment of subpart the high tax exception of section company income (‘‘FBCI’’) (as defined F, domestic partnerships have generally 954(b)(4) to items of gross income that in section 954) and insurance income been treated as entities separate from are subject to a foreign tax rate that is (as defined in section 953) by reason of their partners, rather than as aggregates greater than 18.9 percent (based on the section 954(b)(4). The GILTI proposed of their partners, for purposes of the current U.S. corporate tax rate of 21 regulations limited the application of subpart F regime, including for percent) for purposes of excluding such the exclusion to income that would be purposes of treating a domestic income from gross tested income under included in FBCI or insurance income partnership as the U.S. shareholder that the GILTI high tax exclusion. Whether but for the high tax exception of section has the subpart F inclusion with respect controlling domestic shareholders will 954(b)(4). See proposed § 1.951A– to a CFC owned by the partnership. choose to make the election will depend 2(c)(1)(iii). However, comments to the However, the GILTI final regulations on their specific facts and GILTI proposed regulations generally adopt an aggregate approach circumstances, such as their U.S. recommended that the statute be to domestic partnerships for purposes of expenses allocated to section 951A interpreted so that the GILTI high tax section 951A and the section 951A category income, their foreign tax credit exclusion applies on an elective basis to regulations. See § 1.951A–1(e)(1). position, and the distribution of their a broader category of income, that is, Because the GILTI final regulations foreign activity between high- and low- any income that is subject to a high rate apply only for purposes of section 951A, tax jurisdictions.2 Because GILTI is new, of foreign tax. Other comments absent the proposed regulations, a suggested that because taxpayers have domestic partnership would still be 2 Specifically, the U.S. tax system reduces double the ability to structure transactions so treated as an entity for purposes of the taxation on a U.S. shareholder’s GILTI inclusion subpart F regime. This inconsistency in amount by crediting a portion of certain foreign that they would qualify as FBCI or taxes paid by CFCs against the U.S. tax on the U.S. insurance income, the regulations the treatment of a domestic partnership shareholder’s GILTI inclusion amount. However, should allow a taxpayer to elect to treat for the purposes of section 951A and for the U.S. foreign tax credit regime requires taxpayers all income, or all high-taxed income, as purposes of the subpart F regime is to allocate U.S. deductible expenses, including problematic because it necessitates interest, research and experimentation, and general FBCI or insurance income, with the and administrative expenses, to their foreign source result that such income would then be complicated coordination rules which income in the categories described in section 904(d) excluded from gross tested income could greatly increase compliance and when determining the allowable foreign tax credits. under the GILTI high tax exclusion. administrative burden. Therefore, the The allocated expenses reduce net foreign source proposed regulations conform the income within the section 904(d) categories, which Comments noted that, under the can reduce allowable foreign tax credits. This may narrower application of the exclusion treatment of domestic partnerships for result in a smaller foreign tax credit than would be under the GILTI proposed regulations, purposes of the subpart F regime with allowed if the limitation on foreign tax credits was

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the Treasury Department and the IRS do the rationale for the coordination in the to exclude from gross tested income on not have readily available data to project treatment of domestic partnerships and an elective basis an item of gross income these items in this context. Furthermore, qualitatively evaluates the alternatives that is excluded by reason of another the election would be made with respect considered. exception to subpart F, if such income to qualified business units (QBUs) is subject to a foreign effective tax rate 3. Economic Effects of Specific rather than with respect to CFCs or greater than 18.9 percent; and (iii) to Provisions specific items of income, and the exclude from gross tested income on an Treasury Department and the IRS do not The Treasury Department and IRS elective basis any item of gross income have readily available data on activities solicit comments on each of the items subject to a foreign effective tax rate at the QBU level. In addition, due to the discussed in this Special Analyses greater than 18.9 percent. The Treasury taxpayer-specific nature of the factors section and on any other items of the Department and the IRS considered the influencing a decision to utilize the proposed regulations not discussed in other recommended options discussed GILTI high-tax exclusion, the Treasury this section. The Treasury Department in part IV.B of the Background section, Department and the IRS do not have and the IRS particularly solicit but determined that those other options readily available data or models to comments that provide data, other are not authorized by the relevant predict the marginal effective tax rates evidence, or models that could enhance statutory provisions. that would prevail under these the rigor of the process by which the The first option considered was to provisions for the varied forms of final regulations might be developed. exclude from gross tested income only foreign investments that taxpayers a. Exclusion of Income Subject to High income that would be FBCI or insurance might consider and thus cannot predict Rate of Foreign Tax income but for the high tax exception of with reasonable precision the difference section 954(b)(4), which is the in economic activity, relative to the i. Description interpretation of the GILTI high tax baseline, that might be undertaken by The proposed regulations permit U.S. exclusion in the GILTI proposed taxpayers based on this election. shareholders of CFCs to make an regulations. This narrow approach is The proposed regulations also contain election under section 954(b)(4) with consistent with a reasonable provisions to conform the treatment of respect to high-taxed income in order to interpretation of the statutory text, domestic partnerships for purposes of exclude such income from gross tested which excludes from gross tested subpart F with their treatment for income under the GILTI high tax income only income that is excluded purposes of section 951A. Under the exclusion. Under section 954(b)(4), from subpart F income ‘‘by reason of proposed regulations, the tax treatment high-taxed income is defined as income section 954(b)(4).’’ Moreover, this of domestic partners that are U.S. subject to a foreign effective tax rate approach is consistent with current shareholders of a CFC owned by the greater than 90 percent of the maximum regulations under section 954, which domestic partnership differs from the U.S. corporate tax rate (18.9 percent permit an election under section tax treatment of domestic partners that based on the current U.S. corporate tax 954(b)(4) only with respect to income are not U.S. shareholders of such CFC. rate of 21 percent). Under the proposed that is not otherwise excluded from The Treasury Department and the IRS regulations, the determination as to subpart F income by reason of another do not have readily available data to whether income is high-taxed is made at exception (for example, section identify these types of partners. The the QBU level. However, an election 954(c)(6) or 954(h)). However, under Treasury Department and the IRS made with respect to a CFC applies with this approach, taxpayers with high- further do not have readily available respect to each high-taxed QBU of the taxed gross tested income would have data or models to predict with CFC (including potentially the CFC incentives to restructure their foreign reasonable precision the set of marginal itself), and a U.S. shareholder that operations in order to convert their effective tax rates that taxpayers might makes the election with respect to a CFC gross tested income into subpart F face under these provisions nor the generally must make the same election income. For instance, a taxpayer could effects of those marginal effective tax with respect to each of its CFCs. In restructure its operations to have a CFC rates on economic activity relative to the general, the election may be made or purchase personal property from, or sell baseline. revoked at any time, except that, if a personal property to, a related person With these considerations in mind, U.S. shareholder revokes an election without substantially contributing to the parts I.C.3.a.ii and iii of this Special with respect to a CFC, the U.S. manufacture of the property in its Analyses section explain the rationale shareholder cannot make the election country of incorporation, with the result behind the proposed regulations’ again within five years after the that the CFC’s income from the approach to the GILTI high tax revocation, and then if subsequently disposition of the property is foreign exclusion and qualitatively evaluate the made, the election cannot be revoked base company sales income within the alternatives considered. Part 1.C.3.b of again within five years of the meaning of section 954(d). Any such this Special Analyses section explains subsequent election. restructuring may be unduly costly and only available to certain taxpayers. determined based only on the local country tax ii. Alternatives Considered for Further, such reorganization to realize a assessed on the tested income taken into account Determining the Scope of the GILTI specific income treatment suggests that in determining GILTI. The election to apply the High Tax Exclusion high tax exception of section 954(b)(4) with respect tax instead of business considerations to any high-taxed income allows taxpayers to The Treasury Department and the IRS are determining business structures. eliminate the need to use foreign tax credits to considered a number of options to This can lead to higher compliance reduce GILTI tax liability on such income by address the types of income excluded costs and inefficient investment. removing such income from gross tested income; however, taxpayers choosing the election will not from gross tested income by the GILTI Therefore, the Treasury Department and be able to use the foreign tax credits associated with high tax exclusion. The options were (i) the IRS rejected this option. that income against other section 951A category to exclude from gross tested income The second option considered was to income, and they will not be able to use the tangible only income that would be subpart F broaden the application of the GILTI assets owned by high tax QBUs in their QBAI computation. Therefore, taxpayers will have to income but for the high tax exception of high tax exclusion to allow taxpayers to evaluate their individual facts and circumstances to section 954(b)(4); (ii) in addition to elect under the high tax exception of determine whether they should make the election. excluding the aforementioned income, section 954(b)(4) to exclude from gross

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tested income an item of gross income income is subject to a foreign effective determination on an item-by-item basis; that is subject to a foreign effective tax tax rate greater than 90 percent of the (ii) apply the determination on a CFC- rate greater than 18.9 percent, if such maximum U.S. corporate tax rate (18.9 by-CFC basis; or (iii) apply the income was also excluded from FBCI or percent based on the current U.S. determination on a QBU-by-QBU basis. insurance income by reason of another corporate tax rate of 21 percent). This The first option was to determine exception to subpart F. Under this option therefore establishes a framework whether income is high-taxed income interpretation, income such as active for applying the high tax exception within the meaning of section 954(b)(4) financing income that is excluded from under section 954(b)(4), including rules on an item-by-item basis. This approach subpart F income under section 954(h), to determine the scope of an item of would be consistent with the language active rents or royalties that are income that would otherwise be gross of section 954(b)(4), which applies to an excluded from subpart F income under tested income to which the election ‘‘item of income’’ of a CFC that is 954(c)(2)(A), and related party payments applies and to determine the rate of sufficiently high tax. However, this that are excluded from subpart F income foreign tax on such item. approach would be complex and under section 954(c)(6) could also be The approach chosen by the proposed difficult to administer because it would excluded from gross tested income regulations is consistent with the require analyzing each item of income under the GILTI high tax exclusion if legislative history to section 951A, to determine whether, under Federal tax such items of income are high taxed which evidences an intent to tax low- principles, such item is subject to a within the meaning of section 954(b)(4). taxed income of CFCs that presents base sufficiently high foreign effective tax This broader approach represents a erosion concerns. The approach is also rate. In fact, for this reason, the current plausible interpretation of the GILTI supported by a reasonable interpretation regulations that implement the high tax high tax exclusion; that is, that an item of the high tax exception of section exception of section 954(b)(4) for of income could be excluded both ‘‘by 954(b)(4), which applies to ‘‘any item of purposes of subpart F income do not reason of section 954(b)(4)’’ and by income’’ of a CFC, not just income that require an item-by-item determination reason of another exception. However, would otherwise be FBCI or insurance and aggregate all items of income into this approach would provide taxpayers income. Furthermore, contrary to the separate categories of income for the ability to exclude their CFCs’ high- first two options, this approach permits purposes of determining whether each taxed income that would be subpart F all similarly situated taxpayers with such category is high tax. See § 1.954– income but for an exception (for CFCs subject to a high rate of foreign tax 1(d)(2). Therefore, the Treasury example, active financing income), to make the election with respect to Department and the IRS rejected this while denying taxpayers the same such income to exclude it from gross option. ability with respect to their CFCs’ high- tested income, and reduces the The second option was to apply the determination based on all the items of taxed income that is not subpart F incentive for taxpayers to restructure income of the CFC. On the one hand, income in the first instance (for their operations to convert their high- this approach would minimize example, active business income), taxed gross tested income into subpart complexity and would be relatively easy without any general economic benefit F income for U.S. tax purposes. For taxpayers that make the election, to administer. On the other hand, this from such differential treatment. this approach reduces the taxpayers’ approach could permit inappropriate Furthermore, taxpayers with items of cost of capital on foreign investment by tax planning, such as combining high-taxed income that are not subpart reducing U.S. tax on such taxpayers’ operations subject to different rates of F income would still be incentivized to GILTI relative to the baseline. At the tax into a single CFC. This would have restructure their foreign operations in margin, the lower cost of capital may the effect of ‘‘blending’’ the rates of order to convert their high-taxed gross increase foreign investment by U.S.- foreign tax imposed on the income, tested income into subpart F income, parented firms. Further, removing high- which could result in low- or non-taxed which poses the same compliance costs taxed tested income from the GILTI tax income being excluded as high-taxed and inefficiencies as the first option. base could change the incentives for the income by being blended with much Therefore, the Treasury Department and location of tangible assets. The higher-taxed income. The low-taxed the IRS rejected this option. magnitude of these effects is highly income in this scenario is precisely the The third option, which is adopted in uncertain because of the uncertainty sort of base erosion-type income that the the proposed regulations, is to provide surrounding the number and attributes legislative history describes section an election to broaden the scope of the of the taxpayers that will find it 951A as intending to tax, and such tax high tax exception under section advantageous to make the election and motivated planning behavior is 954(b)(4) for purposes of the GILTI high because the relationship between the economically inefficient. tax exclusion to apply to any item of marginal effective tax rate at the QBU The third option, which is adopted in income that is subject to a foreign level and foreign investment by U.S. the proposed regulations, is to apply the effective tax rate greater than 18.9 taxpayers is not well known. In high tax exception based on the items of percent. The proposed regulations addition, the impact of tax gross income of a QBU of the CFC. permit controlling domestic considerations on taxpayer investment Under this approach, the net income shareholders of CFCs to elect to apply decisions depends on a number of that is taxed by the foreign jurisdiction the high tax exception under section international tax provisions, many of in each QBU must be determined. For 954(b)(4) to items of gross income that which interact in complex ways. example, if a CFC earned $100x of would not otherwise be FBCI or tested income through a QBU in insurance income. If this high tax iii. Alternatives Considered for Country A and was taxed at a 30 percent exception is elected, the GILTI high tax Determining High-Taxed Income rate and earned $100x of tested income exclusion will exclude the item of gross The Treasury Department and the IRS through another QBU in Country B and income from gross tested income. Under next considered options for determining was taxed at 0 percent, the blended rate the election, an item of gross income is whether an item of income is subject to of tax on all of the CFC’s tested income subject to a high rate of foreign tax if, the foreign effective tax rate described is 15 percent ($30x tax/$200x tested after taking into account properly in section 954(b)(4). The options income). However, if the high tax allocable expenses, the net item of considered were (i) apply the exception applies to each of a CFC’s

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QBUs based on the income earned by taxpayers that could potentially be The GILTI final regulations adopt an that QBU then the blending of different affected by an election into the high tax aggregate approach to domestic rates would be minimized. Although exception. The figure is approximate partnerships, but this aggregate applying the high tax exception on the since there is an imperfect treatment applies only for purposes of basis of a QBU, rather than the CFC as correspondence between high-taxed section 951A. CFCs and high-taxed QBUs, and, a whole, may be more complex and ii. Alternatives Considered administratively burdensome under furthermore, not all taxpayers that are certain circumstances, it more eligible for the election would choose to The Treasury Department and the IRS accurately pinpoints income subject to a make the election. The Treasury considered two options for the high rate of foreign tax and therefore Department and the IRS do not have treatment of domestic partnerships for continues to subject to tax the low-taxed readily available data to determine how purposes of subpart F. The first option base erosion-type income that the many of these taxpayers would benefit was to retain the entity approach to legislative history describes section from the election. domestic partnerships for purposes of 951A as intending to tax. Accordingly, Tabulations from the IRS Statistics of subpart F. While this approach would the proposed regulations apply the high Income 2014 Form 5471 file 4 further be consistent with the longstanding tax exception of section 954(b)(4) based indicate that approximately 85 percent entity approach to domestic on the items of net income of each QBU of earnings and profits before taxes of partnerships for purposes of subpart F of the CFC. CFCs are subject to an average foreign inclusions, it would result in domestic effective tax rate that is less than or partnerships being treated iv. Affected Taxpayers equal to 18.9 percent, accounting for inconsistently for purposes of subpart F The proposed regulations potentially approximately 30 percent of CFCs. The and section 951A, despite both regimes affect those taxpayers that have at least data indicate several examples of applying to U.S. shareholders and their one CFC with at least one QBU jurisdictions with effective tax rates CFCs. This inconsistent treatment of (including, potentially, the CFC itself) above 18.9 percent, such as France, domestic partnerships could result in a that has high-taxed income. A taxpayer Italy, and Japan. However, information domestic partnership including subpart with CFCs that have a mix of high-taxed is not readily available to determine F income in gross income under section and low-taxed income (determined on a how many QBUs are part of the same 951(a) and its partners including GILTI QBU-by-QBU basis) will need to CFC and what the effective foreign tax in their gross income under section evaluate the benefit of eliminating any rates are with respect to such QBUs. 951A(a), which would introduce tax under section 951A with respect to Furthermore, the determination of substantial complexity and uncertainty high-taxed income with the costs of whether or not to elect the high tax in the application of provisions that forgoing the use of such taxes against exception will be made at the require basis and E&P adjustments with other section 951A category income and shareholder (not CFC) level, after having respect to CFCs and their U.S. the use of tangible assets in the evaluated the full impact of doing so shareholders for amounts included in computation of QBAI. Taxpayers with across all of the shareholder’s CFCs. income under sections 951(a) and CFCs that have only low-taxed income Taxpayers potentially more likely to 951A(a). This option would also are not eligible to elect the high tax elect the high tax exception are those continue the inconsistent treatment of exception and hence are unaffected by taxpayers with CFCs that only operate domestic partnerships and foreign partnerships (which generally are this provision. in high-tax jurisdictions. treated as aggregates) for purposes of the The Treasury Department and the IRS b. Domestic Partnership Treatment for subpart F rules, despite the lack of a estimate that there are approximately Subpart F substantial policy justification for 4,000 business entities (corporations, S treating domestic partners of a corporations, and partnerships) with at i. Description partnership differently based upon the least one CFC that pays a foreign Under the statute, a U.S. shareholder law under which the partnership is effective tax rate above 18.9 percent. of a CFC is required to include in gross created or organized. In this regard, this The Treasury Department and the IRS income its pro rata share of the CFC’s option would require ‘‘small’’ partners further estimate that, for the subpart F income under section of a domestic partnership (that is, partnerships with at least one CFC that 951(a)(1)(A), the amount determined partners that are not themselves U.S. under section 956, under section pays a foreign effective tax rate greater shareholders of CFCs owned by the 951(a)(1)(B), and its GILTI inclusion than 18.9 percent, there are domestic partnership) to include in amount under section 951A. The Code approximately 1,500 partners that have income their distributive share of the does not explicitly prescribe the a large enough share to potentially domestic partnership’s subpart F qualify as a 10 percent U.S. shareholder treatment of domestic partnerships and 3 inclusion with respect to CFCs of which of the CFC. The 4,000 business entities their partners for purposes of subpart F. the small partners are not themselves and the 1,500 partners provide an However, domestic partnerships have U.S. shareholders. In contrast, if the approximate estimate of the number of generally been treated as entities domestic partnership were instead a separate from their partners, rather than foreign partnership, the small partners 3 Data are from IRS’s Research, Applied as aggregates of their partners, for Analytics, and Statistics division based on E-file would not include any amount in gross purposes of subpart F, including for income under section 951(a) (or a data available in the Compliance Data Warehouse, purposes of determining the amount for tax years 2015 and 2016. The counts include distributive share of such amount) with Category 4 and Category 5 IRS Form 5471 filers. included in the gross income of the respect to CFCs of which such partners Category 4 filers are U.S. persons who had control domestic partnership (and the were not U.S. shareholders. of a foreign corporation during the annual distributive share of such amount of its accounting period of the foreign corporation. The second option would adopt an Category 5 filers are U.S. shareholders who own domestic partners) under section 951(a). aggregate approach to domestic stock in a foreign corporation that is a CFC and who partnerships by treating stock owned by owned that stock on the last day in the tax year of 4 The IRS Statistics of Income Tax Stats report on the foreign corporation in that year in which it was Controlled Foreign Corporations can be accessed a domestic partnership as being owned a CFC. For full definitions, see https://www.irs.gov/ here: https://www.irs.gov/statistics/soi-tax-stats- proportionately by its partners for pub/irs-pdf/i5471.pdf. controlled-foreign-corporations. purposes of determining the U.S.

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shareholder that has the subpart F e-filed at least one Form 5471 as II. Paperwork Reduction Act 5 inclusion. This approach is consistent Category 4 or 5 filers in 2015 and 2016. The collection of information in these with the approach adopted for section The identified partnerships had proposed regulations is in proposed 951A in the GILTI final regulations. approximately 2 million partners, as § 1.951A–2(c)(6)(v). The collection of Under this approach, a domestic indicated by the number of Schedules information in proposed § 1.951A– partnership would not be the U.S. K–1 filed by the partnerships. This 2(c)(6)(v) is an election that a shareholder of a foreign corporation that number includes both domestic and controlling domestic shareholder of a includes subpart F income in its gross foreign partners, so it substantially CFC may make to apply the high tax income under section 951(a). Instead, overstates the number of partners that exception of section 954(b)(4) to gross only the partners of the domestic would be affected by the proposed income of a CFC. The election is made partnership that are U.S. shareholders of regulations, which potentially affect by attaching a statement to an original a CFC owned through the domestic 6 partnership would include subpart F only domestic partners. The proposed or amended income tax return in order income of the CFC in their gross regulations affect domestic partners that to elect to apply the high tax exception income. are U.S. shareholders of a CFC owned of section 954(b)(4) to gross income of This approach is supported by public by the domestic partnership because a CFC. For purposes of the Paperwork comments requesting harmonization of such partners will determine their Reduction Act of 1995 (44 U.S.C. the treatment of domestic partnerships subpart F inclusion amount by reference 3507(d)) (‘‘PRA’’), the reporting burden for purposes of the GILTI and subpart F to their pro rata shares of subpart F associated with proposed § 1.951A– regimes. The harmonization of the income of CFCs owned by the 2(c)(6)(v) will be reflected in the PRA treatment of domestic partnerships for partnership. Domestic partners that are submission associated with income tax purposes of the GILTI and subpart F not U.S. shareholders of a CFC owned returns in the Form 990 series, Form regimes is expected to result in by the domestic partnership will neither 1120 series, Form 1040 series, Form substantial simplification of related determine their own subpart F inclusion 1041 series, and Form 1065 series (see chart at the end of this part II for the rules (for example, previously taxed amount by reference to their pro rata current status of the PRA submissions earnings and profits and related basis shares of subpart F income of CFCs rules), consistency in the treatment of for these forms). In 2018, the IRS owned by the partnership nor include in released and invited comments on drafts domestic partnerships and foreign their income a distributive share of the partnerships, and the reduction of of the above five forms in order to give partnership’s subpart F inclusion members of the public advance notice burden (both administrative burden and amount. This latter group is likely to be tax liability) on taxpayers that are small and an opportunity to submit a substantial portion of domestic partners. This third option is effectuated comments. The IRS received no partners given the high number of in the proposed regulations by using the comments on the portions of the forms partners per partnership, and they will existing framework for foreign that relate to section 951A during the partnerships, which is well-developed have lower compliance costs as a result comment period. Consequently, the IRS and more administrable than a new of the proposed regulations. Because it made the forms available in late 2018 framework. is not possible to precisely identify and early 2019 for use by the public. these types of partners based on The IRS is contemplating making iii. Affected Taxpayers available data, this number is an upper additional changes to forms to take into The Treasury Department and the IRS bound of partners who would have been account these proposed regulations. estimate that there were approximately affected by this rule had this rule been The IRS estimates the number of 7,000 U.S. partnerships with CFCs that in effect in 2015 or 2016. affected filers to be the following:

TAX FORMS IMPACTED

Number of Collection of information respondents Forms to which the information (estimated) may be attached

§ 1.951A–2(c)(6)(v) Election to apply the high tax excep- 25,000–35,000 Form 990 series, Form 1120 series, Form 1040 series, tion of section 954(b)(4) to gross income of a CFC. Form 1041 series, and Form 1065 series. Source: MeF, DCS, and IRS’s Compliance Data Warehouse.

This estimate is based on filers of The current status of the PRA are included in the aggregated burden income tax returns with a Form 5471, submissions related to the tax forms that estimates for OMB control numbers ‘‘Information Return of U.S. Persons will be revised as a result of the 1545–0123 (which represents a total With Respect to Certain Foreign information collection in proposed estimated burden time for all forms and Corporations,’’ attached because only § 1.951A–2(c)(6)(v) is provided in the schedules for corporations of 3.157 filers that are U.S. shareholders of CFCs accompanying table. The reporting billion hours and total estimated would be subject to the information burdens associated with the information monetized costs of $58.148 billion collection requirements. collection in the proposed regulations ($2017)), 1545–0074 (which represents a

5 Data are from IRS’s Research, Applied stock in a foreign corporation that is a CFC and who Some variables may be available on tax forms that Analytics, and Statistics division based on data owned that stock on the last day in the tax year of are not available for statistical purposes. Moreover, available in the Compliance Data Warehouse. the foreign corporation in that year in which it was with new tax provisions, such as section 951A, Category 4 filer includes a U.S. person who had a CFC. For full definitions, see https://www.irs.gov/ relevant data may not be available for a number of pub/irs-pdf/i5471.pdf. control of a foreign corporation during the annual years for statistical purposes. accounting period of the foreign corporation. 6 This analysis is based on the tax data readily Category 5 includes a U.S. shareholder who owns available to the Treasury Department at this time.

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total estimated burden time, including will be revised as a result of the type basis rather than a provision- all other related forms and schedules for information collection in the proposed specific basis. Those estimates would individuals, of 1.784 billion hours and regulations. These numbers are capture both changes made by the Act total estimated monetized costs of therefore unrelated to the future and those that arise out of discretionary $31.764 billion ($2017)), 1545–0092 calculations needed to assess the burden authority exercised in the final (which represents a total estimated imposed by the proposed regulations. regulations. burden time, including all other related These burdens have been reported for The Treasury Department and the IRS forms and schedules for trusts and other regulations related to the taxation request comments on all aspects of estates, of 307,844,800 hours and total of cross-border income and the Treasury information collection burdens related estimated monetized costs of $9.950 Department and the IRS urge readers to to the proposed regulations, including billion ($2016)), and 1545–0047 (which recognize that these numbers are estimates for how much time it would represents a total estimated burden duplicates and to guard against take to comply with the paperwork time, including all other related forms overcounting the burden that burdens described above for each and schedules for tax-exempt international tax provisions imposed relevant form and ways for the IRS to organizations, of 50.450 million hours prior to the Act. No burden estimates minimize the paperwork burden. and total estimated monetized costs of specific to the forms affected by the Proposed revisions (if any) to these $1,297,300,000 ($2017)). The overall proposed regulations are currently forms that reflect the information burden estimates provided for these available. The Treasury Department and collections contained in these proposed OMB control numbers are aggregate the IRS have not estimated the burden, regulations will be made available for amounts that relate to the entire package including that of any new information public comment at https://apps.irs.gov/ of forms associated with the applicable collections, related to the requirements app/picklist/list/draftTaxForms.htm OMB control number and will in the under the proposed regulations. The and will not be finalized until after future include, but not isolate, the Treasury Department and the IRS these forms have been approved by estimated burden of the tax forms that estimate PRA burdens on a taxpayer- OMB under the PRA.

Form Type of filer OMB No.(s) Status

Forms 990 ...... Tax exempt entities 1545–0047 Approved by OIRA 12/21/2018 until 12/31/2019. The form will be updated with (NEW Model). OMB number 1545–0047 and the corresponding PRA Notice on the next revision.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201811-1545-003

Form 1040 ...... Individual (NEW 1545–0074 Limited Scope submission (1040 only) approved on 12/7/2018 until 12/31/2019. Model). Full ICR submission for all forms in 6/2019. 60 Day FRN not published yet for full collection.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201808-1545-031

Form 1041 ...... Trusts and estates 1545–0092 Submitted to OIRA for review on 9/27/2018.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201806-1545-014

Form 1065 and 1120 Business (NEW 1545–0123 Approved by OIRA 12/21/2018 until 12/31/2019. Model).

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201805-1545-019

III. Regulatory Flexibility Act the total combined voting power of all Joint Committee on Taxation for It is hereby certified that these classes of stock of the foreign businesses of all sizes is less than 0.3 proposed regulations will not have a corporation entitled to vote. As an percent of gross receipts as shown in the significant economic impact on a initial matter, foreign corporations are table below. Based on data for 2015 and substantial number of small entities not considered small entities. Nor are 2016, total gross receipts for all within the meaning of section 601(6) of U.S. taxpayers considered small entities businesses with gross receipts under the Regulatory Flexibility Act (5 U.S.C. to the extent the taxpayers are natural $25 million is $60 billion while those chapter 6). persons or entities other than small over $25 million is $49.1 trillion. Given Section 951A generally affects U.S. entities. Thus, proposed § 1.951A– that tax on GILTI inclusion amounts is shareholders of CFCs. The reporting 2(c)(6)(v) generally only affects small correlated with gross receipts, this burden in proposed § 1.951A–2(c)(6)(v) entities if a U.S. taxpayer that is a U.S. results in businesses with less than $25 affects controlling domestic shareholder of a CFC is a small entity. million in gross receipts accounting for shareholders of a CFC that elect to apply Examining the gross receipts of the e- approximately 0.01 percent of the tax the high tax exception of section filed Forms 5471 that is the basis of the revenue. Data are not readily available 954(b)(4) to gross income of a CFC. 25,000—35,000 respondent estimates, to determine the sectoral breakdown of Controlling domestic shareholders are the Treasury Department and the IRS these entities. Based on this analysis, generally U.S. shareholders who, in the have determined that the tax revenue smaller businesses are not significantly aggregate, own more than 50 percent of from section 951A estimated by the impacted by these proposed regulations.

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2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 (billion) (billion) (billion) (billion) (billion) (billion) (billion) (billion) (billion) (billion)

JCT tax revenue...... 7.7 12.5 9.6 9.5 9.3 9.0 9.2 9.3 15.1 21.2 Total gross receipts...... 30,727 53,870 566,676 59,644 62,684 65,865 69,201 72,710 76,348 80,094 Percent ...... 0.03 0.02 0.02 0.02 0.01 0.01 0.01 0.01 0.02 0.03 Source: Research, Applied Analytics and Statistics division (IRS), Compliance Data Warehouse (IRS) (E-filed Form 5471, category 4 or 5, C and S corporations and partnerships); Conference Report, at 689.

The data to assess the number of the affected partnerships. As described by a state, local, or tribal government, in small entities potentially affected by in section II of this Special Analyses the aggregate, or by the private sector, of proposed § 1.951A–2(c)(6)(v) are not section, the Treasury Department and $100 million in 1995 dollars, updated readily available. However, businesses the IRS estimate that there are annually for inflation. In 2019, that that are U.S. shareholders of CFCs are approximately 7,000 U.S. partnerships threshold is approximately $154 generally not small businesses because with CFCs that e-filed at least one Form million. These proposed regulations do the ownership of sufficient stock in a 5471 as Category 4 or 5 filers in 2015 not include any Federal mandate that CFC in order to be a U.S. shareholder and 2016.7 The identified partnerships may result in expenditures by state, generally entails significant resources had approximately 2 million domestic local, or tribal governments, or by the and investment. The Treasury and foreign partners. However, this private sector in excess of that Department and the IRS welcome figure overstates the number of partners threshold. comments on whether the proposed that would be affected by the proposed regulations would affect a substantial regulations, because the proposed V. Executive Order 13132: Federalism number of small entities in any regulations would not affect foreign particular industry. partners of the affected U.S. Executive Order 13132 (entitled Regardless of the number of small partnerships. Of affected U.S. ‘‘Federalism’’) prohibits an agency from entities potentially affected by proposed partnerships, business entities are a publishing any rule that has federalism § 1.951A–2(c)(6)(v), the Treasury minority of the affected domestic implications if the rule either imposes Department and the IRS have concluded partners. Because data to identify the substantial, direct compliance costs on that there is no significant economic size of domestic partners that are state and local governments, and is not impact on such entities as a result of business entities are not readily required by statute, or preempts state proposed § 1.951A–2(c)(6)(v). As available, this number is a high upper law, unless the agency meets the discussed above, smaller businesses are bound and is magnitudes greater than consultation and funding requirements not significantly impacted by the the number of affected domestic of section 6 of the Executive Order. proposed regulations. Furthermore, the partners that are small businesses. These proposed regulations do not have requirements in proposed § 1.951A– Consequently, the Treasury Department federalism implications and do not 2(c)(6)(v) apply only if a taxpayer and the IRS have determined that the impose substantial direct compliance chooses to make an election to apply a proposed regulations will not have a costs on state and local governments or favorable rule. Consequently, the significant economic impact on a Treasury Department and the IRS have preempt state law within the meaning of substantial number of small entities. the Executive Order. determined that proposed § 1.951A– Accordingly, it is hereby certified that 2(c)(6)(v) will not have a significant the proposed regulations would not Comments and Requests for Public economic impact on a substantial have a significant economic impact on Hearing number of small entities. Accordingly, it a substantial number of small entities. is hereby certified that the collection of Pursuant to section 7805(f) of the Before the proposed regulations are information requirements of proposed Code, this notice of proposed adopted as final regulations, § 1.951A–2(c)(6)(v) would not have a rulemaking has been submitted to the consideration will be given to any significant economic impact on a Chief Counsel for Advocacy of the Small comments that are submitted timely to substantial number of small entities. Business Administration for comment the IRS as prescribed in this preamble Notwithstanding this certification, the on its impact on small businesses. under the ADDRESSES heading. The Treasury Department and the IRS invite Treasury Department and the IRS comments from the public on the IV. Unfunded Mandates Reform Act request comments on all aspects of the impact of proposed § 1.951A–2(c)(6)(v) Section 202 of the Unfunded proposed regulations and on changes to on small entities. Mandates Reform Act of 1995 requires forms related to the proposed The treatment of domestic that agencies assess anticipated costs regulations. See also parts I.B and II.A partnerships as an aggregate of their and benefits and take certain other of the Explanation of Provisions section partners in these proposed regulations actions before issuing a final rule that (requesting specific comments related to for purposes of subpart F would reduce includes any Federal mandate that may the aggregate approach to domestic the burden on partners that are not U.S. result in expenditures in any one year partnerships and GILTI high tax shareholders of a CFC owned by the exclusion, respectively). partnership because these partners will 7 Data are from IRS’s Research, Applied no longer be required to include in Analytics, and Statistics division based on data All comments will be available at income a distributive share of subpart F available in the Compliance Data Warehouse. www.regulations.gov or upon request. A Category 4 filer includes a U.S. person who had public hearing will be scheduled if income. The proposed regulations control of a foreign corporation during the annual would also reduce burden on domestic accounting period of the foreign corporation. requested in writing by any person that partnerships that hold CFCs because Category 5 includes a U.S. shareholder who owns timely submits written comments. If a these partnerships would no longer be stock in a foreign corporation that is a CFC and who public hearing is scheduled, then notice owned that stock on the last day in the tax year of of the date, time, and place for the required to calculate their partners’ the foreign corporation in that year in which it was distributive share of subpart F income, a CFC. For full definitions, see https://www.irs.gov/ public hearing will be published in the resulting in compliance cost savings for pub/irs-pdf/i5471.pdf. Federal Register.

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Drafting Information ■ Par. 4. Section 1.951A–2 is amended (2) Income attributable to a QBU. The principal authors of these by revising paragraph (c)(1)(iii) and Gross income is attributable to a QBU if regulations are Joshua P. Roffenbender adding paragraph (c)(6) to read as the gross income is properly reflected and Jorge M. Oben of the Office of follows: on the books and records of the QBU. Such gross income must be determined Associate Chief Counsel (International). § 1.951A–2 Tested income and tested loss. However, other personnel from the under Federal income tax principles, * * * * * Treasury Department and the IRS except that the principles of § 1.904– (c) * * * participated in their development. 4(f)(2)(vi) (without regard to the (1) * * * exclusion described in § 1.904– List of Subjects in 26 CFR Part 1 (iii) Gross income excluded from the 4(f)(2)(vi)(C)(1)) apply to adjust gross Income taxes, Reporting and foreign base company income (as income of a QBU to reflect disregarded recordkeeping requirements. defined in section 954) or the insurance payments. income (as defined in section 953) of the (B) Tentative net tested income item. Proposed Amendments to the corporation by reason of the exception A tentative net tested income item with Regulations described in section 954(b)(4) pursuant respect to a tentative gross tested Accordingly, 26 CFR part 1 is to an election under § 1.954–1(d), or a income item is determined by allocating proposed to be amended as follows: tentative gross tested income item of the and apportioning deductions (not corporation that qualifies for the including any items described in PART 1—INCOME TAXES exception described in section 954(b)(4) § 1.951A–2(c)(5)) to the tentative gross pursuant to an election under paragraph tested income item under the principles ■ Paragraph 1. The authority citation (c)(6) of this section, of § 1.960–1(d)(3) by treating each single for part 1 continues to read in part as * * * * * tentative gross tested income item as follows: (6) Election for application of high tax gross income in a separate tested Authority: 26 U.S.C. 7805. exception of section 954(b)(4)—(i) In income group. (iii) Effective rate at which taxes are ■ general. For purposes of section Par. 2. Section 1.951–1 is amended by imposed. For a CFC inclusion year of a 951A(c)(2)(A)(i)(II) and paragraph adding paragraph (a)(4) and revising the controlled foreign corporation, the (c)(1)(iii) of this section, a tentative last sentence of paragraph (i) to read as effective rate with respect to the gross tested income item of a controlled follows: controlled foreign corporation’s foreign corporation for a CFC inclusion tentative net tested income items is § 1.951–1 Amounts included in gross year qualifies for the exception income of United States shareholders. determined separately for each such described in section 954(b)(4) if— item. The effective rate at which taxes * * * * * (A) An election made under (a) * * * are imposed on a tentative net tested paragraph (c)(6)(v)(A) of this section is income item is— (4) See § 1.958–1(d)(1) for ownership effective with respect to the controlled of stock of a foreign corporation through (A) The U.S. dollar amount of foreign foreign corporation for the CFC income taxes paid or accrued with a domestic partnership for purposes of inclusion year; and sections 951 and 951A and for purposes respect to the tentative net tested (B) The tentative net tested income income item, determined by applying of any other provision that applies by item with respect to the tentative gross reference to section 951 or 951A. paragraph (c)(6)(iv) of this section; tested income item was subject to divided by * * * * * foreign income taxes at an effective rate (B) The U.S. dollar amount of the (i) * * * Paragraph (h) of this section that is greater than 90 percent of the rate tentative net tested income item, applies to taxable years of domestic that would apply if the income were increased by the amount of foreign partnerships ending on or after May 14, subject to the maximum rate of tax income taxes referred to in paragraph 2010, but does not apply to determine specified in section 11. (c)(6)(iv) of this section. the stock of a controlled foreign (ii) Definitions—(A) Tentative gross (iv) Taxes paid or accrued with corporation owned (within the meaning tested income item—(1) In general. A respect to a tentative net tested income of section 958(a)) by a United States single tentative gross tested income item item. For a CFC inclusion year, the person for taxable years of the with respect to a controlled foreign amount of foreign income taxes paid or controlled foreign corporation beginning corporation for a CFC inclusion year is accrued by a controlled foreign on or after the date of publication of the the aggregate of all items of gross corporation with respect to a tentative Treasury decision adopting these rules income attributable to a single qualified net tested income item of the controlled as final regulations in the Federal business unit (QBU) of the controlled foreign corporation for purposes of this Register, and for taxable years of United foreign corporation in such CFC paragraph (c)(6) is the U.S. dollar States persons in which or with which inclusion year that would be gross amount of the controlled foreign such taxable years of the controlled tested income without regard to this corporation’s current year taxes (as foreign corporation end. paragraph (c)(6) and that would be in a defined in § 1.960–1(b)(4)) that would ■ Par. 3. Section 1.951A–0 is amended single tested income group (as defined be allocated and apportioned under the by adding entries for § 1.951A–7(a), in § 1.960–1(d)(2)(ii)(C)). For this principles of § 1.960–1(d)(3)(ii) to the § 1.951A–7(b), and § 1.951A–7(c) to read purpose, a QBU is defined in section tentative net tested income item by as follows: 989(a) and the regulations under that treating such tentative net tested income § 1.951A–0 Outline of section 951A section, and a controlled foreign item as being in a separate tested regulations. corporation’s QBUs includes QBUs income group. If the principles of * * * * * owned by the controlled foreign § 1.904–4(f)(2)(vi) apply to adjust the corporation in addition to the QBU that gross income of a QBU to account for § 1.951A–7 Applicability dates. is the controlled foreign corporation. disregarded payments as provided in (a) In general. Therefore, a controlled foreign paragraph (c)(6)(ii)(A)(2) of this section, (b) High tax exclusion. corporation may have multiple tentative the principles of § 1.904–6(a)(2) apply to (c) Domestic partnerships. gross tested income items. allocate and apportion foreign income

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taxes imposed by reason of the the election made under paragraph shareholder group (including any disregarded payments. Except to the (c)(6)(v)(A) of this section with respect member that joins the controlling extent provided in the next sentence, to a controlled foreign corporation for a domestic shareholder group after the the amount of foreign income taxes paid CFC inclusion year is revoked by the election or revocation) and the rules in or accrued with respect to a tentative controlling domestic shareholders of the paragraphs (c)(6)(v)(A) through (D) of net tested income item, determined in controlled foreign corporation in the this section apply by reference to the the manner provided in this paragraph same manner as prescribed for an controlling domestic shareholder group. (c)(6), will not be affected by a election in paragraph (c)(6)(v)(A) of this (2) Definition of controlling domestic subsequent reduction in foreign income section. shareholder group. For purposes of taxes attributable to a distribution to (2) Limitations by reason of paragraph (c)(6)(v)(E)(1) of this section, shareholders of all or part of such revocation—(i) In general. Except as the term controlling domestic income. To the extent the foreign provided in paragraph (c)(6)(v)(D)(2)(ii) shareholder group means two or more income taxes paid or accrued by the of this section, if an election with controlled foreign corporations (each a controlled foreign corporation are respect to a controlled foreign member) if more than 50 percent of the reasonably certain to be returned by the corporation for a CFC inclusion year is total combined voting power of all foreign jurisdiction imposing such taxes revoked under paragraph (c)(6)(v)(D)(1) classes of the stock of each corporation to a shareholder, directly or indirectly, of this section, a new election cannot be is owned (within the meaning of section through any means (including, but not made under paragraph (c)(6)(v)(A) of 958(a)) by the same controlling domestic limited to, a refund, credit, payment, this section with respect to the shareholder or, if no single controlling discharge of an obligation, or any other controlled foreign corporation for any domestic shareholder owns (within the method) on a subsequent distribution to CFC inclusion year that begins within meaning of section 958(a)) more than 50 such shareholder, the foreign income sixty months following the close of the percent of the total combined voting taxes are not treated as paid or accrued CFC inclusion year for which the power of all classes of the stock of each for purposes of this paragraph (c)(6)(iv). previous election was revoked, and such corporation, more than 50 percent of the (v) Rules regarding the election—(A) subsequent election cannot be revoked total combined voting power of all Manner of making election. An election under paragraph (c)(6)(v)(D)(1) of this classes of the stock of each corporation is made under this paragraph section with respect to the controlled is owned (within the meaning of section (c)(6)(v)(A) with respect to a controlled foreign corporation for any CFC 958(a)) by the same controlling domestic foreign corporation for a CFC inclusion inclusion year that begins within sixty shareholders and each controlling year— months following the close of the CFC domestic shareholder owns (within the (1) By the controlling domestic inclusion year for which the subsequent meaning of section 958(a)) the same shareholders (as defined in § 1.964– election was made. percentage of stock in each controlled 1(c)(5)), by attaching a statement to such (ii) Exception for change of control. foreign corporation. For purposes of the effect with an original or amended The Commissioner may permit a preceding sentence, a controlling income tax return for the U.S. controlled foreign corporation to make domestic shareholder includes any shareholder inclusion year of each an election under paragraph (c)(6)(v)(A) person bearing a relationship described controlling domestic shareholder in of this section or revoke an election in section 267(b) or 707(b)(1) to the which or with which such CFC under paragraph (c)(6)(v)(D)(1) of this controlling domestic shareholder. inclusion year ends, and including any section with respect to any CFC (vi) Example. The following example additional information required by inclusion year within the sixty-month illustrates the application of this applicable administrative period described in paragraph paragraph (c)(6). pronouncements; or (c)(6)(v)(D)(2)(i) of this section if more (2) In accordance with the rules than 50 percent of the total combined (A) Example: Effect of disregarded provided in forms or instructions. voting power of all classes of the stock payments between QBUs—(1) Facts—(i) FP, a (B) Scope of election. An election controlled foreign corporation organized in of the controlled foreign corporation Country A, conducts a trade or business in made under paragraph (c)(6)(v)(A) of entitled to vote as of the beginning of Country A (the Country A Business) and this section that is effective with respect such CFC inclusion year are owned reflects items of income, gain, loss, and to a controlled foreign corporation for a (within the meaning of section 958(a)) expense attributable to the Country A CFC inclusion year applies with respect by persons that did not own any Business on the books and records of FP’s to each tentative gross tested income interests in the controlled foreign home office. Under § 1.989(a)–1(b)(2)(i)(A), item of the controlled foreign corporation as of the close of the CFC FP is a QBU. FP’s functional currency is the corporation for the CFC inclusion year inclusion year for which the prior U.S. dollar. FP has a calendar year taxable and is binding on all United States election or revocation with respect to year in both the United States and Country shareholders of the controlled foreign the controlled foreign corporation A. An election is made under paragraph (c)(6)(v)(A) of this section that is effective for corporation. became effective. For purposes of the FP’s CFC inclusion year. (C) Duration of election. An election preceding sentence, a person includes (ii) FP owns FDE, a Country B disregarded made under paragraph (c)(6)(v)(A) of any person bearing a relationship entity (within the meaning of § 1.904– this section is effective for a CFC described in section 267(b) or 707(b)(1) 4(f)(3)(i)). FDE conducts activities in Country inclusion year of a controlled foreign with respect to the person. B that constitute a trade or business within corporation for which the election is (E) Rules applicable to controlling the meaning of § 1.989(a)–1(c) (the Country B made and all subsequent CFC inclusion domestic shareholder groups—(1) In Business), and reflects items of income, gain, years of such corporation unless general. In the case of a controlled loss, and expense attributable to the Country revoked by the controlling domestic foreign corporation that is a member of B Business on the books and records of FDE. a controlling domestic shareholder Under § 1.989(a)–1(b)(2)(ii)(B), the Country B shareholders of the controlled foreign Business conducted through FDE is a QBU. corporation under paragraph group, an election is made under The Country B Business’s functional (c)(6)(v)(D)(1) of this section. paragraph (c)(6)(v)(A) of this section or currency is the U.S. dollar. FDE has a (D) Revocation of election—(1) In revoked under paragraph (c)(6)(v)(D)(1) calendar year taxable year in Country B. general. Except as provided in of this section with respect to each (iii) On Date A in Year 1, FDE accrues paragraph (c)(6)(v)(D)(2) of this section, member of the controlling domestic $100x of interest income from X, an

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unrelated third party, and reflects the accrual items of the Country A Business, FP’s adopting these rules as final regulations on the books and records of the Country B tentative net tested income item attributable in the Federal Register, and to taxable business. FP excludes the $100x from foreign to the Country A Business is $20x. Taking years of United States shareholders in personal holding company income by reason into account the $20x deduction for Country which or with which such taxable years of section 954(h). Subsequently, on Date B in B income taxes that are allocable to the Year 1, FDE accrues and pays $20x of interest Country B Business under § 1.960–1(d)(3), of foreign corporations end. to FP. FP reflects the interest income item on FP’s tentative net tested income item (c) Domestic partnerships. Section the books and records of the Country A attributable to the Country B Business is $60x 1.951A–1(e) applies to taxable years of Business. FDE reflects the $20x of interest under paragraph (c)(6)(ii)(B) of this section foreign corporations beginning after expense on the books and records of the (tentative gross tested income of $80x less the December 31, 2017, and before the date Country B Business. $20x deduction). of publication of the Treasury decision (iv) Country A imposes no tax on income. (iii) Under paragraphs (c)(6)(iii) and (iv) of adopting these rules as final regulations Country B imposes a 25% tax on income. For this section, for Year 1 (a CFC inclusion year in the Federal Register, and to taxable Country B income tax purposes, FDE (which of FP), the effective rate with respect to FP’s is not disregarded under Country B income $60x tentative net tested income item years of United States persons in which tax principles) recognizes $80x of taxable attributable to its Country B Business is 25%: or with which such taxable years of income ($100x interest income, less a $20x $20x (the U.S. dollar amount of the Country foreign corporations end. deduction for the interest paid to FP). B taxes accrued with respect to FP’s tentative ■ Par. 6. Section 1.954–1 is amended Accordingly, FDE incurs a Country B income tested net income item attributable to the by: tax liability with respect to Year 1, the U.S. Country B Business) divided by $80x (the ■ 1. Adding ‘‘or’’ to the end of dollar amount of which is $20x. For Federal U.S. dollar amount of FP’s $60x tentative net paragraph (c)(1)(iii)(A)(2)(ii). income tax purposes, if FDE were not a tested income item, increased by the $20x ■ 2. Removing and reserving paragraphs disregarded entity (within the meaning of amount of Country B income taxes accrued (c)(1)(iii)(A)(2)(iii) and (iv). § 1.904–4(f)(3)(i)), FP would recognize $20x with respect to that tentative net tested ■ 3. Adding paragraphs (c)(1)(iii)(A)(3) of income in Year 1, and FDE would income item), expressed as a percentage. recognize $80x of taxable income in Year 1. Therefore, FP’s tentative net tested income and (c)(1)(iv). ■ Other than the $20x expense accrued with item attributable to the Country B Business 4. Removing the language ‘‘foreign respect to the income tax imposed by was subject to foreign income taxes at an base company oil related income, as Country B, FP incurs no deductions in Year effective rate (25%) that is greater than 18.9% defined in section 954(g), or’’ in the 1 for Federal income tax purposes. (which is 90% of the rate that would apply second sentence of paragraph (d)(1) (2) Analysis—(i) Under paragraph if the income were subject to the maximum introductory text. (c)(6)(ii)(A)(1) of this section, a separate rate of tax specified in section 11, which is ■ 5. Adding a new sentence after the tentative gross tested income item must be 21%). Accordingly, the requirement of fourth sentence in paragraph (d)(1) determined with respect to FP’s Country A paragraph (c)(6)(i)(B) of this section is introductory text. Business and Country B Business (each of satisfied with respect to FP’s tentative gross ■ 6. Removing the language ‘‘imposed which is a QBU). To determine the separate tested income item attributable to the tentative gross tested income items with Country B Business in Year 1. Further, the by a foreign country or countries’’ in respect to its Country A Business and requirement of paragraph (c)(6)(i)(A) of this paragraph (d)(1)(ii). Country B Business, FP must determine the section is satisfied because an election ■ 7. Removing the language ‘‘in a chain gross income that is attributable to the described in paragraph (c)(6)(v)(A) of this of corporations through which a Country A Business and the Country B section was made with respect to FP for Year distribution is made’’ in the first Business under paragraph (c)(6)(ii)(A)(2) of 1. Accordingly, FP’s $80x item of tentative sentence in paragraph (d)(2) this section. Without regard to the $20x gross tested income attributable to its introductory text. interest payment from FDE to FP, gross Country B Business qualifies for the high tax ■ 8. Removing the language ‘‘(or income attributable to the Country A exception of section 954(b)(4) under deemed paid or accrued)’’ in paragraph Business would be $0 (that is, $20x of paragraph (c)(6)(i) of this section. (d)(2)(i). interest income reflected on the books and (iv) FP’s $20x item of tentative net tested ■ records of the Country A Business, reduced income attributable to its Country A Business 9. Revising the heading and the first by $20x attributable to a payment that is is not subject to foreign income tax, and sentence of paragraph (d)(3)(i). disregarded for Federal income tax therefore does not satisfy the requirement of ■ 10. Removing the second sentence of purposes). Similarly, without regard to the paragraph (c)(6)(i)(B) of this section. paragraph (d)(3)(i). $20x interest payment from FDE to FP, gross Accordingly, FP’s $20x item of tentative ■ 11. Removing and reserving income attributable to the Country B gross tested income attributable to the paragraphs (d)(4)(iii) and (d)(7). Business would be $100x (that is, $100x of Country A Business does not qualify for the The additions and revisions read as interest income reflected on the books and high tax exception of section 954(b)(4) under follows: records of the Country B Business, paragraph (c)(6)(i) of this section. unreduced by the $20x payment from FDE to ■ Par. 5. Section 1.951A–7 is revised to § 1.954–1 Foreign base company income. FP). However, the $20x payment from FDE to read as follows: * * * * * FP is a disregarded payment within the (c) * * * meaning of § 1.904–4(f)(3)(ii), and would, § 1.951A–7 Applicability dates. under the principles of § 1.904–4(f)(2)(vi) (1) * * * (without regard to the exclusion described in (a) In general. Except as otherwise (iii) * * * § 1.904–4(f)(2)(vi)(C)(1)), adjust the gross provided in this section, sections (A) * * * income of the Country A Business from $0 1.951A–1 through 1.951A–6 apply to (3) Amount of a single item. For to $20x and the gross income of the Country taxable years of foreign corporations purposes of paragraph (c)(1)(iii)(A) of B Business from $100x to $80x (in each case, beginning after December 31, 2017, and this section, the aggregate amount from by virtue of the $20x disregarded interest to taxable years of United States all transactions that falls within a single payment from FDE to FP). Accordingly, FP’s shareholders in which or with which separate category (as defined in § 1.904– tentative gross tested income attributable to such taxable years of foreign 5(a)(4)(v)) and is described in paragraph the Country A Business is $20x and its (c)(1)(iii)(A)(1)(i) of this section is a tentative gross tested income attributable to corporations end. the Country B Business is $80x. (b) High tax exclusion. Section single item of income. Similarly, the (ii) Under paragraph (c)(6)(ii)(B) of this 1.951A–2(c)(1)(iii) and (c)(6) applies to aggregate amount from all transactions section, because there are no deductions taxable years of foreign corporations that falls within a single separate allocated or apportioned under § 1.960– beginning on or after the date of category (as defined in § 1.904– 1(d)(3) to the tentative gross tested income publication of the Treasury decision 5(a)(4)(v)) and is described in each one

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of paragraphs (c)(1)(iii)(A)(1)(ii) through of this section and the first sentence of (2) Non-application for determination (c)(1)(iii)(A)(1)(v) of this section is in paragraph (d)(3)(i) of this section apply of status as United States shareholder or each case a separate single item of to taxable years of a controlled foreign controlled foreign corporation. income. The same principles apply for corporation beginning on or after the Paragraph (d)(1) of this section does not transactions described in each one of date of publication of the Treasury apply for purposes of determining paragraphs (c)(1)(iii)(A)(2)(i) through (v) decision adopting these rules as final whether any United States person is a of this section. regulations in the Federal Register. United States shareholder (as defined in * * * * * * * * * * section 951(b)), whether any United (iv) Treatment of deductions or loss ■ Par. 8. Section 1.956–1, as amended States shareholder is a controlling attributable to disqualified basis. For May 23, 2019, at 84 FR 23717, effective domestic shareholder (as defined in purposes of paragraph (c)(1)(i) of this July 22, 2019, is further amended by § 1.964–1(c)(5)), or whether any foreign section (and in the case of insurance revising the first sentence of paragraph corporation is a controlled foreign income, paragraph (a)(6) of this section), (g)(4) to read as follows: corporation (as defined in section in determining the amount of a net item 957(a)). of foreign base company income or § 1.956–1 Shareholder’s pro rata share of (3) Examples. The following examples the average of the amounts of United States insurance income, deductions or loss illustrate the application of this property held by a controlled foreign paragraph (d). described in § 1.951A–2(c)(5) are not corporation. allocated and apportioned to gross * * * * * (i) Example 1—(A) Facts. USP, a domestic corporation, and Individual A, a United foreign base company income or gross (g) * * * insurance income. States citizen unrelated to USP, own 95% (4) Paragraphs (a)(2) and (3) of this and 5%, respectively, of PRS, a domestic (d) * * * section apply to taxable years of (1) * * * For rules concerning the partnership. PRS owns 100% of the single controlled foreign corporations class of stock of FC, a foreign corporation. application of the high tax exception of beginning on or after July 22, 2019, and (B) Analysis—(1) CFC and United States sections 954(b)(4) and to taxable years of a United States shareholder determinations. Under 951A(c)(2)(A)(i)(III) to tentative gross shareholder in which or with which paragraph (d)(2) of this section, the tested income items, see § 1.951A– such taxable years of the controlled determination of whether PRS, USP, and 2(c)(1)(iii) and (c)(6). * * * foreign corporations end, but the last Individual A (each a United States person) are United States shareholders of FC and * * * * * sentence of paragraph (a)(2)(i) and (3) * * * whether FC is a controlled foreign paragraphs (a)(2)(iii) and (a)(3)(iv) of corporation is made without regard to (i) In general. The amount of foreign this section do not apply to taxable paragraph (d)(1) of this section. PRS, a income taxes paid or accrued by a years of controlled foreign corporations United States person, owns 100% of the total controlled foreign corporation with beginning on or after the date of combined voting power or value of the FC respect to a net item of income for publication of the Treasury decision stock within the meaning of section 958(a). purposes of section 954(b)(4) and this adopting these rules as final regulations Accordingly, PRS is a United States paragraph (d) is the U.S. dollar amount in the Federal Register, and to taxable shareholder under section 951(b), and FC is a controlled foreign corporation under of the controlled foreign corporation’s years of a United States shareholder in current year taxes (as defined in section 957(a). USP is a United States which or with which such taxable years shareholder of FC because it owns 95% of the § 1.960–1(b)(4)) that are allocated and of the controlled foreign corporations total combined voting power or value of the apportioned under § 1.960–1(d)(3)(ii) to end. * * * FC stock under sections 958(b) and the subpart F income group (as defined * * * * * 318(a)(2)(A). Individual A, however, is not a in § 1.960–1(d)(2)(ii)(B)) that ■ Par. 9. Section 1.958–1 is amended United States shareholder of FC because corresponds with the net item of by: Individual A owns only 5% of the total income. * * * ■ combined voting power or value of the FC 1. Redesignating paragraph (d) as stock under sections 958(b) and 318(a)(2)(A). * * * * * paragraph (e). (2) Application of sections 951 and 951A. ■ Par. 7. Section 1.954–1, as proposed ■ 2. Adding a new paragraph (d). Under paragraph (d)(1) of this section, for to be amended at 83 FR 63200 The addition reads as follows: purposes of sections 951 and 951A, PRS is (December 7, 2018), is further amended not treated as owning (within the meaning of by: § 1.958–1 Direct and indirect ownership of section 958(a)) the FC stock; instead, PRS is ■ 1. Removing and reserving paragraph stock. treated in the same manner as a foreign (d)(3)(ii). * * * * * partnership for purposes of determining the ■ 2. Redesignating paragraphs (h)(1) and (d) Stock owned through domestic FC stock owned by USP and Individual A (h)(2) as paragraphs (h)(2) and (h)(3), partnerships—(1) In general. Except as under section 958(a)(2) and paragraph (b) of this section. Therefore, for purposes of respectively. otherwise provided in paragraph (d)(2) of this section, for purposes of section sections 951 and 951A, USP is treated as ■ 3. Adding a new paragraph (h)(1). owning 95% of the FC stock under section ■ 4. Removing the language ‘‘Paragraphs 951 and section 951A, and for purposes 958(a), and Individual A is treated as owning (d)(3)(i) and (ii)’’ in newly redesignated of any other provision that applies by 5% of the FC stock under section 958(a). USP paragraph (h)(2) and adding ‘‘The last reference to section 951 or section 951A, is a United States shareholder of FC, and two sentences in paragraph (d)(3)(i)’’ in a domestic partnership is not treated as therefore USP determines its income its place. owning stock of a foreign corporation inclusions under section 951 and 951A based The addition reads as follows: within the meaning of section 958(a). on its ownership of FC stock under section When the preceding sentence applies, a 958(a). However, because Individual A is not § 1.954–1 Foreign base company income. domestic partnership is treated in the a United States shareholder of FC, Individual * * * * * same manner as a foreign partnership A does not have an income inclusion under section 951 with respect to FC or a pro rata (h) * * * under section 958(a)(2) and paragraph share of any amount of FC for purposes of (1) Paragraphs (c)(1)(iii)(A)(3) and (b) of this section for purposes of section 951A. (c)(1)(iv) of this section and portion of determining the persons that own stock (ii) Example 2—(A) Facts. USP, a domestic paragraph (d)(3)(i) of this section. of the foreign corporation within the corporation, and Individual A, a United Paragraphs (c)(1)(iii)(A)(3) and (c)(1)(iv) meaning of section 958(a). States citizen, own 90% and 10%,

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respectively, of PRS1, a domestic paragraphs to taxable years of a foreign Park, Cleveland, OH during the swim partnership. PRS1 and Individual B, a corporation beginning after December events of the multiple triathlons over nonresident alien individual, own 90% and 31, 2017, and to taxable years of the the course of three days. This proposed 10%, respectively, of PRS2, a domestic domestic partnership in which or with rulemaking would prohibit persons and partnership. PRS2 owns 100% of the single class of stock of FC, a foreign corporation. which such taxable years of the foreign vessels from being in the safety zone USP, Individual A, and Individual B are corporation end, provided that the unless authorized by the Captain of the unrelated to each other. partnership, its partners that are United Port Buffalo or a designated (B) Analysis—(1) CFC and United States States shareholders of the foreign representative. We invite your shareholder determination. Under paragraph corporation, and other domestic comments on this proposed rulemaking. (d)(2) of this section, the determination of partnerships that bear relationships DATES: Comments and related material whether PRS1, PRS2, USP, and Individual A described in section 267(b) or 707(b) to must be received by the Coast Guard on (each a United States person) are United the partnership (and their United States or before July 22, 2019. States shareholders of FC and whether FC is shareholder partners) consistently apply a controlled foreign corporation is made ADDRESSES: You may submit comments without regard to paragraph (d)(1) of this paragraph (d) of this section with identified by docket number USCG– section. PRS2 owns 100% of the total respect to all foreign corporations whose 2019–0419 using the Federal combined voting power or value of the FC stock the domestic partnerships own eRulemaking Portal at http:// stock within the meaning of section 958(a). within the meaning of section 958(a) www.regulations.gov. See the ‘‘Public Accordingly, PRS2 is a United States (determined without regard to Participation and Request for shareholder under section 951(b), and FC is paragraph (d)(1) of this section). Comments’’ portion of the a controlled foreign corporation under * * * * * SUPPLEMENTARY INFORMATION section for section 957(a). Under sections 958(b) and ■ 318(a)(2)(A), PRS1 is treated as owning 90% Par. 10. Section 1.1502–51 is further instructions on submitting of the FC stock owned by PRS2. Accordingly, amended by revising the last sentence in comments. paragraph (b) and adding paragraph PRS1 is a United States shareholder under FOR FURTHER INFORMATION CONTACT: If (g)(2) to read as follows: section 951(b). Further, under section you have questions about this proposed 958(b)(2), PRS1 is treated as owning 100% of rulemaking, call or email LT Ryan the FC stock for purposes of determining the § 1.1502–51 Consolidated section 951A. FC stock treated as owned by USP and * * * * * Junod, Chief of Waterways Management, Individual A under section 318(a)(2)(A). (b) * * * In addition, see § 1.958– U.S. Coast Guard Marine Safety Unit Therefore, USP is treated as owning 90% of 1(d). Cleveland; telephone 216–937–6004, the FC stock under section 958(b) (100% x email D09-SMB-SECBuffalo-WWM@ * * * * * 100% x 90%), and Individual A is treated as uscg.mil. owning 10% of the FC stock under section (g) * * * 958(b) (100% x 100% x 10%). Accordingly, (2) The last sentence of paragraph (b) SUPPLEMENTARY INFORMATION: both USP and Individual A are United States of this section. The last sentence of I. Table of Abbreviations shareholders of FC under section 951(b). paragraph (b) of this section applies to (2) Application of sections 951 and 951A. taxable years of United States CFR Code of Federal Regulations Under paragraph (d)(1) of this section, for shareholders described in § 1.958– DHS Department of Homeland Security FR Federal Register purposes of sections 951 and 951A, PRS1 and 1(d)(4). PRS2 are not treated as owning (within the NPRM Notice of proposed rulemaking meaning of section 958(a)) the FC stock; Kirsten Wielobob, § Section instead, PRS1 and PRS2 are treated in the Deputy Commissioner for Services and U.S.C. United States Code same manner as foreign partnerships for Enforcement. II. Background, Purpose, and Legal purposes of determining the FC stock owned [FR Doc. 2019–12436 Filed 6–14–19; 4:15 pm] by USP and Individual A under section Basis 958(a)(2) and paragraph (b) of this section. BILLING CODE 4830–01–P On January 29, 2019, USA Triathlon Therefore, for purposes of determining the notified the Coast Guard that it will be amount included in gross income under conducting the USA Triathlon Age sections 951 and 951A, USP is treated as DEPARTMENT OF HOMELAND Group National Championships from owning 81% (100% x 90% x 90%) of the FC SECURITY 10:00 a.m. to 1:30 p.m. on August 09, stock under section 958(a), and Individual A 2019, from 5:00 a.m. to 5:30 p.m. on is treated as owning 9% (100% x 90% x Coast Guard 10%) of the FC stock under section 958(a). August 10, 2019, and from 5:00 a.m. to 12:00 p.m. on August 11, 2019. The Because USP and Individual A are both 33 CFR Part 165 United States shareholders of FC, USP and swim portion of the multiple triathlon Individual A determine their respective [Docket Number USCG–2019–0419] events will be held off Edgewater Park inclusions under sections 951 and 951A in Lake Erie, Cleveland, OH. Hazards based on their ownership of FC stock under RIN 1625–AA00 from swim events include participants section 958(a). Safety Zone; USA Triathlon Age Group swimming in an area that has a high (4) Applicability date. Paragraphs National Championships Lake Erie, amount of recreational vessel traffic and (d)(1) through (3) of this section apply Cleveland, OH interfering with vessels intending to to taxable years of foreign corporations operate in that location, as well as beginning on or after the date of AGENCY: Coast Guard, DHS. swimming within approaches to public publication of the Treasury decision ACTION: Notice of proposed rulemaking. and private marinas. The Captain of the adopting these rules as final regulations Port Buffalo determined that potential in the Federal Register, and to taxable SUMMARY: The Coast Guard proposes to hazards associated with the swim events years of United States persons in which establish a temporary safety zone for would be a safety concern for anyone or with which such taxable years of certain waters of Lake Erie during the intending to participate in this event or foreign corporations end. For taxable USA Triathlon National for vessels that operate in their vicinity. years that precede the taxable years Championships. This action is The purpose of this rulemaking is to described in the preceding sentence, a necessary to provide for the safety of life protect the safety of the event domestic partnership may apply those on the navigable waters near Edgewater participants and transiting vessels on

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specified waters of Lake Erie before, zone created by this rule will be D. Federalism and Indian Tribal during and after the scheduled event. relatively small and enforced for a Governments The Coast Guard proposes this relatively short time. Also, the safety A rule has implications for federalism rulemaking under authority in 46 U.S.C. zone is designed to allow vessels to under Executive Order 13132, 70034 (previously 33 U.S.C. 1231). transit around it. Thus, restrictions on Federalism, if it has a substantial direct III. Discussion of Proposed Rule vessel movement within that particular effect on the States, on the relationship area are expected to be minimal. The Captain of the Port Buffalo between the national government and Additionally, vessels may still transit the States, or on the distribution of proposes to establish a safety zone from through the safety zone when permitted 9:45 a.m. through 1:45 p.m. on August power and responsibilities among the by the Captain of the Port or a various levels of government. We have 09, 2019, from 4:45 a.m. through 5:45 designated representative. p.m. on August 10, 2019, and from 4:45 analyzed this proposed rule under that a.m. through 12:15 p.m. on August 11, B. Impact on Small Entities Order and have determined that it is 2019. The safety zone would cover all consistent with the fundamental navigable waters of Lake Erie, off of The Regulatory Flexibility Act of federalism principles and preemption Edgewater Park, Cleveland OH, inside 1980, 5 U.S.C. 601–612, as amended, requirements described in Executive an area starting on shore at position requires Federal agencies to consider Order 13132. 41°29′16″ N, 081°44′49″ W extending the potential impact of regulations on Also, this proposed rule does not have NW in a straight line position to small entities during rulemaking. The tribal implications under Executive 41°29′34″ N, 081°45′02″ W then NE in term ‘‘small entities’’ comprises small Order 13175, Consultation and a straight line to position 41°29′43″ N, businesses, not-for-profit organizations Coordination with Indian Tribal 081°44′31″ W, and SE back to shore at that are independently owned and Governments, because it would not have position 41°29′28″ N, 081°44′22″ W operated and are not dominant in their a substantial direct effect on one or (NAD 83). The duration of the zone is fields, and governmental jurisdictions more Indian tribes, on the relationship intended to ensure the safety of vessels, with populations of less than 50,000. between the Federal Government and participants, and these navigable waters The Coast Guard certifies under 5 U.S.C. Indian tribes, or on the distribution of before, during, and after the schedule 605(b) that this proposed rule would not power and responsibilities between the events over the course of the three days. have a significant economic impact on Federal Government and Indian tribes. No vessel or person would be permitted a substantial number of small entities. If you believe this proposed rule has implications for federalism or Indian to enter the safety zone without While some owners or operators of tribes, please contact the person listed obtaining permission from the Captain vessels intending to transit the safety in the FOR FURTHER INFORMATION of the Port or a designated zone may be small entities, for the CONTACT section. representative. reasons stated in section IV.A above, IV. Regulatory Analyses this proposed rule would not have a E. Unfunded Mandates Reform Act significant economic impact on any We developed this proposed rule after The Unfunded Mandates Reform Act vessel owner or operator. considering numerous statutes and of 1995 (2 U.S.C. 1531–1538) requires Executive orders related to rulemaking. If you think that your business, Federal agencies to assess the effects of Below we summarize our analyses organization, or governmental their discretionary regulatory actions. In based on a number of these statutes and jurisdiction qualifies as a small entity particular, the Act addresses actions Executive orders and we discuss First and that this rule would have a that may result in the expenditure by a Amendment rights of protestors. significant economic impact on it, State, local, or tribal government, in the please submit a comment (see aggregate, or by the private sector of A. Regulatory Planning and Review ADDRESSES) explaining why you think it $100,000,000 (adjusted for inflation) or Executive Orders 12866 and 13563 qualifies and how and to what degree more in any one year. Though this direct agencies to assess the costs and this rule would economically affect it. proposed rule would not result in such benefits of available regulatory Under section 213(a) of the Small an expenditure, we do discuss the alternatives and, if regulation is Business Regulatory Enforcement effects of this rule elsewhere in this necessary, to select regulatory Fairness Act of 1996 (Pub. L. 104–121), preamble. approaches that maximize net benefits. we want to assist small entities in F. Environment Executive Order 13771 directs agencies understanding this proposed rule. If the to control regulatory costs through a We have analyzed this proposed rule rule would affect your small business, budgeting process. This NPRM has not under Department of Homeland organization, or governmental been designated a ‘‘significant Security Directive 023–01 and jurisdiction and you have questions regulatory action,’’ under Executive Commandant Instruction 5090.1 (series), concerning its provisions or options for Order 12866. Accordingly, the NPRM which guide the Coast Guard in compliance, please contact the person has not been reviewed by the Office of complying with the National listed in the FOR FURTHER INFORMATION Management and Budget, and pursuant Environmental Policy Act of 1969 (42 to OMB guidance it is exempt from the CONTACT section. The Coast Guard will U.S.C. 4321–4370f), and have made a requirements of Executive Order 13771. not retaliate against small entities that preliminary determination that this This regulatory action determination question or complain about this action is one of a category of actions that is based on the conclusion that this rule proposed rule or any policy or action of do not individually or cumulatively is not a significant regulatory action. We the Coast Guard. have a significant effect on the human anticipate that it will have minimal C. Collection of Information environment. This proposed rule impact on the economy, will not involves a safety zone lasting 3 days that interfere with other agencies, will not This proposed rule would not call for would prohibit entry within certain adversely alter the budget of any grant a new collection of information under waters of Lake Erie, off of Edgewater or loan recipients, and will not raise any the Paperwork Reduction Act of 1995 Park, Cleveland, OH. Normally such novel legal or policy issues. The safety (44 U.S.C. 3501–3520). actions are categorically excluded from

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further review under paragraph L60(a) requirements, Security measures, of the Port Buffalo, or an on-scene in Table 3–1 of U.S. Coast Guard Waterways. representative. Environmental Planning Implementing For the reasons discussed in the Dated: June 17, 2019. Procedures 5090.1. A preliminary preamble, the Coast Guard proposes to Joseph S. Dufresne, Record of Environmental Consideration amend 33 CFR part 165 as follows: Captain, U.S. Coast Guard, Captain of the supporting this determination is Port Buffalo. available in the docket where indicated PART 165—REGULATED NAVIGATION [FR Doc. 2019–13181 Filed 6–20–19; 8:45 am] under ADDRESSES. We seek any AREAS AND LIMITED ACCESS AREAS comments or information that may lead BILLING CODE 9110–04–P to the discovery of a significant ■ 1. The authority citation for part 165 environmental impact from this continues to read as follows: proposed rule. Authority: 46 U.S.C. 70034, 70051; 33 CFR LIBRARY OF CONGRESS G. Protest Activities 1.05–1, 6.04–1, 6.04–6, and 160.5; Department of Homeland Security Delegation Copyright Office The Coast Guard respects the First No. 0170.1. Amendment rights of protesters. 37 CFR Part 201 ■ 2. Add § 165.T09–0419 to read as Protesters are asked to contact the follows: person listed in the FOR FURTHER [Docket No. 2018–4] INFORMATION CONTACT section to § 165.T09–0419 Safety Zone; USA Copyright Office Fees coordinate protest activities so that your Triathlon Age Group National message can be received without Championships; Lake Erie, Cleveland, OH. AGENCY: U.S. Copyright Office, Library jeopardizing the safety or security of (a) Location. The safety zone will of Congress. people, places, or vessels. encompass all waters of Lake Erie, off of ACTION: Supplemental notice of V. Public Participation and Request for Edgewater Park, Cleveland OH, inside proposed rulemaking. Comments an area starting on shore at position 41°29′16″ N, 081°44′49″ W extending SUMMARY: As part of its ongoing fee We view public participation as NW in a straight line position to study, the Copyright Office proposes essential to effective rulemaking, and 41°29′34″ N, 081°45′02″ W then NE in limited revisions to its previously will consider all comments and material a straight line to position 41°29′43″ N, proposed fee schedule relating to received during the comment period. 081°44′31″ W, and SE back to shore at document recordation and new Your comment can help shape the position 41°29′28″ N, 081°44′22″ W prospective group registration options. outcome of this rulemaking. If you (NAD 83). The proposed modifications would submit a comment, please include the (b) Enforcement Period. This rule will adjust the fee structure for document docket number for this rulemaking, be enforced from 9:45 a.m. through 1:45 recordation from a fee formula based on indicate the specific section of this p.m. on August 09, 2019, from 4:45 a.m. the number of titles to a formula based document to which each comment through 5:45 p.m. on August 10, 2019, on the number of works and alternate applies, and provide a reason for each and from 4:45 a.m. through 12:15 p.m. titles and registration numbers to which suggestion or recommendation. on August 11, 2019. a document pertains, and make certain We encourage you to submit (c) Regulations. other clarifications. The Office is also comments through the Federal (1) In accordance with the general noticing its intention to issue fees for its eRulemaking Portal at http:// regulations in § 165.23 of this part, entry previously-proposed group registration www.regulations.gov. If your material into, transiting, or anchoring within this options for short online literary works cannot be submitted using http:// safety zone is prohibited unless and for works contained on an album of www.regulations.gov, contact the person authorized by the Captain of the Port music. The Office is providing an in the FOR FURTHER INFORMATION Buffalo or a designated on-scene opportunity to the public to comment CONTACT section of this document for representative. on these specific proposed changes alternate instructions. (2) This safety zone is closed to all before the Office’s fee schedule is We accept anonymous comments. All submitted to Congress. comments received will be posted vessel traffic, except as may be DATES: Written comments must be without change to http:// permitted by the Captain of the Port received no later than 11:59 p.m. www.regulations.gov and will include Buffalo or a designated on-scene Eastern Time on July 22, 2019. any personal information you have representative. provided. For more about privacy and (3) The ‘‘on-scene representative’’ of ADDRESSES: For reasons of government the docket, visit http:// the Captain of the Port Buffalo is any efficiency, the Copyright Office is using www.regulations.gov/privacyNotice. Coast Guard commissioned, warrant or the regulations.gov system for the Documents mentioned in this NPRM petty officer who has been designated submission and posting of public as being available in the docket, and all by the Captain of the Port Buffalo to act comments in this proceeding. All public comments, will be in our online on his or her behalf. comments are therefore to be submitted docket at http://www.regulations.gov (4) Vessel operators desiring to enter electronically through regulations.gov. and can be viewed by following that or operate within the safety zone must Specific instructions for submitting website’s instructions. Additionally, if contact the Captain of the Port Buffalo comments are available on the you go to the online docket and sign up or an on-scene representative to obtain Copyright Office’s website at https:// for email alerts, you will be notified permission to do so. The Captain of the www.copyright.gov/rulemaking/ when comments are posted or a final Port Buffalo or an on-scene feestudy2018/. If electronic submission rule is published. representative may be contacted via of comments is not feasible due to lack VHF Channel 16. Vessel operators given of access to a computer and/or the List of Subjects in 33 CFR Part 165 permission to enter or operate in the internet, please contact the Office using Harbors, Marine safety, Navigation safety zone must comply with all the contact information below for (water), Reporting and recordkeeping directions given to them by the Captain special instructions.

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FOR FURTHER INFORMATION CONTACT: purposes (e.g., ‘‘Harold & Kumar 2,’’ additional title name and additional Regan A. Smith, General Counsel and also known as ‘‘Harold and Kumar 2,’’ registration number provided beyond Associate Register of Copyrights, by also known as ‘‘Untitled Harold and the first would count as an alternate email at [email protected], or Jalyce Kumar sequel,’’ also known as ‘‘Harold identifier. Thus, if a remitter describes Mangum, Attorney-Advisor, by email at & Kumar go to Amsterdam’’ 6). If a work using one title name, one [email protected], or by telephone at Copyright Office registration numbers registration number, and three 202–707–8350. are also provided for works identified in additional title names, then the fee SUPPLEMENTARY INFORMATION: a document (whether through an would be equal to the base fee plus the electronic title list or otherwise), the fee for three alternate identifiers.10 I. Fees Pertaining to Document titles fee is the same, even though it By adjusting the fee structure, the Recordation costs the Office more to process the Office hopes to encourage the On May 24, 2018, the Copyright document because of the extra work recordation of alternative titles that a Office issued a notice of proposed involved for staff to manually index remitter submits for the record, and, if rulemaking proposing a new fee those numbers when no electronic title applicable, any additional registration schedule for Copyright Office services list is provided.7 Thus, the current titles numbers that may pertain to the same (the ‘‘2018 NPRM’’).1 Included in the fee does not recognize the added benefit work. As a rule, the Office issues only proposal were revised fees for recording remitters receive by providing one basic registration for a work. documents with the Office, including registration numbers in addition to title However, there are exceptions that transfers of copyright ownership and names.8 Similarly, no title-related fee is permit multiple registrations numbers notices of termination.2 As mentioned collected where a document only for one work. For example, if a work in that notice, the Copyright Office is identifies the works to which it pertains was previously registered as an developing a new electronic system by using registration numbers, even unpublished work, the Office will issue through which the public will be able to though the remitter of a document an additional registration for the first submit documents for recordation indexed by registration numbers may published edition of that work, even if online.3 The Office is also in the process benefit from the same constructive the published version ‘‘is substantially of generally modernizing its recordation notice as a remitter recording a the same as the unpublished version.’’ 11 rules and practices.4 In evaluating the document that identifies works by their Additionally, where someone other than Office’s current recordation practices, titles. the author is identified as copyright the Office has now tentatively The Office now proposes to retain the claimant in a registration, the Office will concluded that it should adjust the group and tier structures previously issue an additional registration for the structure of its fees as detailed in the proposed, but to base them on the same work to the author or joint author 2018 NPRM. Specifically, the Office number of works, which are identified who seeks to name him or herself as the proposes to switch from a fee formula by one title and/or registration number, claimant.12 A remitter may also have based on the number of titles to a fee and alternate identifiers (alternate titles multiple registration numbers that formula based on the number of works, and registration numbers) related to a pertain to renewal and supplementary which are identified by one title and/or document, rather than the number of registrations. registration number, and the number of titles. Under this structure, the first title This change is expected to better alternate identifiers (alternate titles and and/or first registration number equalize the fee structure for document registration numbers) to which a provided for a particular work recordation without significantly document pertains. constitutes a work. In other words, if a altering the fees that most remitters pay. The fee proposed in the 2018 NPRM, remitter describes a work using (i) only In practice, the number of remitters that like the current recordation filing fee, is a single title name, (ii) only a single submit documents for recordation with comprised of (1) a base fee that includes registration number, or (iii) both one multiple registration numbers for each one title, and (2) a ‘‘titles fee’’ for any title name and one registration number, work or documents that only contain additional titles beyond the first then each description would count as registration numbers without any titles (sometimes called ‘‘alternate titles’’).5 one ‘‘work’’ for fee purposes.9 In is relatively small, meaning that this Under this structure, the Office particular, this change is intended to proposed fee change should not impact calculates the appropriate filing fee by encourage remitters to include a most filers.13 Finally, the differences counting the total number of title names registration number that matches to a between this proposed fee schedule and for works to which the document title, by clarifying that it will be indexed pertains. For example, a single work for and at no additional cost. Where a work 10 For example, if a document that pertains to one which four different names are provided is identified by multiple title names or work (‘‘Harold & Kumar 2’’), and contains one primary title (‘‘Harold & Kumar 2’’), one would have a title count of four for fee multiple registration numbers, every corresponding registration number (‘‘PAu003086781’’), and three alternate titles 1 Copyright Office Fees, 83 FR 24054 (May 24, 6 See Document Number V3548D204 (2007). (‘‘Harold and Kumar 2,’’ ‘‘Untitled Harold and 2018). 163 comments were filed in response to the 7 An electronic title list is a list of certain Kumar sequel,’’ and ‘‘Harold & Kumar go to 2018 NPRM, and the Office’s careful consideration indexing information about the works to which a Amsterdam’’), the fee would be equal to the base of those comments will be reflected in its document pertains, such as their titles, types, fee plus the fee for three alternate identifiers. forthcoming study submitted to Congress pursuant registration numbers, and authorship information. 11 17 U.S.C. 408(e) (‘‘Registration for the first to 17 U.S.C. 701(b), as well as any eventual 8 Cf. Fees for Electronic Recordation and Notices published edition of a work previously registered in adjustment instituted to the fee schedule. The focus of Intention To Obtain a Compulsory License, 82 FR unpublished form may be made even though the of this supplemental NPRM, however, is on 52221, 52222–23 (Nov. 13, 2017) (‘‘Under this work as published is substantially the same as the additional, targeted changes to the fee schedule, scheme, larger filers submitting documents with a unpublished version.’’); 37 CFR 202.3(b)(11)(i). and the Office is not currently seeking additional larger number of titles pay a higher fee for the 12 37 CFR 202.3(b)(11)(ii) & n.2. This policy aligns comment on those proposed changes previously added benefit they receive (when the fee is viewed ‘‘with the fundamental thrust of the [Copyright Act noticed in 2018. on a per-title basis) to offset the lower total fee for of 1976] in identifying copyright, and the origin of 2 Id. at 24061. smaller filers with fewer titles.’’). all rights comprised in a copyright, with the 3 Id. 9 For example, a recorded work would be author.’’ Applications for Registration of Claim to 4 See Modernizing Copyright Recordation, 82 FR calculated as a single fee regardless of whether it Copyright Under Revised Copyright Act, 42 FR 52213 (Nov. 13, 2017); Modernizing Copyright was identified as ‘‘Harold and Kumar 2,’’ 48944, 48946 (Sept. 26, 1977). Recordation, 82 FR 22771 (May 18, 2017). ‘‘PAu003086781,’’ or ‘‘Harold and Kumar 2; 13 The current fee structure already charges 5 83 FR at 24061; 37 CFR 201.3(c)(18). PAu003086781.’’ remitters for providing additional titles for a work.

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the proposal set forth in the 2018 NPRM • If a document pertains to 20 works, additional works and 20 alternate relate to the description of the base fee and contains one title and one identifiers.15 and of ‘‘additional works and alternative registration number for each work, the The Office recognizes the general identifiers’’; the actual proposed fee would still be equal to the base fee benefit to the public in having a more monetary amounts remain the same. plus the fee for 19 additional works. robust records catalog that includes • The following examples illustrate the If a document pertains to 20 works, more registration numbers for recorded fee calculation under the proposed and contains 20 primary titles, 20 documents, and does not wish for any structure: corresponding registration numbers, and new fees to overburden remitters and 10 alternate titles, the fee would be deter them from providing registration • If a document pertains to 20 works, equal to the base fee plus the fee for 19 numbers. At the same time, the Office and contains one title for each work, the additional works and 10 alternate seeks to better recoup its costs and fee would be equal to the base fee plus identifiers.14 believes that those costs should be more the fee for 19 additional works. • If a document pertains to 20 works, equitably allocated among remitters • If a document pertains to 20 works, and contains 20 primary titles, 20 based on the size of their filing. The and contains one registration number corresponding registration numbers, 10 Office is thus considering making for each work, the fee would be equal alternate titles, and 10 additional changes to the fee schedule for to the base fee plus the fee for 19 registration numbers, the fee would be recordation and related services to additional works. equal to the base fee plus the fee for 19 appear at 37 CFR 201.3(c):

Current fees Proposed fees Recordation and related services ($) ($)

(1) Recordation of a document, including a notice of termination and a notice of intention to enforce a restored copyright: ...... (i) Base fee (includes 1 work identified by 1 title and/or registration number): ...... Paper ...... 105 125 Electronic ...... New fee 95 (ii) Additional transfer (per transfer) (for documents recorded under 17 U.S.C. 205) ...... 105 95 (iii) Additional works and alternate identifiers: ...... Paper (per group of 10 or fewer additional works and alternate identifiers) ...... 35 60 Electronic: 1 to 50 additional works and alternate identifiers ...... 60 60 51 to 500 additional works and alternate identifiers ...... 225 225 501 to 1,000 additional works and alternate identifiers ...... 390 390 1,001 to 10,000 additional works and alternate identifiers ...... 555 555 10,001 or more additional works and alternate identifiers ...... 5,500 5,500 (iv) Correction of online Public Catalog data due to erroneous electronic title submission (per work or alternate identifier)...... 7 7 (2) To calculate the fee specified by paragraph (1), for each work identified in a document: (a) The first title and/or first registration number provided for that particular work constitutes a work; and (b) each additional title and registration number provided for that particular work beyond the first constitutes an alternate identifier...... (3) Special handling surcharge for recordation of documents ...... 550 700

Additionally, the Office further II. Fees Pertaining to New Group Application. For these options, the proposes to extend to notices of Registration Options Office proposes a filing fee equal to the termination the previously proposed The Office proposes fees for new fee that currently applies to any claim reduced fees for electronic submission. group registration options that have submitted on the Standard Application. It was a technical oversight not to recently been or will soon be In the 2018 NPRM, the Office proposed include that proposal in the 2018 established through rulemakings. The to increase this fee from $55 to $75.19 NPRM. Although electronic title lists Office has recently proposed new group If that proposal is adopted, the new fee may not currently be submitted with registration options for short online will apply to any claim submitted on notices of termination, remitters will literary works 17 and for musical works, the Standard Application, including eventually be able to submit notices sound recordings, and certain other claims submitted under these new through the Office’s electronic works contained on an album of group registration options. Although recordation system, and authors seeking music.18 Under the proposed rules, these proposed group registration to record their notices of termination applicants will be required to submit options will follow the Standard should get the same discount for their claims through the electronic Application procedures, to avoid electronic filing offered to remitters of registration system, and they will be confusion, the Office proposes other types of recordable documents.16 required to use the Standard enumerating these new group options

14 For example, if a document that pertains to contains three primary titles, three corresponding information contained in an electronic title list. three works (‘‘Harold and Kumar,’’ ‘‘Harold and registration numbers, nine alternate titles, and three That was also a technical oversight, and that fee has Kumar 2,’’ and ‘‘Harold and Kumar 3’’), and alternate registration numbers for the unpublished now been added to the proposed fee schedule contains three primary titles, three corresponding versions of the works (a rare occurrence for motion without change. registration numbers, and nine alternate titles, the pictures, but used to illustrate the structure), the fee 17 fee would be equal to the base fee plus the fee for would be equal to the base fee plus the fee for two Group Registration of Short Online Literary two works and nine alternate identifiers. works and 12 alternate identifiers. Works, 83 FR 65612 (Dec. 21, 2018). 15 For example, if a document that pertains to 16 The Office did not include in the 2018 NPRM 18 84 FR 22762 (May 20, 2019). three works (‘‘Harold and Kumar,’’ ‘‘Harold and the existing fee for correcting data in the public 19 83 FR 24054, 24057 (May 24, 2018). Kumar 2,’’ and ‘‘Harold and Kumar 3’’), and catalog that is incorrect due to erroneous

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separately on its fee schedule and is models for such claims as it begins to and for musical works, sound now noticing them for public comment. develop the technical and legal recordings, and certain other works Currently, the Office does not have the requirements for its next-generation contained on an album to appear at 37 ability to charge differential prices when registration system.20 CFR 201.3(c): claims in multiple works are submitted As such, the Office is considering a on the Standard Application. However, new fee for new group registration the Office will consider different pricing options for short online literary works

Current fees Proposed fees Group registrations ($) ($)

******* (10) Group registration of short online literary works ...... New Fee ...... 75 (11) Group registration of musical works, sound recordings, and certain other works New Fee ...... 75 contained on an album.

The Office welcomes comment on the EG for existing MSW landfills in only at the hard copy location (e.g., these proposed changes. Albuquerque and Bernalillo County. copyrighted material), and some may Dated: June 14, 2019. The EG requires States to develop plans not be publicly available at either Regan A. Smith, to reduce air emissions from all affected location (e.g., CBI). MSW landfills within their jurisdiction. General Counsel and Associate Register of FOR FURTHER INFORMATION CONTACT: Mr. Copyrights. DATES: Written comments must be Alan Shar, EPA Region 6 Office, State [FR Doc. 2019–12976 Filed 6–20–19; 8:45 am] received on or before July 22, 2019. Planning Implementation Branch, 1201 Elm Street, Dallas, TX 75270, 214–665– BILLING CODE 1410–30–P ADDRESSES: Submit your comments, identified by Docket No. EPA–R06– 6691, [email protected]. To inspect the OAR–2019–0306 at https:// hard copy materials, please schedule an appointment with Alan Shar. ENVIRONMENTAL PROTECTION www.regulations.gov or via email to SUPPLEMENTARY INFORMATION: AGENCY [email protected]. Follow the online instructions for submitting comments. Throughout this document ‘‘we,’’ ‘‘us,’’ 40 CFR Part 62 Once submitted, comments cannot be and ‘‘our’’ means the EPA. edited or removed from Regulations.gov. Table of Contents [EPA–R06–OAR–2019–0306; FRL–9995–26- The EPA may publish any comment Region 6] received to its public docket. Do not I. Background II. Evaluation Approval and Promulgation of State submit electronically any information you consider to be Confidential A. State of New Mexico Plan Plans for Designated Facilities and B. Albuquerque-Bernalillo County Plan Pollutants; New Mexico and Business Information (CBI) or other III. Proposed Action Albuquerque-Bernalillo County; information whose disclosure is IV. Incorporation by Reference Municipal Solid Waste Landfills restricted by statute. Multimedia V. Statutory and Executive Order Reviews submissions (audio, video, etc.) must be AGENCY: Environmental Protection accompanied by a written comment. I. Background Agency (EPA). The written comment is considered the On August 29, 2016, the EPA ACTION: Proposed rule. official comment and should include finalized new source performance discussion of all points you wish to standards (NSPS) for MSW landfills and SUMMARY: Pursuant to the Federal Clean make. The EPA will generally not Emission Guidelines and Compliance Air Act (CAA or the Act), the consider comments or comment Times for existing MSW landfills in 40 Environmental Protection Agency (EPA) contents located outside of the primary CFR part 60, subparts XXX and Cf, is proposing to approve revisions to the submission (i.e. on the web, cloud, or respectively. See 81 FR 59332 and 81 FR section 111(d) Plan submitted by the other file sharing system). For 59313. These actions were taken under New Mexico Environment Department additional submission methods, please section 111 of the Act. (NMED) on May 25, 2017, to regulate contact Alan Shar 214–665–6691, With respect to existing sources, landfill gas and its components, [email protected]. For the full EPA including existing MSW landfills, including methane, from existing public comment policy, information section 111(d) of the Act requires the municipal solid waste (MSW) landfills. about CBI or multimedia submissions, EPA to establish a procedure under The Plan is submitted to implement and and general guidance on making which each state shall submit a plan to enforce the Emissions Guidelines (EG) effective comments, please visit https:// the EPA which establishes standards of for existing landfills in New Mexico, www.epa.gov/dockets/commenting-epa- performance for any air pollutant: (1) except Albuquerque-Bernalillo County. dockets. For which air quality criteria have not We are also proposing to approve Docket: The index to the docket for been issued or which is not included on revisions to the section 111(d) Plan this action is available electronically at a list published under CAA section 108 submitted by the New Mexico www.regulations.gov and in hard copy or emitted from a source category which Environment Department (NMED) on at EPA Region 6, 1201 Elm Street, is regulated under CAA section 112, but; behalf of the Albuquerque-Bernalillo Dallas, Texas. While all documents in (2) to which a NSPS would apply if County Air Quality Control Board on the docket are listed in the index, some such existing source were a new source. May 24, 2017, to implement and enforce information may be publicly available The EPA established requirements for

20 See Registration Modernization, 83 FR 52336, 52339 (Oct. 17, 2018).

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state plan submittals in 40 CFR part 60, submitted to the EPA prior to the May 10. Provision for annual State subpart B. As discussed below, state 30, 2017 submittal deadline. See 40 CFR progress reports to the EPA on plan submittals under CAA sections 60.30f(b). Section II.A below evaluates implementation of the State Plan. 111(d) must be consistent with the the New Mexico Plan while Section II.B Each element of the New Mexico Plan relevant emission guidelines, in this evaluates the Albuquerque-Bernalillo has been evaluated in detail in the instance 40 CFR part 60, subpart Cf, and County Plan. Technical Support Document (TSD) the requirements of 40 CFR part 60, prepared in conjunction with this A. State of New Mexico Plan subpart B and 40 CFR part 62, subpart action.2 Our evaluation demonstrates A. Title 20, Chapter 2, Part 64— that the New Mexico Plan meets all Once a NSPS for a source category is Municipal Solid Waste Landfills of the these 10 elements and is consistent with promulgated, the EPA publishes an New Mexico Administrative Code the requirements for approvable section emissions guideline (EG) applicable to (20.2.64 NMAC) establishes 111(d) state plans for MSW landfills. the control of the same pollutants from requirements for municipal solid waste existing (designated) facilities. In this landfills in New Mexico (except B. Albuquerque-Bernalillo County Plan action, a MSW landfill for which Albuquerque and Bernalillo County) in Title 20, Chapter 11, Part 71— construction, reconstruction, or order to control their methane and Municipal Solid Waste Landfills of the modification was commenced on or nonmethane organic compounds New Mexico Administrative Code before July 17, 2014, is considered a emissions. 20.2.64 NMAC was revised (20.11.71 NMAC) establishes designated facility. The MSW landfills on April 28, 2017 and became effective requirements for municipal solid waste EG, revised in 2016 and promulgated at on May 31, 2017. Title 20, Chapter 2, landfills in Albuquerque-Bernalillo 40 CFR part 60, subpart Cf, updates the Part 77—New Source Performance County in order to control their methane control requirements and monitoring, Standards (20.2.77 NMAC) establishes and nonmethane organic compounds reporting, and recordkeeping provisions state authority to implement federal emissions and serves as the enforceable for existing MSW landfill sources. The NSPS for stationary sources in New mechanism to implement the EG. The MSW landfills EG incorporates by cross- Mexico. The CAA 111(d) Plan for MSW Plan was adopted by the Albuquerque- reference or direct adoption certain landfills in New Mexico was last Bernalillo County Air Quality Control requirements for state and federal plans, approved by the EPA on November 24, Board on April 12, 2017 and became as specified in 40 CFR part 60, subpart 2006 (71 FR 67809). An approvable effective on May 13, 2017. Title 20, Cf. CAA section 111(d) Plan for MSW Chapter 11, Part 63—New Source States with designated facilities must landfills has ten essential elements 1 Performance Standards for Stationary then develop plans implementing the incorporating the legal requirements for Sources (20.11.63 NMAC) provides for EG and submit them to the EPA for approvable state plans. See 40 CFR part the authority to adopt specified federal review and approval. State plans must 60, subparts B and Cf, and 40 CFR part NSPS requirements codified at 40 CFR include compliance times and other 62, subpart A. These elements are as part 60 (e.g., 40 CFR part 60, subpart Cf elements, such as inventories, legal follows: for existing MSW landfills) within the authority, and public participation 1. Identification of enforceable State Albuquerque-Bernalillo County documentation, to demonstrate the mechanisms selected by the State for jurisdictional area. The 111(d) Plan for ability to enforce the EG. See 40 CFR implementing the Emission Guidelines; MSW landfills for Albuquerque- part 60, subpart B. The MSW landfills 2. A demonstration of State’s legal Bernalillo County was last approved by EG, found at 40 CFR part 60, subpart Cf, authority to carry out the Section 111(d) the EPA on November 8, 1999 (64 FR concerns the regulation of landfill gas State plan as submitted; 60689). For detailed evaluation of the 10 and its components, including methane, 3. An inventory of existing MSW essential elements for approvable CAA from MSW landfills for which landfills in the State affected by the section 111(d) state plans for MSW construction, reconstruction, or Emission Guidelines; landfills (as referenced in Section II.A. modification was commenced on or 4. Inventory of emissions from above) for the Albuquerque-Bernalillo before July 17, 2014. The deadline to existing MSW landfills in the State; County Plan, please see the TSD submit a state plan to the EPA was May 5. Emission standards for existing prepared in conjunction with this 30, 2017. MSW landfills that are ‘‘no less action.3 Our evaluation demonstrates In this action, we are proposing to stringent’’ than those in the Emission that the Albuquerque-Bernalillo County approve the incorporation by reference Guidelines; Plan meets all these 10 elements and is (IBR) of Title 20, Chapter 2, Part 64 6. State process for review and consistent with the requirements for Municipal Solid Waste Landfills approval of site-specific gas collection approvable section 111(d) state plans for (20.2.64 NMAC) for the State of New and control system design plans; MSW landfills. Mexico; and proposing to approve the 7. Compliance schedules extending IBR of Title 20, Chapter 11, Part 71 no later than 30 months after the date III. Proposed Action Municipal Solid Waste Landfills the annual nonmethane organic The EPA is proposing to approve (20.11.71 NMAC) for the Albuquerque- compounds (NMOC) emission rate revisions to the CAA section 111(d) Plan Bernalillo County Air Quality Control reaches or exceeds thresholds in submitted by the NMED on May 25, Board. Subpart Cf; 2017, to regulate landfill gas and its 8. Testing, monitoring, recordkeeping, components, including methane, from II. Evaluation and reporting requirements; EPA has evaluated the New Mexico 9. A record of public hearing(s) on the existing MSW landfills in New Mexico, Plan (submitted on May 25, 2017) and State Plan; and except for Albuquerque and Bernalillo the Albuquerque-Bernalillo County Plan County. We are also proposing to approve revisions to the CAA section (submitted on May 24, 2017) to 1 See ‘‘Municipal Solid Waste Landfills, Volume determine whether each meets the 2: Summary of the Requirements for Section 111(d) State Plans for Implementing the Muncipal Solid 2 Pages 4–15 of the TSD, Docket ID. NO. EPA– requirements of CAA section 111(d), 40 Waste Landfills Emission Guidelines,’’ U.S. EPA, R06–OAR–2019–0306 at www.regulations.gov. CFR part 60, subparts B and Cf, and 40 OAQPS; EPA–456R/98–009, November 1998 3 Pages 16–26 of the TSD, Docket ID. NO. EPA– CFR part 62, subpart A. Both Plans were (hereinafter ‘‘1998 State Plan Guidance’’). R06–OAR–2019–0306 at www.regulations.gov.

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111(d) Plan submitted by the NMED on action because this action is not AGENCY FOR INTERNATIONAL behalf of the Albuquerque-Bernalillo significant under Executive Order DEVELOPMENT County Air Quality Control Board on 12866; May 24, 2017, for existing MSW • Does not impose an information 48 CFR Chapter 7 landfills in Albuquerque and Bernalillo collection burden under the provisions RIN 0412–AA86 County. Both Plans are submitted to of the Paperwork Reduction Act (44 implement and enforce the EG for U.S.C. 3501 et seq.); Agency for International Development existing MSW landfills. See 40 CFR part • Is certified as not having a Acquisition Regulation (AIDAR): Leave 60, subpart Cf. The scope of the significant economic impact on a and Holidays for U.S. Personal proposed approval of the section 111(d) substantial number of small entities Services Contractors, Including Family Plans is limited to the provisions of 40 under the Regulatory Flexibility Act (5 and Medical Leave CFR parts 60 and 62 for existing MSW U.S.C. 601 et seq.); AGENCY: U.S. Agency for International landfills, as referenced in the emission • Does not contain any unfunded Development. guidelines, 40 CFR part 60, subpart Cf. mandate or significantly or uniquely ACTION: Proposed rule. IV. Incorporation by Reference affect small governments, as described in the Unfunded Mandates Reform Act In this action, we are proposing to SUMMARY: The U.S. Agency for of 1995 (Pub. L. 104–4); include in a final rule regulatory text • International Development (USAID) that includes incorporation by reference Does not have Federalism proposes to amend the Agency for of the CAA section 111(d) Plan for New implications as specified in Executive International Development Acquisition Mexico applicable to MSW landfills. In Order 13132 (64 FR 43255, August 10, Regulation (AIDAR) to revise the 1999); General Provision contract clause accordance with the requirements of 1 • CFR 51.5, we are proposing to Is not an economically significant (hereafter ‘‘clause’’) 5 entitled ‘‘Leave incorporate by reference revisions to the regulatory action based on health or and Holidays (APR 1997).’’ This New Mexico regulations regarding MSW safety risks subject to Executive Order proposed rule also makes other editorial landfills and to Albuquerque-Bernalillo 13045 (62 FR 19885, April 23, 1997); and clarifying changes to this clause and • County Air Quality Control Board Is not a significant regulatory action the prescription. subject to Executive Order 13211 (66 FR regulations regarding MSW landfills in DATES: Submit comments on or before Albuquerque and Bernalillo County, as 28355, May 22, 2001); August 20, 2019. described in the Proposed Action • Is not subject to requirements of ADDRESSES: Submit comments by any of section of this preamble. The EPA has section 12(d) of the National Technology Transfer and Advancement the following methods: made, and will continue to make, these 1. Through the Federal eRulemaking Act of 1995 (15 U.S.C. 272 note) because documents generally available Portal at http://www.regulations.gov by application of those requirements would electronically through following the instructions for submitting be inconsistent with the Act; and www.regulations.gov, docket ID NO. comments. • Does not provide the EPA with the EPA–R06–OAR–2019–0306 and in hard 2. By Mail addressed to: U.S. Agency discretionary authority to address, as copy at the EPA Region 6 office (please for International Development (USAID), appropriate, disproportionate human contact the person identified in the FOR Bureau for Management, Office of health or environmental effects, using FURTHER INFORMATION CONTACT section of Acquisition & Assistance, Policy practicable and legally permissible this preamble for more information). Division, Attn: Marcelle Wijesinghe, methods, under Executive Order 12898 Room 867–J, SA–44, 1300 Pennsylvania V. Statutory and Executive Order (59 FR 7629, February 16, 1994). Reviews Ave. NW, Washington, DC 20523–2052. In addition, this proposed rule for Under the Act, the Administrator is existing MSW landfills within the State FOR FURTHER INFORMATION CONTACT: required to approve submission of CAA of New Mexico (including Albuquerque- Richard Spencer, Telephone: 202–567– section 111(d) state plans that comply Bernalillo County) does not have tribal 4781 or Email: [email protected]. with the provisions of the Act and implications as specified by Executive SUPPLEMENTARY INFORMATION: applicable Federal regulations. 42 Order 13175 (65 FR 67249, November 9, A. Instructions U.S.C. 7411(d); 40 CFR part 60, subparts 2000), because the section 111(d) plan is B and Cf; and 40 CFR part 62, subpart not approved to apply in Indian All comments must be in writing and A. Thus, in reviewing CAA section country, as defined at 18 U.S.C. 1151, submitted through one of the methods 111(d) state plan submissions, EPA’s located in the state, and EPA notes that specified in the ADDRESSES section role is to approve state choices, it will not impose substantial direct above. USAID encourages all provided that they meet the criteria of costs on tribal governments or preempt commenters to include the title of the the Act and implementing regulations. tribal law. action and RIN for this rulemaking. Accordingly, this action merely Please include your name, title, proposes to approve state law as List of Subjects in 40 CFR Part 62 organization, postal address, telephone meeting Federal requirements and does Environmental protection, number, and email address in the text not impose additional requirements Administrative practice and procedure, of your comment. beyond those imposed by state law. For Air pollution control, Municipal solid Please note that USAID recommends that reason, this action: waste landfill, Intergovernmental sending all comments to the Federal • Is not a ‘‘significant regulatory relations, Methane, Reporting and eRulemaking Portal. action’’ subject to review by the Office recordkeeping requirements. All comments will be made available of Management and Budget under at http://www.regulations.gov for public Dated: June 17, 2019. Executive Order 12866 (58 FR 51735, review without change, including any October 4, 1993) and 13563 (76 FR 3821, David Gray, personal information provided. We January 21, 2011); Acting Regional Administrator, Region 6. recommend that you do not submit • Is not an Executive Order 13771 (82 [FR Doc. 2019–13127 Filed 6–20–19; 8:45 am] information that you consider FR 9339, February 2, 2017) regulatory BILLING CODE 6560–50–P confidential business information or any

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information that is otherwise protected • Advanced annual leave is revised to Missions, currently Iraq, Afghanistan from disclosure by statute. require approval by the cognizant and Pakistan. Home leave for qualifying USAID will only address comments Assistant Administrator for USPSCs Missions is provided to USPSCs that are relevant and within the scope performing at USAID’s headquarters. comparable to what is provided to of this proposed rule. Also, the maximum amount of advanced direct-hire employees in order to attract leave that may be approved is limited to USPSCs for these hard to fill positions. B. Background what the USPSC could earn in a twelve (5) Holidays. The title and text of this USAID is seeking comments on this month period or over the life of the paragraph is revised to add proposed rule to revise AIDAR contract, whichever is less. ‘‘administrative leave’’ to apply Agency appendix D as described below: (2) Sick Leave. emergency closures to USPSCs on the Section 4 is revised to make the • This paragraph is amended to same basis as to U.S. direct hires. prescription for annual and sick leave in clarify that the USPSC may take sick (6) Military Leave. paragraph (c)(2)(ix) consistent with leave based on the same standards that • The ‘‘U.S.’’ is added to ‘‘Armed section 12, General Provision clause 5 apply to U.S. direct hire employees. Forces’’ to clarify that the clause only • entitled ‘‘Leave and Holidays.’’ All the A clarification is made to the applies to U.S. military service. • revisions to section 12, General carryover of sick leave to specify that it The contract filing requirement has Provision clause 5, including annual only applies to a subsequent ‘‘follow- been clarified to inform the contractor and sick leave, are as follows: on’’ contract for the same services. that such approval will be maintained (1) Annual Leave. (3) Home Leave. on file. Home leave is a benefit a USPSC can The title of the clause is changed from (7) Leave Without Pay. earn after performing services abroad, • The ‘‘LWOP’’ abbreviation is ‘‘Vacation Leave’’ to ‘‘Annual Leave,’’ to usually after two years. It provides time included to conform to USAID’s be consistent with section 4, paragraph off that must be used in the U.S., subject timekeeping system. (c)(2)(ix) of this appendix, as well as to a commitment to continued service • Reference to use of LWOP for USAID’s time-keeping system, and the by the USPSC. Home leave is intended family and medical leave is included to FMLA, which allows for use of to ensure that persons living and conform to entitlements for this leave ‘‘annual’’ leave. working abroad undergo reorientation under the FMLA (Pub. L. 103–3). • The minimum contract period and re-exposure in the U.S., and is (8) Compensatory Time. The term required to accrue leave is clarified to provided to USPSCs as a benefit ‘‘leave’’ is removed to characterize this indicate 90 days ‘‘in total duration.’’ comparable to U.S. direct hire more accurately in line with USAID • The terms ‘‘tour,’’ ‘‘tour of duty,’’ employees. Detailed proposed changes internal policies. and ‘‘employee’’ are changed to ‘‘period to the text regarding home leave are as (9) Family and Medical Leave. of performance’’ and ‘‘contractor’’ to be follows: This clause adds a new section consistent with contractual terminology. • covering family and medical leave for • Home Leave is currently only Annual leave accrual rates are provided to USPSCs who agree to return all USAID USPSCs. USAID is extending broadened to include former service as to the same Mission abroad after the eligibility of family and medical a USAID PSC under any statutory completing home leave. In July 1998, leave to USPSCs performing in the U.S. authority, and U.S. Government civilian USAID issued a policy deviation from as well as outside the U.S. as a matter and/or honorable active duty uniformed the rule to authorize a maximum of 20 of policy. The FMLA (Pub. L. 103–3) service, using the definition from 5 workdays home leave based on the was enacted to allow employees to U.S.C. 2101. The clause also specifies USPSC’s commitment to relocate to a balance work and family life by the documents the contracting officer different USAID Mission as a USPSC protecting their employment and may review as evidence of prior service. immediately following home leave for a benefits status when taking reasonable This change is intended to expand the specific period of time, subject to prior leave for medical reasons, including market base and attract former U.S. approval by the Mission Director (i.e., child birth, adoption or care, or care for government employees with relevant the Mission from which the USPSC is a spouse, parent or oneself in the event skills to participate in the competitive departing.) of a serious health condition. process. • The revised clause includes the Following inquiries from USPSCs, • The maximum amount of annual required verification documents the USAID examined the applicability of leave that can be carried over from one USPSC must provide to support home FMLA to USPSCs working in the U.S. calendar year to the next during the leave based on their commitment to and abroad. USAID found that eligibility period of the contract is capped at 240 continue work under a new contract under FMLA Title II is limited to U.S. hours, consistent with the same with a different USAID Mission. Government direct-hire employees, and restriction on U.S. direct hire • A clarification is made to the travel does not apply to contracts with employees. This change will also requirements to specify that travel time individuals. However, USAID eliminate the need for manual entries to for home leave is not included in the determined that USPSCs working in the be made in the Agency’s time-keeping days counted towards home leave, with U.S. are entitled to family and medical system to reinstate forfeited leave that is a cross-reference to the related contract leave under Title I of the FMLA, as automatically cancelled in the time- clause titled ‘‘Travel and Transportation administered by the U.S. Department of keeping system at the end of each Expenses.’’ Labor (DOL) through 29 CFR part 825. calendar year. (4) Home Leave for Qualifying The DOL applies the broad definition of • The conditions that allow the Missions. ‘‘employee’’ from the Fair Labor USPSC to avoid forfeiting annual leave The addition of this category of leave Standards Act of 1938, 29 U.S.C. 201. are clarified; Mission Director is based on a 2006 amendment to the USAID determined that FMLA does endorsement is no longer required for Foreign Service Act of 1980 (Pub. L. 96– not apply to USPSCs working outside the contracting officer to approve those 465), as amended, which authorized this the U.S.; however, in November 2015 conditions, and a Determinations and additional home leave for USPSCs the Acting Administrator authorized Findings (D&F) is now required before following completion of a 12-month family and medical leave for USPSCs a lump-sum payment is authorized. period of performance at qualifying working abroad as a matter of Agency

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policy. This decision was made to allow • Annual Leave—Under the existing • Home Leave for Qualifying for a consistent leave policy for all rule, USPSCs can only accrue annual Missions—The proposed rule increases USPSCs, irrespective of their place of leave per pay period at increasingly home leave by providing 10 days of performance. Based on this approval, in higher hourly rates based on prior PSC leave for USPSCs after every 12 months December 2015, USAID processed a service under the authority of ‘‘Sec. abroad when performing at certain two-year class deviation from (48 CFR) 636(a)(3) of the FAA [Foreign Affairs ‘‘qualifying’’ Missions, currently Iraq, AIDAR appendix D, section 12, clause 5, Act of 1961, as amended]’’. The default Afghanistan, Pakistan and South Sudan. ‘‘Leave and Holidays’’, to authorize contractor accrual rate is four hours per Together these Missions have family and medical leave for all pay period; however the contractor may approximately 70 USPSCs abroad, so USPSCs. USAID implemented the accrue at a rate of six hours per pay again using the average GS–13, 14, 15 deviation on an interim basis pending period as a prior PSC under the FAA step 10 annual salary of $117,000 per the finalization of this rule. exceeding three years, or eight hours per year (base with no locality) equal to USAID has determined that period for prior PSC services under the $450/day for 10 days, the total Cooperating Country National Personal FAA exceeding 15 years. The proposed additional annual cost of this leave is Services Contractors (CCNPSCs) or rule broadens this to allow USPSCs to approximately $315,000 each year. The Third-Country National PSCs include prior service as a USAID PSC cost of this additional leave is justified (TCNPSCs) will not be entitled to the under other statutory authorities, as to increase the USAID’s ability to field family and medical leave provided well as prior civilian or uniformed USPSCs for hard-to-fill positions at under this rule, even if other specific service. USAID estimated the cost of dangerous and high attrition Missions. benefits are approved by the Mission progressively adding four hours for • Holidays and Administrative Director based on an exception under three years and two hours for two years Leave—The proposed rule adds (48 CFR) AIDAR appendix J. Key for 26 pay periods each year of a five emergency dismissals and closures to provisions of the rule regarding family year contract to reach the maximum acknowledge when USAID/Washington and medical leave are as follows: eight hour accrual rate per pay period. headquarters or Missions abroad are • The eligibility criteria are included USAID’s historical data indicates only closed for inclement weather, civil in the clause in accordance with 29 CFR approximately 50% of a given USPSC unrest or other logistical complications. 825.110, with detailed requirements population will have prior experience to This will not have a cost impact since regarding establishing eligibility in make them eligible for the maximum previously USPSCs were not able to USAID internal policy. accrual rate. Based on an average annual work during USAID facilities closures, • The reasons when family and salary for a GS–13, 14, and 15 step 10 and so were given the same medical leave may be taken are of $146,000 (base with DC locality) administrative leave as direct hires as a specified in accordance with 29 CFR equal to $70/hour, USAID estimates 270 practical matter. Additionally, telework 825.112. U.S.-based USPSCs (i.e. 50% of 540 ready USPSCs will continue to perform • The provisions for the substitution total) would cost of approximately as do direct-hires. of LWOP with paid leave, as allowed $1.575 million per year in higher • Family and Medical Leave—The under 29 CFR part 825.207, is consistent accrual rates. The equivalent calculation addition of family and medical leave with what USAID provides to U.S. for 275 USPSCs serving abroad (i.e., will only have a marginal cost impact, direct hires. 50% of 550 total) with an average salary if any, since this entitlement does not • Family and medical leave may not of $117,000 (base with no locality) equal provide additional leave. USPSCs must be authorized beyond the completion to $56/hour comes to $1.283 million per use leave without pay, annual, or sick date of the contract. year. Therefore the total estimated cost leave during family and medical leave • This section provides procedures of additional annual leave status. The benefit that family and the contractor must follow to establish compensation based on the expanded medical leave provides is that it entitles eligibility for family and medical leave. prior service eligibility is estimated at the individual to use their leave once • The clause references the U.S. $2.859 million per year. they are determined eligible and are not Department of Labor Wage and Hour The benefit of this provision is to subject to the ordinary leave approval division publication for more provide this leave for USPSCs on a process. Provision of this benefit to information about family and medical similar basis as is provided to U.S. USPSCs performing in the U.S. is leave and procedures to report direct hires in order to attract a wider required by statute; therefore, the only violations of the underlying law. pool of offerors with greater expansion beyond what the law requires (10) Leave Records. Use of ‘‘shall’’ is opportunities for higher accrual rates. is the Agency’s discretion to apply it changed to ‘‘must.’’ • Home Leave—The proposed rule equally to USPSCs based abroad. This will codify USAID’s current policy in decision was made to provide this C. Impact Assessment place by deviation from the existing entitlement equally to all USPSCs and (1) Regulatory Planning and Review. AIDAR to add home leave eligibility for not disadvantage those performing Under E.O. 12866, OIRA has designated USPSCs who relocate to a different abroad. the proposed rule ‘‘significant’’ and Mission under a new USPSC contract As a regulatory matter, the cost of the therefore subject to the requirements of immediately following home leave rule making process to incorporate these the E.O. and subject to review by the every two years. Assuming about half of revisions into the regulation is also Office of Management and Budget USAID’s 550, or 275, USPSCs abroad justified. The AIDAR appendices (OMB). OIRA has determined that this fulfil their continued service include all the compensation and Rule is not an ‘‘economically significant commitments at a different Mission, the benefits available under personal regulatory action’’ under Section 3(f)(1) maximum additional cost at an average services contracts. Therefore, the of E.O. 12866. This proposed rule is not GS–13, 14, and 15 step 10 annual salary Agency needs these revisions in order to a major rule under 5 U.S.C. 804. of $117,000 (base with no locality) equal keep the regulation consistent, complete The costs and benefit of the revisions to $450/day for 20 days is $2.476 and transparent to industry, other described above are as follows, by each million every two years, or $1.238 government agencies and the general type of leave affected: million for each year. public.

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(2) Regulatory Flexibility Act. The CHAPTER 7—AGENCY FOR (ix) * * * However, PSCs with previous Director, Bureau for Management, Office INTERNATIONAL DEVELOPMENT service are eligible to earn annual leave in accordance with the ‘‘Leave and Holidays’’ of Acquisition and Assistance, acting as ■ 1. Amend Appendix D to Chapter 7 General Provision contract clause in section the Head of the Agency for purposes of by: 12 of this appendix. the Federal Acquisition Regulation, ■ a. In section 4, revising the second * * * * * certifies that this rule will not impact a sentence of paragraph (c)(2)(ix); substantial number of small entities ■ b. In section 12: 12. General Provisions for a Contract With a U.S. Citizen or a U.S. Resident Alien for within the meaning of the Regulatory ■ i. Revising the section heading; Personal Services Abroad Flexibility Act, 5 U.S.C. 601, et seq. ■ ii. Revising clause 5; * * * * * Therefore, an Initial Regulatory ■ iii. In clauses 6 and 16, removing the Flexibility Analysis has not been word ‘‘vacation’’ each time it appears 5. Leave and Holidays performed. and adding in its place the word [For use in all U.S. personal services (3) Paperwork Reduction Act. The ‘‘annual’’. contracts.] ■ proposed rule does not establish or c. By adding a parenthetical authority Leave and Holidays (Date) modify a collection of information that citation at the end of the appendix. The revisions and addition read as (a) Annual Leave. (1) The contractor is not requires the approval of the Office of entitled to annual leave if the period of this Management and Budget under the follows: contract is ninety (90) days or less in Paperwork Reduction Act (44 U.S.C. Appendix D to Chapter 7—Direct continuous duration. If the contract period is Chapter 35). USAID Contracts With a U.S. Citizen or more than ninety (90) days, the contractor a U.S. Resident Alien for Personal will accrue annual leave as of the start date List of Subjects in 48 CFR Chapter 7, of the contract period of performance as Services Abroad Appendix D specified in paragraph (a)(2) of this clause. * * * * * (2) The contractor will accrue annual leave Government procurement. based on the contractor’s time in service 4. Policy according to the table of this paragraph (a)(2). For the reasons discussed in the * * * * * The accrual rates are based on a full-time, 40- preamble, USAID proposes to amend 48 (c) * * * hour workweek, which may be prorated for CFR chapter 7 as follows: (2) * * * a shorter work-week:

Time in service Annual leave (AL) accrual rate

0 to 3 years ...... 4 hours of leave for each 2-week period. over 3, and up to 15 years ...... 6 hours of AL for each 2-week period (including 10 hours AL for the final pay period of a calendar year). over 15 years ...... 8 hours of AL for each 2-week period.

(i) USAID will calculate the time in service forfeited, unless the requirements of the the facts and circumstances that prevented based on all the previous service performed position precluded the employee from taking the contractor from taking annual leave, and by the contractor as: such leave. The contractor may be authorized the contracting officer must find that the (A) An individual personal services to restore annual leave for exceptional contractor did not cause, or have the ability contractor with USAID for any duration circumstances beyond the control of the to control, such facts and circumstances. This covered by Sec. 636(a)(3) of the FAA or other contractor. The restoration of annual leave lump-sum payment must not exceed the statutory authority applicable to USAID; and/ may be approved only by the USAID number of days the contractor could have or Administrator, cognizant Assistant accrued during a twelve (12)-month period (B) A former U.S. Government (USG) Administrator or Head of an Independent based on the contractor’s accrual rate. direct-hire civilian employee; and/or 3) an Office reporting directly to the USAID (5) The contractor may be granted honorable active duty member of the Administrator, and cannot be delegated advanced annual leave by the contracting uniformed services based on the definition in further. Annual leave restored must be officer when circumstances warrant. 5 U.S.C. 2101(3). scheduled and used no later than either the Advanced leave must be approved by the (ii) In addition to the information certified end of the leave year two years after either Mission Director, cognizant Assistant by the contractor in their Offeror Information (i) The date fixed by the approving official Administrator, or Head of an Independent form, the contracting officer may require the as the termination date of the exigency of the Office reporting directly to the contractor to furnish copies of previously public business or other reason beyond the Administrator, as appropriate. In no case may executed contracts, and/or other evidence of contractor’s control, which resulted in the the contracting officer grant advanced annual previous service (e.g. SF 50, DD Form 214 or forfeiture; or leave in excess of the amount the contractor 215) to conduct the due diligence necessary (ii) The end of the contract, whichever is can accrue in a twelve (12) month period or to verify creditable previous service. earlier. over the life of the contract, whichever is (3) Annual Leave is provided under this (4) The contractor must use all accrued less. At the end of the period of performance contract primarily for the purposes of annual leave during the period of or at termination, the contractor must providing the contractor necessary rest and performance. At the end of the contract, the reimburse USAID for any outstanding recreation during the period of performance. contractor will forfeit any unused annual balance of advanced annual leave provided The contractor, in consultation with the leave except where the requirements of the to the contractor under the contract. Supervisor, must develop an annual leave position precluded the contractor from taking (b) Sick Leave. The contractor may use sick schedule early in the period of performance, annual leave. In this case, the contracting leave on the same basis and for the same taking into consideration the requirements of officer may authorize the following: purposes as USAID employees. The the position, the contractor’s preference, and (i) The contractor to take annual leave contractor will accrue sick leave at a rate not other factors. The maximum amount of during the concluding weeks of the contract, to exceed four (4) hours every two (2) weeks annual leave that the contractor can carry not to exceed the period of performance; or for a maximum of thirteen (13) work-days per over from one leave year to the next is (ii) Payment of a lump-sum for annual year. The contractor may carry over unused limited to 240 hours. The contractor’s unused leave not taken based on a signed, written sick leave from year to year under the same annual leave balance at the end of the last determination and findings (D&F) from the contract, and to a new follow-on contract for pay period of each calendar year will be contractor’s supervisor. The D&F must set out the same work at the same place of

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performance. The contractor is not USAID Mission under this contract, and has home leave for qualifying Missions, and this authorized to carry over sick leave to a new not taken more than 30 work days leave paragraph (d) will not apply. contract for a different position or at a (annual, sick or LWOP) in the U.S.; and (e) Holidays and Administrative Leave. The different location. The contractor will not be (iii) The contractor agrees to return contractor is entitled to all holidays and compensated for unused sick leave at the immediately after completing home leave to administrative leave, including weather and completion of this contract. the same Mission to serve out the remaining safety leave, granted by USAID to U.S. (c) Home Leave. (1) The contractor may be time necessary to meet two (2) years of employees as announced by the Agency or granted home leave to be taken only in the continued performance under this contract, Mission. U.S., its commonwealth, possessions or plus an additional— (f) Military Leave. Military leave of not territories, in one continuous period, under (A) Two (2) years, or more than fifteen (15) calendar days in any the following conditions: (B) Not less than one (1) year, if approved calendar year may be granted to the (i) The contractor must complete twenty- by the Mission Director, under the current contractor who is a reservist of the U.S. four (24) continuous months of service contract, or under a new contract for the Armed Forces, provided that the military abroad under this contract, and must not same or similar services at the same Mission, leave has been approved, in advance, by the have taken more than thirty (30) workdays before the contractor departs on home leave. contracting officer or the Mission Director. A leave (annual, sick or LWOP) in the U.S., its (3)(i) Home leave must be taken only in the copy of contractor’s official orders and the commonwealths, possessions or territories. U.S., its commonwealths, possessions or contracting officer or Mission Director The required service abroad will include the territories. Any days spent in any other approval will be part of the contract file. actual days in orientation in the U.S. location will be charged to annual leave, or (g) Leave Without Pay (LWOP). The (excluding any language training), travel time if the contractor does not have accrued contractor may be granted LWOP only with by the most direct route, and actual days annual leave to cover these days, the the written approval of the contracting officer abroad beginning on the date of arrival in the contractor will be placed on LWOP. or Mission Director, unless a such leave is cooperating country. Any annual and sick (ii) Travel time by the most direct route is requested for family and medical leave leave taken abroad, excluding leave without authorized in addition to the home leave purposes under paragraph (i) of this clause. pay (LWOP), will count toward the period of authorized under this ‘‘Leave and Holidays’’ (h) Compensatory Time. USAID may grant service abroad. Any days of annual and sick clause. Salary during travel to and from the compensatory time off only with the written leave taken in the U.S., its commonwealths, U.S. for home leave will be limited to the approval of the contracting officer or Mission possessions or territories will not be counted time required for travel by the most direct Director in rare instances when it has been toward the required twenty-four (24) months and expeditious route. Additional home determined absolutely essential and under of service abroad. leave travel requirements are included in the the guidelines which apply to USAID direct- (ii) The contractor must agree to return ‘‘Travel and Transportation Expenses’’ clause hire employees for its use. immediately after completing home leave to of this contract. (i) Family and Medical Leave. (1) USAID continue performance for an additional— (iii) Except for reasons beyond the provides family and medical leave for (A) Two (2) years, or contractor’s control as determined by the eligible USPSCs working within the U.S., or (B) Not less than one (1) year, if approved contracting officer, the contractor must return any territories or possession of the U.S., in in writing by the Mission Director before the abroad immediately after home leave to accordance with Title I of the Family and contractor departs on home leave. fulfill the additional required continued Medical Leave Act of 1993, as amended (iii) If the contractor agrees to meet the performance of services for any home leave (FMLA), and as administered by the conditions in paragraph (c)(1)(ii) of this provided under this contract, or else the Department of Labor under 29 CFR 825. clause above by returning to the same USAID contractor must reimburse USAID for the USAID also provides family and medical Mission under this contract or a new salary and benefits costs of home leave, travel leave to eligible USPSCs working outside the contract, the contractor may be granted thirty and transportation and any other payments U.S., or any territories or possession of the (30) workdays of home leave. related to home leave. U.S., in accordance with this paragraph (i) (iv) If the contractor agrees to meet the (iv) Unused home leave is not reimbursable outside the provisions of Title I of the FMLA continued performance conditions of under this contract. as a matter of policy discretion. paragraph (c)(1)(ii) of this clause and will be (4) The contracting officer may authorize (2) Family and medical leave only applies relocating to a different USAID Mission the contractor to spend no more than five (5) to USPSCs, not any other type of PSC. under a new USAID personal services days in work status for consultation at (3) In accordance with 29 CFR 825.110, to contract immediately following the USAID/Washington while on home leave in be eligible for family and medical leave, the completion of home leave, the contractor the U.S., before returning abroad. contractor must have performed services may be granted twenty (20) workdays of Consultation in excess of five (5) days or at for— home leave. USAID will reimburse the locations other than USAID/Washington (i) At least twelve (12) months with contractor for these twenty days of home must be approved in advance by the Mission USAID; and leave under this contract, not under the new Director or the contracting officer. (ii) At least 1,250 hours with USAID during contract. (d) Home Leave for Qualifying Missions. (1) the previous 12-month period. (v) If home leave eligibility is based on If the contractor ordinarily qualifies for home (4) In accordance with 29 CFR 825.200(a) paragraph (c)(1)(iv) of this clause, prior to leave and has completed a 12-month period and USAID policy in ADS 309, an eligible departure on home leave, the contractor must at one of the USAID qualifying Missions, as contractor may take up to twelve (12) submit to the contracting officer at the announced by the Department of State or workweeks of leave under FMLA, Title I, in current Mission, a copy of the new contract USAID, the contractor is entitled to ten (10) any 12-month period for the reasons with a special award condition in the workdays of home leave in addition to the specified in 29 CFR 825.112. contract Schedule indicating the contractor’s home leave the contractor is normally (5) In accordance with 29 CFR part obligation to fulfill the commitment for entitled to in accordance with paragraph (c) 825.207, the contractor may take LWOP for continued performance in accordance with of this ‘‘Leave and Holidays’’ clause. family and medical leave purposes. However, paragraph (c)(1)(ii) of this clause. (2) There is no requirement that an eligible the contractor may choose to substitute (2) Advanced Home Leave. contractor take this additional home leave for LWOP with accrued annual or sick leave Notwithstanding the requirements in qualifying Missions; it is for use at the earned under the terms of this contract. If the paragraph (c)(1)of this clause, the contractor contractor’s option. If the contractor is contractor does not choose to substitute may be granted advanced home leave subject eligible and elects to take such home leave, accrued paid leave, the contracting officer, in to all of the following conditions: the contractor must take all ten (10) consultation with the contractor’s supervisor, (i) Granting of advanced home leave would workdays at one time in the U.S. under the may require the contractor to substitute serve in each case to advance the attainment conditions described in paragraphs (c)(5) and accrued paid leave for LWOP. The CO must of the objectives of this contract; and (c)(6) of this clause. If the contractor is obtain the required certifications for approval (ii) The contractor has served at least returning to the U.S. and not returning of family medical leave in accordance with eighteen (18) months abroad, as defined in abroad to the same or different USAID USAID policy. The contractor must notify the paragraph (c)(4) of this clause, at the same Mission, the contractor is not eligible for contractor’s Supervisor of the intent to

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substitute paid leave for LWOP prior to the following the current mileage-based 14 FDMS), which can be reviewed at date such paid leave commences. After inspection interval on the label means www.transportation.gov/privacy. In having invoked the entitlement to family and conducting multiple visual inspections order to facilitate comment tracking and medical leave and taking LWOP for that per year. NHTSA has tentatively response, we encourage commenters to purpose, the contractor cannot retroactively substitute paid leave for the LWOP already concluded multiple visual inspections provide their name, or the name of their taken under family and medical leave. per year based solely on mileage would organization; however, submission of (6) Family medical leave is not authorized not improve vehicle safety for these names is completely optional. Whether for any period beyond the completion date of high-mileage CNG heavy vehicles, and or not commenters identify themselves, this contract. could potentially reduce safety. Because all timely comments will be fully (7) When requesting family medical leave, the current periodic visual inspection considered. the contractor must submit the relevant leave interval is intended for light vehicles Docket: For access to the docket to request in writing, including certifications and is consistent with the operation of read background documents or and other supporting documents required by these vehicles, no change is proposed to comments received, go to 29 CFR 825 and USAID policy in ADS 309. www.regulations.gov, or the street (8) The U.S. Department of Labor’s (DOL’s) the periodic visual inspection interval Wage and Hour Division (WHD) Publication for CNG fuel containers on light address listed above. Follow the online 1420 explains the FMLA’s provisions and vehicles. instructions for accessing the dockets. provides information concerning procedures DATES: Comments must be received on FOR FURTHER INFORMATION CONTACT: Ian for filing complaints for violations of the Act. or before August 20, 2019. MacIntire, Office of Crashworthiness (j) Leave Records. The contractor must Proposed compliance date: We Standards (telephone: 202–493–0248) maintain their current leave records and propose the compliance date for the (fax: 202–493–2990), or Daniel Koblenz, make them available as requested by the Office of Chief Counsel (telephone: 202– Mission Director or the contracting officer. amendments in this rulemaking action would be one year after the date of 366–2992) (fax: 202–366–3820). Address * * * * * for both officials: National Highway (Authority: Sec. 621, Pub. L. 87–195, 75 Stat. publication of the final rule in the Federal Register. We propose to permit Traffic Safety Administration, U.S. 445, (22 U.S.C. 2381), as amended; E.O. Department of Transportation, 1200 12163, Sept. 29, 1979, 44 FR 56673; and optional early compliance with the 3 CFR, 1979 Comp., p. 435.) amended requirements. New Jersey Avenu, SE, West Building, Washington, DC 20590. ADDRESSES: Mark A. Walther, You may submit comments to the docket number identified in the SUPPLEMENTARY INFORMATION: Acting Chief Acquisition Officer. heading of this document by any of the Table of Contents [FR Doc. 2019–12810 Filed 6–20–19; 8:45 am] following methods: BILLING CODE 6116–01–P • Federal eRulemaking Portal: Go to I. Executive Summary II. Summary of Petitions http://www.regulations.gov. Follow the III. Background online instructions for submitting IV. NHTSA’s Analysis DEPARTMENT OF TRANSPORTATION comments. V. Proposed Changes to the Visual Inspection • Mail: Docket Management Facility, Label National Highway Traffic Safety M–30, U.S. Department of VI. Overview of Costs and Benefits Administration Transportation, West Building, Ground VII. Proposed Compliance Date Floor, Rm. W12–140, 1200 New Jersey VIII. Rulemaking Analyses and Notices 49 CFR Part 571 Avenue SE, Washington, DC 20590. IX. Public Participation X. Appendix to the Preamble [Docket No. NHTSA–2019–0055] • Hand Delivery or Courier: West Building Ground Floor, Room W12–140, I. Executive Summary RIN 2127–AL88 1200 New Jersey Avenue SE, between 9 This NPRM proposes to amend the Federal Motor Vehicle Safety a.m. and 5 p.m. Eastern Time, Monday label specified in S7.4(g) of FMVSS No. through Friday, except Federal holidays. Standards; Compressed Natural Gas • 304, ‘‘Compressed natural gas fuel Fuel Container Integrity Fax: 202–493–2251. container integrity,’’ by modifying the Regardless of how you submit your periodic visual inspection interval for AGENCY: National Highway Traffic comments, please mention the docket CNG fuel containers installed on Safety Administration (NHTSA), number of this document. vehicles with a GVWR greater than Department of Transportation (DOT). You may also call the Docket at 202– 4,536 kg (‘‘heavy vehicles’’) to at least ACTION: Notice of proposed rulemaking 366–9324. every 12 months (with no mileage (NPRM). Instructions: For detailed instructions interval).1 FMVSS No. 304 (S7.4(g)) on submitting comments and additional currently requires that CNG fuel SUMMARY: In response to petitions for information on the rulemaking process, containers on all vehicles (regardless of rulemaking from the American Trucking see the Public Participation heading of GVWR) be permanently affixed with a Associations (ATA) and the Natural Gas the Supplementary Information section label that states: ‘‘This container should Vehicles for America (NGVAmerica), of this document. Note: all comments be visually inspected after a motor NHTSA is proposing to amend the received will be posted without change vehicle accident or fire and at least visual inspection labeling requirement to http://www.regulations.gov, including every 36 months or 36,000 miles, in Federal Motor Vehicle Safety any personal information provided. whichever comes first, for damage and Standard (FMVSS) No. 304, Privacy Act: In accordance with 5 deterioration.’’ NHTSA believes that ‘‘Compressed natural gas fuel container U.S.C. 553(c), DOT solicits comments integrity,’’ to state that CNG fuel from the public to better inform its 1 The term ‘‘heavy vehicles’’ as used in this containers used on heavy vehicles decision-making process. DOT posts NPRM includes all vehicles with a GVWR greater should be inspected at least once every these comments, without edit, including than 4,536 kg. Heavy vehicles include both 12 months. NHTSA is proposing this any personal information the ‘‘medium duty’’ vehicles (with a GVWR greater than 4,536 kg and less than or equal to 11,793 kg) and change because CNG heavy vehicles are commenter provides, to ‘‘heavy duty’’ vehicles (with a GVWR greater than typically used in high-mileage www.regulations.gov, as described in 11,793 kg), as those terms are used by the Federal commercial fleet operations and the system of records notice (DOT/ALL– Motor Carrier Safety Administration.

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changing the periodic inspection inspected for damage and deterioration Louisiana, Maine, Maryland, interval for CNG fuel containers on after a motor vehicle accident or fire, Massachusetts, Michigan, Nebraska, heavy vehicles by removing the 36,000- and either (a) at least every 12 months New Hampshire, Rhode Island, Texas, mile mileage interval and reducing the when installed on a vehicle with a Vermont, Virginia, and Wisconsin) have 36-month time interval to a 12-month GVWR greater than 4,536 kg or (b) at adopted NFPA–52 in their regulations. time interval would maintain safety least every 36 months or 36,000 miles, If the inspection interval specified by while eliminating unnecessary visual whichever comes first, when installed the FMVSS No. 304 label were amended inspections by high-mileage commercial on a vehicle with a GVWR less than or as proposed in this NPRM, the motor carriers. These high-mileage equal to 4,536 kg. NHTSA proposes to commercial operators of CNG vehicles carriers can reach the 36,000-mile amend the periodic visual inspection operating pursuant to NFPA–52, or mileage mark in as little as three interval for CNG fuel containers on those following a comparable practice of months. heavy vehicles to ‘‘at least once every 12 inspecting the containers as per the NHTSA initiated this rulemaking in months,’’ without including a mileage interval set forth in the label, would not response to petitions from the ATA interval, to account for the fact that have to inspect the CNG fuel containers (received April 13, 2016) and the these vehicles are commonly used for as frequently. Taking into account the NGVAmerica (received September 16, high-mileage commercial purposes. The cost savings that would result from 2016) requesting that NHTSA amend current periodic inspection interval (at fewer visual inspections, NHTSA S7.4(g) of FMVSS No. 304. According to least every 36,000 miles or 36 months, estimates the annual maintenance cost the petitioners, although the label’s whichever comes first) was originally savings from this proposal range from current inspection interval (every intended for light vehicles. NHTSA has $52.4 million to $83.84 million when 36,000 miles or 36 months, whichever tentatively concluded that reducing the fully implemented into the fleet, comes first) is appropriate for light frequency of inspections to once every assuming the current CNG heavy vehicles (vehicles with a GVWR less 12 months for heavy vehicles aligns the vehicle fleet size remains unchanged. than or equal to 4,536 kg) which are requirement with the agency’s intent The agency believes this is a low typically driven between 10,000 miles that the inspection interval be estimate of the maintenance cost savings and 12,000 miles annually, it is reasonable and not excessive, and is since CNG heavy vehicle sales are inappropriate for heavy vehicles, which appropriately tailored to the vehicle projected to steadily increase through are typically used in high-mileage type (high-mileage commercial 2040.3 commercial fleet operations. According vehicles). In addition, a 12-month to the petitioners, heavy duty vehicles interval for visual inspection aligns with II. Summary of Petitions (vehicles with a GVWR greater than a Federal Motor Carrier Safety This rulemaking responds to two 11,793 kg) are driven well over 100,000 Administration (FMCSA) requirement petitions requesting that NHTSA amend miles annually and to follow the label’s that inspections must be performed the FMVSS No. 304 visual inspection instructions, commercial operators of annually. (This NPRM does not propose labeling requirement (S7.4(g)) for CNG these vehicles need to conduct a changes to the periodic visual fuel containers. detailed visual inspection of their inspection interval for CNG fuel NHTSA received the first of these vehicles’ CNG fuel containers 3 to 4 containers on light vehicles because the petitions from American Trucking times per year. The petitioners believe current periodic inspection interval (at Associations (ATA) on April 13, 2016.4 this creates an unreasonable burden on least every 36,000 miles or 36 months, ATA requests that we amend the visual these commercial operators without a whichever comes first) is consistent inspection label for CNG fuel containers concomitant safety benefit. with ensuring adequate safeguards for on high-mileage commercial vehicles to: To address this issue, the petitioners the operation of these vehicles. ‘‘This container should be visually request that the agency amend the Petitioner NGVAmerica did not provide inspected for damage and/or visual inspection label requirement to information supporting changing the deterioration after a motor vehicle remove the mileage interval for visual interval to 12 months for the light accident or fire, and at least every 36 inspection, while keeping a time vehicle population, so that aspect of its months.’’ ATA states that a visual interval. However, the two petitioners petition is denied.) inspection of the CNG fuel container is differ on how long this time interval NHTSA expects that revising the ‘‘thorough, time consuming and should be, as well as to what weight periodic inspection interval for heavy expensive,’’ and that ‘‘requiring that it classes of vehicle this change should vehicles on the FMVSS No. 304 visual be done every 36,000 miles for vehicles apply. ATA suggests that the visual inspection label will result in fewer that often travel over 100,000 miles per inspection label recommend an visual inspections being conducted. year is an unnecessary burden on the inspection interval of at least every 36 Many States require that commercial industry’’ because high-mileage months, whereas NGVAmerica suggests operators of CNG vehicles comply with commercial fleets undergo an annual that the label recommend an inspection the National Fire Protection Association safety inspection which includes the interval of at least every 12 months. In (NFPA) voluntary standard NFPA–52, fuel system, regardless of the label addition, ATA requests that the revised ‘‘Vehicular Natural Gas Fuel Systems,’’ statement. visual inspection interval apply to CNG which states that CNG fuel containers ATA states that field data collected by fuel containers on high-mileage should be inspected in accordance with NGVAmerica and the Clean Vehicle commercial CNG vehicles, while the container manufacturer’s Education Foundation (CVEF) on CNG NGVAmerica requests that the revised instructions (i.e., the required FMVSS vehicle incidents shows there were 20 visual inspection interval apply to CNG No. 304 visual inspection label).2 fuel containers on all CNG vehicles. Currently, 20 States (Alabama, 3 See Baker, et al., ‘‘Alternative Fuel Vehicle After careful consideration, NHTSA California, Colorado, Connecticut, Forecasts (April 2016),’’ Texas A&M Transportation has decided to partially grant the Institute, https://static.tti.tamu.edu/tti.tamu.edu/ Delaware, Hawaii, Florida, Kentucky, petitions for rulemaking. NHTSA documents/PRC–14–28F.pdf. 4 According to its website, ATA is the largest proposes amending the FMVSS No. 304 2 See https://www.nfpa.org/codes-and-standards/ national trade association for the trucking industry visual inspection label to state that the all-codes-and-standards/list-of-codes-and- and represents more than 37,000 members covering CNG fuel container should be visually standards/detail?code=52. every type of motor carrier in the U.S.

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CNG fuel container failures in the III. Background labeling requirements. It is the agency’s understanding that commercial carriers United States (U.S.) since 1984, and that a. FMVSS No. 304 and FMCSR 393.68 most of these failures were because of that operate CNG vehicles typically treat external influences such as impact, heat, FMVSS No. 304 specifies performance the inspection interval on the FMVSS or chemical damage. ATA states some of and labeling requirements for CNG fuel No. 304 visual inspection label as the the CNG fuel container failure incidents containers on passenger cars, de-facto minimum inspection interval multipurpose passenger vehicles, resulted in changes in voluntary for the industry. (Further, as noted trucks, and buses that use CNG as a industry codes and standards to ensure above, 20 States have adopted NFPA motor fuel, and to each container safe deployment of CNG vehicle Code 52, ‘‘Vehicular Natural Gas Fuel designed to store CNG as a motor fuel Systems,’’ which specifies that technology, and that as a result of on-board any motor vehicle. (FMVSS commercial vehicle operators visually improvements in voluntary container No. 304, S3.) FMVSS No. 304 contains inspect CNG fuel containers in standards, the CNG fuel container is the a number of performance requirements accordance with the visual inspection currently most reliable component for CNG fuel containers to ensure label permanently affixed to the within the high-pressure fuel system. adequate strength, durability, and container per FMVSS No. 304.) According to ATA, the high reliability pressure relief characteristics of CNG of CNG fuel containers means that fuel containers installed on motor b. FMCSA Research and decreasing the frequency of visual vehicles. Recommendation inspections would not reduce vehicle Because proper maintenance of CNG In March 2013, FMCSA issued a safety. fuel containers is critical to their long- research report titled, ‘‘Natural Gas term safety, NHTSA requires that CNG NHTSA received the second petition Systems: Suggested Changes to Truck fuel containers be affixed with a label and Motorcoach Regulations and from NGVAmerica on September 16, providing for visual inspection Inspection Procedures’’ 9 (herein 2016.5 NGVAmerica requests that we periodically and after a motor vehicle referred to as the ‘‘March 2013 Report’’), amend the statement for CNG fuel accident or fire. This promotes safe use which provided recommendations for containers to: ‘‘This container should be of the containers and reduces the changes to the FMCSRs and other visually inspected for damage and/or possibility that damage caused by standards 10 to accommodate and deterioration after a motor vehicle external factors (including motor facilitate the use of natural gas as a accident or fire, and at least every 12 vehicle accidents and fires) would go motor fuel in commercial motor months.’’ Like ATA, NGVAmerica undetected, a situation that could lead vehicles. FMCSA initiated this research believes that following the inspection to CNG fuel container failure.6 The project in 2012 to identify whether there interval specified in S7.4(g) for heavy requirement for a visual inspection label are needed changes to the current vehicles would lead to detailed visual is found in S7.4(g) of FMVSS No. 304. FMCSRs and inspection procedures to inspections of CNG fuel containers 3 to Currently, CNG fuel containers on all specifically and fully address unique 4 times per year without a safety benefit, vehicles must be permanently labeled characteristics of natural gas used as a which unreasonably burdens with the statement, ‘‘This container fuel. FMCSA’s goal was to improve the commercial operators. NGVAmerica should be visually inspected after a safety of commercial motor vehicle also believes that, because the motor vehicle accident or fire and at operations by ensuring commercial inspection involves physically removing least every 36 months or 36,000 miles, motor vehicles powered by natural gas and later replacing parts of the vehicle’s whichever comes first, for damage and meet appropriate safety criteria at all 7 protective structure around the CNG deterioration.’’ times while operating on public roads. Although NHTSA has the authority to As part of its research, FMCSA tank (shielding), unnecessary require that all new CNG fuel containers inspections needlessly increase the risk conducted an extensive literature be labeled in accordance with S7.4(g), review of codes, standards, best of damage to the fuel system. NHTSA does not have the authority to practices, and lessons learned related to NGVAmerica requests that the new require that commercial operators of natural gas fueled heavy vehicles as visual inspection label language be CNG vehicles follow the inspection well as a series of industry site visits to required for all vehicles, including light interval found on the visual inspection gather feedback. vehicles. However, NGVAmerica does label. Rather, the in-use operation, One recommendation in the March express concern that changing the inspection, repair, and maintenance of 2013 Report was for NHTSA to modify inspection interval on the label from commercial motor vehicles is regulated the required visual inspection label on once every 36 months or 36,000 miles federally by the FMCSA.8 FMCSA CNG fuel containers by deleting the to once every 12 months would be regulates commercial motor vehicles reference to mileage for commercial burdensome for most light vehicle primarily thorough the promulgation motor vehicles. The report notes the owners and operators, as it could and enforcement of Federal Motor labeling requirement was originally Carrier Safety Regulations (FMCSRs). potentially triple the frequency with intended for passenger cars, and that FMCSR 393.68, ‘‘Compressed natural commercial motor vehicles, which which they currently conduct gas fuel containers,’’ which is inspections. NGVAmerica suggests that typically travel more than 160,930 km administered by FMCSA, directly (100,000 miles) per year, were not taken this problem could be addressed by addresses CNG fuel containers. It limiting the applicability of the new into account. The report also states that, requires that all CNG fuel containers for commercial motor vehicles, the label to lower-mileage vehicles, but does conform to FMVSS No. 304, and reference to mileage in the current not propose specifically how to do so in specifically requires that they meet the its petition. 9 FMCSA–RRT–13–044, ‘‘Natural Gas Systems: 6 60 FR 57943, November 24, 1995. Suggested Changes to Truck and Motorcoach 5 According to its website, NGVAmerica is a trade 7 A detailed account of the history of the FMVSS Regulations and Inspection Procedures,’’ March association that represents more than 230 No. 304 visual inspection requirement can be found 2013. https://rosap.ntl.bts.gov/view/dot/83. companies, environmental groups, and in the appendix to this document. 10 North American Standard (inspection organizations interested in the promotion and use 8 See Motor Carrier Safety Act of 1999 (49 U.S.C. procedures and out-of-service criteria) and FMVSS of natural gas as motor fuel. 113). No. 304.

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visual inspection label results in at least shuttle, transit, and school buses, refuse that rule, the Agency explained that it three detailed inspections of the CNG trucks, street sweepers, and large haul chose to recommend a visual inspection fuel containers per year performed by truck tractor/trailers with centralized interval of 12-months/12,000 miles CNG-trained mechanics, which is too fueling operations.13 Natural gas is most because it was ‘‘consistent with the burdensome and unnecessary. commonly used as fuel by medium and recommended interval for many motor Accordingly, the report recommends heavy duty vehicle commercial fleet vehicle warranties and routine that NHTSA amend the visual operations, because the price for natural maintenance items.’’ 16 This meant that inspection label requirement of FMVSS gas has been low relative to diesel and the agency tailored the visual inspection No. 304 to delete the reference to gasoline,14 and refueling infrastructure requirement to light vehicles, since the mileage for commercial motor vehicles. can be centrally located for fleet CNG vehicle fleet at the time was 15 IV. NHTSA’s Analysis operations. primarily comprised of light vehicles. The visual inspection label then b. FMVSS No. 304’s Inspection Label a. Introduction changed to the current 36-month/ Was Based on Lower-Mileage Light 36,000-mile interval in response to In general, CNG heavy vehicles are Vehicles currently used in commercial fleet petitions for reconsideration of the operations.11 Although the U.S. has an The petitioners justify their request to November 24, 1995 final rule. Like the extensive natural gas distribution amend the FMVSS No. 304 visual final rule itself, NHTSA’s response to system in place, vehicle fueling inspection label in part by arguing that the petitioners for reconsideration of the infrastructure (i.e., availability of fueling the visual inspection label’s current visual inspection label was based on stations) is limited. Therefore, natural 36,000-mile mileage interval was field data available at the time, which gas as a vehicle fuel is most amenable intended for lower-mileage light was primarily obtained from light to commercial fleet operations that vehicles, and is not necessarily vehicles.17 The visual inspection label install their own natural gas fueling appropriate for higher mileage heavy has not been changed since. stations and/or partner with other fleet vehicles. NHTSA has concluded that the A statistical analysis of mileage data operations. Because the initial cost of petitioners are correct that the current collected by the U.S. Federal Highway CNG vehicles is significantly higher mileage interval was intended for light Administration (FHWA) shows that the than conventional diesel vehicles, vehicles, based on both the regulatory 3-year/36,000-mile interval on the commercial carriers who operate CNG history of the visual inspection label inspection label is more consistent with vehicles tend to do so in high-mileage requirement, and a comparison of the the average annual VMT of light operations, so that they can more average annual vehicle miles traveled vehicles than of heavy vehicles.18 The quickly recover the initial cost.12 As a (VMT) by light versus heavy vehicles. average annual VMT in 2014 and 2015 result, natural gas as a motor fuel is NHTSA established the visual for all vehicles (not just CNG vehicles) gaining popularity among medium and inspection label requirement in a final broken down by vehicle type, is shown heavy duty vehicle fleets such as rule issued on November 24, 1995. In in Table 1:

TABLE 1—AVERAGE ANNUAL VMT IN 2014 AND 2015 BY VEHICLE TYPE * [All fuel types]

All All light All single combination Year vehicles All buses unit trucks trucks (SUTs) (CTs)

2014 ...... 11,287 18,347 13,123 65,897 2015 ...... 11,443 18,258 12,960 61,978

Average ...... 11,365 18,303 13,042 63,938 * Buses, SUTs, and CTs are overwhelmingly heavy vehicles.

Table 1 indicates that an average light and the average annual VMT of buses is vehicles have a relatively high upfront vehicle travels just shy of 12,000 miles 1.6 times greater than that of light cost to operators, which means that they over 12 months and equates to vehicles. are generally used in high-mileage approximately 36,000 miles over 36 Although the single unit trucks operations to recoup that cost and thus months. By contrast, the average annual (SUTs) 19 figure is comparable to that of tend to have higher annual VMTs than VMT of combination trucks (truck/ light vehicles, we think it is likely that average vehicles in their weight class.20 tractor with trailer) is nearly 6 times that CNG SUTs are typically used in high- Accordingly, although NHTSA does not of light vehicles (passenger cars, vans, mileage and centrally fueled fleet have precise VMT data on CNG SUTs, light trucks, and sport utility vehicles), operations. This is because CNG the agency believes that the average

11 Baker, et al., ‘‘Alternative Fuel Vehicle 14 For example, the national average price of CNG Distance Traveled in Miles and Related Data—2015 Forecasts (April 2016),’’ Texas A&M Transportation in April 2018 was about 30 percent less than that by Highway Category and Vehicle Type. https:// Institute, https://static.tti.tamu.edu/tti.tamu.edu/ of diesel. www.fhwa.dot.gov/policyinformation/statistics/ documents/PRC-14-28F.pdf. 15 Baker, et al., ‘‘Alternative Fuel Vehicle 2015/vm1.cfm. Forecasts (April 2016),’’ Texas A&M Transportation 19 12 U.S. Department of Energy, ‘‘Natural Gas SUTs are defined as single frame trucks with Institute, https://static.tti.tamu.edu/tti.tamu.edu/ 2-axles and at least 6 tires or a GVWR greater than Vehicles,’’ Alternative Fuels Data Center, https:// documents/PRC-14-28F.pdf. _ 4,536 kg. See https://www.fhwa.dot.gov/ www.afdc.energy.gov/vehicles/natural gas.html. 16 60 FR 57945, November 24, 1995. policyinformation/statistics/2015/vm1.cfm. 13 https://static.tti.tamu.edu/tti.tamu.edu/ 17 61 FR 47086, September 6, 1996 20 U.S. Department of Energy, ‘‘Natural Gas documents/PRC-14-28F.pdf. 18 Data obtained from the FHWA Office of Vehicles,’’ Alternative Fuels Data Center, https:// Highway Policy Information—Annual Vehicle www.afdc.energy.gov/vehicles/natural_gas.html.

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annual VMT by CNG SUTs is likely conducted its own research on this failure of a high-pressure vessel can be significantly higher than the average subject and thus has no basis on which catastrophic. Nonetheless, according to reported in Table 1 for all SUTs. to independently corroborate those ATA, between 1984 and 2015 there For these reasons, NHTSA agrees with calculations. (Although the March 2013 were only about 20 known CNG fuel the petitioner’s assessment that the FMCSA report concluded that frequent container failures in the U.S. and current mileage interval on the visual visual inspections did impose a cost on Canada. ATA attributes this low number inspection label was intended for light operators of commercial vehicles, it did to the high quality of CNG fuel vehicles and is not consistent with not include hard calculations of what containers due to voluntary industry medium and heavy duty vehicle CNG that cost would be.) We therefore seek standards. fleet operations due to the greater miles comment and input on the frequency of ATA states that the statistic it cites of traveled annually by the latter vehicles. visual inspections, cost of an inspection, approximately 20 canister failures from NHTSA seeks comment on the number of days of downtime per 1984 to 2015 is based on field data appropriateness of the current labeling inspection, and the cost of downtime. collected by the CVEF.22 NHTSA linked requirement for high-mileage heavy d. Potential Safety Risks of Frequent the source of ATA’s information to a vehicles. In addition, to focus on the 23 CNG Fuel Container Inspections presentation, ‘‘CVEF ACT Training,’’ average annual VMT for CNG heavy which reported there were 68 CNG vehicles, the agency seeks comment and NGVAmerica argues in its petition vehicle ‘‘incidents’’ in North America input on the average annual VMT of that multiple detailed visual inspections from 1984 to 2015. CNG vehicles by vehicle GVWR. of CNG fuel containers per year can NHTSA obtained the CVEF Master increase the risk of damage to the fuel 24 c. Cost Burden of Frequent Vehicle Incident List underlying the ‘‘68 system. incidents’’ statistic, and found that 19 of Inspections According to NGVAmerica, frequent these incidents were CNG fuel container visual inspections can increase risk of According to ATA’s petition, rupture failures. (The other ‘‘incidents’’ damage because visual inspections following the current periodic visual on the list were not container failures; require that the fuel system’s covers and inspection interval specified on the they involved either a CNG leak or a shields be removed and reinstalled. FMVSS No. 304 visual inspection label release of CNG by Pressure Release Frequent removal and reinstallation of (i.e., 36,000 miles or 36 months, Device (PRD) activation, which are shielding and covers increases the risk whichever comes first), means that CNG typically caught during the routine pre- of human error, such as leaving a bolt fuel containers on heavy duty vehicles trip inspection that drivers must do or fastener loose, over tightening a bolt need to be inspected three to four times every time they operate the vehicle.) Of or fastener, moving a fuel line out of per year, at an annual cost between the 19 CNG canister ruptures, 16 21 place which could cause it to rub other $1,500 and $2,500 per vehicle. occurred in the U.S. and 3 occurred in components, replacing a bolt or fastener NHTSA tentatively agrees that this is a Canada. Details of the 16 CNG fuel with one that is too long that rubs reasonable estimation of the annual cost container failures in the U.S., broken against other components, or replacing burden imposed on high-mileage down by container type,25 are shown in a bolt with one that is too short and carriers. Table 2. According to ATA, the cost of a single does not provide proper clamping force. The petitioner believes that this risk inspection ranges between $200 and 22 CVEF was funded by the U.S. Department of $500 per vehicle with an average cost of cannot be eliminated even with Energy’s National Renewable Energy Laboratory, $350. This cost includes inspection by improved training and feedback to the but all the data collected has been transferred to a trained and certified inspector and technicians. In addition, bolts and and it maintained by NGVAmerica. It is available removal and replacement of shields or fasteners have a usable life cycle and at http://www.ngvamerica.org/media-center/ frequent removal and replacement may technical-and-safety-documents/. covers of the CNG fuel containers before 23 Horne, Douglas, Dimmick, John, ‘‘CVEF ACT and after the inspection, respectively. In increase wear and tear resulting in Training,’’ originally published on May 14, 2012. addition, ATA expects a vehicle to have premature hardware failure. The document was updated on September 26, 2016. a two-day downtime for the inspection The agency seeks comment on the The document is available from NGVAmerica and in the docket of this NPRM. costing about $150 per day. Using the extent of potential damage to the fuel system and the associated safety risks 24 CVEF Master Incident List is a list of CNG information provided by ATA, NHTSA incidents world-wide originally collected and estimates that the average cost of a posed by frequent visual inspections. documented by CVEF up to 2015. The document is single inspection is about $650 ($350 + e. Field Data on CNG Vehicle/Container maintained by NGVAmerica. A copy of the 2 × $150). document is available in the docket of this NPRM. Failures 25 Because different types of CNG fuel containers This information is supportive of the ATA states in its petition that field experience different types of failure modes and are petitioners’ views that multiple visual susceptible to different types of failure mechanisms, inspection of the CNG fuel container per data indicate that there are very few failures are grouped by container type. There are year imposes an unreasonable economic instances of container failures across all generally four types of CNG fuel containers. The type designation is based on the way the container burden on operators of high-mileage CNG-fueled vehicles, and that these failures were due to external influence, is made and the material it is made out of commercial CNG-fueled heavy vehicles (aluminum, steel, carbon fiber, etc.). Type 1 given the apparent absence of a safety such as impact and excessive heat rather containers are all metal cylinders (steel or need for multiple inspections. NHTSA than insufficient inspection. NHTSA aluminum). Type 2 containers have a thinner metal liner and a composite and wire or metal hoop notes, however, that the agency has not tentatively agrees with this assessment. CNG fuel containers are high pressure ‘‘wrap’’ that provides reinforcement for the cylinders. Type 3 containers have a metal liner that 21 This estimate is of the cumulative cost of all vessels and need more scrutiny to detect is completely wrapped in composite/fiber resin. fuel tank inspections that can be attributed to damage and deterioration than fuel Type 4 containers are cylinders with a polymer following the inspection label. tanks of diesel fueled vehicles because liner wrapped in fiber.

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TABLE 2—CAUSE OF CNG FUEL CONTAINER FAILURE INCIDENTS IN THE U.S. FROM 1984 TO 2015

Number of CNG fuel container failures by container type Cause of CNG fuel container failure Type 1 Type 2 Type 3 Type 4 Total

Fire or failure of pressure relief device ...... 0 1 0 1 2 External corrosion ...... 0 0 0 0 0 Overpressurization ...... 1 0 0 0 1 Physical damage ...... 0 0 0 2 2 Combination of overpressurization, physical damage, and stress corrosion cracking ...... 0 3 0 0 3 Stress corrosion cracking from acid/chemical exposure, degradation of glass fiber ...... 0 0 8 0 8

Total ...... 1 4 8 3 16

Among the 16 CNG fuel container However, data do not indicate the fuel containers to state: ‘‘This container failures in the U.S. from 1984 to 2015, necessity of multiple visual inspections should be visually inspected for damage one was a Type 1 container, four were per year over a single annual inspection. and deterioration after a motor vehicle Type 2 containers, eight were Type 3 In the 1980s and 1990s, the CNG fleet accident or fire, and either (a) at least containers, and three were Type 4 was composed of taxi cabs, delivery every 12 months when installed on a containers. Two CNG fuel container vans, and light trucks, i.e., vehicles vehicle with a GVWR greater than 4,536 failures (one Type 2 and one Type 4) whose CNG containers were labeled kg or (b) at least every 36 months or were caused by fire during which the under FMVSS No. 304 as subject to an 36,000 miles, whichever comes first, pressure relief device (PRD) failed to inspection interval of every 36 months when installed on a vehicle with a operate. One Type 1 container failure or 36,000 miles. Given that the GVWR less than or equal to 4,536 kg.’’ was caused by overpressurization by extremely low failure rate of CNG fuel NHTSA has tentatively decided to faulty fueling systems. Three Type 2 containers (19 failures over 33 years) 27 revise the periodic inspection interval container failures were caused by a occurred during a time the containers for heavy vehicles to at least once every combination of stress corrosion were presumably only inspected every 12 months primarily for two reasons. cracking, physical damage, and 36 months or 36,000 miles, it does not First, a 12-month inspection period overpressurization resulting from appear to NHTSA that there is a need would be consistent and aligned with improper installation of the container for the heavy vehicle containers to be the annual inspection commercial motor on the vehicle. Eight Type 3 container visually inspected every 3 to 4 months vehicles undergo in accordance with failures were caused by stress corrosion (which results from following the FMCSR 396.17, ‘‘Periodic inspection,’’ cracking from exposure to chemicals wording of the current FMVSS No. 304 which includes inspection of the fuel and acid that resulted in degradation of label). Thus, NHTSA has tentatively system and fuel container for leaks, the glass wrap.26 Two Type 4 container concluded that multiple inspections per damage, and deterioration.29 An annual failures were caused by physical year are excessive to ensuring CNG fuel visual inspection interval of CNG fuel damage. One Type 4 container failure container safety.28 Accordingly, NHTSA containers on heavy vehicles would was caused by an impact with an has tentatively concluded that visually permit the inspection of the CNG fuel overpass during vehicle motion (the inspecting CNG fuel containers multiple containers along with the rest of the fuel container was located on the roof), and times per year does not produce a safety system, which is reasonable and another Type 4 container failure was benefit commensurate with the burden practical. caused by an impact with road debris of inspection. Second, the agency believes that a 12- while the vehicle was in motion (the The agency seeks comment and input month inspection interval for heavy container was mounted under the floor on CNG vehicle incidents in the field, vehicles is appropriate because the and not protected from damage). the effectiveness of visual inspections agency lacks field data to support NHTSA notes that it is not known how for identifying potential CNG container moving to a longer interval, such as long prior to some of these failures a failures, and the frequency with which every 36 months (as was suggested in visual inspection was performed. inspections conducted every 3- to 4- the March 2013 Report). NHTSA is Periodic visual inspections are months reveal safety problems on heavy concerned that because heavy vehicles intended to detect external damage to vehicles. in commercial fleets travel significantly the CNG fuel containers; it is possible more miles than light vehicles, the CNG V. Proposed Changes to the Visual fuel containers on heavy vehicles may inspections have found anomalies that Inspection Label undetected could have resulted in be exposed to more wear and tear than incidents such as those described above. In consideration of the above, NHTSA CNG fuel containers on light vehicles. In is proposing to modify the FMVSS No. light of this concern, NHTSA has 26 In 2001, the American National Standards 304 label for visual inspection of CNG tentatively concluded that that an Institute (ANSI) revised NGV 2, ‘‘Basic Requirements for Compressed Natural Gas Vehicle 27 To put this figure in perspective, the U.S. 29 A 12-month inspection interval for CNG fuel (NGV) Fuel Containers,’’ a voluntary industry Department of Energy estimates that there are over containers is also consistent with the CNG fuel standard for the manufacturers of CNG fuel 160,000 natural gas vehicles on U.S. roads today. system inspection system developed by the containers to address the fact that a See https://www.afdc.energy.gov/vehicles/natural_ NGVAmerica Technology &Development disproportionate number of container failures gas.html. NGVAmerica estimates that this figure is Committee and ATA’s Technology Maintenance involved Type 3 containers that ruptured due to even higher at 175,000 vehicles. See https:// Council. See Compressed Natural Gas Fuel System stress corrosion cracking resulting from acid and www.ngvamerica.org/why-ngv/. Inspection Guidance,’’ NGVAmerica Technology & chemical exposure that degraded the containers’ 28 NHTSA is aware of only the CVEF data on this Development Committee, https:// glass fibers. Since the revision of NGV 2, there have subject. Commenters knowing of other data are www.ngvamerica.org/2017/12/04/new-cng-fuel- been no known failures of this type. encouraged to submit such information. system-inspection-guidance-released/.

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annual visual inspection interval is vehicles for visual inspection of their $40,000 more expensive than a similar appropriate because it is more likely to CNG fuel containers. conventional diesel engine heavy provide inspectors an opportunity to VI. Overview of Costs and Benefits vehicle. The model also considered the identify and remedy damage to the CNG price differential between diesel and fuel container and fuel system prior to ATA stated the cost of a single visual natural gas, the cost of fueling a fuel container failure, as compared to inspection ranges between $200 and infrastructure, vehicle maintenance a 36-month inspection interval. NHTSA $500 per vehicle. This cost includes costs, and the relative fuel economy of seeks comment on its tentative decision inspection by a trained and qualified CNG and diesel vehicles to determine to include a 12-month inspection inspector and removal and replacement the minimum annual average VMT per interval on the visual inspection label of shields or covers of the CNG fuel CNG vehicle for a 20 percent return on containers before and after the for heavy vehicles rather than a 36- investment. The model indicates that for inspection. ATA expects a vehicle to month period. a price differential of $1.25 per gallon have a 2-day downtime for the Because NHTSA believes that the between diesel and natural gas, the current periodic visual inspection inspection with a cost of about $150 per minimum annual average VMT per CNG interval on the visual inspection label is day. Using this information, NHTSA vehicle required to maintain a 20 appropriate for light vehicles, the estimates the cost of a single inspection percent return on investment is 75,000 proposed language for the label includes is $500 ($200 + $150 × 2) to $800 ($500 different periodic inspection intervals + $150 × 2) with an average of $650 miles for a medium duty vehicle and for light and heavy vehicles. NHTSA ($350 + $150 × 2). For purposes of 123,000 miles for a heavy duty vehicle. believes that keeping a single, estimating costs and benefits, heavy Based on this information, to harmonize universally applicable label articulating vehicles were broken down into two these numbers with current label, the the two different inspection intervals is categories: ‘‘medium duty’’ vehicles agency selected an annual average VMT preferable to requiring different labels (with a GVWR greater than 4,536 kg and for medium duty vehicles of 72,000 for CNG fuel containers depending on less than or equal to 11,793 kg) and miles and that for heavy duty vehicles the weight class of the vehicles because ‘‘heavy duty’’ vehicles (with a GVWR of 108,000 miles to calculate visual manufacturers of CNG fuel containers greater than 11,793 kg). inspection costs. Therefore, CNG fuel may not know the GVWR of the vehicle For determining the number of CNG containers on heavy duty vehicles on which the fuel container will be heavy vehicles in the fleet, NHTSA require on average about 3 visual installed at the time the manufacturer reviewed available information on CNG inspections annually, and those on affixes the label. vehicle stock from the U.S. Energy medium duty vehicles require on In addition, NHTSA believes that Information Agency (EIA) and from average about 2 visual inspections whether a vehicle has a GVWR greater NGVAmerica. According to EIA’s annually under the current visual than 4,536 kg (i.e., whether a vehicle is Annual Energy Outlook 2017, there inspection label specified in FMVSS No. a heavy vehicle) is the proper way to were 2,150 CNG medium duty vehicles 304. We seek comment on the accuracy determine whether the revised and 22,350 CNG heavy duty vehicles on of this model, and on the reasonableness inspection interval is appropriate for the roads in 2015.31 By contrast, data of its underlying assumptions. that vehicle. Currently available data from NGVAmerica indicates that there The proposed periodic visual show nearly all new CNG heavy are 25,800 CNG medium duty vehicles inspection interval of 12 months for vehicles are used in commercial high- and 39,500 CNG heavy duty vehicles.32 mileage fleet operations.30 Because of NHTSA believes that NGVAmerica’s CNG fuel containers on heavy vehicles limited public fueling infrastructure and data is more accurate than EIA’s data would reduce the average number of the high initial cost of CNG vehicles because NGVAmerica obtains stock data visual inspections in a year by 2 for compared to conventional diesel from its members, whereas EIA uses heavy duty vehicles and by one for vehicles, CNG as a motor fuel is mainly vehicle registration data. A count of medium duty vehicles, assuming that used in high-mileage commercial fleets CNG vehicle registrations would vehicle operators followed the label. that allow for quick recovery of initial systematically undercount the number Using the above information, NHTSA cost. Thus, as a practical matter, the of CNG vehicles because many states do estimated the total cost savings from the revised periodic inspection interval not require fuel type to be noted on the proposed update of the visual would affect virtually only vehicles vehicle registration, and because many inspection label for the CNG heavy with a GVWR greater than 4,536 kg used CNG heavy vehicles are conversions vehicle fleet in the future when all the in commercial fleet operations. after first vehicle purchase. NHTSA CNG heavy vehicles have CNG fuel NHTSA seeks comment on CNG therefore used data from NGVAmerica containers with the proposed visual vehicles, with a GVWR greater than for estimating the fleet size of CNG inspection label (Table 3). The analysis 4,536 kg, that are used in low-mileage heavy vehicles. in Table 3 assumes that the CNG heavy operations and are currently inspected For estimating the annual average vehicle fleet size in the future when all at intervals greater than 12 months. We VMT for heavy vehicles, NHTSA the CNG heavy vehicles would be seek information on the number of such reviewed a published business model 33 equipped with the updated visual vehicles, whether the proposed 12- for heavy vehicle fleet operations that inspection label is the same as the month inspection interval would evaluated the benefit of converting to current CNG medium and heavy duty increase the burden without natural gas fuel over diesel fuel.34 The vehicle fleet size and assumes that all commensurate safety improvements, model took into account that a CNG vehicles will have inspections as and appropriate treatment of these heavy vehicle is on average about directed by the label.

30 Baker, et al., ‘‘Alternative Fuel Vehicle 32 http://www.ngvamerica.org/vehicles/for-fleets/. 34 NHTSA did not use the VMT data in the Forecasts (April 2016),’’ Texas A&M Transportation 33 Dee, Anna Lea, ‘‘What Set of Conditions Would Annual Energy Outlook 2017 (AEO2017) because Institute, https://static.tti.tamu.edu/tti.tamu.edu/ Make the Business Case to Convert Heavy Trucks the agency believes it underestimates the size of the documents/PRC-14-28F.pdf. to Natural Gas?—a Case Study,’’ National Energy CNG heavy vehicle fleet, and it is not consistent 31 U.S. Energy Information Administration, Policy Institute, 2012. This document is available with the results from the business models for CNG Annual Energy Outlook 2017, https://www.eia.gov/ vehicle fleet operations. outlooks/aeo/. in the docket of this NPRM.

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TABLE 3—ESTIMATES OF ANNUAL COST SAVINGS FROM THE PROPOSED UPDATE OF THE VISUAL INSPECTION LABEL FOR CNG HEAVY VEHICLES [Estimates in 2017 dollars and based on the current heavy vehicle fleet size]

Cost of Inspection Low Average High

Cost of Single Inspection (a) ...... $500 $650 $800 Number of CNG Heavy Duty Vehicles (b) ...... 39,500 39,500 39,500 Number of CNG Medium Duty Vehicles (c) ...... 25,800 25,800 25,800 Number of Inspections Reduced Per Year for Heavy Duty Vehicles by the Proposal (d) ...... 2 2 2 Number of Inspections Reduced Per Year for Medium Duty Vehicles by the Proposal (e) ...... 1 1 1 Cost Reduction for Heavy Duty Vehicles, (f) = (a) × (b) × (d) in Millions (M) ...... $39.50 M $51.35 M $63.20 M Cost Reduction for Medium Duty Vehicles, (g) = (a) × (c) × (e) in Millions (M) ...... $12.90 M $16.77 M $20.64 M

Total Cost Saving (f) + (g) in Millions (M) ...... $52.40 M $68.12 M $83.84 M

The potential annual cost savings (in terms of both reduced potential Therefore, we are proposing a because of the reduced number of CNG damage discovery and reduced potential compliance date of one year after the fuel container inspections per year for damage caused by intrusive tank date of publication of the final rule in heavy vehicles ranges between $52.40 teardown inspections). While we the Federal Register, with optional early million to $83.84 million with an received some anecdotal feedback about compliance permitted. We believe one average cost savings of $68.12 million the infrequency with which visual year is sufficient time to make needed when the proposed inspection label is inspections caught potential safety changes to the visual inspection label fully implemented into the fleet, issues, no source could provide us with for CNG fuel containers with no assuming the current CNG heavy comprehensive, substantive data on the additional cost, and that permitting vehicle fleet size remains unchanged. effectiveness of periodic visual early compliance will provide The above analysis is likely a low inspections. Accordingly, the agency manufacturers with flexibility. estimate of the total cost saving because seeks comment and input on CNG projections indicate the annual sale of vehicle incidents in the field, especially VIII. Rulemaking Analyses and Notices CNG heavy vehicles used in commercial regarding the effectiveness of multiple Executive Order 12866, Executive Order annual visual inspections, and the risk fleets will increase from 4,250 in 2015 13563, and DOT Regulatory Policies and 35 36 of damage to CNG tanks as a result of to 68,000 in 2040. NHTSA seeks Procedures comment on the above analysis and the excessive inspection. data used to support the analysis. The agency notes that, since it is not NHTSA has considered the impact of As noted above, given the extremely changing the requirement that all this rulemaking action under Executive low failure rate of CNG containers in the vehicles need a label, it does not believe Orders 12866 and 13563. This action field (19 failures over 33 years), NHTSA that the textual changes to the label was not reviewed by the Office of has tentatively concluded that changing proposed here will lead to any Management and Budget under these the periodic visual inspection interval significant costs associated with executive orders. This NPRM is not of CNG fuel containers on heavy creating and installing the label. NHTSA considered to be significant under the vehicles from ‘‘36 months or 36,000 estimates a de minimis cost impact, as Department of Transportation’s miles, whichever comes first,’’ to an manufacturers would be replacing a regulatory policies and procedures (44 annual inspection would not result in a current label with a new one with FR 11034; Feb. 26, 1979). NHTSA is reduction in safety. NHTSA notes that different wording. The new label may proposing to modify the required label the agency has reached out to multiple need to be slightly larger because of for visual inspection of CNG fuel potential sources of CNG vehicle data, wording changes, and there would be a containers to specify that the container including businesses that use CNG one-time cost of redesigning the label, should be visually inspected for damage but all in all the costs of this rulemaking trucks, businesses that conduct and deterioration after a motor vehicle would be negligible when distributed inspections of CNG trucks, and trade accident or fire, and either (a) at least among all CNG vehicles sold. associations that represent users of CNG every 12 months when installed on a trucks, for information on potential VII. Proposed Compliance Date vehicle with a GVWR greater than 4,536 safety impacts of reduced inspections We believe the proposed change in kg or (b) at least every 36 months or the visual inspection label on CNG fuel 36,000 miles, whichever comes first, 35 Baker, et al., ‘‘Alternative Fuel Vehicle when installed on a vehicle with a Forecasts (April 2016),’’ Texas A&M Transportation containers would alleviate the cost Institute, https://static.tti.tamu.edu/tti.tamu.edu/ burden associated with multiple visual GVWR less than or equal to 4,536 kg. documents/PRC-14-28F.pdf. inspections per year for heavy vehicles Based on an analysis of CNG fuel 36 While NHTSA did not use the AEO2017 data and is supported by CNG fuel container container failures in the field, NHTSA in its cost/benefit analysis due to underreporting of believes this change will not lead to a the current size of the CNG fueled heavy vehicle manufacturers, CNG vehicle fleet, we note that the AEO2017 data estimates an manufacturers and integrators, operators reduction in safety. NHTSA believes increase in the CNG medium and heavy duty of CNG-fueled heavy vehicle fleets, and that the only substantive effect of this vehicle fleet by 2040. According to AEO2017 voluntary standards organizations that proposal would be to eliminate projected estimates, there would be 16,335 CNG 37 unnecessary visual inspections of CNG medium duty vehicles and 74,469 CNG heavy duty are members of NGVAmerica. vehicles in 2040. By contrast, the AEO2017 estimates that in 2015, there were 2,150 CNG 37 Members of NGVAmerica include the CSA containers, manufacturers and integrators of CNG- medium duty vehicles and 22,350 CNG heavy duty group (a standards development organization in fueled vehicles, and CNG vehicle fleet operators. vehicles. North America), manufacturers of CNG fuel http://www.ngvamerica.org/about-us/.

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fuel containers by operators of high- The Small Business Administration’s a standard applicable to the same aspect mileage commercial CNG vehicles. regulations at 13 CFR part 121 define a of performance of a motor vehicle or NHTSA estimates the proposed small business, in part, as a business motor vehicle equipment only if the change would potentially reduce the entity ‘‘which operates primarily within standard is identical to the standard number of visual inspections per year the United States.’’ (13 CFR part prescribed under this chapter.’’ 49 by approximately 2 inspections for 121.105(a)). SBREFA amended the U.S.C. 30103(b)(1). heavy duty CNG vehicles and by Regulatory Flexibility Act to require It is this statutory command by approximately 1 inspection for medium Federal agencies to provide a statement Congress (and not today’s proposed duty CNG vehicles. The agency further of the factual basis for certifying that a rulemaking) that preempts any non- estimates that the elimination of these proposal will not have a significant identical State legislative and visual inspections will result in an economic impact on a substantial administrative law addressing the same average annual cost savings of $68.12 number of small entities. aspect of performance, so consultation million when fully implemented into I certify this NPRM would not have a would be inappropriate. the fleet, assuming the current CNG significant impact on a substantial Second, the Supreme Court has heavy vehicle fleet size remains number of small entities. The changes recognized the possibility, in some unchanged. proposed in this NPRM are entirely instances, of implied preemption of deregulatory; any small operators who State requirements imposed on motor Executive Order 13771 may be affected by this NPRM would vehicle manufacturers, including Executive Order 13771 titled see a reduction in maintenance costs sanctions imposed by State tort law. ‘‘Reducing Regulation and Controlling because of reduced number of CNG fuel That possibility is dependent upon Regulatory Costs,’’ directs that, unless container inspections. there being an actual conflict between a prohibited by law, whenever an FMVSS and the State requirement. If executive department or agency National Environmental Policy Act and when such a conflict exists, the publicly proposes for notice and NHTSA has analyzed this rulemaking Supremacy Clause of the Constitution comment or otherwise promulgates a action for the purposes of the National makes the State requirements new regulation, it shall identify at least Environmental Policy Act (42 U.S.C. unenforceable. See Geier v. American two existing regulations to be repealed. 4321 et seq.), as amended. The agency Honda Motor Co., 529 U.S. 861 (2000), In addition, any new incremental costs has determined that implementation of finding implied preemption of state tort associated with new regulations shall, to this action will not have an adverse law on the basis of a conflict discerned the extent permitted by law, be offset by impact on the quality of the human by the court,38 not on the basis of an the elimination of existing costs. Only environment. The modification in the intent to preempt asserted by the agency those rules deemed significant under visual inspection label for CNG fuel itself. section 3(f) of Executive Order 12866, containers would have the consequence NHTSA has considered, pursuant to ‘‘Regulatory Planning and Review,’’ are of reducing the annual inspection costs Executive Orders 13132 and 12988, subject to these requirements. As for CNG heavy vehicle owners and whether the proposals of this NPRM discussed below, this rule is not a operators, which would make them could or should preempt State common significant rule under Executive Order more cost-effective in fleet operations law causes of action. To this end, the 12866 and, accordingly, is not subject to and incentivize their purchase by fleet agency has examined the nature (e.g., the offset requirements of 13771. operators. the language and structure of the NHTSA has determined that this regulatory text) and objectives of this NPRM is a deregulatory action under Executive Order 13132 (Federalism) proposal and finds that this NPRM is E.O. 13771, as it imposes no costs on NHTSA has examined today’s NPRM not intended to preempt State tort law manufacturers of CNG fuel containers, pursuant to Executive Order 13132 (64 that effectively imposes a higher who must already meet the current FR 43255; Aug. 10, 1999) and concluded standard on regulated entities than that visual inspection labeling requirement, that no additional consultation with would be established by today’s and it proposes changes to FMVSS No. States, local governments, or their proposed rule. The change proposed in 304 that would have the effect of representatives is mandated beyond the this NPRM amends a labeling reducing the cost burden of multiple rulemaking process. The agency has requirement that applies to newly visual inspections of CNG fuel concluded the proposal does not have manufactured CNG fuel containers; it containers on heavy vehicles without sufficient federalism implications to does not to conflict with the any loss in safety, as described above. warrant consultation with State and establishment of a higher standard of local officials or the preparation of a safety by means of State tort law that Regulatory Flexibility Act federalism summary impact statement. applies to the same subject matter (i.e., Pursuant to the Regulatory Flexibility The proposal does not have ‘‘substantial adequate labeling of CNG fuel Act (5 U.S.C. 601 et seq., as amended by direct effects on the States, on the containers). Without any conflict, there the Small Business Regulatory relationship between the national could not be any implied preemption of Enforcement Fairness Act (SBREFA) of government and the States, or on the state law, including state tort law. 1996), whenever an agency is required distribution of power and Executive Order 12988 (Civil Justice to publish a notice of proposed responsibilities among the various Reform) rulemaking, it must prepare and make levels of government.’’ available for public comment a NHTSA rules can have preemptive With respect to the review of the regulatory flexibility analysis that effect in two ways. First, the National promulgation of a new regulation, describes the effect of the rule on small Traffic and Motor Vehicle Safety Act section 3(b) of Executive Order 12988, entities (i.e., small businesses, small contains an express preemption ‘‘Civil Justice Reform’’ (61 FR 4729; Feb. organizations, and small governmental provision: jurisdictions) unless the head of an ‘‘When a motor vehicle safety 38 The conflict was discerned based upon the nature (e.g., the language and structure of the agency certifies the proposal will not standard is in effect under this chapter, regulatory text) and the safety-related objectives of have a significant economic impact on a State or a political subdivision of a FMVSS requirements in question and the impact of a substantial number of small entities. State may prescribe or continue in effect the State requirements on those objectives.

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7, 1996), requires Executive agencies bodies, such as the SAE International. regulatory cooperation can identify make every reasonable effort to ensure The NTTAA directs us to provide approaches that are at least as protective the regulation: (1) Clearly specifies the Congress (through OMB) with as those that are or would be adopted in preemptive effect; (2) clearly specifies explanations when the agency decides the absence of such cooperation. the effect on existing Federal law or not to use available and applicable International regulatory cooperation can regulation; (3) provides a clear legal voluntary consensus standards. also reduce, eliminate, or prevent standard for affected conduct, while FMVSS No. 304 has historically unnecessary differences in regulatory promoting simplification and burden drawn largely from ANSI NGV 2, and requirements. reduction; (4) clearly specifies the the proposed changes in this NPRM to The European regulation for CNG retroactive effect, if any; (5) specifies the visual inspection label were made in vehicles, ECE R.110, ‘‘I. Specific whether administrative proceedings are accordance with data provided by components of motor vehicles using to be required before parties file suit in NGVAmerica and ATA and the compressed natural gas (CNG) and/or court; (6) adequately defines key terms; recommendations developed by liquefied natural gas (LNG) in their and (7) addresses other important issues industry technical working groups.39 propulsion system,’’ 40 requires a affecting clarity and general Unfunded Mandates Reform Act detailed visual inspection of CNG fuel draftsmanship under any guidelines containers on vehicles at least every 48 issued by the Attorney General. This The Unfunded Mandates Reform Act months and after an accident or fire. document is consistent with that of 1995 (UMRA) requires Federal However, the working pressure of CNG requirement. agencies to prepare a written assessment fuel containers in Europe is 20 Pursuant to this Order, NHTSA notes of the costs, benefits and other effects of Megapascals (MPa) (3,000 pounds per as follows. The issue of preemption is proposed or final rules that include a square inch (psi)), while that in the U.S. discussed above. NHTSA notes further Federal mandate likely to result in the is typically 26 MPa (3,600 psi). The there is no requirement that individuals expenditure by State, local or tribal higher container pressure in the U.S. submit a petition for reconsideration or governments, in the aggregate, or by the necessitates more frequent visual pursue other administrative proceedings private sector, of more than $100 inspections than that conducted in before they may file suit in court. million annually (adjusted annually for Europe. Therefore, NHTSA did not inflation, with base year of 1995). consider harmonizing with ECE R.110. Privacy Act UMRA also requires an agency issuing All submissions, including public an NPRM or final rule subject to the Act Regulation Identifier Number comments on this NPRM, will be placed to select the ‘‘least costly, most cost- The Department of Transportation in the docket. Anyone is able to search effective or least burdensome alternative assigns a regulation identifier number the electronic form of all documents that achieves the objectives of the rule.’’ (RIN) to each regulatory action listed in received into any of our dockets by the This NPRM would not result in a the Unified Agenda of Federal name of the individual submitting the Federal mandate that will likely result Regulations. The Regulatory Information document (or signing the document, if in the expenditure by State, local or Service Center publishes the Unified submitted on behalf of an association, tribal governments, in the aggregate, or Agenda in April and October of each business, labor union, etc.). You may by the private sector, of more than $100 year. You may use the RIN contained in review DOT’s complete Privacy Act million annually (adjusted annually for the heading at the beginning of this Statement in the Federal Register inflation, with base year of 1995). document to find this action in the published on April 11, 2000 (Volume Executive Order 13609 (Promoting Unified Agenda. 65, Number 70; Pages 19477–78). Regulatory Cooperation) Plain Language Paperwork Reduction Act The policy statement in section 1 of Executive Order 12866 requires each Executive Order 13609 provides, in part: Under the Paperwork Reduction Act agency to write all rules in plain the regulatory approaches taken by of 1995 (PRA), a person is not required language. Application of the principles foreign governments may differ from to respond to a collection of information of plain language includes consideration by a Federal agency unless the those taken by U.S. regulatory agencies to address similar issues. In some cases, of the following questions: collection displays a valid OMB control • Have we organized the material to number. There are no information differences between the regulatory approaches of U.S. agencies and those of suit the public’s needs? collection requirements associated with • Are the requirements in the rule their foreign counterparts might not be this NPRM. clearly stated? necessary and might impair the ability • Does the rule contain technical National Technology Transfer and of American businesses to export and language or jargon that isn’t clear? Advancement Act compete internationally. In meeting • Would a different format (grouping shared challenges involving health, Section 12(d) of the National and order of sections, use of headings, safety, labor, security, environmental, Technology Transfer and Advancement paragraphing) make the rule easier to and other issues, international Act of 1995 (NTTAA), Public Law 104– understand? 113, as amended by Public Law 107–107 • Would more (but shorter) sections (15 U.S.C. 272 note), directs the agency 39 The NGVAmerica Technology & Development Committee’s Guidance on Fuel System Inspection be better? to evaluate and use voluntary consensus published in November 2017 specifies annual • Could we improve clarity by adding standards in its regulatory activities visual inspection for CNG fuel containers on heavy tables, lists, or diagrams? unless doing so would be inconsistent vehicles as a practical approach to inspection and • What else could we do to make the with applicable law or is otherwise maintenance of the fuel container and fuel system which would match intervals and procedures with rule easier to understand? impractical. Voluntary consensus other vehicle maintenance tasks, such as engine oil If you have any responses to these standards are technical standards (e.g., and filter changes, that are conducted on an annual questions, please write to us with your materials specifications, test methods, basis per FMCSR 396.17. The CSA group, which views. sampling procedures, and business maintains NGV 2, is considering modifying the inspection interval in NGV 2 to an annual practices) that are developed or adopted inspection following the NGVAmerica Technology 40 http://www.unece.org/fileadmin/DAM/trans/ by voluntary consensus standards &Development Committee’s Guidance document. main/wp29/wp29regs/2015/R110r3e.pdf.

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IX. Public Participation www.regulations.gov/docs/Tips_For_ periodically check the Docket for new Submitting_Effective_Comments.pdf. material. You can arrange with the How do I prepare and submit docket to be notified when others file comments? How can I be sure that my comments comments in the docket. See were received? • To ensure that your comments are www.regulations.gov for more correctly filed in the Docket, please If you wish Docket Management to information. include the Docket Number found in the notify you upon its receipt of your heading of this document in your comments, enclose a self-addressed, List of Subjects in 49 CFR Part 571 comments. stamped postcard in the envelope Imports, motor vehicles, motor • Your comments must not be more containing your comments. Upon vehicle safety. 41 than 15 pages long. NHTSA receiving your comments, Docket In consideration of the foregoing, established this limit to encourage you Management will return the postcard by NHTSA proposes to amend 49 CFR part to write your primary comments in a mail. 571 as follows: concise fashion. However, you may How do I submit confidential business attach necessary additional documents PART 571—FEDERAL MOTOR information? to your comments, and there is no limit VEHICLE SAFETY STANDARDS on the length of the attachments. If you wish to submit any information • If you are submitting comments under a claim of confidentiality, you ■ 1. The authority citation for part 571 electronically as a PDF (Adobe) file, should submit three copies of your continues to read as follows: NHTSA asks that the documents be complete submission, including the Authority: 49 U.S.C. 322, 30111, 30115, submitted using the Optical Character information you claim to be confidential 30117, and 30166; delegation of authority at Recognition (OCR) process, thus business information, to the Chief 49 CFR 1.95. allowing NHTSA to search and copy Counsel, NHTSA, at the address given ■ 2. In § 571.304, revise paragraph certain portions of your submissions. above under FOR FURTHER INFORMATION • S7.4(g) to read as follows. Please note that pursuant to the CONTACT. In addition, you should Data Quality Act, in order for submit a copy, from which you have § 571.304 Standard No. 304; Compressed substantive data to be relied on and deleted the claimed confidential natural gas fuel container integrity. used by NHTSA, it must meet the business information, to the docket at * * * * * information quality standards set forth the address given above under S7.4 * * * in the OMB and DOT Data Quality Act ADDRESSES. When you send a comment (g) The statement: ‘‘This container guidelines. Accordingly, NHTSA containing information claimed to be should be visually inspected for damage encourages you to consult the confidential business information, you and deterioration after a motor vehicle guidelines in preparing your comments. should include a cover letter setting accident or fire, and either (a) at least DOT’s guidelines may be accessed at forth the information specified in our every 12 months when installed on a https://www.transportation.gov/ confidential business information vehicle with a GVWR greater than 4,536 regulations/dot-information- regulation. (49 CFR part 512) kg or (b) at least every 36 months or dissemination-quality-guidelines. Will the agency consider late 36,000 miles, whichever comes first, Tips for Preparing Your Comments comments? when installed on a vehicle with a GVWR less than or equal to 4,536 kg.’’ When submitting comments, please We will consider all comments * * * * * remember to: received before the close of business on • Identify the rulemaking by docket the comment closing date indicated Issued in Washington, DC, under authority number and other identifying above under DATES. To the extent delegated in 49 CFR 1.95 and 501.5. information (subject heading, Federal possible, we will also consider Heidi Renate King, Register date and page number). Deputy Administrator. • Explain why you agree or disagree, comments that the docket receives after suggest alternatives, and substitute that date. If the docket receives a The following appendix will not language for your requested changes. comment too late for us to consider in appear in the Code of Federal • Describe any assumptions you make developing a final rule (assuming that Regulations. and provide any technical information one is issued), we will consider that X. Appendix to the Preamble: and/or data that you used. comment as an informal suggestion for Regulatory History of the CNG Visual • If you estimate potential costs or future rulemaking action. Inspection Label Requirement burdens, explain how you arrived at How can I read the comments submitted NHTSA first proposed a visual inspection your estimate in sufficient detail to by other people? allow for it to be reproduced. label requirement for CNG fuel containers in • Provide specific examples to You may read the comments received a Supplemental Notice of Proposed by the docket at the address given above Rulemaking (SNPRM) on December 19, illustrate your concerns, and suggest 1994.42 The original language proposed for alternatives. under ADDRESSES. The hours of the • the visual inspection label stated that a CNG Explain your views as clearly as docket are indicated above in the same fuel container should be periodically possible, avoiding the use of profanity location. You may also see the inspected at least every 36 months but did or personal threats. comments on the internet. To read the not include a mileage requirement, which • To ensure that your comments are comments on the internet, go to http:// was consistent with American National considered by the agency, make sure to www.regulations.gov. Follow the online Standards Institute (ANSI) Natural Gas submit them by the comment period instructions for accessing the dockets. Vehicle (NGV) guidelines at that time.43 deadline identified in the DATES section Please note that even after the above. comment closing date, we will continue 42 59 FR 65299, December 19, 1994. For additional guidance on submitting to file relevant information in the docket 43 ANSI NGV 2—Compressed Natural Gas Vehicle Fuel Containers. Section 2.1.3 Periodic In-Service effective comments, visit: https:// as it becomes available. Further, some Inspection states, ‘‘Each container shall be visually people may submit late comments. inspected at least every 36 months, or at the time 41 49 CFR 553.21. Accordingly, we recommend that you Continued

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NHTSA received several comments in fuel container should be visually inspected explained in the September 6, 1996 final rule response to the SNPRM, which the agency for damage and deterioration at least every 12 that while visual inspection of a CNG fuel incorporated into its November 24, 1995 final months or 12,000 miles, whichever comes container may detect some conditions that rule establishing the visual inspection label first. indicate a potential failure, the Agency 44 requirement. First, in response to After issuing the November 24, 1995 final agreed with the petitioners that a 12-month comments by Navistar and a 1994 rule, NHTSA received several petitions for or 12,000 mile inspection interval would be publication by the Natural Gas Vehicle reconsideration requesting that the CNG fuel excessive. Moreover, the Agency noted that Coalition entitled ‘‘Natural Gas Vehicle container inspection interval on the CNG fuel Inspection Program,’’ the agency lowered the container label be changed to every 36 a 12-month inspection interval would not time interval on the inspection label to 12 months instead of every 12 months. The have prevented two publicized CNG fuel months. This change was intended to reduce petitioners argued that a 36-month time container failures because they were caused the possibility that damage caused by interval for visual inspections harmonized by stress corrosion cracking which is internal external factors would go undetected and with draft international standards, and to the container and therefore would not lead to container failure. In addition, in moreover that field data suggested that an have been identifiable during a visual response to comments by Ford, the final rule annual visual inspection time interval would inspection of the container’s exterior. The included a mileage interval in addition to a not have prevented any known container agency also explained that a time interval of time interval because mileage exposure could failures. The petitioners also expressed 36 months was consistent with industry and also be a factor in leading to premature concern about the additional cost of annual voluntary international standards.46 container failure due to exterior damage. We inspections and the increased risk of NHTSA has not amended the statement on explained in the final rule that we selected container damage due to frequent inspections the visual inspection label required under a 12-month or 12,000-mile interval because it that require disassembly and assembly of S7.4(g) since the September 6, 1996 final was consistent with the recommended components. interval for many motor vehicle warranties In response to these petitions, the visual rule. and routine maintenance items. As a result inspection label was amended in a final rule [FR Doc. 2019–12895 Filed 6–20–19; 8:45 am] of these changes, the final rule required that issued on September 6, 1996, which changed BILLING CODE 4910–59–P the visual inspection label state that CNG the label’s visual inspection statement to the current interval of ‘‘36 months or 36,000 46 Specifically, the redrafted the Natural Gas 45 of any re-installation, for external damage and miles, whichever comes first.’’ NHTSA Vehicle Coalition (NGVC) voluntary standard and deterioration.’’ the draft International Standards Organization (ISO) 44 45 60 FR 57943. 61 FR 47086, September 6, 1996 final rule. standard for CNG cylinder inspection.

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Notices Federal Register Vol. 84, No. 120

Friday, June 21, 2019

This section of the FEDERAL REGISTER holidays. To be sure someone is there to APHIS, HIOs must maintain an contains documents other than rules or help you, please call (202) 799–7039 acceptable DQP program and proposed rules that are applicable to the before coming. recordkeeping systems. Managers and public. Notices of hearings and investigations, FOR FURTHER INFORMATION CONTACT: For operators of HPA-regulated events may committee meetings, agency decisions and appoint and retain the services of DQPs rulings, delegations of authority, filing of information on the Horse Protection Act petitions and applications and agency regulations, contact Dr. Kay Carter- to inspect and detect a horse that is sore statements of organization and functions are Corker, Director, National Policy Staff, or otherwise noncompliant with the examples of documents appearing in this Animal Care, APHIS, 4700 River Road, HPA, and both managers and DQPs are section. Unit 84, Riverdale, MD 20737; (301) required to provide and/or maintain 851–3748. For more detailed certain information. Persons who own, information on the information train, show, exhibit, sell, transport, or DEPARTMENT OF AGRICULTURE collection, contact Ms. Kimberly Hardy, otherwise have custody of, or direction APHIS’ Information Collection or control over any horse shown, Animal and Plant Health Inspection Coordinator, at (301) 851–2483. exhibited, sold, or auctioned or entered Service SUPPLEMENTARY INFORMATION: for the purpose of being shown, [Docket No. APHIS–2019–0029] Title: Horse Protection Regulations. exhibited, sold, or auctioned at any OMB Control Number: 0579–0056. horse show, horse exhibition, or horse Notice of Request for Revision to and Type of Request: Revision to and sale or auction must also satisfy and Extension of Approval of an extension of approval of an information abide by the requirements of the HPA Information Collection; Horse collection. and regulations. Protection Regulations Abstract: In 1970, Congress passed the APHIS works with HIOs on an Horse Protection Act (HPA, 15 U.S.C. ongoing basis to oversee their AGENCY: Animal and Plant Health 1821 et seq.), which was enacted to performance under the HPA. Inspection Service, USDA. prevent showing, exhibiting, selling, or Throughout the year, APHIS uses ACTION: Revision to and extension of auctioning of ‘‘sore’’ horses, and certain training sessions, conference calls, and approval of an information collection; transportation of sore horses in open letters to HIOs, event managers, comment request. connection therewith, at horse shows, exhibitors, owners, trainers, custodians, horse exhibitions, horse sales, and horse and farriers involved in HPA-covered SUMMARY: In accordance with the auctions. Soring is a process whereby activities to provide communication and Paperwork Reduction Act of 1995, this chemical or mechanical agents, or a feedback to address issues and notice announces the Animal and Plant combination thereof, are applied to the strengthen enforcement under the Act. Health Inspection Service’s intention to limbs of a horse in order to exaggerate Data collected throughout the year from request a revision to and extension of its gait. A ‘‘sore’’ horse is one that has within APHIS and from the HIOs and approval of an information collection been subjected to prohibited practices event management provide an account associated with the Horse Protection and, as a result, suffers, or can of the HIOs’ performance and progress Program and enforcement of the Horse reasonably be expected to suffer, toward eliminating the soring of horses Protection Act. physical pain or distress, inflammation, and promoting fair competition. HIOs, DATES: We will consider all comments or lameness when walking, trotting or through their certified licensing that we receive on or before August 20, otherwise moving. A horse that is programs for DQPs, provide the primary 2019. ‘‘sore’’ is prohibited from entering or means of detecting sored horses. ADDRESSES: You may submit comments participating in HPA-regulated events We are asking the Office of by either of the following methods: because exhibitors, owners, and trainers Management and Budget (OMB) to • Federal eRulemaking Portal: Go to of such horse may obtain unfair approve our use of these information http://www.regulations.gov/ advantage over individuals exhibiting collection activities, as described, for an #!docketDetail;D=APHIS-2019-0029. horses that are not ‘‘sore.’’ additional 3 years. • Postal Mail/Commercial Delivery: To carry out the Act, the Animal and The purpose of this notice is to solicit Send your comment to Docket No. Plant Health Inspection Service (APHIS) comments from the public (as well as APHIS–2019–0029, Regulatory Analysis of the U.S. Department of Agriculture affected agencies) concerning our and Development, PPD, APHIS, Station (USDA) administers and enforces the information collection. These comments 3A–03.8, 4700 River Road, Unit 118, regulations in 9 CFR part 11. Part 11 will help us: Riverdale, MD 20737–1238. delineates the responsibilities of horse (1) Evaluate whether the collection of Supporting documents and any industry organizations (HIOs), information is necessary for the proper comments we receive on this docket designated qualified persons (DQPs), performance of the functions of the may be viewed at http:// management of regulated horse events, Agency, including whether the www.regulations.gov/ and persons who have control over information will have practical utility; #!docketDetail;D=APHIS-2019-0029 or regulated horses. (2) Evaluate the accuracy of our in our reading room, which is located in An HIO wishing to certify a program estimate of the burden of the collection Room 1141 of the USDA South to license DQPs to inspect horses for of information, including the validity of Building, 14th Street and Independence compliance under the HPA must satisfy the methodology and assumptions used; Avenue SW, Washington, DC. Normal and abide by the requirements of the (3) Enhance the quality, utility, and reading room hours are 8 a.m. to 4:30 HPA and regulations. After requesting clarity of the information to be p.m., Monday through Friday, except and receiving USDA certification from collected; and

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(4) Minimize the burden of the SUPPLEMENTARY INFORMATION: Members DEPARTMENT OF COMMERCE collection of information on those who of the public can listen to the are to respond, through use, as discussion. This meeting is available to Foreign-Trade Zones Board appropriate, of automated, electronic, the public through the above listed toll mechanical, and other collection free number. An open comment period [Order No. 2084] technologies; e.g., permitting electronic will be provided to allow members of submission of responses. the public to make a statement as time Reorganization of Foreign-Trade Zone Estimate of burden: The public allows. The conference call operator 16 Under Alternative Site Framework burden for this collection of information will ask callers to identify themselves, Sault Ste. Marie, Michigan is estimated to average 0.09 hours per the organization they are affiliated with response. (if any), and an email address prior to Pursuant to its authority under the Foreign- Respondents: Horse custodians, event placing callers into the conference Trade Zones Act of June 18, 1934, as managers, HIOs, and DQPs. room. Callers can expect to incur regular amended (19 U.S.C. 81a–81u), the Foreign- Estimated annual number of charges for calls they initiate over Trade Zones Board (the Board) adopts the respondents: 2,004. wireless lines, according to their following Order: Estimated annual number of wireless plan. The Commission will not Whereas, the Foreign-Trade Zones responses per respondent: 19. refund any incurred charges. Callers Estimated annual number of (FTZ) Act provides for ‘‘. . . the will incur no charge for calls they establishment . . . of foreign-trade responses: 37,136. initiate over land-line connections to Estimated total annual burden on zones in ports of entry of the United the toll-free telephone number. Persons respondents: 3,374 hours. (Due to States, to expedite and encourage with hearing impairments may also averaging, the total annual burden hours foreign commerce, and for other follow the proceedings by first calling may not equal the product of the annual purposes,’’ and authorizes the Board to the Federal Relay Service at 1–800–877– number of responses multiplied by the grant to qualified corporations the 8339 and providing the Service with the reporting burden per response.) privilege of establishing foreign-trade All responses to this notice will be conference call number and conference zones in or adjacent to U.S. Customs summarized and included in the request ID number. and Border Protection ports of entry; Members of the public are also for OMB approval. All comments will entitled to submit written comments; Whereas, the Board adopted the also become a matter of public record. the comments must be received in the alternative site framework (ASF) (15 Done in Washington, DC, this 17th day of regional office within 30 days following CFR Sec. 400.2(c)) as an option for the June 2019. the meeting. Written comments may be establishment or reorganization of Kevin Shea, mailed to the Regional Programs Unit zones; Administrator, Animal and Plant Health Office, U.S. Commission on Civil Rights, Whereas, the Sault Ste. Marie Inspection Service. 230 S Dearborn, Suite 2120, Chicago, IL Economic Development Corporation, [FR Doc. 2019–13149 Filed 6–20–19; 8:45 am] 60604. They may also be faxed to the grantee of Foreign-Trade Zone 16, BILLING CODE 3410–34–P Commission at (312) 353–8324, or submitted an application to the Board emailed to Carolyn Allen at callen@ (FTZ Docket B–4–2019, docketed usccr.gov. Persons who desire February 11, 2019) for authority to COMMISSION ON CIVIL RIGHTS additional information may contact the reorganize under the ASF with a service Regional Programs Unit Office at (312) area of Chippewa County, Michigan, in Notice of Public Meeting of the Georgia 353–8311. and adjacent to the Sault Ste. Marie Advisory Committee to the U.S. Records generated from this meeting Customs and Border Protection port of Commission on Civil Rights may be inspected and reproduced at the entry, and FTZ 16’s existing Site 1 AGENCY: U.S. Commission on Civil Regional Programs Unit Office, as they would be categorized as a magnet site; Rights. become available, both before and after Whereas, notice inviting public the meeting. Records of the meeting will ACTION: Announcement of meeting. comment was given in the Federal be available via www.facadatabase.gov Register (84 FR 4767, February 19, SUMMARY: Notice is hereby given, under the Commission on Civil Rights, 2019) and the application has been pursuant to the provisions of the rules Georgia Advisory Committee link. processed pursuant to the FTZ Act and and regulations of the U.S. Commission Persons interested in the work of this the Board’s regulations; and, on Civil Rights (Commission) and the Committee are also directed to the Whereas, the Board adopts the Federal Advisory Committee Act that Commission’s website, http:// findings and recommendations of the the Georgia Advisory Committee www.usccr.gov, or may contact the examiner’s report, and finds that the (Committee) will hold a meeting via Regional Programs Unit office at the requirements of the FTZ Act and the teleconference on Thursday July 11, above email or street address. Board’s regulations are satisfied; 2019, at 1:00 p.m. EDT for the purpose Agenda of reviewing/finalizing their draft report Now, therefore, the Board hereby regarding Civil Rights and The Welcome and Roll Call orders: Olmstead Act (Disability Rights). Discussion Civil Rights in Georgia: The Olmstead The application to reorganize FTZ 16 DATES: The meeting will be held on Act (Disability Rights) under the ASF is approved, subject to Thursday July 11, 2019, at 1:00 p.m. Public Comment the FTZ Act and the Board’s regulations, EDT. Adjournment including Section 400.13, to the Board’s Public Call Information: Dial: 877– standard 2,000-acre activation limit for 260–1479, Conference ID: 7297000. Dated: June 18, 2019. the zone, and to an ASF sunset FOR FURTHER INFORMATION CONTACT: David Mussatt, provision for magnet sites that would Melissa Wojnaroski, DFO, at Supervisory Chief, Regional Programs Unit. terminate authority for Site 1 if not [email protected] or 312–353– [FR Doc. 2019–13278 Filed 6–20–19; 8:45 am] activated within five years from the 8311. BILLING CODE 6335–01–P month of approval.

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Dated: June 11, 2019. countervailable subsidies are being 2019.3 If the new deadline falls on a Jeffrey I. Kessler, provided to producers and exporters of non-business day, in accordance with Assistant Secretary for Enforcement and steel propane cylinders from the Commerce’s practice, the deadline will Compliance Alternate Chairman, Foreign- People’s Republic of China (China). become the next business day. The Trade Zones Board. DATES: Applicable June 21, 2019. revised deadline for the final [FR Doc. 2019–13124 Filed 6–20–19; 8:45 am] FOR FURTHER INFORMATION CONTACT: determination of this investigation is BILLING CODE 3510–DS–P Samuel Brummitt, AD/CVD Operations, now June 17, 2019. Office III, Enforcement and Compliance, Period of Investigation International Trade Administration, DEPARTMENT OF COMMERCE U.S. Department of Commerce, 1401 The period of investigation is January 1, 2017 through December 31, 2017. International Trade Administration Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–7851. Scope of the Investigation Initiation of Five-Year (Sunset) SUPPLEMENTARY INFORMATION: The merchandise covered by this Reviews; Correction Background investigation is steel propane cylinders AGENCY: Enforcement and Compliance, On October 26, 2018, Commerce from China. For a complete description International Trade Administration, published the Preliminary of the scope of this investigation, see Department of Commerce. Determination.1 In the Preliminary Appendix I of this notice. SUMMARY: On June 4, 2019, the Determination, Commerce aligned the Scope Comments Department of Commerce (Commerce) final determination in this During the course of this investigation published the Initiation of Five-Year countervailing duty investigation with and the concurrent less-than-fair-value (‘‘Sunset’’) Reviews (June 4, 2019), in the final determination in the investigations, Commerce received which Commerce inadvertently omitted companion less-than-fair-value scope comments from interested parties. Oil Country Tubular Goods from investigation, in accordance with Certain interested parties commented on Vietnam (A–552–817) from the list of section 705(a)(1) of the Tariff Act of the scope of the investigation as it cases that initiate June 2019. This notice 1930, as amended (the Act), and 19 CFR appeared in the Preliminary Scope serves to correct the June 2019 Initiation 351.210(b)(4). A complete summary of Decision Memorandum,4 which was of Five-Year (‘‘Sunset’’) Reviews Sunset the events that occurred since issued concurrently with the Notice for the aforementioned item. Commerce published the Preliminary Determination, as well as a full Preliminary Determination. We did not DATES: Applicable (June 1, 2019). receive any scope comments after the FOR FURTHER INFORMATION CONTACT: discussion of the issues raised by parties for this final determination, may be Preliminary Scope Decision Brenda E. Brown, Office of AD/CVD Memorandum; therefore, the Operations, Customs and Liaison Unit, found in the Issues and Decision 2 preliminary scope determination Enforcement and Compliance, Memorandum. The Issues and Decision remains unchanged in the final International Trade Administration, determination. U.S. Department of Commerce, 1401 Memorandum is a public document and Constitution Avenue NW, Washington is available electronically via Verification Enforcement and Compliance’s DC 20230; telephone: (202) 482–4735. As provided in section 782(i) of the Antidumping and Countervailing Duty SUPPLEMENTARY INFORMATION: This Act, Commerce verified the subsidy Centralized Electronic Service System correction notice for the advance information reported by the Government (ACCESS). ACCESS is available to notification of sunset reviews is being of China (GOC) and Shandong Huanri registered users at https:// published in accordance with section Group Co. Ltd. (Huanri) for use in our access.trade.gov and to all parties in the 751(c) of the Act and 19 CFR 351.218 final determination. We used standard Central Records Unit, Room B–8024 of (c). verification procedures, including an Commerce’s main building. In addition, examination of relevant accounting Dated: June 17, 2019. a complete version of the Issues and records and original source documents James Maeder, Decision Memorandum can be accessed provided by the respondents. Acting Deputy Assistant Secretary for at http://enforcement.trade.gov/frn/. Antidumping and Countervailing Duty The signed Issues and Decision Analysis of Subsidy Programs and Operations. Memorandum and electronic version are Comments Received [FR Doc. 2019–13254 Filed 6–20–19; 8:45 am] identical in content. All issues raised in the case briefs and BILLING CODE 3510–DS–P Commerce exercised its discretion to rebuttal briefs submitted by interested toll all deadlines affected by the partial parties in this proceeding are discussed federal government closure from in the Issues and Decision DEPARTMENT OF COMMERCE December 22, 2018, through the resumption of operations on January 29, International Trade Administration 3 See Memorandum to the Record from Gary Taverman, Deputy Assistant Secretary for [C–570–087] 1 See Steel Propane Cylinders From the People’s Antidumping and Countervailing Duty Operations, Republic of China: Preliminary Affirmative performing the non-exclusive functions and duties Steel Propane Cylinders From the Countervailing Duty Determination and Alignment of the Assistant Secretary for Enforcement and of Final Determination With Final Antidumping Compliance, ‘‘Deadlines Affected by the Partial People’s Republic of China: Final Duty Determination, 83 FR 54086 (October 26, Shutdown of the Federal Government,’’ dated Affirmative Countervailing Duty 2018) (Preliminary Determination), and January 28, 2019. All deadlines in this segment of Determination accompanying Preliminary Decision Memorandum. the proceeding have been extended by 40 days. 2 See Memorandum, ‘‘Issues and Decision 4 See Memorandum, ‘‘Steel Propane Cylinders AGENCY: Enforcement and Compliance, Memorandum for the Final Affirmative from the People’s Republic of China (China) and International Trade Administration, Determination of the Countervailing Duty Thailand: Scope Decision Memorandum for the Department of Commerce. Investigation of Steel Propane Cylinders from the Preliminary Antidumping Duty (AD) and People’s Republic of China,’’ dated concurrently Countervailing Duty (CVD) Determinations,’’ dated SUMMARY: The Department of Commerce with, and hereby adopted by, this notice (Issues and December 18, 2018 (Preliminary Scope (Commerce) determines that Decision Memorandum). Memorandum).

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Memorandum. A list of the issues raised purposes of this final determination, we purposes for subject merchandise by parties and responded to by continue to assign the non-cooperating entered, or withdrawn from warehouse, Commerce are in the Issues and companies a rate based entirely on AFA. on or after February 23, 2019, but to Decision Memorandum, attached at Section 705(c)(5)(A) of the Act continue the suspension of liquidation Appendix II. provides that in the final determination, of all entries from October 26, 2018 Commerce shall determine an estimated Preliminary through February 22, 2019. Changes Since the If the U.S. International Trade Determination all-others rate for companies not individually examined. This rate shall Commission (ITC) issues a final Based on our analysis of the be an amount equal to the weighted affirmative injury determination, we comments received from the interested average of the countervailable subsidy will issue a countervailing duty order, parties and our findings at verification, rates established for those companies will reinstate the suspension of we made certain changes to the individually examined, excluding any liquidation under section 706(a) of the respondents’ subsidy rate calculations zero and de minimis rates and any rates Act, and will require a cash deposit of since the Preliminary Determination. based entirely under section 776 of the estimated countervailing duties for such For a discussion of these changes, see Act. Huanri is the only respondent for entries of subject merchandise in the the Issues and Decision Memorandum. which Commerce calculated a weighted- amounts indicated above. If the ITC Methodology average countervailable subsidy rate determines that material injury, or that is not zero, de minimis, or based threat of material injury, does not exist, Commerce conducted this entirely on facts otherwise available. this proceeding will be terminated, and investigation in accordance with section Therefore, for purposes of determining all estimated duties deposited or 701 of the Act. For each of the subsidy the ‘‘all-others’’ rate, and pursuant to securities posted as a result of the programs found countervailable, section 705(c)(5)(A) of the Act, we are suspension of liquidation will be Commerce determines that there is a using the subsidy rate calculated for refunded or canceled. subsidy, i.e., a financial contribution by Huanri. an ‘‘authority’’ that gives rise to a International Trade Commission Commerce determines the total benefit to the recipient, and that the Notification estimated net countervailable subsidy subsidy is specific.5 In making these rates to be the following: In accordance with section 705(d) of findings, Commerce relied, in part, on the Act, we will notify the ITC of our facts otherwise available and, because it Subsidy final affirmative determination that finds that one or more respondents did Company rate countervailable subsidies are being not act to the best of their ability to (percent) provided to producers and exporters of respond to Commerce’s requests for steel propane cylinders from China. information, Commerce drew an adverse Guangzhou Lion Cylinders Co. Because the final determination in this inference where appropriate in selecting Ltd ...... 142.37 proceeding is affirmative, in accordance Hubei Daly LPG Cylinder Manu- from among the facts otherwise with section 705(b) of the Act, the ITC 6 facturer Co. Ltd ...... 142.37 available. For a full description of the Shandong Huanri Group Co. Ltd 37.91 will make its final determination as to methodology underlying our final Taishan Machinery Factory Ltd .. 142.37 whether the domestic industry in the determination, see the Issues and TPA Metals and Machinery (SZ) United States is materially injured, or Decision Memorandum. Co. Ltd ...... 142.37 threatened with material injury, by Wuyi Xilinde Machinery Manu- Final Determination reason of imports, or sales (or the facture Co., Ltd ...... 142.37 likelihood of sales) for importation of In accordance with section Zhejiang Jucheng Steel Cylinder steel propane cylinders from China no 705(c)(l)(B)(i)(I) of the Act, we Co., Ltd ...... 142.37 later than 45 days after this final All Others ...... 37.91 calculated a rate for Huanri, a producer/ determination. If the ITC determines exporter of subject merchandise selected that material injury or threat of material for individual examination in this Disclosure injury does not exist, the proceeding investigation. With regard to TPA We will disclose the calculations will be terminated, and all cash deposits Metals and Machinery (SZ) Co. Ltd., an performed within five days of public will be refunded. If the ITC determines additional producer/exporter selected announcement of this notice in that such injury does exist, Commerce for individual examination, as well as accordance with 19 CFR 351.224(b). will issue a countervailing duty order Guangzhou Lion Cylinders Co. Ltd.; Suspension of Liquidation directing CBP to assess, upon further Hubei Daly LPG Cylinder Manufacturer instruction by Commerce, Co. Ltd.; Taishan Machinery Factory As a result of our Preliminary countervailing duties on all imports of Ltd.; Wuyi Xilinde Machinery Determination and pursuant to sections the subject merchandise, entered, or Manufacture Co., Ltd.; and Zhejiang 703(d)(1)(B) and (d)(2) of the Act, we withdrawn from warehouse, for Jucheng Steel Cylinder Co., Ltd., for the instructed U.S. Customs and Border consumption on or after the effective reasons described in the Preliminary Protection (CBP) to suspend liquidation date of the suspension of liquidation. Determination, Commerce assigned a of all appropriate entries of steel rate based entirely on adverse facts propane cylinders from China, as Notification Regarding Administrative available (AFA) pursuant to section described in Appendix I of this notice, Protective Orders 776(b) of the Act. No interested party which were entered, or withdrawn from This notice serves as the only commented on our preliminary decision warehouse, for consumption on or after reminder to parties subject to the to assign these six companies a rate October 26, 2018, the date of administrative protective order (APO) of based entirely on AFA, and so for publication of the Preliminary their responsibility concerning the Determination of this investigation in destruction of proprietary information 5 See sections 771(5)(B) and (D) of the Act the Federal Register. In accordance with disclosed under APO in accordance regarding financial contribution; section 771(5)(E) of the Act regarding benefit; and section 771(5A) of section 703(d) of the Act, we issued with 19 CFR 351.305(a)(3). Timely the Act regarding specificity. instructions to CBP to discontinue the notification of the return or destruction 6 See sections 776(a), (b), and 782(d) of the Act. suspension of liquidation for CVD of APO materials or conversion to

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judicial protective order is hereby not limited to, attachment of collars, foot Comment 13: Whether to Use the requested. Failure to comply with the rings, or handles by welding or brazing, heat Government of China’s (GOC) Coaster regulations and terms of an APO is a treatment, painting, testing, certification, or Freight Rates in the Ocean Freight sanctionable violation. any other processing that would not Benchmark otherwise remove the merchandise from the Comment 14: Whether to Apply AFA to Notification to Interested Parties scope of the investigation if performed in the Find the Provision of Electricity for LTAR to be Specific This determination is issued and country of manufacture of the in-scope steel propane cylinders. Comment 15: Whether to Remove published pursuant to sections 705(d) Specifically excluded are seamless steel Shandong Laizhou Steel Cylinder and 777(i) of the Act and 19 CFR propane cylinders and propane cylinders Factory’s (SC Factory) Loans from 351.210(c). made from stainless steel (i.e., steel Huanri’s Reported Loans Dated: June 17, 2019. containing at least 10.5 percent chromium by Comment 16: Which Benchmark Interest Rates to Apply in the Export Seller’s Jeffrey I. Kessler, weight and less than 1.2 percent carbon by weight), aluminum, or composite fiber Credit and Policy Loan Benefit Assistant Secretary for Enforcement and material. Composite fiber material is material Calculations Compliance. consisting of the mechanical combination of Comment 17: Whether to Adjust Huanri’s Appendix I—Scope of the Investigation two components: fiber (typically glass, Sales Denominator carbon, or aramid (synthetic polymer)) and a Comment 18: Whether to Correct a The products subject to this investigation matrix material (typically polymer resin, Translation Error in the Electricity for are steel cylinders for compressed or ceramic, or metallic). LTAR Benefit Calculation liquefied propane or other gases (Steel The merchandise subject to this Comment 19: Which AFA Program Rates to Propane Cylinders) meeting the requirements investigation is properly classified under Apply to the Non-Cooperating of, or produced to meet the requirements of, statistical reporting numbers 7311.00.0060 Companies U.S. Department of Transportation (USDOT) and 7311.00.0090 of the Harmonized Tariff VIII. Recommendation Specifications 4B, 4BA, or 4BW, or Transport Schedule of the United States (HTSUS). [FR Doc. 2019–13257 Filed 6–20–19; 8:45 am] Canada Specification 4BM, 4BAM, or 4BWM, Although the HTSUS statistical reporting BILLING CODE 3510–DS–P or United Nations pressure receptacle numbers are provided for convenience and standard ISO 4706 and otherwise meeting the customs purposes, the written description of description provided below. The scope the merchandise is dispositive. includes steel propane cylinders regardless of DEPARTMENT OF COMMERCE whether they have been certified to these Appendix II—List of Topics Discussed specifications before importation. Steel in the Issues and Decision International Trade Administration propane cylinders range from 2.5 pound Memorandum [A–570–086] nominal gas capacity (approximate 6 pound water capacity and approximate 4–6 pound I. Summary Steel Propane Cylinders From the tare weight) to 42 pound nominal gas II. Background capacity (approximate 100 pound water III. Scope of the Investigation People’s Republic of China: Final capacity and approximate 28–32 pound tare IV. Use of Facts Otherwise Available and Determination of Sales at Less Than weight). Steel propane cylinders have two or Adverse Inferences Fair Value fewer ports and may be imported assembled V. Subsidies Valuation or unassembled (i.e., welded or brazed before VI. Analysis of Programs AGENCY: Enforcement and Compliance, or after importation), with or without all VII. Discussion of the Issues International Trade Administration, components (including collars, valves, Comment 1: Whether to Apply Adverse Department of Commerce. gauges, tanks, foot rings, and overfill Facts Available (AFA) to Shandong SUMMARY: The Department of Commerce prevention devices), and coated or uncoated. Huanri Group Co. Ltd. (Huanri) for the (Commerce) determines that steel Also included within the scope are drawn Export Buyer’s Credit (EBC) Program propane cylinders from the People’s cylinder halves, unfinished propane Comment 2: Whether to Apply AFA to cylinders, collars, and foot rings for steel Huanri for Policy Lending Republic of China (China) are being, or propane cylinders. Comment 3: Whether Policy Loans are likely to be, sold in the United States An ‘‘unfinished’’ or ‘‘unassembled’’ Provided by State-Owned Commercial at less than fair value (LTFV). propane cylinder includes drawn cylinder Banks (SOCBs) to the Steel Propane DATES: Applicable June 21, 2019. halves that have not been welded into a Cylinder Industry are Specific FOR FURTHER INFORMATION CONTACT: cylinder, cylinders that have not had flanges Comment 4: Whether All Hot-Rolled Steel welded into the port hole(s), cylinders that (HRS) Producers are ‘‘Authorities’’ Stephanie Berger or Laura Griffith, AD/ are otherwise complete but have not had Under Section 771(5)(B) of the Act CVD Operations, Office III, Enforcement collars or foot rings welded to them, Comment 5: Whether the Provision of HRS and Compliance, International Trade otherwise complete cylinders without a valve for Less Than Adequate Remuneration Administration, U.S. Department of assembly attached, and cylinders that are (LTAR) is Specific Commerce, 1401 Constitution Avenue otherwise complete except for testing, Comment 6: Whether the Chinese Domestic NW, Washington, DC 20230; telephone: certification, and/or marking. HRS Market is Distorted (202) 482–2483 or (202) 482–6430, This investigation also covers steel Comment 7: Whether to Fill in Certain respectively. propane cylinders that meet, are produced to Months with Missing Data in the Ocean meet, or are certified as meeting, other U.S. Freight Benchmark SUPPLEMENTARY INFORMATION: or Canadian government, international, or Comment 8: Whether to Exclude Routes to industry standards (including, for example, Xiamen from the Ocean Freight Background American Society of Mechanical Engineers Benchmark On December 27, 2018, Commerce (ASME), or American National Standard Comment 9: Whether to Exclude the Tokyo published its Preliminary Determination Institute (ANSI)), if they also meet, are to Qingdao Route from the Ocean Freight of sales at LTFV of steel propane produced to meet, or are certified as meeting Benchmark cylinders from China.1 A complete USDOT Specification 4B, 4BA, or 4BW, or Comment 10: Which Ports to Use for the Transport Canada Specification 4BM, 4BAM, Calculation of Inland Freight 1 or 4BWM, or a United Nations pressure Comment 11: Whether to Include Value See Steel Propane Cylinders from the People’s Republic of China: Preliminary Affirmative receptacle standard ISO 4706. Added Tax (VAT) in Huanri’s Inland Determination of Sales at Less Than Fair Value and Subject merchandise also includes steel Freight Costs Postponement of Final Determination Measures, 83 propane cylinders that have been further Comment 12: Which HRS Import Tariff FR 66675 (December 27, 2018) (Preliminary processed in a third country, including but Rates to Select Continued

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summary of the events that occurred appeared in the Preliminary Scope subject merchandise that were named in since Commerce published the Decision Memorandum,4 which was the petition and to which Commerce Preliminary Determination, as well as a issued concurrently with the issued Q&V questionnaires.5 TPA full discussion of the issues raised by Preliminary Determination. We did not Metals and Machinery (DG) Co. Ltd., parties for this final determination, may receive any scope comments after the which did respond to the Q&V be found in the Issues and Decision Preliminary Scope Decision questionnaire and was initially selected Memorandum.2 Memorandum; therefore, the as a mandatory respondent in this The Issues and Decision preliminary scope determination investigation, failed to respond to Memorandum is a public document and remains unchanged in the final Commerce’s initial questionnaire, and is available electronically via determination. was thus deemed non-responsive.6 As Enforcement and Compliance’s Verification these non-responsive companies in Antidumping and Countervailing Duty China did not demonstrate that they are Centralized Electronic Service System As provided in section 782(i) of the eligible for separate rate status, (ACCESS). ACCESS is available to Tariff Act of 1930, as amended (the Act), Commerce continues to consider them registered users at https:// Commerce verified the sales and cost to be a part of the China-wide entity. access.trade.gov and to all parties in the data reported by Hong Kong GSBF Consequently, we continue to find that Central Records Unit, Room B–8024 of Company Ltd. and GSBF TANK Inc. the China-wide entity withheld Commerce’s main building. In addition, (collectively, GSBF) and Shandong requested information, significantly a complete version of the Issues and Huanri Group Co., Ltd. (Huanri) for use impeded the proceeding, and failed to Decision Memorandum can be accessed in our final determination. We used cooperate to the best of their abilities, at http://enforcement.trade.gov/frn/. standard verification procedures, and thus we are continuing to base the The signed Issues and Decision including an examination of relevant China-wide entity’s rate on AFA. Memorandum and electronic version are accounting and production records, and identical in content. original source documents provided by China-Wide Rate Commerce exercised its discretion to the respondents. toll all deadlines affected by the partial In selecting the AFA rate for the Analysis of Comments Received federal government closure from China-wide entity, Commerce’s practice December 22, 2018 through the All issues raised in the case briefs and is to select a rate that is sufficiently resumption of operations on January 29, rebuttal briefs submitted by interested adverse to ensure that the uncooperative 2019.3 If the new deadline falls on a parties in this proceeding are discussed party does not obtain a more favorable non-business day, in accordance with in the Issues and Decision result by failing to cooperate than if it Commerce’s practice, the deadline will Memorandum. A list of the issues raised had fully cooperated.7 Specifically, it is become the next business day. The by parties and responded to by Commerce’s practice to select, as an revised deadline for the final results of Commerce are in the Issues and AFA rate, the higher of: (a) The highest this investigation is now June 17, 2019. Decision Memorandum, attached at dumping margin alleged in the petition; Appendix II. or, (b) the highest calculated dumping Period of Investigation margin of any respondent in the Changes Since the Preliminary The POI is October 1, 2017 through 8 Determination investigation. As AFA, Commerce has March 31, 2018. assigned to the China-wide entity the Based on our analysis of the Scope of the Investigation rate of 108.60 percent. comments received and our findings at The merchandise covered by this verification, we made certain changes to Combination Rates investigation is steel propane cylinders the margin calculations for both In the Initiation Notice, Commerce from China. For a complete discussion respondents since the Preliminary stated that it would calculate of the scope of this investigation, see Determination. For a discussion of these combination rates for the respondents Appendix I of this notice. changes, see the Issues and Decision that are eligible for a separate rate in Memorandum. Scope Comments this investigation.9 Accordingly, we During the course of this investigation China-Wide Entity have assigned combination rates to and the concurrent countervailing duty For the reasons explained in the (CVD) investigation, Commerce received Preliminary Determination, we are 5 See Preliminary Decision Memorandum at 15. scope comments from interested parties. continuing to find that the use of 6 Id. Certain interested parties commented on 7 See, e.g., Notice of Preliminary Determination of adverse facts available (AFA), pursuant Sales at Less Than Fair Value and Postponement the scope of the investigation as it to sections 776(a) and (b) of the Act, is of Final Determination: Purified Carboxymethyl appropriate and are applying a rate cellulose from Finland, 69 FR 77216, 77219 Determination), and accompanying Preliminary based entirely on AFA to the China- (December 27, 2004), unchanged in Notice of Final Decision Memorandum. wide entity. Commerce did not receive Determination of Sales at Less Than Fair Value: 2 See Memorandum, ‘‘Issues and Decision Purified Carboxymethyl Cellulose from Finland, 70 Memorandum for the Final Determination of the timely responses to its quantity and FR 28279, 28279 (May 17, 2005). Antidumping Duty Investigation of Steel Propane value (Q&V) questionnaire, separate rate 8 See, e.g., Certain Stilbenic Optical Brightening Cylinders from the People’s Republic of China,’’ applications, or separate rate Agents from the People’s Republic of China: Final dated concurrently with, and hereby adopted by, supplemental questionnaires from Determination of Sales at Less Than Fair Value, 77 this notice (Issues and Decision Memorandum). FR 17436, 17438 (March 26, 2012); Final 3 See Memorandum to the Record from Gary certain exporters and/or producers of Determination of Sales at Less Than Fair Value: Taverman, Deputy Assistant Secretary for Certain Cold-Rolled Flat-Rolled Carbon Quality Antidumping and Countervailing Duty Operations, 4 See Memorandum, ‘‘Steel Propane Cylinders Steel Products from the People’s Republic of China, performing the non-exclusive functions and duties from the People’s Republic of China (China) and 65 FR 34660 (May 31, 2000), and accompanying of the Assistant Secretary for Enforcement and Thailand: Scope Decision Memorandum for the Issues and Decision Memorandum. Compliance, ‘‘Deadlines Affected by the Partial Preliminary Antidumping Duty (AD) and 9 See Steel Propane Cylinders from the People’s Shutdown of the Federal Government,’’ dated Countervailing Duty (CVD) Determinations,’’ dated Republic of China, Taiwan, and Thailand: Initiation January 28, 2019. All deadlines in this segment of December 18, 2018 (Preliminary Scope Decision of Less-Than-Fair-Value Investigations, 83 FR the proceeding have been extended by 40 days. Memorandum). 28196, 28201 (June 18, 2018) (Initiation Notice).

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certain companies, as provided in the Final Determination margins exist for the period October 1, ‘‘Final Determination’’ section below. Commerce determines that the 2017 through March 31, 2018: following weighted-average dumping

Cash deposit Weighted- adjusted for Producer Exporter average margin subsidy offset (percent) (percent)

GSBF Tank Inc ...... Hong Kong GSBF Company Limited ...... 37.41 3.94 Shandong Huanri Group Co. Ltd ...... Shandong Huanri Group Co. Ltd ...... 25.52 0.0 Jiaxing Pressure Vessel Factory ...... Jiaxing Pressure Vessel Factory ...... 26.28 0.0 China-Wide Entity 10 ...... 108.60 75.13

Disclosure adjusted estimated weighted-average antidumping duty order directing CBP We will disclose the calculations dumping margin for those subsidies at to assess, upon further instruction by performed within five days of public this time. Commerce, antidumping duties on all announcement of this notice in Pursuant to section 735(c)(1)(B)(ii) of imports of the subject merchandise, accordance with 19 CFR 351.224(b). the Act and 19 CFR 351.210(d), entered, or withdrawn from warehouse, Commerce will instruct CBP to require for consumption on or after the effective Continuation of Suspension of a cash deposit equal to the weighted- date of the suspension of liquidation. Liquidation average amount by which NV exceeds Notification Regarding Administrative U.S. price as follows: (1) The cash In accordance with section Protective Orders 735(c)(1)(B) of the Act, we will instruct deposit rate for the exporter/producer U.S. Customs and Border Protection combination listed in the table above This notice serves as the only (CBP) to continue to suspend will be the rate identified for that reminder to parties subject to an liquidation of all appropriate entries of combination in the table; (2) for all administrative protective order (APO) of steel propane cylinders from China, as combinations of exporters/producers of their responsibility concerning the described in Appendix I of this notice, merchandise under consideration that disposition of proprietary information which were entered, or withdrawn from have not received their own separate disclosed under APO in accordance warehouse, for consumption on or after rate above, the cash-deposit rate will be with 19 CFR 351.305(a)(3). Timely December 27, 2018, the date of the cash deposit rate established for the notification of the return or destruction publication of the Preliminary China-wide entity; and (3) for all non- of APO materials or conversion to Determination of this investigation in Chinese exporters of the merchandise judicial protective order is hereby the Federal Register. Further, under consideration which have not requested. Failure to comply with the Commerce will instruct CBP to require received their own separate rate above, regulations and the terms of an APO is a cash deposit equal to the estimated the cash-deposit rate will be the cash a violation subject to sanction. amount by which the normal value deposit rate applicable to the Chinese Notification to Interested Parties exceeds the U.S. price as shown above. exporter/producer combination that To determine the cash deposit rate, supplied that non-Chinese exporter. This determination is issued and Commerce normally adjusts the These suspension of liquidation published in accordance with sections estimated weighted-average dumping instructions will remain in effect until 735(d) and 777(i)(1) of the Act and 19 margin by the amount of domestic further notice. CFR 351.210(c). subsidy pass-through and export Dated: June 17, 2019. subsidies determined in a companion International Trade Commission (ITC) Notification Jeffrey I. Kessler, CVD proceeding when CVD provisional Assistant Secretary for Enforcement and measures are in effect. Accordingly, In accordance with section 735(d) of Compliance. where Commerce makes an affirmative the Act, we will notify the International determination for domestic subsidy Trade Commission (ITC) of the final Appendix I—Scope of the Investigation pass-through or export subsidies, affirmative determination of sales at The merchandise covered by this Commerce offsets the calculated LTFV. Because the final determination investigation is steel cylinders for estimated weighted-average dumping in this proceeding is affirmative, in compressed or liquefied propane or other margin by the appropriate rate(s). In this accordance with section 735(b)(2) of the gases (steel propane cylinders) meeting the case, we have made an affirmative Act, the ITC will make its final requirements of, or produced to meet the determination as to whether the requirements of, U.S. Department of determination for domestic subsidy Transportation (USDOT) Specifications 4B, pass-through and export subsidies for domestic industry in the United States 4BA, or 4BW, or Transport Canada certain respondents. However, is materially injured, or threatened with Specification 4BM, 4BAM, or 4BWM, or suspension of liquidation for material injury, by reason of imports, or United Nations pressure receptacle standard provisional measures in the companion sales (or the likelihood of sales) for ISO 4706 and otherwise meeting the CVD case has been discontinued; importation of steel propane cylinders description provided below. The scope therefore, we are not instructing CBP to from China no later than 45 days after includes steel propane cylinders regardless of collect cash deposits based upon the our final determination. If the ITC whether they have been certified to these determines that material injury or threat specifications before importation. Steel 10 propane cylinders range from 2.5 pound The China-wide entity includes: Hubei Daly of material injury does not exist, the nominal gas capacity (approximate 6 pound LPG Cylinder Manufacturer Co. Ltd., Taishan proceeding will be terminated, and all Machinery Factory Ltd., TPA Metals and Machinery water capacity and approximate 4–6 pound (DG) Co. Ltd., Wuyi Xilinde Machinery cash deposits will be refunded. If the tare weight) to 42 pound nominal gas Manufacture Co., Ltd., and Zhejiang Jucheng Steel ITC determines that such injury does capacity (approximate 100 pound water Cylinder Co., Ltd. exist, Commerce will issue an capacity and approximate 28–32 pound tare

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weight). Steel propane cylinders have two or V. Discussion of the Issues Background fewer ports and may be imported assembled Comment 1: Selection of Financial or unassembled (i.e., welded or brazed before Statements to Value the Financial Ratios On July 25, 2018, Commerce or after importation), with or without all Comment 2: Subsidy Rate Calculated for published the Preliminary components (including collars, valves, the Export Buyer’s Credit Program Determination of circumvention of the gauges, tanks, foot rings, and overfill Comment 3: Surrogate Value Selections for Order.1 A summary of the events that prevention devices), and coated or uncoated. Huanri and GSBF Also included within the scope are drawn A. Natural Gas for Huanri occurred since Commerce published the cylinder halves, unfinished propane B. Rubber Plug for GSBF Preliminary Determination, as well as a cylinders, collars, and foot rings for steel C. Teflon Tape for GSBF full discussion of the issues raised by propane cylinders. D. Valve for GSBF parties for this final determination, may An ‘‘unfinished’’ or ‘‘unassembled’’ E. Steel Roll for GSBF be found in the Issues and Decision propane cylinder includes drawn cylinder F. Steel Scrap for GSBF Memorandum.2 The Issues and Decision halves that have not been welded into a Comment 4: Ministerial Errors and Other Memorandum is a public document and cylinder, cylinders that have not had flanges Issues welded into the port hole(s), cylinders that A. Errors in the Determination of the is on file electronically via Enforcement are otherwise complete but have not had Surrogate Financial Ratios and Compliance’s Antidumping and collars or foot rings welded to them, B. Argon Conversion for Huanri and GSBF Countervailing Duty Centralized otherwise complete cylinders without a valve C. Oxygen Gas Conversion for GSBF Electronic Service System (ACCESS). assembly attached, and cylinders that are D. Natural Gas Conversion for Huanri ACCESS is available to registered users otherwise complete except for testing, E. Calculation of Market Economy certification, and/or marking. at http://access.trade.gov, and it is Purchase for Overflow Protection available to all parties in the Central This investigation also covers steel Devices (OPDs) for Huanri propane cylinders that meet, are produced to F. Misclassified Paint Variable in GSBF’s Records Unit, Room B8024 of the main meet, or are certified as meeting, other U.S. Margin Calculation Program Commerce building. In addition, a or Canadian government, international, or G. Errors Identified in Huanri’s Verification complete version of the Issues and industry standards (including, for example, Report Decision Memorandum can be accessed American Society of Mechanical Engineers VI. Recommendation directly at http://enforcement.trade.gov/ (ASME), or American National Standard Institute (ANSI)), if they also meet, are [FR Doc. 2019–13250 Filed 6–20–19; 8:45 am] frn/. The signed and electronic versions produced to meet, or are certified as meeting BILLING CODE 3510–DS–P of the Issues and Decision USDOT Specification 4B, 4BA, or 4BW, or Memorandum are identical in content. Transport Canada Specification 4BM, 4BAM, or 4BWM, or a United Nations pressure DEPARTMENT OF COMMERCE Scope of the Order receptacle standard ISO 4706. Subject merchandise also includes steel International Trade Administration The products covered by the Order propane cylinders that have been further are carbon steel butt-weld pipe fittings. processed in a third country, including but [A–570–814] For a complete description of the scope not limited to, attachment of collars, foot of the Order, see the Issues and Decision rings, or handles by welding or brazing, heat Carbon Steel Butt-Weld Pipe Fittings Memorandum. treatment, painting, testing, certification, or From the People’s Republic of China: any other processing that would not Final Affirmative Determination of Scope of the Anti-Circumvention otherwise remove the merchandise from the Inquiry scope of the investigation if performed in the Circumvention of the Antidumping country of manufacture of the in-scope steel Duty Order This anti-circumvention inquiry propane cylinders. AGENCY: Enforcement and Compliance, covers butt-weld pipe fittings exported Specifically excluded are seamless steel from Malaysia to the United States, propane cylinders and propane cylinders International Trade Administration, made from stainless steel (i.e., steel Department of Commerce. which were completed (i.e., have containing at least 10.5 percent chromium by SUMMARY: The Department of Commerce undergone minor finishing processes, or weight and less than 1.2 percent carbon by (Commerce) determines that carbon were simply marked with ‘‘Malaysia’’ as weight), aluminum, or composite fiber steel butt-weld pipe fittings (butt-weld the country of origin) in Malaysia using material. Composite fiber material is material pipe fittings) exported from Malaysia, finished or unfinished butt-weld pipe consisting of the mechanical combination of which were completed in Malaysia fittings sourced from China (inquiry two components: Fiber (typically glass, merchandise). This final ruling applies carbon, or aramid (synthetic polymer)) and a using finished or unfinished butt-weld matrix material (typically polymer resin, pipe fittings sourced from the People’s to all shipments of inquiry merchandise ceramic, or metallic). Republic of China (China), are on or after the date of the initiation of The merchandise subject to this circumventing the antidumping duty this inquiry. investigation is properly classified under (AD) order on butt-weld pipe fittings statistical reporting numbers 7311.00.0060 from China. Commerce has also updated 1 See Carbon Steel Butt-Weld Pipe Fittings From and 7311.00.0090 of the Harmonized Tariff the language in the certification the People’s Republic of China: Preliminary Schedule of the United States (HTSUS). Affirmative Determination of Circumvention of the Although the HTSUS statistical reporting requirements and importer and exporter Antidumping Duty Order, 83 FR 35205 (July 25, numbers are provided for convenience and certifications that are appended to this 2018) (Preliminary Determination) and customs purposes, the written description of notice. accompanying Preliminary Decision Memorandum; the merchandise is dispositive. see also Antidumping Duty Order and Amendment DATES: Applicable June 21, 2019. to the Final Determination of Sales at Less Than Appendix II—List of Topics Discussed FOR FURTHER INFORMATION CONTACT: Jerry Fair Value; Certain Carbon Steel Butt-Weld Pipe Huang, AD/CVD Operations, Office V, Fittings from the People’s Republic of China, 57 FR in the Issues and Decision 29702 (July 6, 1992) (Order). Memorandum Enforcement and Compliance, 2 See Memorandum, ‘‘Issues and Decision International Trade Administration, I. Summary Memorandum for the Anti-Circumvention Inquiry U.S. Department of Commerce, 1401 of the Antidumping Duty Order on Certain Carbon II. Background Constitution Avenue NW, Washington, Steel Butt-Weld Pipe Fittings from the People’s III. Scope of the Investigation Republic of China,’’ dated concurrently with, and IV. Changes Since the Preliminary DC 20230; telephone: (202) 482–4047. hereby adopted by, this notice (Issues and Decision Determination SUPPLEMENTARY INFORMATION: Memorandum).

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Methodology manufacturer with a company-specific certification process with regard to Commerce is conducting this anti- separate rate. In that instance, the cash those imports. circumvention inquiry in accordance deposit rate will be the rate of the In the Preliminary Determination, with section 781(b) of the Tariff Act of Chinese butt-weld pipe fittings Pantech Steel Industries Sdn. Bhd. 3 1930, as amended (the Act). For a full manufacturer that has its own rate. (Pantech) and its importers were description of the methodology Butt-weld pipe fittings completed in precluded from participating in the underlying the Commerce’s final Malaysia from finished and unfinished certification process. However, because determination, see the Issues and butt-weld pipe fittings that are not of Commerce has verified Pantech’s ability Decision Memorandum. Chinese-origin are not subject to this to trace the country of origin for its Analysis of Comments Received inquiry and are not included within the shipments of butt-weld pipe fittings, we scope of the Order as a result of this will allow Pantech and its importers to All issues raised in the case and final affirmative determination. participate in the certification process rebuttal briefs by parties in this inquiry Therefore, the suspension of liquidation are addressed in the Issues and Decision for unliquidated entries of butt-weld and cash deposit requirements do not pipe fittings from Malaysia that were Memorandum. A list of the issues raised apply to such merchandise, subject to is attached to this notice as Appendix I. entered, or withdrawn from warehouse, the following certification requirements. for consumption on or after August 21, Based on our analysis of the results of An importer of butt-weld pipe fittings Commerce’s verification of 2017 (the initiation date of this anti- from Malaysia claiming that its butt- circumvention inquiry). For any questionnaire responses and the weld pipe fittings were completed from comments received, we made certain unliquidated entries of butt-weld pipe finished and/or unfinished non-Chinese fittings produced and/or exported by changes to the Preliminary butt-weld pipe fittings must meet the Determination. Pantech that were entered, or certification and documentation withdrawn from warehouse, for requirements described in Appendices Final Affirmative Determination of consumption on or after August 21, II, III, and IV. Commerce will instruct Circumvention 2017, and through the day before the CBP to suspend liquidation and require As detailed in the Issues and Decision date of publication of this Federal cash deposits for entries where the Memorandum, we determine that butt- Register notice, Commerce will instruct importer/exporter cannot demonstrate weld pipe fittings exported from CBP to liquidate the entries without Malaysia, which were completed in that the imported merchandise was completed from non-Chinese origin regard to AD duties if the importer Malaysia using finished or unfinished provides both the importer and exporter butt-weld pipe fittings from China, or finished or unfinished butt-weld pipe fittings. The AD cash deposits required certification and documentation were simply marked with ‘‘Malaysia’’ as requirements as described in the country of origin, are circumventing on such entries will be equal to the China-wide rate of 182.90 percent, Appendices II, III, and IV to CBP. An the Order. As such, we determine that importer of butt-weld pipe fittings from it is appropriate to include this unless the importer/exporter can demonstrate that the Chinese-origin Malaysia produced and/or exported by merchandise within the Order and to Pantech, which claims that its butt-weld instruct U.S. Customs and Border finished or unfinished butt-weld pipe pipe fittings were completed from Protection (CBP) to continue to suspend fittings completed in Malaysia were finished and/or unfinished non-Chinese liquidation and require cash deposits for supplied by a Chinese manufacturer butt-weld pipe fittings, must meet the any unliquidated entries of butt-weld with a company-specific separate rate. pipe fittings from Malaysia, which were In that instance, the cash deposit rate certification and documentation completed in Malaysia using finished or will be the rate of the Chinese butt-weld requirements described in Appendices unfinished butt-weld pipe fittings from pipe fittings manufacturer that has its II, III, and IV for such entries that were China, or were simply marked with own rate. entered, or withdrawn from warehouse, for consumption on or after the date of ‘‘Malaysia’’ as the country of origin, as We determine that the following discussed below. companies are not eligible for the publication of this Federal Register notice. Continuation of Suspension of certification process: Able Steel Pipes Liquidation Sdn. Bhd, Alliance Fittings Industry Notification Regarding Administrative Sdn Bhd, Anggerik Laksana Sdn. Bhd, Protective Orders In accordance with 19 CFR Globefit Manufacturing Sdn Bhd, Hiap 351.225(l)(3), Commerce will direct CBP Teck Venture Bhd., JAKS Steel This notice will serve as the only to continue to suspend liquidation and Industries Sdn Bhd, Luda Malaysia, reminder to parties subject to to require a cash deposit of estimated Ltd., Pipefab Industries Sdn. Bhd, administrative protective order (APO) of duties on unliquidated entries of Solidbend Fittings & Flanges Sdn. Bhd., their responsibility concerning the inquiry merchandise that were entered, Southern Steel Bhd, and Wing Tiek destruction of proprietary information or withdrawn from warehouse, for Ductile Iron Pipe Sdn Bhd. Accordingly, disclosed under APO in accordance consumption on or after August 21, importers of butt-weld pipe fittings from with 19 CFR 351.305(a)(3). Timely 2017, the date of initiation of the anti- Malaysia that are produced and/or written notification of return/ circumvention inquiry. exported by these ineligible companies The suspension of liquidation and destruction or APO materials or are similarly ineligible for the cash deposit instructions will remain in conversion to judicial protective order is effect until further notice. Commerce hereby requested. Failure to comply 3 will instruct CBP to require AD cash See, e.g., Glycine from the People’s Republic of with the regulations and the terms of an China: Preliminary Partial Affirmative APO is a sanctionable violation. deposits equal to the China-wide rate of Determination of Circumvention of the 182.90 percent, unless the importer/ Antidumping Duty Order and Initiation of Scope Notification to Interested Parties exporter can demonstrate that the Inquiry, 77 FR 21532, 21535 (April 10, 2012), unchanged in Glycine from the People’s Republic of These determinations are issued and Chinese-origin finished or unfinished China: Final Partial Affirmative Determination of butt-weld pipe fittings completed in Circumvention of the Antidumping Duty Order, 77 published in accordance with section Malaysia were supplied by a Chinese FR 73426 (December 10, 2012). 781(b) of the Act and 19 CFR 351.225(f).

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Dated: June 14, 2019. the timeframes specified in Sections 2 or 3 and 38) entries and report those entries using Jeffrey I. Kessler, below (as appropriate). Where the importer the third-country case number, A–557–994. uses a broker to facilitate the entry process, Similarly, the importer should pay cash Assistant Secretary for Enforcement and it should obtain the entry number from the deposits on those entries consistent with the Compliance. broker. Agents of the importer, such as regulations governing post summary Appendix I—List of Topics Discussed in brokers, however, are not permitted to make corrections that require payment of the Issues and Decision Memorandum this certification on behalf of the importer. additional duties. The exporter is required to complete and I. Summary maintain the exporter certification, attached 2. Certification Timing Requirements for II. Background as Appendix IV, and is further required to Companies Other Than Pantech and Its III. Scope of the Order provide the importer a copy of that Importers IV. Merchandise Subject to the Anti- certification and all supporting A. For Entries on or after August 21, 2017 circumvention Inquiry documentation. The exporter certification Through July 25, 2018 V. Period of Inquiry must be completed, signed, dated, and For entries suspended pursuant to the VI. Changes Since the Preliminary provided to the importer within the Preliminary Determination and continue to Determination timeframes specified in Sections 2 or 3 below be suspended pursuant to the final VII. Statutory Framework (as appropriate). The exporter certification determination of this anti-circumvention VIII. Use of Facts Available and Facts should be completed by the party selling the inquiry that were shipped and/or entered, or Available with Adverse Inference merchandise manufactured in Malaysia to withdrawn from warehouse, for consumption IX. Anti-Circumvention Determination the United States, which is not necessarily on or after August 21, 2017 (the date of X. Country-Wide Determination the producer of the product. initiation of this anti-circumvention inquiry) XI. Certification for Use of Non-Chinese- The importer will not be required to through July 25, 2018 (the date of publication Origin Butt Weld Pipe Fittings submit the certifications or supporting of the Preliminary Determination in the XII. Discussion of the Issues documentation to U.S. Customs and Border Federal Register), for which certifications are Comment 1: Whether Commerce May Issue Protection (CBP) as part of the entry process required, the importer certification should a Country-Wide Finding at this time. However, the importer and the have been completed, and the exporter Comment 2: Whether Pantech Has exporter will be required to present the certification should have been completed and Circumvented the Order certifications and supporting documentation, provided to the importer, no later than Comment 3: Whether Pantech and Its to Commerce and/or CBP, as applicable, September 8, 2018 (45 days after the date of Importers Should Be Allowed to upon request by the respective agency. publication of the Preliminary Determination Participate in the Certification Process Additionally, the claims made in the in the Federal Register). Comment 4: Whether Solidbend Was certifications and any supporting Accordingly, where appropriate, the Lawfully Subject to This Anti- documentation are subject to verification by relevant bullet in the certification should Circumvention Inquiry Commerce and/or CBP. The importer and have been edited to reflect that the Comment 5: Whether Solidbend Has exporter are required to maintain the certification was completed within the time Circumvented the Order certifications and supporting documentation frame specified in the paragraph above. For Comment 6: Whether Commerce’s for the later of (1) a period of five years from example, the bullet in the importer Instructions to Suspend Liquidation and the date of entry or (2) a period of three years certification that reads: ‘‘This certification Require Cash Deposits Following the after the conclusion of any litigation in was completed by the time of filing the Entry Preliminary Determination Were Lawful United States courts regarding such entries. Summary,’’ could be edited as follows: ‘‘The XIII. Recommendation If it is determined that the certification and/ shipments/products referenced herein Appendix II—Certification or documentation requirements in a entered before the 07/25/2018 publication of certification have not been met, Commerce Requirements the Preliminary Determination Federal intends to instruct CBP to suspend, under the Register notice. This certification was Section 1 provides general instructions for antidumping duty (AD) order on butt-weld completed on mm/dd/yyyy, within 45 days the certification process applicable to all pipe fittings from the People’s Republic of of that Federal Register notice publication.’’ eligible importers and exporters of carbon China, A–570–814, all unliquidated entries Similarly, the bullet in the exporter steel butt-weld pipe fittings (butt-weld pipe for which these requirements were not met certification that reads, ‘‘This certification fittings) from Malaysia. Section 2 provides and require the importer to post applicable was completed by the time of shipment,’’ the certification timing requirements for AD cash deposits equal to the rates as could be edited as follows: ‘‘The shipments/ eligible companies other than Pantech Steel determined by Commerce. Commerce has products referenced herein shipped before Industries Sdn. Bhd. (Pantech) and the established the following third-country case the 07/25/2018 publication of the importers of butt-weld pipe fittings produced number in the Automated Commercial Preliminary Determination Federal Register and/or exported by firms other than Pantech. Environment (ACE): A–557–994 for such notice. This certification was completed on Section 3 provides the certification timing entries. Entries suspended under A–557–994 mm/dd/yyyy, within 45 days of that Federal requirements for Pantech and the importers will be liquidated pursuant to applicable Registernotice publication.’’ For such of butt-weld pipe fittings produced and/or administrative reviews of the China AD order entries/shipments, importers and exporters exported by Pantech. or through the automatic liquidation process. each have the option to complete a blanket For unliquidated entries (and entries for 1. General Instructions certification covering multiple entries/ which liquidation has not become final) shipments, individual certifications for each For all parties eligible for the certification entered as non-AD/CVD type entries that entry/shipment, or a combination thereof. process, the following requirements apply. If were shipped and/or entered, or withdrawn an importer imports butt-weld pipe fittings from warehouse, for consumption during the B. For Entries on or After July 26, 2018 from Malaysia and claims that the butt-weld period, August 21, 2017 (the date of initiation Through August 31, 2018 pipe fittings were completed in Malaysia of this anti-circumvention inquiry) through For entries suspended pursuant to the using finished or unfinished butt-weld pipe the day prior to the date of publication of the Preliminary Determination and continue to fittings manufactured of non-Chinese origin, final determination of this anti- be suspended pursuant to the final the importer is required to complete and circumvention inquiry in the Federal determination of this anti-circumvention maintain the importer certification, attached Register, for which certifications are required inquiry that were shipped and/or entered, or as Appendix III, and all supporting to be maintained in accordance with the withdrawn from warehouse, for consumption documentation. The importer is further instructions above, importers should file a on or after July 26, 2018 through August 31, required to maintain a copy of the exporter Post Summary Correction with CBP, in 2018, for which certifications are required, certification, discussed below and attached accordance with CBP’s regulations, regarding the importer certification should have been as Appendix IV, and all supporting conversion of such entries from non- completed within 45 days after the date of documentation. The importer certification antidumping entries (e.g., type 01) to Entry Summary and the exporter certification must be completed, signed, and dated within antidumping entries (i.e., type 03, 06, 07, 34, should have been completed and provided to

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the importer within 45 days after the date of not previously eligible for the certification Appendix III—Importer Certification shipment. process. Accordingly, where appropriate, the I hereby certify that: A. For Entries on or After August 21, 2017 • { relevant bullet in the certification should My name is COMPANY OFFICIAL’S Through the 30th Day After the Date of NAME} and I am an official of {IMPORTING have been edited to reflect that the Publication of the Final Determination of COMPANY}; certification was completed within the time This Anti-Circumvention Inquiry in the • I have direct personal knowledge of the frame specified in the paragraph above. For Federal Register example, the bullet in the importer facts regarding the importation into the certification that reads: ‘‘This certification For entries of butt-weld pipe fittings from Customs territory of the United States of the was completed by the time of filing the Entry Pantech suspended pursuant to the carbon steel butt-weld pipe fittings Summary,’’ could be edited as follows: ‘‘The Preliminary Determination of this anti- completed in Malaysia that entered under shipments/products referenced herein circumvention inquiry that were shipped entry number(s) {INSERT ENTRY entered during the period 07/26/2018 and/or entered, or withdrawn from NUMBER(S)} and are covered by this through 08/31/2018. This certification was warehouse, for consumption during the certification. ‘‘Direct personal knowledge’’ completed on mm/dd/yyyy, within 45 days period, August 21, 2017 (the date of initiation refers to facts the certifying party is expected of the date of entry.’’ Similarly, the bullet in of this anti-circumvention inquiry) through to have in its own records. For example, the the exporter certification that reads, ‘‘This the 30th day after the date of publication of importer should have ‘‘direct personal certification was completed by the time of the final determination in the Federal knowledge’’ of the importation of the product shipment,’’ could be edited as follows: ‘‘The Register, for which certifications are (e.g., the name of the exporter) in its records; required, the importer certification should be shipments/products referenced herein • I have personal knowledge of the facts completed, and exporter certification should shipped during the period 07/26/2018 regarding the production of the imported be completed and provided to the importer, through 08/31/2018. This certification was products covered by this certification. within 45 days of the date of publication of completed on mm/dd/yyyy, within 45 days ‘‘Personal knowledge’’ includes facts the final determination in the Federal of the date of shipment.’’ For such entries/ obtained from another party, (e.g., shipments, importers and exporters each Register. Accordingly, where appropriate, the correspondence received by the importer (or have the option to complete a blanket exporter) from the producer regarding the certification covering multiple entries/ relevant bullet in the certification should be edited to reflect that the certification was source of the input used to produce the shipments, individual certifications for each imported products); entry/shipment, or a combination thereof. completed within the time frame specified in • the paragraph above. For example, the bullet The carbon steel butt-weld pipe fittings C. For Entries on or After September 1, 2018 in the importer certification that reads: ‘‘This completed in Malaysia do not contain Through the Day Prior to the Date of certification was completed by the time of finished or unfinished butt-weld pipe fittings Publication of the Final Determination of filing the Entry Summary,’’ could be edited manufactured in the People’s Republic of This Anti-Circumvention Inquiry in the as follows: ‘‘The shipments/products China; Federal Register referenced herein entered during the period • I understand that {IMPORTING } For entries suspended pursuant to the 08/21/2017 through the 30th day after the COMPANY is required to maintain a copy Preliminary Determination and continue to date of publication of the final determination of this certification and sufficient be suspended pursuant to the final in the Federal Register. This certification documentation supporting this certification determination of this anti-circumvention was completed on mm/dd/yyyy, within 45 (i.e., documents maintained in the normal inquiry that were shipped and/or entered, or days of that Federal Register notice course of business, or documents obtained by withdrawn from warehouse, for consumption publication.’’ Similarly, the bullet in the the certifying party, for example, mill on or after September 1, 2018 through the exporter certification that reads, ‘‘This certificates, productions records, invoices, day prior to the date of publication of the certification was completed by the time of etc.) for the later of (1) a period of five years final determination of this anti- shipment,’’ could be edited as follows: ‘‘The from the date of entry or (2) a period of three circumvention inquiry in the Federal shipments/products referenced herein years after the conclusion of any litigation in Register for which certifications are required, shipped during the period 08/21/2017 the United States courts regarding such the importer certification should have been through the 30th day after the date of entries; completed by the date of Entry Summary and publication of the final determination in the • I understand that {IMPORTING the exporter certification should have been Federal Register. This certification was COMPANY} is required to provide this completed and provided to the importer by completed on mm/dd/yyyy, within 45 days certification and supporting records, upon the date of shipment. of that Federal Register notice publication.’’ request, to U.S. Customs and Border D. For Entries on or After the Date of For such entries/shipments, importers and Protection (CBP) and/or the Department of Publication of the Final Determination of exporters each have the option to complete Commerce (Commerce); This Anti-Circumvention Inquiry in the a blanket certification covering multiple • I understand that {IMPORTING entries/shipments, individual certifications Federal Register COMPANY} is required to maintain a copy for each entry/shipment, or a combination of the exporter’s certification, (attesting to the For entries suspended pursuant to the thereof. production and/or export of the imported Preliminary Determination and continue to B. For Entries on or After the 31st Day After merchandise identified above), for the later of be suspended pursuant to the final (1) a period of five years from the date of determination of this anti-circumvention the Date of Publication of the Final inquiry that were shipped and/or entered, or Determination of This Anti-Circumvention entry or (2) a period of three years after the withdrawn from warehouse, for consumption Inquiry in the Federal Register conclusion of any litigation in United States courts regarding such entries; on or after the date of publication of the final For entries of butt-weld pipe fittings from • { Pantech that were shipped and/or entered, or I understand that IMPORTING determination in the Federal Register for } which certifications are required, the withdrawn from warehouse, for COMPANY is required to maintain and, importer certification should be completed consumption, on or after the 31st day after upon request, provide a copy of the by the date of Entry Summary and the the date of publication of the final exporter’s certification and supporting exporter certification should be completed determination of this anti-circumvention records to CBP and/or Commerce; • and provided to the importer by the date of inquiry in the Federal Register, for which I understand that the claims made shipment. For such entries/shipments, the certifications are required, the importer herein, and the substantiating importers and exporters must use the certification should be completed by the date documentation, are subject to verification by updated certification forms in Appendices III of Entry Summary and the exporter CBP and/or Commerce; and IV. certification should be completed and • I understand that failure to maintain the provided to the importer by the date of required certification and/or failure to 3. Certification Timing Requirements for shipment. For such entries/shipments, the substantiate the claims made herein will Pantech and Its Importers importers and exporters must use the result in: These timing requirements apply only to updated certification forms in Appendices III Æ suspension of liquidation of all Pantech and its importers because they were and IV. unliquidated entries (and entries for which

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liquidation has not become final) for which Æ the requirement that the importer post found in the Issues and Decision these requirements were not met; and applicable antidumping duty (AD) cash Memorandum.2 Æ the requirement that the importer post deposits (as appropriate) equal to the rates as The Issues and Decision applicable antidumping duty (AD) cash determined by Commerce; Memorandum is a public document and deposits (as appropriate) equal to the rates • This certification was completed at or determined by Commerce; prior to the time of shipment; and is available electronically via • I understand that agents of the importer, • I am aware that U.S. law (including, but Enforcement and Compliance’s such as brokers, are not permitted to make not limited to, 18 U.S.C. 1001) imposes Antidumping and Countervailing Duty this certification; criminal sanctions on individuals who Centralized Electronic Service System • This certification was completed by the knowingly and willfully make material false (ACCESS). ACCESS is available to time of filing the Entry Summary; and statements to the U.S. government. registered users at https:// • I am aware that U.S. law (including, but Signature llllllllllllllll access.trade.gov and to all parties in the not limited to, 18 U.S.C. 1001) imposes NAME OF COMPANY OFFICIAL criminal sanctions on individuals who Central Records Unit, Room B–8024 of knowingly and willfully make material false lllllllllllllllllllll Commerce’s main building. In addition, statements to the U.S. government. TITLE a complete version of the Issues and Signature llllllllllllllll lllllllllllllllllllll Decision Memorandum can be accessed NAME OF COMPANY OFFICIAL DATE at http://enforcement.trade.gov/frn/. lllllllllllllllllllll [FR Doc. 2019–13252 Filed 6–20–19; 8:45 am] The signed Issues and Decision TITLE BILLING CODE 3510–DS–P Memorandum and electronic version are lllllllllllllllllllll identical in content. Commerce exercised its discretion to Appendix IV—Exporter Certification DEPARTMENT OF COMMERCE toll all deadlines affected by the partial I hereby certify that: federal government closure from • My name is {COMPANY OFFICIAL’S International Trade Administration December 22, 2018 through the NAME HERE} and I am an official of {NAME [A–549–839] resumption of operations on January 29, OF EXPORTING COMPANY}; 3 • 2019. If the new deadline falls on a I have direct personal knowledge of the non-business day, in accordance with facts regarding the production and Steel Propane Cylinders From exportation of the carbon steel butt-weld pipe Thailand: Final Determination of Sales Commerce’s practice, the deadline will fittings identified below. ‘‘Direct personal at Less Than Fair Value become the next business day. The knowledge’’ refers to facts the certifying party revised deadline for the final is expected to have in its own books and AGENCY: Enforcement and Compliance, determination of this investigation is records. For example, an exporter should International Trade Administration, now June 17, 2019. have ‘‘direct personal knowledge’’ of the Department of Commerce. producer’s identity and location. SUMMARY: The Department of Commerce Period of Investigation (POI) • The carbon steel butt-weld pipe fittings (Commerce) determines that steel The POI is April 1, 2017 through completed in Malaysia do not contain propane cylinders from Thailand are March 31, 2018. finished or unfinished butt-weld pipe fittings being, or are likely to be, sold in the manufactured in the People’s Republic of Scope of the Investigation China; United States at less than fair value • I understand that {NAME OF (LTFV). The merchandise covered by this } investigation is steel propane cylinders EXPORTING COMPANY is required to DATES: Applicable June 21, 2019. maintain a copy of this certification and from Thailand. For a complete sufficient documentation supporting this FOR FURTHER INFORMATION CONTACT: discussion of the scope of this certification (i.e., documents maintained in Cindy Robinson or Stephanie Moore, investigation, see Appendix I of this the normal course of business, or documents AD/CVD Operations, Office III, notice. obtained by the certifying party, for example, Enforcement and Compliance, mill certificates, productions records, International Trade Administration, Scope Comments invoices, etc.) for the later of (1) a period of U.S. Department of Commerce, 1401 During the course of this investigation five years from the date of entry or (2) a Constitution Avenue NW, Washington, and the concurrent countervailing duty period of three years after the conclusion of DC 20230; telephone: (202) 482–3797 or any litigation in the United States courts (CVD) investigation, Commerce received regarding such entries; (202) 482–3692, respectively. scope comments from interested parties. • I understand that {NAME OF SUPPLEMENTARY INFORMATION: Certain interested parties commented on EXPORTING COMPANY} must provide this Background the scope of the investigation as it Exporter Certification to the U.S. importer by appeared in the Preliminary Scope the time of shipment. ; On December 27, 2018, Commerce Decision Memorandum,4 which was • I understand that {NAME OF published the Preliminary EXPORTING COMPANY} is required to Determination of sales at LTFV of steel 2 See Memorandum, ‘‘Issues and Decision provide a copy of this certification and propane cylinders from Thailand.1 On Memorandum for Final Affirmative Determination supporting records, upon request, to U.S. June 3, 2019, a public hearing was held in the Antidumping Duty Investigation of Steel Customs and Border Protection (CBP) and/or Propane Cylinders from Thailand,’’ dated the Department of Commerce (Commerce); at Commerce. A complete summary of concurrently with, and hereby adopted by, this • I understand that the claims made the events that occurred since notice (Issues and Decision Memorandum). herein, and the substantiating Commerce published the Preliminary 3 See Memorandum to the Record from Gary documentation, are subject to verification by Determination, as well as a full Taverman, Deputy Assistant Secretary for CBP and/or Commerce; discussion of the issues raised by parties Antidumping and Countervailing Duty Operations, • performing the non-exclusive functions and duties I understand that failure to maintain the for this final determination, may be required certification and/or failure to of the Assistant Secretary for Enforcement and Compliance, ‘‘Deadlines Affected by the Partial substantiate the claims made herein will 1 See Steel Propane Cylinders from Thailand: Shutdown of the Federal Government,’’ dated result in: Æ Preliminary Affirmative Determination of Sales at January 28, 2019. All deadlines in this segment of Suspension of all unliquidated entries Less Than Fair Value and Postponement of Final the proceeding have been extended by 40 days. (and entries for which liquidation has not Determination, 83 FR 66678 (December 27, 2018) 4 See Memorandum, ‘‘Steel Propane Cylinders become final) for which these requirements (Preliminary Determination), and accompanying from the People’s Republic of China (China) and were not met; and Preliminary Decision Memorandum. Thailand: Scope Decision Memorandum for the

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issued concurrently with the margin calculated for SMPC, as Trade Commission (ITC) of the final Preliminary Determination. We did not referenced in the ‘‘Final Determination’’ affirmative determination of sales at receive any scope comments after the section below. LTFV. Because the final determination Preliminary Scope Decision in this proceeding is affirmative, in Final Determination Memorandum; therefore, the accordance with section 735(b)(2) of the preliminary scope determination Commerce determines that the Act, the ITC will make its final remains unchanged in the final following weighted-average dumping determination as to whether the determination. margins exist for the period April 1, domestic industry in the United States 2017 through March 31, 2018: is materially injured, or threatened with Verification material injury, by reason of imports, or As provided in section 782(i) of the Weighted- sales (or the likelihood of sales) for Tariff Act of 1930, as amended (the Act), average Exporter/producer margins importation of steel propane cylinders Commerce verified the sales and cost (percent) from Thailand no later than 45 days data reported by Sahamitr Pressure after our final determination. If the ITC Container Public Company Limited Sahamitr Pressure Container determines that material injury or threat (SMPC) for use in our final Public Company Limited ...... 10.77 of material injury does not exist, the determination. We used standard All Others ...... 10.77 proceeding will be terminated, and all verification procedures, including an cash deposits will be refunded. If the examination of relevant accounting and Disclosure ITC determines that such injury does production records, and original source We will disclose the calculations exist, Commerce will issue an documents provided by the respondent. performed within five days of public antidumping duty order directing CBP Analysis of Comments Received announcement of this notice in to assess, upon further instruction by accordance with 19 CFR 351.224(b). Commerce, antidumping duties on all All issues raised in the case briefs and imports of the subject merchandise, Continuation of Suspension of rebuttal briefs submitted by interested entered, or withdrawn from warehouse, Liquidation parties in this proceeding are discussed for consumption on or after the effective in the Issues and Decision In accordance with section date of the suspension of liquidation. Memorandum. A list of the issues raised 735(c)(1)(B) of the Act, we will instruct by parties and responded to by U.S. Customs and Border Protection Notification Regarding Administrative Commerce are in the Issues and (CBP) to continue the suspension of Protective Orders Decision Memorandum, attached at liquidation of all appropriate entries of This notice serves as the only Appendix II. steel propane cylinders from Thailand, reminder to parties subject to an Changes Since the Preliminary as described in Appendix I of this administrative protective order (APO) of Determination notice, which were entered, or their responsibility concerning the withdrawn from warehouse, for disposition of proprietary information Based on our analysis of the consumption on or after December 27, disclosed under APO in accordance comments received and our findings at 2018, the date of publication of the with 19 CFR 351.305(a)(3). Timely verification, we made certain changes to Preliminary Determination of this notification of the return or destruction the margin calculations for SMPC since investigation in the Federal Register. of APO materials or conversion to the Preliminary Determination. For a Pursuant to section 735(c)(1)(B)(ii) of judicial protective order is hereby discussion of these changes, see the the Act and 19 CFR 351.210(d), requested. Failure to comply with the Issues and Decision Memorandum. Commerce will instruct CBP to require regulations and the terms of an APO is All-Others Rate a cash deposit for such entries of a violation subject to sanction. merchandise equal to the estimated Section 735(c)(5)(A) of the Act weighted-average dumping margin or Notification to Interested Parties provides that the estimated weighted- the estimated all-others rate, as follows: We are issuing and publishing this average dumping margin for all-other (1) The cash deposit rate for the determination and notice in accordance producers and exporters not respondent listed above will be equal to with sections 735(d) and 777(i) of the individually investigated shall be equal the respondent-specific estimated Act and 19 CFR 351.210(c). to the weighted average of the estimated weighted-average dumping margin weighted-average dumping margins Dated: June 17, 2019. determined in this final determination; established for individually investigated Jeffrey I. Kessler, (2) if the exporter is not a respondent exporters and producers, excluding any Assistant Secretary for Enforcement and identified above but the producer is, margins that are zero or de minimis or Compliance. then the cash deposit rate will be equal any margins determined entirely under to the respondent-specific estimated Appendix I section 776 of the Act. SMPC is the only weighted-average dumping margin respondent for which Commerce Scope of the Investigation established for that producer of the calculated an estimated weighted- The merchandise covered by this subject merchandise; and (3) the cash average dumping margin that is not investigation is steel cylinders for deposit rate for all other producers and zero, de minimis, or based entirely on compressed or liquefied propane or other exporters will be equal to the all-others facts otherwise available. Therefore, for gases (steel propane cylinders) meeting the estimated weighted-average dumping requirements of, or produced to meet the purposes of determining the ‘‘all-others’’ margin. These suspension of liquidation requirements of, U.S. Department of rate, and pursuant to section instructions will remain in effect until Transportation (USDOT) Specifications 4B, 735(c)(5)(A) of the Act, we are using the further notice. 4BA, or 4BW, or Transport Canada estimated weighted-average dumping Specification 4BM, 4BAM, or 4BWM, or International Trade Commission United Nations pressure receptacle standard Preliminary Antidumping Duty (AD) and Notification ISO 4706 and otherwise meeting the Countervailing Duty (CVD) Determinations,’’ dated description provided below. The scope December 18, 2018 (Preliminary Scope Decision In accordance with section 735(d) of includes steel propane cylinders regardless of Memorandum). the Act, we will notify the International whether they have been certified to these

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specifications before importation. Steel Appendix II (India), or John McGowan at (202) 482– propane cylinders range from 2.5 pound 3019 (Japan), AD/CVD Operations, nominal gas capacity (approximate 6 pound List of Topics Discussed in the Issues and Decision Memorandum Office VI, Enforcement and Compliance, water capacity and approximate 4–6 pound International Trade Administration, tare weight) to 42 pound nominal gas I. Summary II. Background U.S. Department of Commerce, 1401 capacity (approximate 100 pound water Constitution Avenue NW, Washington, capacity and approximate 28–32 pound tare III. Scope of the Investigation weight). Steel propane cylinders have two or IV. Changes Since the Preliminary DC 20230. fewer ports and may be imported assembled Determination SUPPLEMENTARY INFORMATION: or unassembled (i.e., welded or brazed before V. Discussion of the Issues or after importation), with or without all Comment 1: Nominal Gas Capacity Background components (including collars, valves, (CAPACITY) vs. Sahamitr Pressure Container Public Company Limited’s In accordance with sections 735(d) gauges, tanks, foot rings, and overfill and 777(i)(1) of the Tariff Act of 1930, prevention devices), and coated or uncoated. (SMPC’s) Water-Converted Gas Capacity Comment 2: Zinc Coating as a Separate as amended (the Act), and 19 CFR Also included within the scope are drawn Product Characteristic 351.210(c), Commerce published its cylinder halves, unfinished propane Comment 3: Tare Weight Basis cylinders, collars, and foot rings for steel affirmative final determinations in the Comment 4: Numeric Coding for Product propane cylinders. less-than-fair-value investigations of Characteristics VALVE and VALVETYPE An ‘‘unfinished’’ or ‘‘unassembled’’ glycine from India and Japan on May 1, Comment 5: Identity of Certain U.S. 2019.1 On June 14, 2019, the ITC propane cylinder includes drawn cylinder Customers for Differential Pricing halves that have not been welded into a Analysis notified Commerce of its final cylinder, cylinders that have not had flanges Comment 6: Deletion of a U.S. Sale and All affirmative determinations that an welded into the port hole(s), cylinders that Sales With a CAPACITY Code of 250 industry in the United States is are otherwise complete but have not had Comment 7: Whether Commerce Should materially injured within the meaning collars or foot rings welded to them, Apply Adverse Facts Available (AFA) for of section 735(b)(1)(A)(i) of the Act, by otherwise complete cylinders without a valve SMPC’s Home Market Credit Expenses reason of the less-than-fair-value assembly attached, and cylinders that are Comment 8: Whether SMPC’s Method for imports of glycine from India and otherwise complete except for testing, Reporting its Cost Data Warrants Japan.2 certification, and/or marking. Application of Total AFA This investigation also covers steel Comment 8(a): Whether SMPC Withheld Scope of the Orders propane cylinders that meet, are produced to Information Regarding the Availability of meet, or are certified as meeting, other U.S. a Certain Production Metric Used to The merchandise covered by these or Canadian government, international, or Allocate Conversion Costs and Relied orders is glycine from India and Japan. industry standards (including, for example, Instead on Data from 2010 For a complete description of the scope American Society of Mechanical Engineers Comment 8(b): Whether SMPC Failed to of the orders, see the Appendix to this (ASME), or American National Standard Report Control Number (CONNUM)- notice. Institute (ANSI)), if they also meet, are Specific Costs produced to meet, or are certified as meeting Comment 9: Whether SMPC’s Amendment to Final Determination USDOT Specification 4B, 4BA, or 4BW, or Manufacturing Costs are Understated Transport Canada Specification 4BM, 4BAM, Comment 10: SMPC’s Scrap Offset A ministerial error is defined as an or 4BWM, or a United Nations pressure VI. Recommendation error in addition, subtraction, or other arithmetic function, clerical error receptacle standard ISO 4706. [FR Doc. 2019–13253 Filed 6–20–19; 8:45 am] Subject merchandise also includes steel resulting from inaccurate copying, BILLING CODE 3510–DS–P propane cylinders that have been further duplication, or the like, and any other processed in a third country, including but similar type of unintentional error not limited to, attachment of collars, foot DEPARTMENT OF COMMERCE which the Secretary considers rings, or handles by welding or brazing, heat ministerial.3 treatment, painting, testing, certification, or International Trade Administration Pursuant to sections 735(e) of the Act any other processing that would not and 19 CFR 351.224(e) and (f), otherwise remove the merchandise from the [A–533–883, A–588–878] scope of the investigation if performed in the Commerce is amending the India Final country of manufacture of the in-scope steel Glycine From India and Japan: Determination to reflect the correction propane cylinders. Amended Final Affirmative of two ministerial errors in the final Specifically excluded are seamless steel Antidumping Duty Determination and estimated weighted-average dumping propane cylinders and propane cylinders Antidumping Duty Orders margin calculated for Kumar Industries, made from stainless steel (i.e., steel India (Kumar). In addition, because containing at least 10.5 percent chromium by AGENCY: Enforcement and Compliance, Kumar’s estimated weighted-average weight and less than 1.2 percent carbon by International Trade Administration, dumping margin is the basis for the weight), aluminum, or composite fiber Department of Commerce. estimated weighted-average dumping material. Composite fiber material is material SUMMARY: Based on affirmative final margin determined for all other Indian consisting of the mechanical combination of producers and exporters of subject two components: Fiber (typically glass, determinations by the Department of carbon, or aramid (synthetic polymer)) and a Commerce (Commerce) and the merchandise, we also are revising the matrix material (typically polymer resin, International Trade Commission (ITC), ‘‘all-others’’ rate in the India Final ceramic, or metallic). Commerce is issuing antidumping duty The merchandise subject to this orders on glycine from India and Japan. 1 See Glycine from India: Final Determination of investigation is properly classified under In addition, Commerce is amending its Sales at Less Than Fair Value, 84 FR 18487 (May statistical reporting numbers 7311.00.0060 final affirmative determination on 1, 2019) (India Final Determination); see also and 7311.00.0090 of the Harmonized Tariff Glycine from Japan: Final Determination of Sales at glycine from India. Less Than Fair Value, 84 FR 18484 (May 1, 2019). Schedule of the United States (HTSUS). DATES: Applicable June 21, 2019. 2 See section 735(d) of the Act (requiring Although the HTSUS statistical reporting notification); see also ITC Letter dated June 14, 2019 numbers are provided for convenience and FOR FURTHER INFORMATION CONTACT: (ITC Letter). customs purposes, the written description of Edythe Artman at (202) 482–3931 or 3 See section 735(e) of the Act and 19 CFR the merchandise is dispositive. Kent Boydston at (202) 482–5649 351.224(f).

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Determination.4 The amended estimated antidumping duties equal to the amount from India and Japan), effective the date weighted-average dumping margins are by which the normal value of the of publication of the ITC final listed in the Suspension of Liquidation merchandise exceeds the export price or determination in the Federal Register, section below. constructed export price of the and to assess, upon further instruction merchandise, for all relevant entries of by Commerce pursuant to section Antidumping Duty Orders glycine from India and Japan. In the 736(a)(1) of the Act, antidumping duties On June 14, 2019, in accordance with case of entries from India, the for each entry of the subject sections 735(b)(1)(A)(i) and 735(d) of the antidumping duties will be adjusted for merchandise equal to the amount by Act, the ITC notified Commerce of its export subsidies found in the final which the normal value of the final determinations that an industry in determination of the companion merchandise exceeds the export price or the United States is materially injured countervailing duty investigation.6 constructed export price of the by reason of imports of glycine from Antidumping duties will be assessed on merchandise, adjusted by the amount of India and Japan.5 Therefore, in unliquidated entries of glycine from export subsidies, where appropriate. We accordance with sections 735(c)(2) and India and Japan entered, or withdrawn intend to instruct CBP to require, at the 736 of the Act, we are issuing these from warehouse, for consumption on or same time as importers would normally antidumping duty orders. Because the after October 31, 2018, the date of deposit estimated import duties on this ITC determined that imports of glycine publication of the Preliminary merchandise, cash deposits for each from India and Japan are materially Determinations, 7 but will not include entry of subject merchandise equal to injuring a U.S. industry, unliquidated entries occurring after the expiration of the rates noted below. These entries of such merchandise from India the provisional measures period and instructions suspending liquidation will and Japan, entered or withdrawn from before publication in the Federal remain in effect until further notice. The warehouse for consumption, are subject Register of the ITC’s injury all-others rates apply to all other to the assessment of antidumping determination, as further described producers or exporters not specifically duties. below. listed. As a result of the ITC’s final affirmative determinations, in Suspension of Liquidation Estimated Weighted-Average Dumping accordance with section 736(a)(1) of the In accordance with section 736 of the Margins Act, Commerce will direct U.S. Customs Act, Commerce will instruct CBP to The estimated weighted-average and Border Protection (CBP) to assess, reinstitute the suspension of liquidation dumping margins for each antidumping upon further instruction by Commerce, of subject merchandise (i.e., glycine duty order are as follows:

Estimated weighted- Cash deposit rate average dumping (adjusted for Exporter/producer margin subsidy offsets) (percent) (percent)

India

Kumar Industries, India ...... 13.61 6.62 Paras Intermediates Private Limited ...... 10.86 8 7.83 All Others ...... 12.24 9 7.23

Japan

Yuki Gosei Kogyo Co., Ltd ...... 53.66 NA Showa Denko K.K ...... 86.22 NA All Others ...... 53.66 NA NA = Not Applicable.

Provisional Measures the rates listed above will begin on the the day preceding the date of date of publication of the ITC’s final publication of the ITC’s final affirmative Section 733(d) of the Act 89 states that injury determination in the Federal injury determinations in the Federal suspension of liquidation pursuant to an Register. Register. Suspension of liquidation will affirmative preliminary determination Therefore, in accordance with section resume on the date of publication of the may not remain in effect for more than 733(d) of the Act, Commerce instructed ITC’s final affirmative injury six months. Commerce published its CBP to terminate the suspension of determinations in the Federal Register. affirmative Preliminary Determinations liquidation and to liquidate, without Notification to Interested Parties on October 31, 2018. Therefore, the six- regard to countervailing duties, month period beginning on the date of unliquidated entries of glycine from This notice constitutes the publication of the Preliminary India and Japan entered, or withdrawn antidumping duty orders with respect to Determinations ended on April 28, from warehouse, for consumption after glycine from India and Japan pursuant 2019. Pursuant to section 737(b) of the April 28, 2019, the date on which the to section 736(a) of the Act. Interested Act, the collection of cash deposits at provisional measures expired, through parties can find a list of antidumping

4 See Memorandum, ‘‘Less-Than-Fair-Value 6 See India Final Determination, 84 FR at 18488. Determination of Sales at Less Than Fair Value and Investigation of Glycine from India: Allegations of 7 See Glycine from India: Preliminary Affirmative Postponement of Final Determination, 83 FR 54718 Ministerial Errors in the Final Determination,’’ Determination of Sales at Less Than Fair Value, (October 31, 2018) (collectively, Preliminary dated May 29, 2019 (Ministerial Error Postponement of Final Determination, and Determinations). Memorandum). Extension of Provisional Measures, 83 FR 54713 8 See India Final Determination, 84 FR at 18488. 5 See ITC Letter. (October 31, 2018); Glycine from Japan: Preliminary 9 Id.; see Ministerial Error Memorandum at 4.

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duty orders currently in effect at http:// Compliance, International Trade withdrew its review request.8 On June 6, enforcement.trade.gov/stats/ Administration, Department of 2019, the petitioner and ASPA iastats1.html. Commerce, 1401 Constitution Avenue withdrew their respective review These orders are published in NW, Washington, DC 20230; telephone: requests for an additional three accordance with section and 736(a) of (202) 482–6905. companies.9 the Act and 19 CFR 351.211(b). All interested parties that withdrew SUPPLEMENTARY INFORMATION: Dated: June 18, 2019. their requests for review of companies Background also included those companies’ name Jeffrey I. Kessler, variations, as listed in the Initiation Assistant Secretary for Enforcement and On May 2, 2019, based on timely Notice and the attached Appendix. All Compliance. requests for review for 107 companies review requests for the company names Appendix by the Ad Hoc Shrimp Trade Action listed in the Appendix have been 1 withdrawn; no other party requested a Scope of the Orders Committee (the petitioner), 185 companies by the American Shrimp review of these exporters. The merchandise covered by these orders Processors Association (ASPA),2 and Two additional companies withdrew is glycine at any purity level or grade. This various Vietnamese companies,3 their review requests on May 30, 2019.10 includes glycine of all purity levels, which However, because the petitioner and covers all forms of crude or technical glycine Commerce published in the Federal including, but not limited to, sodium Register a notice of initiation of an ASPA did not withdraw their respective glycinate, glycine slurry and any other forms administrative review of the review requests for these two of amino acetic acid or glycine. Subject antidumping duty order on certain companies, the two companies remain merchandise also includes glycine and frozen warmwater shrimp from Vietnam under active review. precursors of dried crystalline glycine that covering the period February 1, 2018, Partial Rescission of Review are processed in a third country, including, through January 31, 2019.4 but not limited to, refining or any other Pursuant to 19 CFR 351.213(d)(1), processing that would not otherwise remove On May 31, 2019, Commerce Commerce will rescind an the merchandise from the scope of these published in the Federal Register a administrative review, in whole or in orders if performed in the country of notice of rescission, in part, wherein part, if the party that requested the manufacture of the in-scope glycine or Commerce rescinded the administrative review withdraws its request within 90 precursors of dried crystalline glycine. review for 40 companies, based on days of the publication of the notice of Glycine has the Chemical Abstracts Service (CAS) registry number of 56–40–6. Glycine timely-filed withdrawals of review initiation of the requested review. and glycine slurry are classified under requests from the petitioner, ASPA, and Because the petitioner, ASPA, and the Harmonized Tariff Schedule of the United certain Vietnamese companies.5 individual companies all withdrew their States (HTSUS) subheading 2922.49.43.00. On May 30, 2019, and May 31, 2019, requests for administrative review Sodium glycinate is classified in the HTSUS the petitioner and ASPA withdrew their within 90 days of the date of publication under 2922.49.80.00. While the HTSUS respective review requests, in part, for of the Initiation Notice, and no other subheadings and CAS registry number are interested party requested a review of provided for convenience and customs an additional five Vietnamese exporters 6 these companies, Commerce is purposes, the written description of the initiated for review. On May 30, 2019, Quoc Viet Seaproducts Processing Trade rescinding this review with respect to scope of these orders is dispositive. the companies identified in the [FR Doc. 2019–13362 Filed 6–20–19; 8:45 am] and Import-Export Co., Ltd. withdrew its review requests.7 On May 31, 2019, Appendix, in accordance with 19 CFR BILLING CODE 3510–DS–P Soc Trang Seafood Joint Stock Company 351.213(d)(1). Assessment DEPARTMENT OF COMMERCE 1 See the Petitioner’s Request for Administrative Commerce will instruct U.S. Customs Review, dated February 27, 2019. and Border Protection (CBP) to assess International Trade Administration 2 See ASPA’s Request for Administrative Review, dated February 27, 2019. antidumping duties on all appropriate [A–552–802] 3 See, e.g., VASEP’s submission, ‘‘Request for entries at a rate equal to the cash deposit Administrative Review (02/01/18–01/31/19),’’ dated of estimated antidumping duties Certain Frozen Warmwater Shrimp February 26, 2019; Soc Trang Seafood Seafood Joint required at the time of entry, or Stock Company’s ‘‘Request for Review,’’ dated From the Socialist Republic of February 11, 2019. withdrawal from warehouse, for Vietnam: Partial Rescission of 4 See Initiation of Antidumping and consumption, during the period Antidumping Duty Administrative Countervailing Duty Administrative Reviews, 84 FR February 1, 2018, through January 31, Review; 2018–2019 18777 (May 2, 2019) (Initiation Notice). 5 See Certain Frozen Warmwater Shrimp from the 8 See Soc Trang Seafood Joint Stock Company AGENCY: Enforcement and Compliance, Socialist Republic of Vietnam: Partial Rescission of Submission, ‘‘Withdrawal of Request for International Trade Administration, Antidumping Duty Administrative Review; 2018– Administrative Review,’’ dated May 31, 2019. Department of Commerce. 2019, 84 FR 25238 (May 31, 2019). 9 See the Petitioner’s Submission, ‘‘Domestic 6 See the Petitioner’s Submission, ‘‘Domestic Producers’ Partial Withdrawal of Review Requests,’’ SUMMARY: The Department of Commerce Producers’ Partial Withdrawal of Review Requests,’’ dated June 6, 2019; see also ASPA’s Submission, (Commerce) is rescinding, in part, the dated May 30, 2019; ASPA’s Submissions, ‘‘Partial ‘‘Partial Withdrawal of Review Requests,’’ dated administrative review of the Withdrawal of Review Requests,’’ and ‘‘Corrections June 6, 2019. All three companies withdrawn had to Partial Withdrawal of Review Requests,’’ both only been requested for review by the petitioner antidumping duty order on certain dated May 31, 2019. Of these five companies, only and ASPA; thus, no other review requests remain frozen warmwater shrimp from the two of them had also requested an administrative on the record for Au Vung One Seafood Processing Socialist Republic of Vietnam (Vietnam) review; thus, three of these companies had only Import & Export Joint Stock Company, Au Vung for the period February 1, 2018, through been requested for review by the petitioner and Two Seafood Processing Import & Export Joint ASPA (Bien Dong Seafood Co., Ltd.; NGO BROS Stock Company, and Thanh Doan Sea Products January 31, 2019. Seaproducts Import-Export One Member Company Import & Export Processing Joint Stock Company. DATES: Applicable June 21, 2019. Limited; and Seavina Joint Stock Company). 10 See Cadovimex Seafood Import-Export & 7 FOR FURTHER INFORMATION CONTACT: See Quoc Viet Seaproducts Processing Trade Processing Joint-Stock Company and Trong Nhan and Import-Export Co., Ltd. Submission, Seafood Company Limited’s Submission, Irene Gorelik, AD/CVD Operations, ‘‘Withdrawal of Review Request,’’ dated May 30, ‘‘Withdrawal of Entry of Appearance and Review Office VIII, Enforcement and 2019. Request,’’ dated May 30, 2019.

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2019, in accordance with 19 CFR —Quoc Viet Seaproducts Processing Trade materially injured within the meaning 351.212(c)(1)(i). Commerce intends to and Import-Export Co., Ltd. (‘‘Quoc Viet of section 705(b)(1)(A)(i) of the Act, by issue appropriate assessment Co. Ltd.’’) reason of subsidized imports of glycine instructions to CBP 15 days after the 6. —Seavina Joint Stock Co from India and China.2 —Seavina Joint Stock Company publication of this notice in the Federal 7. —Soc Trang Seafood Joint Stock Company Scope of the Orders Register, if appropriate. (STAPIMEX) The merchandise covered by these Notifications —Soc Trang Seafood Joint Stock Company (‘‘STAPIMEX’’) orders is glycine from India and China. This notice serves as a reminder to 8. —Thanh Doan Sea Products Import & For a complete description of the scope importers of their responsibility under Export Processing Joint Stock Company of the orders, see the Appendix to this 19 CFR 351.402(f)(2) to file a certificate Thadimexco notice. regarding the reimbursement of —Thanh Doan Sea Products Import & Countervailing Duty Orders antidumping duties prior to liquidation Export Processing Joint-Stock Company of the relevant entries during this (THADIMEXCO) On June 14, 2019, in accordance with review period. Failure to comply with [FR Doc. 2019–13251 Filed 6–20–19; 8:45 am] sections 705(b)(1)(A)(i) and 705(d) of the this requirement could result in BILLING CODE 3510–DS–P Act, the ITC notified Commerce of its Commerce’s presumption that final determinations that an industry in reimbursement of the antidumping the United States is materially injured duties occurred and the subsequent DEPARTMENT OF COMMERCE by reason of imports of glycine from assessment of doubled antidumping India and China.3 Therefore, in International Trade Administration duties. accordance with sections 705(c)(2) and This notice also serves as a reminder [C–533–884; C–570–081] 706 of the Act, we are issuing these to parties subject to administrative countervailing duty orders. Because the protective order (APO) of their Glycine From India and the People’s ITC determined that imports of glycine responsibility concerning the return or Republic of China: Countervailing Duty from India and China are materially destruction of proprietary information Orders injuring a U.S. industry, unliquidated disclosed under APO in accordance entries of such merchandise from India AGENCY: Enforcement and Compliance, with 19 CFR 351.305(a)(3), which and China, entered or withdrawn from International Trade Administration, warehouse for consumption, are subject continues to govern business Department of Commerce. proprietary information in this segment to the assessment of countervailing SUMMARY: of the proceeding. Timely written Based on affirmative final duties. notification of the return or destruction determinations by the Department of As a result of the ITC’s final of APO materials, or conversion to Commerce (Commerce) and the affirmative determinations, in judicial protective order, is hereby International Trade Commission (the accordance with section 706(a)(1) of the requested. Failure to comply with the ITC), Commerce is issuing Act, Commerce will direct U.S. Customs regulations and terms of an APO is a countervailing duty orders on glycine and Border Protection (CBP) to assess, violation which is subject to sanction. from India and the People’s Republic of upon further instruction by Commerce, This notice is issued and published in China (China). countervailing duties on unliquidated accordance with sections 751(a)(1) and DATES: Applicable June 21, 2019. entries of glycine from India and China. 777(i)(1) of the Tariff Act of 1930, as FOR FURTHER INFORMATION CONTACT: Countervailing duties will be assessed amended, and 19 CFR 351.213(d)(4). Davina Friedmann at (202) 482–0698 or on unliquidated entries of glycine from India and China entered, or withdrawn Dated: June 18, 2019. Julie Geiger at (202) 482–2057 (India), or Tyler Weinhold at (202) 482–1121 from warehouse, for consumption on or James Maeder, (China), AD/CVD Operations, Office VI, after September 4, 2018, the date of Acting Deputy Assistant Secretary for Enforcement and Compliance, publication of the Preliminary Antidumping and Countervailing Duty Determinations,4 but will not include Operations. International Trade Administration, U.S. Department of Commerce, 1401 entries occurring after the expiration of Appendix Constitution Avenue NW, Washington, the provisional measures period and before publication in the Federal Companies Rescinded From Review DC 20230. SUPPLEMENTARY INFORMATION: Register of the ITC’s injury 1. —Au Vung One Seafood Processing Import determination, as further described & Export Joint Stock Company Background 2. —Au Vung Two Seafood Processing below. Import & Export Joint Stock Company In accordance with sections 705(d) Suspension of Liquidation 3. —Bien Dong Seafood Co., Ltd and 777(i)(1) of the Tariff Act of 1930, 4. —NGO BROS Seaproducts Import-Export as amended (the Act), and 19 CFR In accordance with section 706 of the One Member Company Limited (‘‘NGO 351.210(c), Commerce published its Act, Commerce will instruct CBP to BROS Company’’) affirmative final determinations in the reinstitute the suspension of liquidation —Ngo Bros Seaproducts Import-Export of subject merchandise (i.e., glycine One Member Company Limited (‘‘Ngo countervailing duty investigations of glycine from India and China on May 1, from India and China), effective on the Bros. Co., Ltd.’’) date of publication of the ITC’s final —Ngo Bros Seaproducts Import-Export 2019.1 On June 14, 2019, the ITC One Member Company Limited (Ngo notified Commerce of its final 2 Bros) See ITC Letter, dated June 14, 2019 (ITC Letter). affirmative determinations that an 3 —NGO BROS Seaproducts Import-Export See ITC Letter. industry in the United States is 4 One Member Company Limited (NGO See Glycine from India: Preliminary Affirmative BROS) Countervailing Duty Determination and Alignment 1 See Countervailing Duty Investigation of Glycine of Final Determination with Final Antidumping 5. —Quoc Viet Seaproducts Processing from India: Affirmative Final Determination, 84 FR Duty Determination, 83 FR 44859 (September 4, Trading and Import-Export Co., Ltd. 18482 (May 1, 2019); see also Glycine from the 2018); see also Glycine from the People’s Republic —Quoc Viet Seaproducts Processing Trade People’s Republic of China: Final Affirmative of China: Preliminary Affirmative Countervailing and Import-Export Co., Ltd. (Quoc Viet Countervailing Duty Determination, 84 FR 18489 Duty Determination, 83 FR 44863 (September 4, Co., Ltd.) (May 1, 2019). 2018) (collectively, Preliminary Determinations).

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determination in the Federal Register, Register. Suspension of liquidation will ACTION: Notice; request for comments. and to assess, upon further instruction resume on the date of publication of the by Commerce pursuant to 706(a)(1) of ITC’s final affirmative injury SUMMARY: The Regional Administrator, the Act, countervailing duties for each determinations in the Federal Register. West Coast Region, NMFS, has made a entry of the subject merchandise in an preliminary determination that an Notifications to Interested Parties amount based on the net countervailable application for an Exempted Fishing subsidy rates for the subject This notice constitutes the Permit warrants further consideration. merchandise. We intend to instruct CBP countervailing duty orders with respect The application, submitted by the to require, at the same time as importers to glycine from India and China California Wetfish Producers would normally deposit estimated pursuant to section 706(a) of the Act. Association, requests an exemption duties on this merchandise, cash Interested parties can find a list of from the expected prohibition of deposits for each entry of subject countervailing duty orders currently in primary directed fishing for Pacific merchandise equal to the rates noted effect at http://enforcement.trade.gov/ sardine for the 2019–2020 fishing year below. These instructions suspending stats/iastats1.html. to collect Pacific sardine as part of an liquidation will remain in effect until These orders are published in industry-based scientific survey. NMFS further notice. The all-others rates apply accordance with sections 705(c) and requests public comment on the to all producers or exporters not 706(a) of the Act and 19 CFR 351.211(b). application. specifically listed. Dated: June 18, 2019. DATES: Comments must be received by July 8, 2019. Estimated Subsidy Rates Jeffrey I. Kessler, Assistant Secretary for Enforcement and ADDRESSES: You may submit comments The estimated subsidy rates for each Compliance. on this document, identified by NOAA– countervailing duty order are as follows: NMFS–2019–0057, by any of the Appendix following methods: Subsidy Scope of the Orders • Electronic Submissions: Submit all Exporter/producer rate (percent) The merchandise covered by these orders electronic public comments via the is glycine at any purity level or grade. This Federal e-Rulemaking Portal. Go to India includes glycine of all purity levels, which www.regulations.gov/ covers all forms of crude or technical glycine #!docketDetail;D=NOAA-NMFS-2019- Kumar Industries, India ...... 6.99 including, but not limited to, sodium 0057, click the ‘‘Comment Now!’’ icon, Paras Intermediates Private Lim- glycinate, glycine slurry and any other forms complete the required fields, and enter ited ...... 3.03 of amino acetic acid or glycine. Subject or attach your comments. The EFP All Others ...... 5.01 merchandise also includes glycine and precursors of dried crystalline glycine that application will be available under China are processed in a third country, including, Relevant Documents through the same but not limited to, refining or any other link. JC Chemicals Limited ...... 144.01 processing that would not otherwise remove • Mail: Submit written comments to Sigmachem Corp ...... 144.01 the merchandise from the scope of these Lynn Massey, West Coast Region, All Others ...... 144.01 orders if performed in the country of NMFS, 501 W. Ocean Blvd., Ste. 4200, manufacture of the in-scope glycine or Long Beach, CA 90802–4250. Provisional Measures precursors of dried crystalline glycine. • Instructions: Comments must be Glycine has the Chemical Abstracts Service submitted by one of the above methods Section 703(d) of the Act states that (CAS) registry number of 56–40–6. Glycine the suspension of liquidation pursuant to ensure that the comments are and glycine slurry are classified under received, documented, and considered to an affirmative preliminary Harmonized Tariff Schedule of the United determination may not remain in effect States (HTSUS) subheading 2922.49.43.00. by NMFS. Comments sent by any other for more than four months. Commerce Sodium glycinate is classified in the HTSUS method, to any other address or published its affirmative Preliminary under 2922.49.80.00. While the HTSUS individual, or received after the end of Determinations on September 4, 2018. subheadings and CAS registry number are the comment period, may not be Therefore, the four-month period provided for convenience and customs considered. All comments received are purposes, the written description of the a part of the public record and will beginning on the date of the publication scope of these orders is dispositive. of the Preliminary Determinations generally be posted for public viewing ended on January 1, 2019. Pursuant to [FR Doc. 2019–13361 Filed 6–20–19; 8:45 am] on www.regulations.gov without change. section 707(b) of the Act, the collection BILLING CODE 3510–DS–P All personal identifying information of cash deposits at the rates listed above (e.g., name, address, etc.) submitted voluntarily by the sender will be will begin on the date of publication of DEPARTMENT OF COMMERCE the ITC’s final injury determination in publicly accessible. Do not submit the Federal Register. confidential business information, or National Oceanic and Atmospheric otherwise sensitive or protected Therefore, in accordance with section Administration 703(d) of the Act, Commerce instructed information. NMFS will accept CBP to terminate the suspension of RIN 0648–XW001 anonymous comments (enter ‘‘N/A’’ in liquidation and to liquidate, without the required fields if you wish to remain Magnuson-Stevens Act Provisions; regard to countervailing duties, anonymous). General Provisions for Domestic unliquidated entries of glycine from FOR FURTHER INFORMATION CONTACT: Fisheries; Coastal Pelagic Species India and China entered, or withdrawn Lynn Massey, West Coast Region, Fishery; Application for Exempted from warehouse, for consumption after NMFS, (562) 436–2462, lynn.massey@ Fishing Permits January 1, 2019, the date on which noaa.gov. provisional measures expired, through AGENCY: National Marine Fisheries SUPPLEMENTARY INFORMATION: On May the day preceding the date of Service (NMFS), National Oceanic and 28, 2019, NMFS published a proposed publication of the ITC’s final affirmative Atmospheric Administration (NOAA), rule (84 FR 24459) to implement Pacific injury determinations in the Federal Commerce. sardine harvest specifications for the

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2019–2020 fishing year off the U.S. West Authority: 16 U.S.C. 1801 et seq. organizations that will furnish the Coast, which begins on July 1. This Jennifer M. Wallace, products to the Government. proposed rule included a 4,514 metric 2. The action will result in ton (mt) annual catch limit (ACL) and a Acting Director, Office of Sustainable authorizing small entities to furnish the Fisheries, National Marine Fisheries Service. prohibition on directed commercial products to the Government. fishing for Pacific sardine off the coasts [FR Doc. 2019–13214 Filed 6–20–19; 8:45 am] 3. There are no known regulatory of Washington, Oregon, and California BILLING CODE 3510–22–P alternatives which would accomplish (except for small directed catch and the objectives of the Javits-Wagner- catch of live bait). At the April 2019 O’Day Act (41 U.S.C. 8501–8506) in Pacific Fishery Management Council COMMITTEE FOR PURCHASE FROM connection with the products proposed (Council) meeting, the Council voted in PEOPLE WHO ARE BLIND OR for addition to the Procurement List. SEVERELY DISABLED support of the California Wetfish End of Certification Producer Association’s (CWPA) exempted fishing permit (EFP) Procurement List; Additions and Accordingly, the following products application as well as one other Deletions are added to the Procurement List: application that NMFS is evaluating AGENCY: Committee for Purchase From Products separately, which both requested an People Who Are Blind or Severely NSN—Product Name: 6550–00–NIB–0023— exemption from the prohibition on Disabled. Test Cup, Drug Detection, Round, 2–7/8″ ″ directed fishing for Pacific sardine. The ACTION: Additions to and deletions from D x 3–1/2 H, 13-card dipcard Council therefore structured the 2019– the procurement list. Mandatory Source of Supply: Tarrant County 2020 Pacific sardine harvest Association for the Blind, Fort Worth, specifications so that up to 405 mt (the SUMMARY: This action adds products to TX combined total of the anticipated the Procurement List that will be Contracting Activity: DEFENSE LOGISTICS harvests under the two EFP proposals furnished by nonprofit agencies AGENCY, DLA TROOP SUPPORT the Council reviewed) of the ACL could employing persons who are blind or MR 1086—Mop, Spritz and Go Mandatory Source of Supply: LC Industries, be harvested under EFPs. The CWPA have other severe disabilities, and requested to directly harvest up to 400 Inc., Durham, NC deletes products and services from the Contracting Activity: Military Resale-Defense mt of Pacific sardine for its Coastal Procurement List previously furnished Commissary Agency Pelagic Species Near-shore Cooperative by such agencies. Deletions Survey (CPS–NCS). DATES: Date added to and deleted from Since 2012 the California Department the Procurement List: July 21, 2019. On 5/17/2019, the Committee for of Fish and Wildlife, in partnership Purchase From People Who Are Blind with the CWPA, has been conducting ADDRESSES: Committee for Purchase From People Who Are Blind or Severely or Severely Disabled published notice of aerial surveys to estimate the biomass proposed deletions from the and distribution of sardine and certain Disabled, 1401 S Clark Street, Suite 715, Arlington, Virginia 22202–4149. Procurement List. other CPS species in nearshore waters in After consideration of the relevant FOR FURTHER INFORMATION CONTACT: the Southern California Bight, and in matter presented, the Committee has the Monterey-San Francisco area since Michael R. Jurkowski, Telephone: (703) determined that the products and the summer of 2017. Currently, there is 603–2117, Fax: (703) 603–0655, or email services listed below are no longer uncertainty in the biomass estimates [email protected]. suitable for procurement by the Federal from aerial spotter pilots. The CPS–NCS SUPPLEMENTARY INFORMATION: Government under 41 U.S.C. 8501–8506 survey associated with the proposed Additions and 41 CFR 51–2.4. EFP is part of research to quantify that level of uncertainty by capturing CPS On 3/1/2019 and 5/17/2019, the Regulatory Flexibility Act Certification schools identified by aerial spotter Committee for Purchase From People I certify that the following action will pilots and validating the biomass and Who Are Blind or Severely Disabled not have a significant impact on a species composition of the schools. A published notice of proposed additions substantial number of small entities. portion of each point set (i.e., an to the Procurement List. The major factors considered for this individual haul of fish captured with a After consideration of the material certification were: purse seine net) will be retained for presented to it concerning capability of 1. The action will not result in biological sampling, and the remainder qualified nonprofit agencies to provide additional reporting, recordkeeping or will be sold by the participating the products and impact of the other compliance requirements for small fishermen and processors to offset additions on the current or most recent entities. research costs and avoid unnecessary contractors, the Committee has 2. The action may result in discard. This research contributes to determined that the products listed authorizing small entities to furnish the broader efforts to understand CPS below are suitable for procurement by products and services to the biomass in shallow, nearshore areas that the Federal Government under 41 U.S.C. Government. NOAA’s CPS offshore acoustic trawl 8501–8506 and 41 CFR 51–2.4. 3. There are no known regulatory survey is unable to access. alternatives which would accomplish Regulatory Flexibility Act Certification If NMFS issues this EFP, the CPS– the objectives of the Javits-Wagner- NCS will survey nearshore waters of the I certify that the following action will O’Day Act (41 U.S.C. 8501–8506) in Southern California Bight for 7–10 days not have a significant impact on a connection with the products and between July 1, 2019 and June 30, 2020. substantial number of small entities. services deleted from the Procurement Any harvest under this EFP would The major factors considered for this List. count against the ACL for Pacific certification were: sardine. If NMFS does not issue this 1. The action will not result in any End of Certification EFP, then this 400 mt-portion of the additional reporting, recordkeeping or Accordingly, the following products ACL would be available for harvest by other compliance requirements for small and services are deleted from the other permissible fishing activities. entities other than the small Procurement List:

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Products Mandatory for: West Hill Dam, Uxbridge, MA who are blind or have other severe NSN—Product Name: 7920–01–626–8205— Mandatory Source of Supply: UNKNOWN disabilities. Sponge, All-Purpose, Nylon Mesh, 7 1/ Contracting Activity: DEPT OF THE ARMY, ″ ″ ″ W40M RHCO–ATLANTIC USAHCA DATES: Comments must be received on 2 x 4 1/4 x 1 3/4 or before: July 21, 2019. Mandatory Source of Supply: Alphapointe, Service Type: Janitorial/Custodial Kansas City, MO Mandatory for: Austin AFRC #1, 4601 ADDRESSES: Committee for Purchase Contracting Activity: GSA/FSS GREATER Fairview Drive, Austin, TX From People Who Are Blind or Severely SOUTHWEST ACQUISITI, FORT Mandatory Source of Supply: Blue Solutions, Disabled, 1401 S Clark Street, Suite 715, WORTH, TX Austin, TX Arlington, Virginia 22202–4149. 7045–01–086–2044—Tape, Electronic Data Contracting Activity: DEPT OF THE ARMY, FOR FURTHER INFORMATION CONTACT: For Processing W6QM MICC–PRESIDIO (RC–W) further information or to submit Mandatory Source of Supply: North Central Service Type: Document Destruction comments contact: Michael R. Sight Services, Inc., Williamsport, PA Mandatory for: Aberdeen Proving Ground: Jurkowski, Telephone: (703) 603–2117, Building 314, Northeast Civilian Contracting Activity: DLA TROOP SUPPORT, Fax: (703) 603–0655, or email PHILADELPHIA, PA Personnel Operation Center, Aberdeen [email protected]. 7510–01–625–0850—Toner Cartridge, Laser, Proving Ground, MD Extra High Yield, Lexmark E260 Series Mandatory Source of Supply: The Arc SUPPLEMENTARY INFORMATION: This Mandatory Source of Supply: Alabama Northern Chesapeake Region, notice is published pursuant to 41 Industries for the Blind, Talladega, AL Incorporated, Aberdeen, MD U.S.C. 8503(a)(2) and 41 CFR 51–2.3. Its Contracting Activity: DEPT OF THE ARMY, purpose is to provide interested persons 7530–01–600–2023—Notebook, Spiral W40M RHCO–ATLANTIC USAHCA Bound, Biobased Bagasse Paper, 6x9–1/ an opportunity to submit comments on 2″, 150 sheets, College Rule, White Service Type: Pest Control the proposed actions. Mandatory Source of Supply: Winston-Salem Mandatory for: Healthy Beginnings Child Industries for the Blind, Inc., Winston- Development Center: 5610 Fishers Lane, Deletions Salem, NC Rockville, MD The following products and services Contracting Activity: GSA/FAS ADMIN Mandatory for: Parklawn Building: 5600 Fishers Lane, Rockville, MD are proposed for deletion from the SVCS ACQUISITION BR (2), NEW Procurement List: YORK, NY Mandatory Source of Supply: Davis Memorial Goodwill Industries, Washington, DC Products 7360–00–177–4958—Dining Packet (Dietetic) Contracting Activity: HEALTH AND HUMAN NSNs—Product Names: 7360–00–177–4959—Dining Packet (Dietetic) SERVICES, DEPARTMENT OF, DEPT OF 8345–00–242–0266—Flag, 3 Star, Outdoor, 7360–00–177–4960—Dining Packet (Dietetic) HHS 7360–00–177–4961—Dining Packet (Dietetic) 58″ x 81″ 7360–00–177–4962—Dining Packet (Dietetic) Service Type: Janitorial/Custodial 8345–00–242–0267—Flag, 3 Star, Outdoor, 7360–00–177–4963—Dining Packet (Dietetic) Mandatory for: Defense Logistics Agency: 43″ x 62″ 7360–00–935–6408—Dining Packet DNSZ Curtis Bay Depot, Baltimore, MD 8345–00–242–0268—Flag, 3 Star, Outdoor, 7360–00–935–6409—Dining Packet Mandatory Source of Supply: The Arc 22″ x 32″ 7360–00–935–6410—Dining Packet Baltimore, Inc., Baltimore, MD 8345–00–242–0269—Flag, 3 Star, Outdoor, 7360–00–935–6411—Dining Packet Contracting Activity: DEFENSE LOGISTICS 12″ x 15″ 7360–00–935–6412—Dining Packet AGENCY, DLA SUPPORT SERVICES— 8345–00–242–0270—Flag, 2 Star, Outdoor, 7360–00–935–6413—Dining Packet DSS 58″ x 81″ 7360–00–935–6416—Dining Packet (Dietetic) Service Type: Janitorial/Grounds 8345–00–242–0271—Flag, 2 Star, Outdoor, 7360–00–935–6417—Dining Packet (Dietetic) Maintenance 43″ x 62″ 7360–00–935–6420—Dining Packet (Dietetic) Mandatory for: US Army Reserve Center, 8345–00–265–7522—Pennant 7360–00–935–6421—Dining Packet (Dietetic) TSG Harold C. Lockwood USARC, 8345–01–033–9300—Flag, 2 Star, Outdoor, Mandatory Source of Supply: Georgia Malone, NY 52″ x 66″ Industries for the Blind, Bainbridge, GA Mandatory Source of Supply: Citizen 8345–01–085–6033—Flag, Commandant, ″ ″ Contracting Activity: DLA TROOP SUPPORT, Advocates, Inc., Malone, NY 52 x 66 PHILADELPHIA, PA Contracting Activity: DEPT OF THE ARMY, 8345–01–085–6034—Flag, Vice W6QK ACC–PICA Commandant, 52″ x 66″ Services 8345–01–087–4592—Flag, Commandant, Service Type: Janitorial/Custodial Patricia Briscoe, Outdoor 43″ x 62″ Mandatory for: US Army, 1LT John S. Turner Deputy Director, Business Operations (Pricing 8345–01–087–4593—Flag, Commandant, USARC, Fairfield, CT and Information Management). Outdoor, 22″ x 32″ Mandatory Source of Supply: CW Resources, [FR Doc. 2019–13202 Filed 6–20–19; 8:45 am] 8345–01–087–4596—Flag, Vice Commandant, Outdoor 22″ x 32″ Inc., New Britain, CT BILLING CODE 6353–01–P Contracting Activity: DEPT OF THE ARMY, 8345–01–087–4597—Flag, Vice ″ ″ W6QK ACC–PICA Commandant, Automobile, 12 x 15 8345–01–168–1144—Flag, 1 Star, 52″ x 66″ Service Type: Grounds Maintenance COMMITTEE FOR PURCHASE FROM 8345–01–168–1145—Flag, 1 Star, Outdoor, Mandatory for: U.S. Army Reserve Center: 50 PEOPLE WHO ARE BLIND OR 22″ x 32″ East Street, Springfield, MA SEVERELY DISABLED 8345–01–168–1147—Flag, 1 Star, 43″ x 62″ Mandatory Source of Supply: CW Resources, 8345–01–248–4071—Flag, 3 Star, 52″ x 66″ Inc., New Britain, CT Procurement List; Proposed Deletions 8345–01–298–7403—Flag, Standard Coast Contracting Activity: DEPT OF THE ARMY, Guard, 52″ x 66″ W40M RHCO–ATLANTIC USAHCA AGENCY: Committee for Purchase From 8345–00–242–0272—Flag, 2 Star, Outdoor, Service Type: Janitorial Service People Who Are Blind or Severely 22x32 Mandatory for: Norman Military Complex Disabled. 8345–01–087–4594—Flag, Commandant, (excluding Norman Armed Force Reserve Automobile, 12x15 ACTION: Center), Norman, OK Proposed deletions from the 8345–01–087–4595—Flag, Vice Mandatory Source of Supply: Dale Rogers Procurement List. Commandant, Outdoor, 43x62 Training Center, Inc., Oklahoma City, OK 8345–01–168–1146—Flag, 1 Star, Contracting Activity: DEPT OF THE ARMY, SUMMARY: The Committee is proposing Automobile W7NV USPFO ACTIVITY OK ARNG to delete products and services from the Mandatory Source of Supply: Goodwill Service Type: Janitorial/Grounds Procurement List that were furnished by Industries of South Florida, Inc., Miami, Maintenance nonprofit agencies employing persons FL

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Contracting Activity: SFLC PROCUREMENT (GPS) Directorate will host the 2019 DEPARTMENT OF DEFENSE BRANCH 3, BALTIMORE, MD Public Interface Control Working Group Services and Open Public Forum on September Department of the Army, Corps of Engineers Service Type: Data Entry 25, 2019 for the following NAVSTAR Mandatory for: USDA, Food Safety & GPS public documents: IS–GPS–200 (Navigation User Interfaces), IS–GPS– Intent To Prepare a Draft Inspection Services: 100 North Sixth Environmental Impact Statement for a Street, Minneapolis, MN 705 (User Segment L5 Interfaces), IS– Contracting Activity: GENERAL SERVICES GPS–800 (User Segment L1C Interface), Proposed: High Voltage Electrical ADMINISTRATION, FPDS AGENCY and ICD–GPS–870 (NAVSTAR GPS Transmission Line and Its Associated COORDINATOR Control Segment to User Support Infrastructure, Known as Surry-Skiffes Service Type: Document Destruction Community Interfaces). Additional Creek-Whealton Aerial Transmission Mandatory for: US Department of the logistical details can be found below. Line ‘‘Project’’ Interior, Interior Business Center, AGENCY: Acquisition Services Directorate, DATES: 0830–1600 PST, Wednesday, 25 Department of the Army, U.S. Division III, Sierra Vista, AZ September 2019. Army Corps of Engineers, DOD. Mandatory Source of Supply: Beacon Group, ADDRESSES: SAIC, 100 N Sepulveda ACTION: Notice of intent. Inc., Tucson, AZ Blvd., El Segundo, CA 90245, The Great SUMMARY: The U.S. Army Corps of Contracting Activity: DEPARTMENTAL Room; Dial In: 310–653–2663 Meeting OFFICES, IBC ACQ SERVICES DIVISION Engineers (Corps) will prepare an (00063) ID: 20190925 Password: 123456. Environmental Impact Statement (EIS) Service Type: Janitorial/Custodial SUPPLEMENTARY INFORMATION: The to evaluate project alternatives and the Mandatory for: U.S. Army Reserve, Fridley purpose of this meeting is to update the public interest review factors for the USARC, Covington, VA public on GPS public document Project which includes 17 in-stream Mandatory Source of Supply: Goodwill revisions and collect issues/comments transmission towers and fender Industries of the Valleys, Inc., Roanoke, for analysis and possible integration protection systems to support a VA into future GPS public document 500kiloVolt (kV) aerial transmission line Contracting Activity: DEPT OF THE ARMY, revisions. The 2019 Public Interface over navigable waters and placement of W6QM MICC–FT DIX (RC–E) Control Working Group and Open 27 transmission towers in non-tidal Service Type: Janitorial/Custodial Forum are open to the general public. wetlands. The Project begins in Surry Mandatory for: U.S. Army Reserve AFRC: 3938 Old French Road, Erie, PA For those who would like to attend and County near Surry Nuclear Power Plant, Mandatory Source of Supply: Dr. Gertrude A. participate, we request that you register crosses the James River towards Skiffes Barber Center, Inc., Erie, PA no later than 18 September 2019. Please Creek in James City County, and Contracting Activity: DEPT OF THE ARMY, send the registration information to continues through Newport News, York W6QM MICC CTR–FT DIX (RC) [email protected], providing your County, and Hampton to an existing Service Type: Janitorial/Custodial name, organization, telephone number, substation in Whealton. In total, the Mandatory for: Camp Lincoln Museum, email address, and country of Project permanently impacts 2712 Springfield, IL citizenship. square feet (0.06 acres) of subaqueous Mandatory for: Combined Support Comments will be collected, river bottom and 281 square feet (0.006 Maintenance Shop, Springfield, IL catalogued, and discussed as potential acres) of non-tidal wetlands, and Mandatory for: U.S. Property and Fiscal inclusions to the version following the converts 0.67 acres of palustrine Office Warehouse: Building 2, Springfield, IL current release. If accepted, these forested non-tidal wetlands to Mandatory for: U.S. Property and Fiscal changes will be processed through the palustrine scrub shrub non-tidal Office, Building 1, Springfield, IL formal directorate change process for wetlands. The Project is located within Mandatory Source of Supply: United Cerebral IS–GPS–200, IS–GPS–705, IS–GPS–800, the Lower James River and Lynnhaven- Palsy of the Land of Lincoln, Springfield, and ICD–GPS–870. All comments must Poquoson watersheds; specifically the IL be submitted in a Comments Resolution James River, Skiffes Creek, Lee-Hall Contracting Activity: DEPT OF THE ARMY, Matrix. This form along with proposed Reservoir, Harwood’s Mill Reservoir, W7M6 USPFO ACTIVITY IL ARNG document revisions of the documents Woods Creek, Jones Run, Brick Kiln Patricia Briscoe, and the official meeting notice are Creek, Newmarket Creek and Whiteman Deputy Director, Business Operations (Pricing posted at: https://www.gps.gov/ Swamp. Hydrologic Unit Codes and Information Management). technical/icwg/meetings/2019/09/. 02080206 & 02080108. [FR Doc. 2019–13203 Filed 6–20–19; 8:45 am] Please submit comments to the SMC/ DATES: A Public Scoping meeting will BILLING CODE 6353–01–P GPS Requirements (SMC/GPER) be held on July 17, 2019, between the mailbox at [email protected] by hours of 5:00 p.m.–8:00 p.m. September 6, 2019. Special topics may ADDRESSES: The scoping meeting will be DEPARTMENT OF DEFENSE also be considered for the Public Open held at the Doubletree by Hilton Forum. If you wish to present a special Williamsburg located at 50 Kingsmill Department of The Air Force topic, please submit any materials to Road, Williamsburg, Virginia 23185. SMC/GPER no later than August 21, FOR FURTHER INFORMATION CONTACT: 2019 Public Interface Control Working 2019. Questions about the proposed action Group for the NAVSTAR GPS Public FOR FURTHER INFORMATION CONTACT: and the Draft Environmental Impact Documents Please contact Lieutenant Benjamin Statement (DEIS) can be answered by: AGENCY: Department of Defense, Ratner at 310–653–2236 or Mr. Daniel Randy Steffey, U.S. Army Corps of Department of the Air Force, Global Godwin at 310–653–3640. Engineers, Norfolk District, 803 Front Positioning System Directorate (GPSD). Street, Norfolk, VA 23510, (757) 201– Carlinda N. Lotson, ACTION: Meeting notice. 7579 or [email protected]. Acting Federal Register Liaison Officer. More information about the project can SUMMARY: This notice informs the public [FR Doc. 2019–13177 Filed 6–20–19; 8:45 am] be found at the following website: that the Global Positioning Systems BILLING CODE 5001–10–P https://www.nao.usace.army.mil/

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Missions/Regulatory/ scheduled for completion by October u. Surry—Whealton 500 kV Line SkiffesCreekPowerLine.aspx. 2019. On February 26, 2019, Dominion overhead. SUPPLEMENTARY INFORMATION: 1. Energy electrically energized the v. Chickahominy—Skiffes Creek 500 Proposed Action: Virginia Electric and Project. kV line. w. Surry—Skiffes Creek 500 kV line Power Company (Dominion) has 2. Alternatives: Alternatives subject to overhead (Dominion’s Proposed proposed an electrical transmission consideration include, but will not be Project). powerline and associated infrastructure, limited to: a. No action alternative. x. High Tension Low Sag Conductors known as Surry-Skiffes Creek-Whealton on the Proposed Project. project. The proposed project involves a b. Implementation of demand-side management practices. y. Surry—Skiffes Creek 500 kV 7.76-mile 500 kV overhead transmission underwater line (high voltage direct powerline from Surry nuclear power c. Operate all units at Yorktown using co-firing fuels (i.e., natural gas and oil, current). plant to the proposed Skiffes Creek 500 z. Surry—Skiffes Creek 500 kV kV–230 kV–115 kV switching station, but no coal). d. Decommission Yorktown Units 1 underwater line (alternating current). on 51 acres of private and commercial aa. Surry—Fort Eustis underwater property in James City County, and 20.2 and 2. e. 230 kV Line #214/263 rebuild at the double circuit 230 kV line. miles of 230 kV overhead powerline bb. Hybrid alternatives including along an existing right of way from the James River Bridge crossing. f. Chuckatuck—Newport News 230 kV several combinations of retrofitting, switching station to Whealton line. repowering, and retiring with substation in Hampton. In July 2017, the g. Chickahominy—Lenexa 500 kV. transmission construction. Corps issued an Individual Permit for h. Save the James Alliance Alt 3. Scoping Process: The Corps has the Project under Section 404 of the Solution (Close Yorktown Unit 1, determined that the provisions of Clean Water Act (33 U.S.C. 1344) and operate Yorktown Unit 2, construct a Executive Order 13807 (‘‘One Federal Section 10 of the Rivers and Harbors Act submarine 230 kV line across the James Decision’’) apply to this project. One of 1899 (33 U.S.C. 403), as well as a River, and construct future generation Federal Decision is intended to permission letter under RHA Section facilities). streamline federal permitting processes, 408. As part of its review process, the i. Surry—Skiffes Underwater 230 kV including environmental reviews and Corps prepared an environmental single circuit line (standalone). authorization decisions, for major assessment (EA), which is available at j. Surry—Skiffes Underwater 230 kV infrastructure projects. In accordance the Corps’ project website (https:// double circuit line (standalone). with 40 CFR 1501 and the Council on www.nao.usace.army.mil/Missions/ k. 230 kV phase angle regulating Environmental Quality (CEQ) guidance, Regulatory/ transformer. the Corps has identified NOAA SkiffesCreekPowerLine.aspx). Among l. Surry—Skiffes Underwater 345 kV Fisheries and the United States Fish and other conditions, the permit was issued line. Wildlife Service as having authorization subject to compliance with a 2017 m. National Trust for Historic decision responsibilities in this action Memorandum of Agreement (MOA) Preservation (NHTP)/Tabors Caramanis and therefore has invited them to be executed by the Corps; Dominion; and Rudkevich (TCR) Alternative A (Enable cooperating agencies in the preparation the Acting Assistant Secretary of the Yorktown Unit 3 to operate of the EIS. Additionally, the Corps has Interior for Fish, Wildlife, and Parks (on continuously as a synchronous invited the Advisory Council on behalf of the National Park Service condenser, reconductor and reconfigure Historic Preservation, Environmental (NPS)), among other parties. The MOA, a number of existing transmission lines). Protection Agency, Federal Aviation developed through the National Historic n. NTHP/TCR Alternative B (Use Administration, Federal Energy Preservation Act Section 106 Yorktown Unit 3 only during summer Regulatory Commission, National Park consultation process, contained peak loads). Service, and United States Coast Guard stipulations to avoid, minimize, and o. NTHP/TCR Alternative C (Convert as having special expertise important in mitigate impacts to the historic Yorktown Unit 3 to run as a continuous the review of this action and therefore properties in proximity to the proposed synchronous condenser and only use a has invited them to serve as cooperating project. Dominion proceeded with standby generation supply under agencies in the EIS. As the lead federal construction of the project pursuant to summer peak conditions upon the agency, the Corps will also coordinate the Corps permit and its conditions, occurrence of a critical single-element with the public and other state and local including the conditions set forth in the contingency). agencies and Tribes in order to evaluate MOA. The Corps permit was challenged p. NTHP/TCR Alternative D (Tap into the range of actions, alternatives, direct, in the U.S. District Court for the District existing 230 kV transmission lines, indirect, and cumulative impacts of the of Columbia, which awarded summary build new 230 kV transmission lines, proposed project. The significant issues judgment to the Corps and upheld the reconductor existing transmission lines, identified thus far include potential permit decision. That decision was enable Yorktown Unit 3 to run as a impacts, due to the proximity of the appealed. In National Parks continuous synchronous condenser, and proposed project, to historic properties. Conservation Association v. Semonite, reconfigure transmission delivery 4. Public Scoping Meeting: This notice No. 18–5179, the United States Court of during summer peak conditions). serves to inform the public that a Public Appeals for the District of Columbia q. Chickahominy Generation (Utilize Scoping meeting will be held on July 17, Circuit remanded this action to the two natural gas plants projected in 2019, between 5:00 p.m.–8:00 p.m., at district court with instructions to direct Charles City County). the Doubletree by Hilton Williamsburg the Corps to prepare an EIS pursuant to r. New Generation (such as combined- located at 50 Kingsmill Road, the National Environmental Policy Act cycle, combustion turbine, coal Williamsburg, Virginia 23185. The (NEPA). Consistent with the court’s generation, biomass, wind, or solar). Corps will use the comments received to decision, Dominion seeks authorization s. Retrofit Yorktown Power Station. assist in identifying the significant from the Corps for the original proposed t. 230 kV Line #214/263 Rebuild at issues, which should be addressed in project whose construction is the James River Bridge crossing with the DEIS. Attendance at the public approximately 99 percent complete and additional facilities. meeting is not necessary to provide

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comments. Written comments may also Species Act, 16 U.S.C. 1531 et seq.; Sec. through an appointment process. be given to the contact listed under FOR 601(a) of the Water Resources Interested State and Tribal government FURTHER INFORMATION CONTACT. Development Act (WRDA) of 1986, representatives should contact the Corps 5. DEIS Availability: The Corps Public Law 99–662; Sec. 334(a) of for information about the appointment estimates that the DEIS will be available WRDA 1999, Public Law 106–53, and process. to the public for review and comment Sec. 5018 of WRDA 2007, Public Law This Notice is for individuals around the November 2019. 110–114. The Federal Advisory interested in serving as a stakeholder Dated: June 14, 2019. Committee Act, 5 U.S.C. App. 2, does member on the Committee. Members not apply to the MRRIC. William T. Walker, and alternates must be able to A Charter for the MRRIC has been demonstrate that they meet the Chief, Regulatory Branch. developed and should be reviewed prior definition of ‘‘stakeholder’’ found in the [FR Doc. 2019–13229 Filed 6–20–19; 8:45 am] to applying for a stakeholder Charter of the MRRIC. Applications are BILLING CODE 3720–58–P representative membership position on currently being accepted for the Committee. The Charter, operating representation in the stakeholder procedures, and stakeholder application DEPARTMENT OF DEFENSE interest categories listed below: forms are available electronically at a. Environmental/Conservation Org; www.MRRIC.org. Department of the Army; Army Corps b. Fish & Wildlife; Purpose and Scope of the Committee. c. Flood Control; of Engineers 1. The primary purpose of the MRRIC d. Irrigation; is to provide guidance to the Corps and Notice of Solicitation of Applications e. Major Tributaries; U.S. Fish and Wildlife Service with for Stakeholder Representative respect to the Missouri River recovery f. Water Quality; Members of the Missouri River and mitigation plan currently in g. Waterway Industries; and Recovery Implementation Committee existence, including recommendations h. At Large Terms of stakeholder representative AGENCY: Department of the Army, U.S. relating to changes to the members of the MRRIC are three years. Army Corps of Engineers, DoD. implementation strategy from the use of There is no limit to the number of terms ACTION: Notice. adaptive management; coordination of the development of consistent policies, a member may serve. Incumbent SUMMARY: The Commander of the strategies, plans, programs, projects, Committee members seeking Northwestern Division of the U.S. Army activities, and priorities for the Missouri reappointment do not need to re-submit Corps of Engineers (Corps) is soliciting River recovery and mitigation plan. an application. However, renewal applications to fill vacant stakeholder Information about the Missouri River requests are not guaranteed re-selection representative member positions on the Recovery Program is available at and they must submit a renewal letter Missouri River Recovery www.MoRiverRecovery.org. and related materials as outlined in the Implementation Committee (MRRIC). 2. Other duties of MRRIC include ‘‘Streamlined Process for Existing Members are sought to fill vacancies on exchange of information regarding Members’’ portion of the document a committee to represent various programs, projects, and activities of the Process for Filling MRRIC Stakeholder categories of interests within the agencies and entities represented on the Vacancies (www.MRRIC.org). Missouri River basin. The MRRIC was Committee to promote the goals of the Members and alternates of the formed to advise the Corps on a study Missouri River recovery and mitigation Committee will not receive any of the Missouri River and its tributaries plan; establishment of such working compensation from the federal and to provide guidance to the Corps groups as the Committee determines to government for carrying out the duties with respect to the Missouri River be necessary to assist in carrying out the of the MRRIC. Travel expenses incurred recovery and mitigation activities duties of the Committee, including by members of the Committee are not currently underway. The Corps duties relating to public policy and currently reimbursed by the federal established the MRRIC as required by scientific issues; facilitating the government. the U.S. Congress through the Water resolution of interagency and Application for Stakeholder Resources Development Act of 2007 intergovernmental conflicts between Membership. Persons who believe that (WRDA), Section 5018. entities represented on the Committee they are or will be affected by the Missouri River recovery and mitigation DATES: The agency must receive associated with the Missouri River activities may apply for stakeholder completed applications and recovery and mitigation plan; membership on the MRRIC. Committee endorsement letters no later than July coordination of scientific and other members are obligated to avoid and 26, 2019. research associated with the Missouri River recovery and mitigation plan; and disclose any individual ethical, legal, ADDRESSES: Mail completed annual preparation of a work plan and financial, or other conflicts of interest applications and endorsement letters to associated budget requests. they may have involving MRRIC. U.S. Army Corps of Engineers, Kansas Administrative Support. To the extent Applicants must disclose on their City District (Attn: MRRIC), 601 E 12th authorized by law and subject to the application if they are directly Street, Kansas City, MO 64106 or email availability of appropriations, the Corps employed by a government agency or completed applications to mrric@ provides funding and administrative program (the term ‘‘government’’ usace.army.mil. Please put ‘‘MRRIC’’ in support for the Committee. encompasses state, tribal, and federal the subject line. Committee Membership. Federal agencies and/or programs). FOR FURTHER INFORMATION CONTACT: Lisa agencies with programs affecting the Applications for stakeholder Rabbe, 816–389–3837. Missouri River may be members of the membership may be obtained SUPPLEMENTARY INFORMATION: The MRRIC through a separate process with electronically at www.MRRIC.org. operation of the MRRIC is in the public the Corps. States and Federally Applications may be emailed or mailed interest and provides support to the recognized Native American Indian to the location listed (see ADDRESSES). In Corps in performing its duties and tribes, as described in the Charter, are order to be considered, each application responsibilities under the Endangered eligible for Committee membership must include:

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1. The name of the applicant and the • Agreement to participate in Full Text of Announcement primary stakeholder interest category collaboration training as a condition of I. Funding Opportunity Description that person is qualified to represent; membership. 2. A written statement describing the All applicants will be notified in Purpose of Program: The Mental applicant’s area of expertise and why writing as to the final decision about Health Service Professional the applicant believes he or she should their application. Demonstration Grant Program provides be appointed to represent that area of Certification. I hereby certify that the competitive grants to support and expertise on the MRRIC; establishment of the MRRIC is necessary demonstrate innovative partnerships to 3. A written statement describing how and in the public interest in connection train school-based mental health the applicant’s participation as a with the performance of duties imposed services providers for employment in Stakeholder Representative will fulfill on the Corps by the Endangered Species schools and local educational agencies the roles and responsibilities of MRRIC; Act and other statutes. (LEAs). The goal of this program is to expand the pipeline of high-quality, 4. A written description of the Dated: June 11, 2019. trained providers to address the applicant’s past experience(s) working Mark Harberg, shortages of mental health service collaboratively with a group of Program Manager for the Missouri River professionals in schools served by high- individuals representing varied interests Recovery Program. need LEAs. The partnerships must towards achieving a mutual goal, and [FR Doc. 2019–13230 Filed 6–20–19; 8:45 am] include (1) one or more high-need LEAs the outcome of the effort(s); BILLING CODE 3720–58–P or a State educational agency (SEA) on 5. A written description of the behalf of one or more high-need LEAs; communication network that the and (2) one or more eligible institutions applicant plans to use to inform his or DEPARTMENT OF EDUCATION of higher education (IHE). Partnerships her constituents and to gather their must provide opportunities to place feedback, and Applications for New Awards; Mental graduate students of IHEs in school- 6. A written endorsement letter from Health Service Professional based mental health fields into schools an organization, local government body, Demonstration Grant Program served by the participating high-need or formal constituency, which LEAs to complete required field work, AGENCY: Office of Elementary and demonstrates that the applicant credit hours, internships, or related Secondary Education, Department of represents an interest group(s) in the training as applicable for the degree, Education. Missouri River basin. license, or credential program of each To be considered, the application ACTION: Notice. student. must be complete and received by the Background: Our Nation’s schools SUMMARY: The Department of Education close of business on July 26 2019, at the should be safe and secure settings where (Department) is issuing a notice inviting location indicated (see ADDRESSES). children can learn and grow to their full applications for fiscal year (FY) 2019 for Applications must include an potential. However, over the last few the Mental Health Service Professional endorsement letter to be considered years violent acts inside and outside our Demonstration Grant Program, Catalog complete. Full consideration will be schools, as well as a growing rate of of Federal Domestic Assistance (CFDA) given to all complete applications student suicides, have created stress and number 84.184X. This notice relates to received by the specified due date. trauma for individual students and the approved information collection Application Review Process. disrupted the learning environment. under OMB control number 1894–0006. Committee stakeholder applications will School-based mental health services be forwarded to the current members of DATES: providers offer supports that encompass the MRRIC. The MRRIC will provide Applications Available: June 21, 2019. social-emotional learning, mental membership recommendations to the Deadline for Transmittal of wellness, resilience, and positive Corps as described in Attachment A of Applications: August 5, 2019. connections between students and the Process for Filling MRRIC Deadline for Intergovernmental adults. These supports are essential to Stakeholder Vacancies document Review: September 4, 2019. creating a school culture in which (www.MRRIC.org). The Corps is ADDRESSES: For the addresses for students feel safe and empowered to responsible for appointing stakeholder obtaining and submitting an report safety concerns, which is proven members. The Corps will consider application, please refer to our Common to be among the most effective school applications using the following criteria: Instructions for Applicants to safety strategies. Additionally, in the • Ability to commit the time required. Department of Education Discretionary aftermath of a crisis, school-based • Commitment to make a good faith Grant Programs, published in the mental health professionals provide (as defined in the Charter) effort to seek Federal Register on February 13, 2019 supports that facilitate a return to balanced solutions that address multiple (84 FR 3768) and available at normalcy, are sustainable, and can help interests and concerns. www.govinfo.gov/content/pkg/FR-2019- to identify and work with students with 1 • Agreement to support and adhere to 02-13/pdf/2019-02206.pdf. more intense or ongoing needs. the approved MRRIC Charter and FOR FURTHER INFORMATION CONTACT: Earl However, in school year 2015–16, the Operating Procedures. Myers, U.S. Department of Education, Department of Education’s Civil Rights • Demonstration of a formal 400 Maryland Avenue SW, Room Data collected by the National Center for designation or endorsement by an 3E244, Washington, DC 20202–6450. Education Statistics provided evidence organization, local government, or Email: [email protected]. If you use a telecommunications 1 ‘‘School Based Mental Health Services: constituency as its preferred Improving Student Learning and Well-Being.’’ representative. device for the deaf (TDD) or a text (2016). National Association of School • Demonstration of an established telephone (TTY), call the Federal Relay Psychologists. Bethesda, MD. www.nasponline.org/ communication network to keep Service (FRS), toll-free, at 1–800–877– resources-and-publications/resources/mental- 8339. health/school-psychology-and-mental-health/ constituents informed and efficiently school-based-mental-health-services. Accessed June seek their input when needed. SUPPLEMENTARY INFORMATION: 12, 2019.

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that there were not enough counselors, health care-related professionals in the Federal Register on March 2, 2018 social workers, or nurses employed by high-poverty districts and schools (83 FR 9096). our public schools. Partnerships where needs are the greatest. Absolute Priority: For FY 2019 and between schools and community mental In December 2018, the Commission any subsequent year in which we make health providers (including colleges and released its final report,7 which offers awards from the list of unfunded universities), will expand the pipeline several recommendations for leaders at applications from this competition, this of mental health providers exposed to the local, State, and Federal levels on priority is an absolute priority. Under 34 working in schools and should play a strategies and actions for improving CFR 75.105(c)(3) we consider only major role in addressing these shortages. school safety, including expanded applications that meet this priority. According to the data, 36 million access to mental health services. In This priority is: students were enrolled in 55,000 addition, the Statement of the Managers Expand the capacity of high-need schools but substantially exceeded the accompanying the Department’s fiscal LEAs in partnership with IHEs to train recommended ratios for student-to- year 2019 appropriations act encouraged school-based mental health services counselor, student-to-social worker, or the Department to use a portion of providers, as defined in this notice, with student-to-nurse. The actual student-to- School Safety National Activities funds the goal of expanding the pipeline of psychologist ratio was below the to support a Mental Health these professionals into high-need recommended ratio.2 Nationally, the Demonstration Grant program.8 public elementary schools and ratios were as follows: The Department is implementing the secondary schools in order to address • The student-to-counselor ratio was Mental Health Service Professional the shortages of school-based mental 444:1 as compared to a recommended Demonstration Grant Program in health service providers in such schools. ratio of 250:1 by the American School response to these recommendations. To meet this priority, the applicant Counselor Association; 3 These grants will enable high-need must propose a School-Based Mental • The student-to-social worker ratio LEAs or SEAs on behalf of high-need Health partnership (as defined in this was 2,160:1 as compared to a LEAs, in partnerships with one or more notice) established for the purpose of recommended 250:1 by the National participating eligible IHEs, to expand placing graduate students of university Association of Social Workers; 4 academic programs in school-based • the pipeline of school-based mental The student-to-psychologist ratio health services providers, as defined in mental health fields into schools served was 444-to-1 as compared to 1,000:1 this notice, for high-need public by the participating high-need LEAs to generally and no more than 500 to 700:1 elementary schools and secondary complete required field work, credit for broader services; by the National schools with shortages of school-based hours, internships, or related training as 5 Association of School Psychologists; mental health service providers. The applicable for the degree, license, or and provision of medical services by such credential program of each student. • The student-to-nurse ratio was 936- professionals is not an allowable use of Competitive Preference Priorities: For to-1 as compared to a recommended funds under this grant. To the extent FY 2019 and any subsequent year in 750-to-1 by the National Association of that grant funds directly benefits an which we make awards from the list of School Nurses.6 individual graduate student, the unfunded applications from this In March 2018, President Trump competition, these priorities are established a Federal Commission on Department encourages an applicant to consider how it might implement a competitive preference priorities. Under School Safety (Commission) to review 34 CFR 75.105(c)(2)(i) we award up to school climate and safety issues and service obligation for such graduate student as a school-based mental health an additional five points to an make meaningful and actionable application, depending on how well the recommendations regarding best services provider in a high-need school commensurate with the level of support application meets Competitive practices to keep students safe. To Preference Priority 1; and up to an inform its work, the Commission held the graduate student receives. Priorities: This notice contains one additional five points to an application four formal meetings, four site visits, absolute priority and two competitive that meets Competitive Preference and four listening sessions. A consistent preference priorities. We are Priority 2. Applicants may address one theme emphasized throughout these establishing the absolute priority for the or both of the competitive preference activities was longstanding concern over FY 2019 grant competition and any priorities. The total maximum points we limited access to counselors and other subsequent year in which we make may award an application that chooses awards from the list of unfunded to address each of the competitive 2 Civil Rights Data Collection. U.S. Department of preference priorities is 10. An applicant Education. https://ocrdata.ed.gov/. Accessed June applications from this competition, in 12, 2019. accordance with section 437(d)(1) of the must clearly indicate in the abstract 3 American School Counselor Association Home General Education Provisions Act section of its application each Page. https://www.schoolcounselor.org/. Accessed (GEPA), 20 U.S.C. 1232(d)(1). In competitive preference priority under June 12, 2019. accordance with 34 CFR 75.105(b)(2)(ii), which it is applying. The Department 4 ‘‘NASW Highlights the Growing Need for School may choose not to award points under Social Workers to Prevent School Violence.’’ the competitive preference priorities are National Association of Social Workers. March 27, from the Department’s notice of Final these competitive preference priorities 2018. https://www.socialworkers.org/News/News- Supplemental Priorities and Definitions for any application that fails to do so. Releases/ArticleType/ArticleView/ArticleID/1633. for Discretionary Grant Programs These priorities are: Accessed June 12, 2019. Competitive Preference Priority 1— (Supplemental Priorities), published in 5 ‘‘Shortages in School Psychology.’’ National Fostering Knowledge and Promoting the Association of School Psychologists. https:// Development of Skills That Prepare www.nasponline.org/Documents/ 7 DeVos, B., et al. Final Report of the Federal Resources%20and%20publications/Resources/ Commission on School Safety. (2018). https:// Students To Be Informed, Thoughtful, School_Psychology_Shortage_2017.pdf. Accessed www2.ed.gov/documents/school-safety/school- and Productive Individuals and June 12, 2019. safety-report.pdf. Citizens. (0 to 5 points) 6 ‘‘School Nurse Workload: Staffing for Safe 8 Conference Report for the Department of Supporting projects likely to improve Care.’’ National Association of School Nurses. Defense for the Fiscal Year Ending September 30, student academic performance and https://www.nasn.org/advocacy/professional- 2019, and for Other Purposes. https:// practice-documents/position-statements/ps- www.congress.gov/115/crpt/hrpt952/CRPT- better prepare students for employment, workload. Accessed June 12, 2019. 115hrpt952.pdf (Page 543). responsible citizenship, and fulfilling

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lives, including by preparing children or (b) Collaboration and coordination describe its approach, if any, to students to do one or more of the with related Federal, State, and local implementing a service obligation for following: initiatives. such graduate student as a school-based (i) Develop positive personal Applicants must describe how they mental health services provider in a relationships with others. intend to collaborate with State, high-need school commensurate with (ii) Develop determination, regional, and local chapters of social the level of support the graduate student perseverance, and the ability to workers, psychologists, and nurses receives. overcome obstacles. associations, and describe their (d) Enhancing LEAs ability to assess (iii) Develop self-esteem through relationship and coordination with and address the needs of students in perseverance and earned success. regional and local mental health, public high-need LEAs. (iv) Develop problem solving skills. health, child welfare, and other Applicants must describe the specific (v) Develop self-regulation in order to community agencies, to achieve project process and activities they will use to work toward long-term goals. goals and objectives of establishing a ensure students in high-need who may Competitive Preference Priority 2— pipeline program to train and expand be in need of school-based mental Protecting Freedom of Speech and the capacity of school-based mental health services, are properly targeted, Encouraging Respectful Interactions in a health service providers in high-need assessed, and provided the appropriate Safe Educational Environment. (0 to 5 LEAs. Applicants must also describe school-based mental health service. Definitions: We are establishing the points) proposed coordination with existing definitions of ‘‘eligible institution of Developing positive learning federally funded efforts related to higher education,’’ ‘‘high-need school,’’ environments that promote strong elementary and secondary school ‘‘School-Based Mental Health relationships among students and counseling and mental health partnership,’’ and ‘‘student from a low- school personnel to help prevent promotion. Evidence of collaboration income family,’’ in this notice for the FY bullying, violence, and disruptive and coordination must be provided 2019 grant competition and any actions that diminish the opportunity through letters of support or Memoranda of Agreement/Memoranda subsequent year in which we make for each student to receive a high- of Understanding (MOAs/MOUs) from awards from the list of unfunded quality education. State, regional, or local chapters or applications from this competition, in Requirements: We are establishing agencies, if applicable. Applicants must accordance with section 437(d)(1) of these application requirements for the describe how they will use the Mental GEPA, 20 U.S.C. 1232(d)(1). The FY 2019 grant competition and any Health Service Professional definition of ‘‘high-need LEA’’ is from subsequent year in which we make Demonstration Grant Program funds to section 200 of the Higher Education Act awards from the list of unfunded complement, rather than duplicate, of 1965, as amended (20 U.S.C. applications from this competition, in existing, ongoing, or new efforts to 1021(10)). The definition of ‘‘local accordance with section 437(d)(1) of expand the pipeline of school-based educational agency’’ is from 20 U.S.C. GEPA, 20 U.S.C. 1232(d)(1). mental health services providers to be 7801(30) and is included for the Application Requirements: An employed by schools and local convenience of the reader. The applicant must include the following in educational agencies (LEAs) qualified to definition of ‘‘institution of higher its application: provide school-based mental health education’’ is from 20 U.S.C. 1002. The (a) Description of the severity and services. Finally, applicants must definition of ‘‘State educational agency’’ magnitude of the problem and include estimates of the number of is from 20 U.S.C. 7801. The definitions identification of schools to be served by mental health service providers they of ‘‘ambitious’’ and ‘‘baseline’’ are from the proposed project. expect to train and have placed into 34 CFR 77.1. The definition of ‘‘school- Applicants must describe how the employment by high-need schools and based mental health services provider’’ lack of school-based mental health high-need LEAs each year. is from 20 U.S.C. 7112(6). services providers is specifically (c) Enhancing LEA capacity to provide These definitions are: affecting students in schools to be mental health services to students. Ambitious means promoting served by project activities. Applicants Applicants must describe the specific continued, meaningful improvement for must describe the nature of the problem activities they will conduct to expand program participants or for other for the LEA, based on information such and improve LEA capacity to serve individuals or entities affected by the as, but not limited to, the most recent students in high-need LEAs and ensure grant, or representing a significant available ratios of school-based mental that students receive appropriate mental advancement in the field of education health service providers to students health services. To meet this research, practices, or methodologies. enrolled in schools in each high-need requirement, the applicant must When used to describe a performance LEA that is part of the School-Based propose a School-Based Mental Health target, whether a performance target is Mental Health partnership (in the partnership (as defined in this notice) ambitious depends upon the context of aggregate and disaggregated by established for the purpose of placing the relevant performance measure and profession (e.g., social workers, school graduate students of university the baseline for that measure. psychologists)). The description may academic programs in school-based Baseline means the starting point also include LEA and school-level mental health fields into schools served from which performance is measured demographic data, school climate by the participating high-need LEAs to and targets are set. surveys, school violence/crime data and complete required field work, credit Eligible institution of higher data related to suicide rates. In order to hours, internships, or related training as education means an institution of help the Department assess the applicable for the degree, license, or higher education that offers a program magnitude of the problem and ensure credential program of each student. If of study that leads to a masters or other the applications selected will serve the applicant intends to establish a graduate degree— high-need LEAs, data cited must be program that directly benefits an (a) In school psychology that prepares compared to similar data at the State or individual graduate student, such as students in such program for the State local level, and on a per capita basis through a stipend or tuition credit, the licensing or certification examination in when available. Department encourages the applicant to school-based psychology;

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(b) In school counseling that prepares State program funded under part A of (e) The term includes the State students in such program for the State title IV of the Social Security Act. educational agency in a State in which licensing or certification examination in (4) The percentage of students eligible the State educational agency is the sole school counseling; to receive medical assistance under the educational agency for all public (c) In school social work that prepares Medicaid program. schools. students in such program for the State (5) A composite of two or more of the School-Based Mental Health licensing or certification examination in measures described in subclauses (I) partnership means: school social work; through (IV). (a) One or more high-need LEAs or a (d) In another school-based mental (b) In the case of— State educational agency (SEA) on health field that prepares students in (1) an elementary school, the school behalf of one or more high-need LEAs; such program for the State licensing or serves students not less than 60 percent and certification examination in such fields of whom are eligible for a free or (b) one or more eligible IHEs. as behavioral health aides, school reduced price school lunch under the School-based mental health services nurses, and clinical psychologists Richard B. Russell National School provider means a State-licensed or employed by the schools or under Lunch Act; or State-certified school counselor, school contract with LEAs to provide (2) any other school that is not an psychologist, school social worker, or evaluations, if applicable; or elementary school, the other school other State licensed or certified mental (e) In any combination of study serves students not less than 45 percent health professional qualified under described in subparagraphs (a) through of whom are eligible for a free or State law to provide mental health (d). reduced price school lunch under the services to children and adolescents. High-need local educational agency Richard B. Russell National School State educational agency has the (LEA) means an LEA— Lunch Act. meaning given the term in section 8101 (a)(1) For which not less than 20 Institution of higher education has the of the ESEA (20 U.S.C. 7801). percent of the children served by the meaning given to such term in section Student from a low-income family agency are children from low-income 102 of the Higher Education Act of 1965 means any student whose family meets families; (20 U.S.C. 1002), but excludes any any of the poverty thresholds (2) That serves not fewer than 10,000 institution of higher education established in ESEA section 1113 for the children from low-income families; described in section 102(a)(1)(C) of such relevant grade level. (3) That meets the eligibility Act. Waiver of Proposed Rulemaking: requirements for funding under the Local educational agency means: Under the Administrative Procedure Act Small, Rural School Achievement (a) A public board of education or (5 U.S.C. 553), the Department generally (SRSA) program under section 5211(b) other public authority legally offers interested parties the opportunity of the ESEA (20 U.S.C. 7345(b)); or constituted within a State for either to comment on proposed priorities, (4) That meets eligibility requirements administrative control or direction of, or definitions, and requirements. Section for funding under the Rural and Low- to perform a service function for, public 437(d)(1) of GEPA, however, allows the Income School (RLIS) program under elementary schools or secondary Secretary to exempt from rulemaking section 5221(b) of the ESEA (20 U.S.C. schools in a city, county, township, requirements regulations governing the 7351(b)); and— school district, or other political first grant competition under a new or (b)(1) For which there is a high subdivision of a State, or of or for a substantially revised program authority. percentage of teachers not teaching in combination of school districts or This is the first grant competition for the academic subject areas or grade counties that is recognized in a State as this program under title IV, part F, levels in which the teachers were an administrative agency for its public subpart 3 of the ESEA (20 U.S.C. 7281) trained to teach; or elementary schools or secondary and therefore qualifies for this (2) For which there is a high teacher schools. exemption. In order to ensure timely turnover rate or a high percentage of (b) The term includes any other grant awards, the Secretary has decided teachers with emergency, provisional, or public institution or agency having to forgo public comment on the temporary certification or licensure. administrative control and direction of priorities, definitions, and requirements High-need school means a school that, a public elementary school or secondary under section 437(d)(1) of GEPA. These based on the most recent data available, school. priorities, definitions, and requirements meets one or both of the following: (c) The term includes an elementary will apply to the FY 2019 grant (a) The school is in the highest school or secondary school funded by competition and any subsequent year in quartile of schools in a ranking of all the Bureau of Indian Education but only which we make awards from the list of schools served by a local educational to the extent that including the school unfunded applications from this agency, ranked in descending order by makes the school eligible for programs competition. percentage of students from low-income for which specific eligibility is not Program Authority: Section families enrolled in such schools, as provided to the school in another 4631(a)(1)(B) of the ESEA (20 U.S.C. determined by the local educational provision of law and the school does not 7281). agency based on one of the following have a student population that is Applicable Regulations: (a) The measures of poverty: smaller than the student population of Education Department General (1) The percentage of students aged 5 the local educational agency receiving Administrative Regulations in 34 CFR through 17 in poverty counted in the assistance under this chapter with the parts 75, 77, 79, 81, 82, 84, 97, 98, and most recent census data approved by the smallest student population, except that 99. (b) The Office of Management and Secretary. the school shall not be subject to the Budget Guidelines to Agencies on (2) The percentage of students eligible jurisdiction of any State educational Governmentwide Debarment and for a free or reduced price school lunch agency other than the Bureau of Indian Suspension (Nonprocurement) in 2 CFR under the Richard B. Russell National Education. part 180, as adopted and amended as School Lunch Act. (d) The term includes educational regulations of the Department in 2 CFR (3) The percentage of students in service agencies and consortia of those part 3485. (c) The Uniform families receiving assistance under the agencies. Administrative Requirements, Cost

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Principles, and Audit Requirements for 3. Funding Restrictions: We reference of appropriate methodological tools to Federal Awards in 2 CFR part 200, as regulations outlining funding ensure successful achievement of adopted and amended as regulations of restrictions in the Applicable project objectives. (15 points) the Department in 2 CFR part 3474. (d) Regulations section of this notice. In (ii) The extent to which the proposed The Supplemental Priorities. addition, we remind applicants that project represents an exceptional section 4001(b) of the ESEA (20 U.S.C. approach to the priority or priorities II. Award Information 7101) prohibits the use of funds for established for the competition. (5 Type of Award: Discretionary grants. medical services or drug treatment or points) Estimated Available Funds: rehabilitation, except for integrated (d) Quality of the Project Services (30 $15,000,000. student supports, specialized points) Contingent upon the availability of instructional support services, or (1) The Secretary considers the funds and the quality of applications, referral to treatment for impacted quality of the services to be provided by we may make additional awards in students, which may include students the proposed project. subsequent years from the list of who are victims of, or witnesses to, (2) In determining the quality of the unfunded applications from the crime or who illegally use drugs. This services to be provided by the proposed competition. prohibition does not preclude the use of project, the Secretary considers the Estimated Range of Awards: $250,000 funds to support mental health quality and sufficiency of strategies for to $500,000. counseling and support services, ensuring equal access and treatment for Estimated Average Size of Awards: including those provided by a mental eligible project participants who are $300,000. health services provider outside of members of groups that have Estimated Number of Awards: 50. school, so long as such services are not traditionally been underrepresented based on race, color, national origin, Note: The Department is not bound by any medical. estimates in this notice. gender, age, or disability. V. Application Review Information (3) In addition, the Secretary Project Period: Up to 60 months. 1. Selection Criteria: The selection considers the extent to which the III. Eligibility Information criteria for this program are from 34 CFR training or professional development 75.210. The maximum score for all services to be provided by the proposed 1. Eligible Applicants: High-need selection criteria is 100 points. The project are likely to alleviate the LEAs; SEAs on behalf of one or more points assigned to each criterion are personnel shortages that have been high-need LEA(s). Applicants must indicated in parentheses. Non-Federal identified or are the focus of the propose to work in partnership with an peer reviewers will evaluate and score proposed project. eligible IHE. each application program narrative (e) Quality of the Project Evaluation 2. Cost Sharing or Matching: This against the following selection criteria: (20 points) program does not require cost sharing or (a) Need for the Project (15 points) (1) The Secretary considers the matching. (1) The Secretary considers the quality of the evaluation to be 3. Subgrantees: A grantee under this proposed need for the project. conducted of the proposed project. competition may not award subgrants to (2) In determining the need for the (2) In determining the quality of the entities to directly carry out project proposed project, the Secretary evaluation, the Secretary considers the activities described in its application. considers the extent to which specific following factors: 4. Limitation on Awards: The gaps or weaknesses in services, (i) The extent to which the methods Department will make only one award infrastructure, or opportunities have of evaluation are thorough, feasible, and that serves any individual LEA. been identified and will be addressed by appropriate to the goals, objectives, and IV. Application and Submission the proposed project, including the outcomes of the proposed project. (10 Information nature and magnitude of those gaps or points) weaknesses. (ii) The extent to which the methods 1. Application Submission (b) Significance (15 points) of evaluation will provide performance Instructions: Applicants are required to (1) The Secretary considers the feedback and permit periodic follow the Common Instructions for significance of the proposed project. assessment of progress toward achieving Applicants to Department of Education (2) In determining the significance of intended outcomes. (10 points) Discretionary Grant Programs, the proposed project, the Secretary 2. Review and Selection Process: We published in the Federal Register on considers the extent to which the remind potential applicants that in February 13, 2019 (84 FR 3768), and proposed project is likely to build local reviewing applications in any available at www.govinfo.gov/content/ capacity to provide, improve, or expand discretionary grant competition, the pkg/FR-2019-02-13/pdf/2019-02206.pdf, services that address the needs of the Secretary may consider, under 34 CFR which contain requirements and target population. 75.217(d)(3), the past performance of the information on how to submit an (c) Quality of the Project Design (20 applicant in carrying out a previous application. points) award, such as the applicant’s use of 2. Intergovernmental Review: This (1) The Secretary considers the funds, achievement of project program is subject to Executive Order quality of the design of the proposed objectives, and compliance with grant 12372 and the regulations in 34 CFR project. conditions. The Secretary may also part 79. Information about (2) In determining the quality of the consider whether the applicant failed to Intergovernmental Review of Federal design of the proposed project, the submit a timely performance report or Programs under Executive Order 12372 Secretary considers the following submitted a report of unacceptable is in the application package for this factors: quality. program. Please note that, under 34 CFR (i) The extent to which the design of In addition, in making a competitive 79.8(a), we have shortened the standard the proposed project includes a grant award, the Secretary also requires 60-day intergovernmental review period thorough, high-quality review of the various assurances including those in order to make awards by the end of relevant literature, a high-quality plan applicable to Federal civil rights laws FY 2019. for project implementation, and the use that prohibit discrimination in programs

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or activities receiving Federal financial requirements in the application package (a) The unduplicated number of assistance from the Department (34 CFR and reference these and other school-based mental health services 100.4, 104.5, 106.4, 108.8, and 110.23). requirements in the Applicable providers employed by schools and 3. Risk Assessment and Specific Regulations section of this notice. LEAs as of the date for each annual Conditions: Consistent with 2 CFR We reference the regulations outlining reporting period of the grant who have 200.205, before awarding grants under the terms and conditions of an award in been trained and placed by the grant to this program the Department conducts a the Applicable Regulations section of provide school-based mental health review of the risks posed by applicants. this notice and include these and other services. Under 2 CFR 3474.10, the Secretary may specific conditions in the GAN. The (b) Number of school-based mental impose specific conditions and, in GAN also incorporates your approved health services providers employed by appropriate circumstances, high-risk application as part of your binding schools and LEAs retained on an annual conditions on a grant if the applicant or commitments under the grant. basis by a high-need local educational grantee is not financially stable; has a 3. Open Licensing Requirements: agency to provide school-based mental history of unsatisfactory performance; Unless an exception applies, if you are health services. has a financial or other management awarded a grant under this competition, These measures constitute the system that does not meet the standards you will be required to openly license Department’s indicators of success for in 2 CFR part 200 subpart D; has not to the public grant deliverables created this program. Consequently, we advise fulfilled the conditions of a prior grant; in whole, or in part, with Department an applicant for a grant under this or is otherwise not responsible. grant funds. When the deliverable program to give careful consideration to 4. Integrity and Performance System: consists of modifications to pre-existing these measures in conceptualizing the If you are selected under this works, the license extends only to those approach and evaluation for its competition to receive an award that modifications that can be separately proposed project. Each grantee will be over the course of the project period identified and only to the extent that required to provide, in its annual may exceed the simplified acquisition open licensing is permitted under the performance and final reports, data threshold (currently $250,000), under 2 terms of any licenses or other legal about its progress in meeting these CFR 200.205(a)(2) we must make a restrictions on the use of pre-existing measures. This data will be considered works. Additionally, a grantee or judgment about your integrity, business by the Department in making potential subgrantee that is awarded competitive ethics, and record of performance under continuation awards. grant funds must have a plan to Federal awards—that is, the risk posed Consistent with 34 CFR 75.591, disseminate these public grant by you as an applicant—before we make grantees funded under this program deliverables. This dissemination plan an award. In doing so, we must consider shall requirements of any evaluation of can be developed and submitted after any information about you that is in the the program conducted by the integrity and performance system your application has been reviewed and selected for funding. For additional Department or an evaluator selected by (currently referred to as the Federal the Department. Awardee Performance and Integrity information on the open licensing Performance measure targets: The Information System (FAPIIS)), requirements please refer to 2 CFR applicant must propose annual targets accessible through the System for 3474.20. for the measures listed above in their Award Management. You may review 4. Reporting: (a) If you apply for a application. Applications must also and comment on any information about grant under this competition, you must provide the following information as yourself that a Federal agency ensure that you have in place the directed under 34 CFR 75.110(b) and (c): previously entered and that is currently necessary processes and systems to (1) Why each proposed performance in FAPIIS. comply with the reporting requirements Please note that, if the total value of in 2 CFR part 170 should you receive target is ambitious (as defined in this your currently active grants, cooperative funding under the competition. This notice) yet achievable compared to the agreements, and procurement contracts does not apply if you have an exception baseline for the performance measure. from the Federal Government exceeds under 2 CFR 170.110(b). (2)(a) The data collection and $10,000,000, the reporting requirements (b) At the end of your project period, reporting methods the applicant would in 2 CFR part 200, Appendix XII, you must submit a final performance use and why those methods are likely to require you to report certain integrity report, including financial information, yield reliable, valid, and meaningful information to FAPIIS semiannually. as directed by the Secretary. If you performance data; and (b) the Please review the requirements in 2 CFR receive a multiyear award, you must applicant’s capacity to collect and part 200, Appendix XII, if this grant submit an annual performance report report reliable, valid, and meaningful plus all the other Federal funds you that provides the most current performance data, as evidenced by high- receive exceed $10,000,000. performance and financial expenditure quality data collection, analysis, and information as directed by the Secretary reporting in other projects or research. VI. Award Administration Information under 34 CFR 75.118. The Secretary Note: If the applicant does not have 1. Award Notices: If your application may also require more frequent experience with collection and is successful, we notify your U.S. performance reports under 34 CFR reporting of performance data through Representative and U.S. Senators and 75.720(c). For specific requirements on other projects or research, the applicant send you a Grant Award Notification reporting, please go to www.ed.gov/ should provide other evidence of (GAN); or we may send you an email fund/grant/apply/appforms/ capacity to successfully carry out data containing a link to access an electronic appforms.html. collection and reporting for its proposed version of your GAN. We may notify 5. Performance Measures: The project. you informally, also. Department has established the The reviewers of each application will If your application is not evaluated or following Government Performance and score related selection criteria on the not selected for funding, we notify you. Results Act of 1993 performance basis of how well an applicant has 2. Administrative and National Policy measures for the Mental Health Service considered these measures in Requirements: We identify Professional Demonstration Grant conceptualizing the approach and administrative and national policy Program: evaluation of the project.

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All grantees must submit an annual DEPARTMENT OF ENERGY specified in the Decision and Order. performance report and final Beghelli’s representations concerning [Case Number 2018–007; EERE–2018–BT– the energy consumption of the specified performance report with information WAV–0011] that is responsive to these performance basic models must be based on testing measures. Energy Conservation Program: according to the provisions and 6. Continuation Awards: In making a Decision and Order Granting a Waiver restrictions in the alternate test continuation award under 34 CFR to Beghelli From the Department of procedure set forth in the Decision and 75.253, the Secretary considers, among Energy Illuminated Exit Sign Test Order, and the representations must other things: Whether a grantee has Procedure fairly disclose the test results. made substantial progress in achieving Distributors, retailers, and private AGENCY: Office of Energy Efficiency and the goals and objectives of the project; labelers are held to the same Renewable Energy, Department of whether the grantee has expended funds requirements when making Energy. in a manner that is consistent with its representations regarding the energy consumption of this equipment. (42 approved application and budget; and, ACTION: Notice of decision and order. U.S.C. 6293(c)) if the Secretary has established SUMMARY: The U.S. Department of Consistent with 10 CFR 431.401(j), performance measurement Energy (‘‘DOE’’) gives notice of a not later than August 20, 2019, any requirements, the performance targets in Decision and Order (Case Number manufacturer currently distributing in the grantee’s approved application. 2018–007) that grants to Beghelli North commerce in the United States In making a continuation award, the America (‘‘Beghelli’’) a waiver from equipment employing a technology or Secretary also considers whether the specified portions of the DOE test characteristic that results in the same grantee is operating in compliance with procedure for determining the energy need for a waiver from the applicable the assurances in its approved consumption of specified basic models test procedure must submit a petition application, including those applicable of illuminated exit signs. Beghelli is for waiver. Manufacturers not currently to Federal civil rights laws that prohibit required to test and rate the specified distributing such equipment in discrimination in programs or activities basic models in accordance with the commerce in the United States must receiving Federal financial assistance alternate test procedure set forth in the petition for and be granted a waiver from the Department (34 CFR 100.4, Decision and Order. prior to the distribution in commerce of 104.5, 106.4, 108.8, and 110.23). DATES: The Decision and Order is that equipment in the United States. Manufacturers may also submit a VII. Other Information effective on June 21, 2019. The Decision and Order will terminate upon the request for interim waiver pursuant to Accessible Format: Individuals with compliance date of any future the requirements of 10 CFR 431.401. disabilities can obtain this document amendment to the test procedure for Signed in Washington, DC, on June 7, and a copy of the application package in illuminated exit signs located at 10 CFR 2019. an accessible format (e.g., braille, large 431.204 that addresses the issues Alexander Fitzsimmons, print, audiotape, or compact disc) on presented in this waiver. At such time, Acting Deputy Assistant Secretary for Energy request to the program contact person Beghelli must use the relevant test Efficiency, Energy Efficiency and Renewable listed under FOR FURTHER INFORMATION procedure for this equipment for any Energy. CONTACT. testing to demonstrate compliance with Case Number 2018–007 the applicable standards, and any other Electronic Access to This Document: Decision and Order The official version of this document is representations of energy use. the document published in the Federal FOR FURTHER INFORMATION CONTACT: I. Background and Authority Register. You may access the official Ms. Lucy deButts, U.S. Department of The Energy Policy and Conservation edition of the Federal Register and the Energy, Office of Energy Efficiency and Act of 1975, as amended (‘‘EPCA’’),1 Code of Federal Regulations at Renewable Energy, Building authorizes the U.S. Department of www.govinfo.gov. At this site you can Technologies Office, EE–5B, 1000 Energy (‘‘DOE’’) to regulate the energy view this document, as well as all other Independence Avenue SW, Washington, efficiency of a number of consumer documents of this Department DC 20585–0121. Email: AS_Waiver_ products and industrial equipment. (42 published in the Federal Register, in [email protected]. U.S.C. 6291–6317) Title III, Part B 2 of text or Portable Document Format Mr. Michael Kido, U.S. Department of EPCA established the Energy (PDF). To use PDF you must have Energy, Office of the General Counsel, Conservation Program for Consumer Adobe Acrobat Reader, which is Mail Stop GC–33, Forrestal Building, Products Other Than Automobiles, available free at the site. 1000 Independence Avenue SW, which sets forth a variety of provisions Washington, DC 20585–0103. You may also access documents of the designed to improve energy efficiency Telephone: (202) 586–8145. Email: Department published in the Federal for certain types of consumer products. [email protected]. Register by using the article search These products include illuminated exit feature at www.federalregister.gov. SUPPLEMENTARY INFORMATION: In signs, the focus of this document. (42 Specifically, through the advanced accordance with Title 10 of the Code of U.S.C. 6291(37); 42 U.S.C. 6295(w)) search feature at this site, you can limit Federal Regulations (10 CFR Under EPCA, DOE’s energy your search to documents published by 431.401(f)(2)), DOE gives notice of the conservation program consists the Department. issuance of its Decision and Order as set essentially of four parts: (1) Testing, (2) forth below. The Decision and Order labeling, (3) Federal energy conservation Dated: June 18, 2019. grants Beghelli a waiver from the Frank T. Brogan, applicable test procedure at 10 CFR 1 All references to EPCA in this document refer Assistant Secretary for Elementary and 431.204 for specified basic models of to the statute as amended through America’s Water Secondary Education. Infrastructure Act of 2018, Public Law 115–270 illuminated exit signs, and requires that (October 23, 2018). [FR Doc. 2019–13289 Filed 6–20–19; 8:45 am] Beghelli test and rate such equipment 2 For editorial reasons, upon codification in the BILLING CODE 4000–01–P using the alternate test procedure U.S. Code, Part B was redesignated as Part A.

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standards, and (4) certification and as to provide materially inaccurate petition for waiver. 84 FR 2194 (‘‘Notice enforcement procedures. Relevant comparative data. 10 CFR 431.401(f)(2). of Petition for Waiver’’). In the Notice of provisions of EPCA include definitions DOE may grant the waiver subject to Petition for Waiver, DOE reviewed the (42 U.S.C. 6291), energy conservation conditions, including adherence to alternate test procedure suggested by standards (42 U.S.C. 6295), test alternate test procedures. Id. Beghelli. The suggested alternate procedures (42 U.S.C. 6293), labeling procedure would measure the output II. Beghelli’s Petition for Waiver: provisions (42 U.S.C. 6294), and the power of the exit sign and apply Assertions and Determinations authority to require information and conversion losses to back-calculate the reports from manufacturers (42 U.S.C. By letter with attachment dated June input power to the exit sign. This 6296). 26, 2018, Beghelli filed a petition for approach would require assumptions The Federal testing requirements waiver from the illuminated exit sign that would likely result in an consist of test procedures that test procedure set forth in 10 CFR uncertainty of measured values. manufacturers of covered products must 431.204. (Beghelli, No. 1 at pp. 1–6) 4 Beghelli contended that the input to use as the basis for: (1) Certifying to Beghelli requested a waiver for basic output power conversion losses of all DOE that their products comply with models that provide the dual function of basic models under consideration the applicable energy conservation exit signage and lighting for emergency would not exceed 30 percent. However, standards adopted pursuant to EPCA (42 egress (combination illuminated exit Beghelli’s petition did not provide a U.S.C. 6295(s)), and (2) making signs) 5, stating that the battery used in sufficient basis for the 30-percent value. representations about the efficiency of combination illuminated exit signs With the differences in battery types that product (42 U.S.C. 6293(c)). requires a substantially larger capacity and sizes used in the various basic Similarly, DOE must use these test to provide a minimum of 90 minutes of models addressed by the waiver request, procedures to determine whether the egress lighting, as required by safety it was not evident from the petition that product complies with relevant codes. Beghelli further stated that it is the 30-percent value would apply across standards promulgated under EPCA. (42 not feasible to separate the power all the basic models of illuminated exit U.S.C. 6295(s)) measurement associated with the exit sign models identified in Beghelli’s Under 42 U.S.C. 6293, EPCA sets forth signage and the egress lighting because petition. Additionally, as DOE the criteria and procedures DOE is a single battery and charging circuit explained in the Notice of Petition for required to follow when prescribing or supplies power for both functions. Waiver, it was unclear from the limited amending test procedures for covered As an alternate to the test procedure information provided by Beghelli in its products. EPCA requires that any test currently in place at 10 CFR 431.204, petition whether the measurement of procedures prescribed or amended Beghelli requested that it be permitted the DC output voltage and current under this section must be reasonably to determine the power consumption for measurement in Beghelli’s suggested designed to produce test results which its combination illuminated exit signs alternative testing method would result reflect energy efficiency, energy use or using the following procedure: in a power measurement that could only estimated annual operating cost of a 1. Measure AC input power of the be attributable to the light sources of the covered product during a representative complete unit of combination exit sign, without resorting to additional average use cycle or period of use and illuminated exit sign with a fully steps such as cutting wires or otherwise requires that test procedures not be charged battery. modifying the equipment’s circuitry. 84 unduly burdensome to conduct. (42 2. Measure the DC output voltage and FR 2194, 2195. Accordingly, in light of U.S.C. 6293(b)(3)) The test procedure for current to the light source of the unit. the uncertainty regarding the basis for illuminated exit signs is contained in 3. Calculate the AC power Beghelli’s assumptions and the absence the Code of Federal Regulations (‘‘CFR’’) consumption of the light source of the of any clarifying supplemental at 10 CFR 431.204, ‘‘Uniform test unit by applying a power factor method for the measurement of energy information from the company in correction of 30 percent as worst-case support of those assumptions, DOE consumption of illuminated exit scenario. (Beghelli asserted that it 3 initially determined in its Notice of signs.’’ arrived at this value based on its view Under 10 CFR 431.401, any interested Petition for Waiver that the alternative that the circuitry design would not person may submit a petition for waiver test procedure suggested by Beghelli produce a loss exceeding 30 percent.) from DOE’s test procedure (i.e., to use the estimated conversion 4. If needed, calculate the stand-by requirements. DOE will grant a waiver losses in conjunction with a power for the unit when the battery is from the test procedure requirements if measurement for which it is uncertain fully charged using the following DOE determines either that the basic whether the power consumption of the equation: Stand-by Power = Input Power model for which the waiver was light source(s) of the exit sign is (from Item 1) ¥ Power of Basic Exit requested contains a design isolated) would not likely accurately Sign Light Source (from Item 3). characteristic that prevents testing of the calculate the combination illuminated On February 6, 2019, DOE published basic model according to the prescribed exit sign input power demand of the a notice announcing its receipt of the test procedures, or that the prescribed affected basic models. 84 FR 2194, test procedures evaluate the basic model 2195–2196. 4 A notation in this form provides a reference for in a manner so unrepresentative of its information that is in the docket for this test As an alternate to Beghelli’s suggested true energy consumption characteristics procedure waiver (Docket No. EERE–2018–BT– approach, in the Notice of Petition for WAV–0011) (available at https:// Waiver, DOE proposed that the 3 Although illuminated exit signs are covered www.regulations.gov/document?D=EERE-2018-BT- company apply an alternate testing WAV-0011-0001) This notation indicates that the products pursuant to EPCA, as a matter of method that would not require administrative convenience and to minimize statement preceding the reference is document confusion among interested parties, DOE adopted number 1 in the docket and appears at pages 2–4 application of conversion losses and, illuminated exit sign provisions into subpart L of of that document. instead, would rely on a more direct 10 CFR part 431 (the portion of DOE’s regulations 5 DOE uses the term ‘‘combination illuminated measurement of the input power dealing with commercial and industrial equipment) exit sign’’ in this notice to mean an illuminated exit consumption attributable to the light because typically businesses, rather than sign that includes or is packaged with (1) at least individuals, purchase them. 70 FR 60407, 60409 one auxiliary feature and (2) a battery electrically source(s) of the exit sign. 84 FR 2194, (Oct. 18, 2005). connected to the illumination source for the face. 2195. Under this alternate test

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procedure, the manufacturer would combination illuminated exit sign basic basic models’ true energy consumption determine the input power demand of a models according to the alternate test characteristics. 10 CFR 431.401(k)(1). unit of the basic model by testing an procedure involving testing units of Likewise, Beghelli may request that equivalent 6 unit of a non-combination equivalent non-combination illuminated DOE rescind or modify the waiver if the illuminated exit sign. This approach is exit signs. Using this method, for each company discovers an error in the similar to an alternate test procedure combination illuminated exit sign unit information provided to DOE as part of approved by DOE for use in the waiver selected, Beghelli must assign the its petition, determines that the waiver granted to Acuity Brands Lighting Inc. measured input power demand of a is no longer needed, or for other for similar equipment. 83 FR 11740 separate corresponding equivalent non- appropriate reasons. 10 CFR (March 16, 2018). combination unit. For example, if DOE 431.401(k)(2). As set forth above, the In the Notice of Petition for Waiver, regulations require testing of two units, test procedure specified in this Decision DOE also solicited comments from Beghelli must identify and measure the and Order is not the same as the test interested parties on all aspects of the input power demand of two equivalent procedure offered by Beghelli. If petition and Beghelli’s suggested non-combination units, and assign the Beghelli believes that the alternate test alternate method as well as DOE’s measured input power of each unit to method it suggested provides proposed alternate method. 84 FR 2194, each of the two combination units, representative results and is less 2196. DOE received no comments in respectively. In those instances where burdensome than the test method response to the Notice of Petition for only a single, non-combination unit is required by this Decision and Order, Waiver. available, Beghelli would be required to Beghelli may submit a request for For the reasons explained here and in measure the input power demand of modification under 10 CFR the Notice of Petition for Waiver, absent that single unit and assign the measured 431.401(k)(2) that addresses the a waiver, the basic models identified by input power to the combination unit. Beghelli in its petition cannot be tested concerns that DOE has specified with See generally 10 CFR 429.48(a) and 10 that procedure. Beghelli may also and rated for energy consumption on a CFR 429.11(b)(2). submit another less burdensome basis representative of their true energy The alternate test procedure provided consumption characteristics. DOE has by DOE and specified in this Decision alternative test procedure not expressly reviewed the recommended procedure and Order is substantively the same as considered in this notice under the suggested by Beghelli and concludes that detailed in the Notice of Petition for same provision. that it will not allow for the accurate Waiver. III. Consultations With Other Agencies measurement of the energy use of the This Decision and Order applies only combination illuminated exit sign, to the basic models listed and does not DOE consulted with the Federal Trade while alleviating the testing problems extend to any other basic models. DOE Commission (‘‘FTC’’) staff concerning associated with Beghelli’s evaluates and grants waivers for only Beghelli’s petition for waiver. The FTC implementation of DOE’s applicable those basic models specifically set out staff did not have any objections to DOE illuminated exit sign test procedure for in the petition, not future models that granting a waiver to Beghelli for the the specified basic models. No comment may be manufactured by the petitioner. specified basic models. or additional information was received Beghelli may request that the scope of in response to the Notice of Petition for this waiver be extended to include IV. Order additional basic models that employ the Waiver. As such, for the reasons After careful consideration of all the same technology as those listed in this discussed, the following main issues material submitted by Beghelli, the with Beghelli’s alternative test waiver. 10 CFR 431.401(g). Beghelli may various public-facing materials (e.g., procedure remain unresolved: (1) also submit another petition for waiver marketing materials, product Assumptions of conversion losses and from the test procedure for additional specification sheets, and installation (2) no non-destructive method of basic models that employ a different manuals) for the units identified in the isolating the power consumption to the technology and meet the criteria for test petition, in this matter, it is ordered light source(s) of the exit sign. procedure waivers. 10 CFR Based on DOE’s review of product 431.401(a)(1). that: specification sheets of the basic models DOE notes that it may modify or (1) Beghelli must, as of the date of for which Beghelli seeks a waiver, it rescind the waiver at any time upon publication of this Order in the Federal appears that there are units of non- DOE’s determination that the factual Register, test and rate the following combination illuminated exit signs basis underlying the petition for waiver RBO–C combination illuminated exit equivalent to units of these basic is incorrect, or upon a determination sign basic models with the alternate test models. Thus, DOE is requiring that that the results from the alternate test procedure as set forth in paragraph (2) Beghelli test and rate specified procedure are unrepresentative of the of this Order:

Brand name Basic model No.

Beghelli ...... RBO–C–6–36–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–42–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–54–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–60–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–72–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–90–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–100–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–120–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–36–LG1–U–W–2LRWP–9W

6 A unit of a non-combination illuminated exit those of the unit of the combination illuminated auxiliary features, and contains an electrically- sign is equivalent only if it consists entirely of exit sign basic model, but does not include any connected battery. electricity-consuming components identical to all of

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Brand name Basic model No.

Beghelli ...... RBO–C–6–42–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–54–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–60–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–72–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–90–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–100–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–120–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–36–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–42–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–60–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–90–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–120–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–130–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–140–LR1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–36–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–42–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–60–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–90–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–120–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–130–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–12–140–LG1–U–W–2LRWP–9W Beghelli ...... RBO–C–6–36–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–42–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–54–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–60–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–72–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–90–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–100–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–120–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–36–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–42–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–54–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–60–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–72–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–90–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–100–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–120–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–36–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–42–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–60–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–90–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–120–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–130–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–140–LR1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–36–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–42–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–60–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–90–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–120–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–130–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–12–140–LG1–U–W–2LRWP–18W Beghelli ...... RBO–C–6–36–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–42–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–54–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–60–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–72–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–90–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–100–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–120–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–36–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–42–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–54–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–60–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–72–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–90–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–100–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–6–120–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–36–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–42–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–60–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–90–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–120–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–130–LR1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–140–LR1–U–W–2LRWP–8W

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Brand name Basic model No.

Beghelli ...... RBO–C–12–36–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–42–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–60–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–90–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–120–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–130–LG1–U–W–2LRWP–8W Beghelli ...... RBO–C–12–140–LG1–U–W–2LRWP–8W

(2) The alternate test procedure for the a test procedure waiver. DOE may by postal mail addressed to National Beghelli basic models referenced in rescind or modify this waiver at any Energy Technology Laboratory, 3610 paragraph (1) of this Order is the test time if it determines that the factual Collins Ferry Road, P.O. Box 880, procedure for illuminated exit signs basis underlying the petition for waiver Morgantown, WV 26507–0880. Please prescribed by DOE at 10 CFR 431.204 is incorrect, or the results from the direct all media inquiries to the NETL except use the following instructions in alternate test procedure are Public Affairs Officer at (304) 285–0228. place of 10 CFR 431.204(b): unrepresentative of the basic models’ SUPPLEMENTARY INFORMATION: Determine the energy efficiency of true energy consumption characteristics. each combination illuminated exit sign 10 CFR 431.401(k)(1). Likewise, Beghelli Instructions and Information on the unit under test (‘‘combination unit’’) by may request that DOE rescind or modify Public Meeting conducting the test procedure, as the waiver if Beghelli discovers an error The public meeting will be held via follows: in the information provided to DOE as WebEx. The public meeting will begin (i) Identify a unit of a non- part of its petition, determines that the at 1:00 p.m. and end at 3:00 p.m. combination illuminated exit sign waiver is no longer needed, or for other Interested parties may RSVP, to confirm (‘‘non-combination unit’’) equivalent to appropriate reasons. 10 CFR their participation and receive login the combination unit. A non- 431.401(k)(2). instructions, by emailing Seth.Lawson@ combination unit is equivalent only if it (6) Granting of this waiver does not netl.doe.gov. consists entirely of electricity- release Beghelli from the certification The objective of the Supercritical CO consuming components identical to all requirements set forth at 10 CFR part 2 Oxy-combustion Technology Group is to of those of the combination unit, but 429. promote a technical understanding of does not include any auxiliary features, Signed in Washington, DC, on June 7, oxy-combustion for direct-fired sCO and contains an electrically connected 2 2019. power cycles by sharing information or battery. The equivalent non- Alexander Fitzsimmons, viewpoints from individual participants combination unit must also have the Acting Deputy Assistant Secretary for Energy regarding risk reduction and challenges same manufacturer and number of faces Efficiency, Energy Efficiency and Renewable associated with developing the as the combination unit. Energy. (ii) Test the equivalent non- technology. [FR Doc. 2019–13216 Filed 6–20–19; 8:45 am] combination unit using the DOE test Oxy-combustion systems in directly procedure at 10 CFR, part 431, BILLING CODE 6450–01–P heated supercritical CO2 (SCO2) power subpart L. cycles utilize natural gas or syngas oxy- combustion systems to produce a high (iii) Assign the measured input power DEPARTMENT OF ENERGY demand of the non-combination unit as temperature SCO2 working fluid and the input power demand of the Notice of Public Meeting of the have the potential to be efficient, cost effective and well-suited for carbon combination unit. Supercritical CO2 Oxy-Combustion (3) Representations. Beghelli may not Technology Group dioxide (CO2) capture. To realize the make representations about the energy benefits of direct fired SCO2 power use of the basic models referenced in AGENCY: National Energy Technology cycles, the following challenges must be paragraph (1) of this Order for Laboratory, Office of Fossil Energy, addressed: Chemical kinetic compliance, marketing, or other Department of Energy. uncertainties, combustion instability, purposes unless the basic model has ACTION: Notice of public meeting. flowpath design, thermal management, been tested in accordance with the pressure containment, definition/ SUMMARY: The National Energy provisions set forth above and such prediction of turbine inlet conditions, Technology Laboratory (NETL) will host representations fairly disclose the ignition, off-design operation, transient a public meeting via WebEx July 9, results of such testing. capabilities, in-situ flame monitoring, (4) This waiver shall remain in effect 2019, of the Supercritical CO2 Oxy- and modeling, among others. according to the provisions of 10 CFR combustion Technology Group, to The format of the meeting will 431.401. address challenges associated with oxy- facilitate equal opportunity for (5) This waiver is issued on the combustion systems in directly heated discussion among all participants; all condition that the statements, supercritical CO2 (sCO2) power cycles. participants will be welcome to speak. representations, and documents DATES: The public meeting will be held Following a detailed presentation by provided by Beghelli are valid. If on July 9, 2019, from 1 p.m. to 3 p.m. one volunteer participant regarding Beghelli makes any modifications to the ET. lessons learned from his or her area of controls or configurations of a basic ADDRESSES: The public meeting will be research, other participants will be model referenced in paragraph (1), the held via WebEx and hosted by NETL. provided the opportunity to briefly waiver will no longer be valid for that FOR FURTHER INFORMATION CONTACT: For share lessons learned from their own basic model and Beghelli will either be further information regarding the public research. Meetings are expected to take required to use the current Federal test meeting, please contact Seth Lawson by place every other month with a different method or submit a new application for email at [email protected], or volunteer presenting at each meeting.

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Meeting minutes shall be published for System, L.L.C., P.O. Box 1642, Houston, First Street NE, Washington, DC 20426, those who are unable to attend. Texas 77251, by calling (713) 627–4102, a motion to intervene in accordance This meeting is considered ‘‘open-to- by fax at (713) 627–5947, or by email with the requirements of the the-public;’’ the purpose for this [email protected]. Commission’s Rules of Practice and meeting has been examined during the Specifically, Gulfstream seeks Procedure (18 CFR 385.214 or 385.211) planning stages, and NETL management authorization to: (i) Install one 16,000 and the Regulations under the NGA (18 has made specific determinations that horsepower turbine driven compressor CFR 157.10). A person obtaining party affect attendance. All information unit at its existing Compressor Station status will be placed on the service list presented at this meeting must meet 410 located in Mobile County, Alabama; maintained by the Secretary of the criteria for public sharing or be (ii) abandon in place approximately 4 Commission and will receive copies of published and available in the public miles of 36-inch-diameter pipeline in all documents filed by the applicant and domain. Participants should not Mobile County, Alabama; (iii) construct by all other parties. A party must submit communicate information that is approximately 4 miles of thicker walled 3 copies of filings made in the considered official use only, 36-inch-diameter pipeline to replace the proceeding with the Commission and proprietary, sensitive, restricted or abandoned pipeline; (iv) increase the must provide a copy to the applicant protected in any way. Foreign nationals, maximum allowable operating pressure and to every other party. Only parties to who may be present, have not been of approximately 59 miles of 36-inch- the proceeding can ask for court review approved for access to DOE information diameter onshore and offshore pipeline; of Commission orders in the proceeding. and technologies. (v) construct metering equipment at its However, a person does not have to Dated: June 3, 2019. existing Compressor Station 420 in intervene in order to have comments Heather Quedenfeld, Manatee County, Florida; (vi) construct considered. The second way to other related auxiliary facilities; and participate is by filing with the Associate Director, Coal, Technology Development & Integration Center, National (vii) establish and charge initial Secretary of the Commission, as soon as Energy Technology Laboratory. incremental recourse rates and system possible, an original and two copies of [FR Doc. 2019–13226 Filed 6–20–19; 8:45 am] fuel retainage for firm service. comments in support of or in opposition Gulfstream estimates the cost of the to this project. The Commission will BILLING CODE 6450–01–P proposed project to be approximately consider these comments in $155 million. Gulfstream requests that determining the appropriate action to be DEPARTMENT OF ENERGY the Commission issue an order granting taken, but the filing of a comment alone authorization by June 1, 2020, to allow will not serve to make the filer a party Federal Energy Regulatory Gulfstream to obtain a special permit for to the proceeding. The Commission’s Commission the increased pipeline pressure from the rules require that persons filing Pipeline and Hazardous Materials Safety comments in opposition to the project [Docket No. CP19–475–000] Administration and commence provide copies of their protests only to Gulfstream Natural Gas System, L.L.C.; construction by November 1, 2021, to the party or parties directly involved in Notice of Application meet the requested in service date of the protest. December 1, 2022. Persons who wish to comment only Take notice that on June 3, 2019, Pursuant to section 157.9 of the on the environmental review of this Gulfstream Natural Gas System, L.L.C. Commission’s rules, 18 CFR 157.9, project should submit an original and (Gulfstream), 2701 North Rocky Point within 90 days of this Notice the two copies of their comments to the Drive, Suite 1050, Tampa, Florida Commission staff will either: Complete Secretary of the Commission. 33607, filed an application pursuant to its environmental assessment (EA) and Environmental commentors will be section 7(b) and 7(c) of the Natural Gas place it into the Commission’s public placed on the Commission’s Act (NGA) and Part 157 of the record (eLibrary) for this proceeding; or environmental mailing list and will be Commission’s regulations seeking issue a Notice of Schedule for notified of any meetings associated with authorization for its Phase VI Expansion Environmental Review. If a Notice of the Commission’s environmental review Project. Gulfstream states the proposed Schedule for Environmental Review is process. Environmental commentors project is designed to create issued, it will indicate, among other will not be required to serve copies of approximately 78,000 dekatherms per milestones, the anticipated date for the filed documents on all other parties. day of mainline capacity from existing Commission staff’s issuance of the EA However, the non-party commentors points of receipt in Mississippi and for this proposal. The filing of the EA will not receive copies of all documents Alabama to an existing point of delivery in the Commission’s public record for filed by other parties or issued by the in Manatee County, Florida, all as more this proceeding or the issuance of a Commission and will not have the right fully described in the application which Notice of Schedule for Environmental to seek court review of the is on file with the Commission and open Review will serve to notify federal and Commission’s final order. to public inspection. The filing may also state agencies of the timing for the As of the February 27, 2018 date of be viewed on the web at http:// completion of all necessary reviews, and the Commission’s order in Docket No. www.ferc.gov using the ‘‘eLibrary’’ link. the subsequent need to complete all CP16–4–001, the Commission will Enter the docket number excluding the federal authorizations within 90 days of apply its revised practice concerning last three digits in the docket number the date of issuance of the Commission out-of-time motions to intervene in any field to access the document. For staff’s EA. new Natural Gas Act section 3 or section assistance, contact FERC at There are two ways to become 7 proceeding.1 Persons desiring to [email protected] or call involved in the Commission’s review of become a party to a certificate toll-free, (866) 208–3676 or TTY, (202) this project. First, any person wishing to proceeding are to intervene in a timely 502–8659. obtain legal status by becoming a party manner. If seeking to intervene out-of- Any questions regarding this to the proceedings for this project time, the movant is required to ‘‘show application should be directed to Lisa should, on or before the comment date A. Connolly, Director, Rates and stated below file with the Federal 1 Tennessee Gas Pipeline Company, L.L.C., 162 Certificates, Gulfstream Natural Gas Energy Regulatory Commission, 888 FERC ¶ 61,167 at P 50 (2018).

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good cause why the time limitation www.ferc.gov under the eLibrary link. DEPARTMENT OF ENERGY should be waived,’’ and should provide Enter the docket number excluding the justification by reference to factors set last three digits in the docket number Federal Energy Regulatory forth in Rule 214(d)(1) (18 CFR field to access the document. For Commission 385.214(d)(1)) of the Commission’s assistance, contact FERC Online Rules and Regulations. Support at FERCOnlineSupport@ Combined Notice of Filings #1 The Commission strongly encourages ferc.gov, (866) 208–3676 (toll free), or Take notice that the Commission electronic filings of comments, protests, (202) 502–8659 (TTY). received the following electric corporate and interventions in lieu of paper using You may also register online at http:// filings: the ‘‘eFiling’’ link at http:// www.ferc.gov/docs-filing/ Docket Numbers: EC19–63–000. www.ferc.gov. Persons unable to file esubscription.asp to be notified via Applicants: NRG Wholesale electronically should submit an original email of new filings and issuances Generation LP, Entergy Mississippi, and 3 copies of the protest or related to this or other pending projects. LLC. intervention to the Federal Energy For assistance, contact FERC Online Description: Response of GenOn regulatory Commission, 888 First Street Support. Wholesale Generation LP and Entergy NE, Washington, DC 20426. All comments must be filed by August Mississippi, LLC, to May 16, 2019 Comment Date: 5:00 p.m. Eastern 13, 2019. deficiency letter. Time on July 8, 2019. The Commission strongly encourages Filed Date: 6/14/19. Dated: June 17, 2019. electronic filing. Please file comments Accession Number: 20190614–5211. Nathaniel J. Davis, Sr., using the Commission’s eFiling system Comments Due: 5 p.m. ET 7/5/19. Deputy Secretary. at http://www.ferc.gov/docs-filing/ Take notice that the Commission [FR Doc. 2019–13234 Filed 6–20–19; 8:45 am] efiling.asp. Commenters can submit received the following exempt BILLING CODE 6717–01–P brief comments up to 6,000 characters, wholesale generator filings: without prior registration, using the Docket Numbers: EG19–128–000. eComment system at http:// Applicants: PSEG Keys Energy Center DEPARTMENT OF ENERGY www.ferc.gov/docs-filing/ LLC, PSEG Fossil Sewaren Urban ecomment.asp. You must include your Renewal LLC. Federal Energy Regulatory name and contact information at the end Description: Self-Certifications of EG Commission of your comments. For assistance, of PSEG Keys Energy Center LLC and [Project No. 619–164] please contact FERC Online Support. In PSEG Fossil Sewaren Urban Entitiy lieu of electronic filing, please send a LLC. Pacific Gas and Electric Company and paper copy to: Secretary, Federal Energy Filed Date: 6/14/19. City of Santa Clara, California; Notice Regulatory Commission, 888 First Street Accession Number: 20190614–5145. of Availability of the Draft NE, Washington, DC 20426. The first Comments Due: 5 p.m. ET 7/5/19. Environmental Impact Statement for page of any filing should include docket Docket Numbers: EG19–129–000. the Bucks Creek Hydropower Project number P–619–164. Applicants: Wessington Springs Anyone may intervene in this In accordance with the National Wind, LLC. proceeding based on this draft EIS (18 Description: Notice of Self- Environmental Policy Act of 1969 and CFR 380.10). You must file your request the Federal Energy Regulatory Certification of Exempt Wholesale to intervene as specified above.1 You do Generator Status of Wessington Springs Commission’s (Commission) not need intervenor status to have your regulations, 18 CFR part 380, the Office Wind, LLC. comments considered. Filed Date: 6/14/19. of Energy Projects has reviewed the Commission staff will hold two public Accession Number: 20190614–5155. application for license for the Bucks meetings for the purpose of receiving Comments Due: 5 p.m. ET 7/5/19. Creek Hydropower Project (FERC No. comments on the draft EIS. The daytime 619) and has prepared a draft Docket Numbers: EG19–131–000. meeting will focus on resource agency, environmental impact statement (EIS) Applicants: PSEG Keys Energy Center Indian tribes, and non-governmental for the project. The project is located on LLC. organization comments, while the Bucks, Grizzly, and Milk Ranch Creeks Description: Self-Certification of EG of evening meeting is primarily for in Plumas County, California. Portions PSEG Keys Energy Center LLC. receiving input from the public. All of the project are located within the Filed Date: 6/17/19. interested individuals and entities will Plumas National Forest. Accession Number: 20190617–5143. be invited to attend one or both of the The draft EIS contains staff’s Comments Due: 5 p.m. ET 7/8/19. public meetings. A notice detailing the evaluations of the co-applicants’ Docket Numbers: EG19–132–000. exact date, time, and location of the proposal and the alternatives for Applicants: PSEG Fossil Sewaren public meetings will be forthcoming. relicensing the Bucks Creek Urban Renewal LLC. Hydropower Project. The draft EIS For further information, please Description: Self-Certification of EG of documents the views of governmental contact Alan Mitchnick at (202) 502– PSEG Fossil Sewaren Urban Renewal agencies, non-governmental 6074 or at [email protected]. LLC. organizations, affected Indian tribes, the Dated: June 14, 2019. Filed Date: 6/17/19. public, the license applicants, and Nathaniel J. Davis, Sr., Accession Number: 20190617–5145. Comments Due: 5 p.m. ET 7/8/19. Commission staff. Deputy Secretary. A copy of the draft EIS is available for [FR Doc. 2019–13132 Filed 6–20–19; 8:45 am] Take notice that the Commission received the following electric rate review in the Commission’s Public BILLING CODE 6717–01–P Reference Branch, Room 2A, located at filings: 888 First Street NE, Washington, DC 1 Interventions may also be filed electronically via Docket Numbers: ER18–1739–002. 20426. The draft EIS also may be viewed the internet in lieu of paper. See the previous Applicants: Midcontinent on the Commission’s website at http:// discussion on filing comments electronically. Independent System Operator, Inc.

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Description: Compliance filing: 2019– Filed Date: 6/14/19. Docket Numbers: ER19–2165–000. 06–17_Addtl Compliance by MISO TOs Accession Number: 20190614–5165. Applicants: Western Interconnect to revise Att O and ADIT Work Papers Comments Due: 5 p.m. ET 7/5/19. LLC. to be effective 1/1/2019. Docket Numbers: ER19–2157–000. Description: Compliance filing: Order Filed Date: 6/17/19. Applicants: Mountain Power, LLC. No. 845 Compliance Filing to be Accession Number: 20190617–5098. Description: Baseline eTariff Filing: effective 5/22/2019. Comments Due: 5 p.m. ET 7/8/19. New Baseline Reactive Tariff Filing to Filed Date: 6/14/19. Docket Numbers: ER18–2063–002. be effective 9/1/2019. Accession Number: 20190614–5180. Applicants: Flemington Solar, LLC. Filed Date: 6/14/19. Comments Due: 5 p.m. ET 7/5/19. Description: Compliance filing: Accession Number: 20190614–5166. Docket Numbers: ER19–2166–000. Flemington Solar Compliance Filing to Comments Due: 5 p.m. ET 7/5/19. Applicants: Southwest Power Pool, be effective 10/1/2018. Docket Numbers: ER19–2158–000. Inc. Filed Date: 6/17/19. Applicants: Orrtanna Power, LLC. Description: § 205(d) Rate Filing: Accession Number: 20190617–5123. 1888R9 Westar Energy, Inc. NITSA NOA Comments Due: 5 p.m. ET 7/8/19. Description: Baseline eTariff Filing: New Baseline Reactive Tariff Filing to to be effective 9/1/2019. Docket Numbers: ER18–2323–003. be effective 9/1/2019. Filed Date: 6/17/19. Applicants: Midcontinent Filed Date: 6/14/19. Accession Number: 20190617–5025. Independent System Operator, Inc., Accession Number: 20190614–5168. Comments Due: 5 p.m. ET 7/8/19. Michigan Electric Transmission Comments Due: 5 p.m. ET 7/5/19. Docket Numbers: ER19–2168–000. Company, LLC. Description: Compliance filing: 2019– Docket Numbers: ER19–2159–000. Applicants: Southwest Power Pool, 06–17_Addtl Compliance Filing re Applicants: Shawnee Power, LLC. Inc. METC Revisions to Att O Formula Rates Description: Baseline eTariff Filing: Description: § 205(d) Rate Filing: to be effective 1/1/2019. New Baseline Reactive Tariff Filing to 1889R8 Westar Energy, Inc.— Filed Date: 6/17/19. be effective 9/1/2019. Mindenmines NITSA NOA to be Accession Number: 20190617–5086. Filed Date: 6/14/19. effective 9/1/2019. Comments Due: 5 p.m. ET 7/8/19. Accession Number: 20190614–5169. Filed Date: 6/17/19. Accession Number: 20190617–5037. Docket Numbers: ER18–2323–004. Comments Due: 5 p.m. ET 7/5/19. Applicants: Midcontinent Docket Numbers: ER19–2160–000. Comments Due: 5 p.m. ET 7/8/19. Independent System Operator, Inc., ITC Applicants: Titus Power, LLC. Docket Numbers: ER19–2169–000. Midwest LLC, International Description: Baseline eTariff Filing: Applicants: Southwest Power Pool, Transmission Company. New Baseline Reactive Tariff Filing to Inc. Description: Compliance filing: 2019– be effective 9/1/2019. Description: § 205(d) Rate Filing: 06–17_Addtl Compliance Filing re ITC Filed Date: 6/14/19. 1890R9 Westar Energy, Inc.—Moran Companies Revisions to Att O to be Accession Number: 20190614–5171. NITSA NOA to be effective 9/1/2019. effective 1/1/2019. Comments Due: 5 p.m. ET 7/5/19. Filed Date: 6/17/19. Filed Date: 6/17/19. Docket Numbers: ER19–2161–000. Accession Number: 20190617–5064. Accession Number: 20190617–5118. Applicants: Hamilton Power, LLC. Comments Due: 5 p.m. ET 7/8/19. Comments Due: 5 p.m. ET 7/8/19. Description: Baseline eTariff Filing: Docket Numbers: ER19–2170–000. Docket Numbers: ER19–1806–001. New Baseline Reactive Tariff Filing to Applicants: Duke Energy Progress, Applicants: Mitsui Bussan be effective 9/1/2019. LLC. Commodities, Ltd. Filed Date: 6/14/19. Description: § 205(d) Rate Filing: Description: Compliance filing: Accession Number: 20190614–5172. DEP–5 Towns Dynamic Schedule Agmts Amendment to MBR filing to be Comments Due: 5 p.m. ET 7/5/19. Concurrence to be effective 6/8/2019. effective 8/19/2019. Docket Numbers: ER19–2162–000. Filed Date: 6/17/19. Filed Date: 6/17/19. Applicants: Blossburg Power, LLC. Accession Number: 20190617–5079. Accession Number: 20190617–5091. Description: Baseline eTariff Filing: Comments Due: 5 p.m. ET 7/8/19. Comments Due: 5 p.m. ET 7/8/19. New Baseline Reactive Tariff Filing to Docket Numbers: ER19–2171–000. Docket Numbers: ER19–2154–000. be effective 9/1/2019. Applicants: NSTAR Electric Applicants: Sayreville Power, LLC. Filed Date: 6/14/19. Company. Description: Baseline eTariff Filing: Accession Number: 20190614–5173. Description: Initial rate filing: New Baseline Reactive Tariff Filing to Comments Due: 5 p.m. ET 7/5/19. Vineyard Wind Design and Engineering be effective 9/1/2019. Docket Numbers: ER19–2163–000. Agreement to be effective 6/17/2019. Filed Date: 6/14/19. Filed Date: 6/17/19. Accession Number: 20190614–5161. Applicants: Hunterstown Power, LLC. Accession Number: 20190617–5097. Comments Due: 5 p.m. ET 7/5/19. Description: Baseline eTariff Filing: Comments Due: 5 p.m. ET 7/8/19. Docket Numbers: ER19–2155–000. New Baseline Reactive Tariff Filing to Applicants: Portland Power, LLC. be effective 9/1/2019. Docket Numbers: ER19–2172–000. Description: Baseline eTariff Filing: Filed Date: 6/14/19. Applicants: PJM Interconnection, New Baseline Reactive Tariff Filings to Accession Number: 20190614–5174. L.L.C. be effective 9/1/2019. Comments Due: 5 p.m. ET 7/5/19. Description: § 205(d) Rate Filing: SA Filed Date: 6/14/19. Docket Numbers: ER19–2164–000. No. 5420 and SA No. 5421 re NITSAs Accession Number: 20190614–5162. Applicants: Tolna Power, LLC. Among PJM and NRG Power Marketing Comments Due: 5 p.m. ET 7/5/19. Description: Baseline eTariff Filing: LLC to be effective 6/1/2019. Docket Numbers: ER19–2156–000. New Baseline Reactive Tariff Filing to Filed Date: 6/17/19. Applicants: Warren Generation, LLC. be effective 9/1/2019. Accession Number: 20190617–5113. Description: Baseline eTariff Filing: Filed Date: 6/14/19. Comments Due: 5 p.m. ET 7/8/19. New Baseline Reactive Tariff Filing to Accession Number: 20190614–5176. The filings are accessible in the be effective 9/1/2019. Comments Due: 5 p.m. ET 7/5/19. Commission’s eLibrary system by

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clicking on the links or querying the 90-day Federal Authoriza- December 29, 2019. at (866) 208–3676, TTY (202) 502–8659, docket number. tion Decision Deadline. or at [email protected]. The Any person desiring to intervene or If a schedule change becomes eLibrary link on the FERC website also protest in any of the above proceedings necessary, additional notice will be provides access to the texts of formal must file in accordance with Rules 211 provided so that the relevant agencies documents issued by the Commission, and 214 of the Commission’s are kept informed of the Project’s such as orders, notices, and rule Regulations (18 CFR 385.211 and progress. makings. 385.214) on or before 5:00 p.m. Eastern Project Description Dated: June 17, 2019. time on the specified comment date. Nathaniel J. Davis, Sr., Protests may be considered, but Texas Eastern proposes to replace two intervention is necessary to become a existing compressor units (one 22,000 Deputy Secretary. party to the proceeding. horsepower [hp] and one 19,800 hp [FR Doc. 2019–13237 Filed 6–20–19; 8:45 am] eFiling is encouraged. More detailed unit) with two new compressor units BILLING CODE 6717–01–P information relating to filing (one 26,000 hp and one 18,100 hp unit). requirements, interventions, protests, Texas Eastern would install software service, and qualifying facilities filings controls to limit the total horsepower of DEPARTMENT OF ENERGY can be found at: http://www.ferc.gov/ the 26,000 hp compressor unit to 23,700 Federal Energy Regulatory docs-filing/efiling/filing-req.pdf. For hp. Therefore, no additional Commission other information, call (866) 208–3676 compression would occur as a result of (toll free). For TTY, call (202) 502–8659. this Project. The replacement activities [Docket No. IC19–19–000] Dated: June 17, 2019. would require the use of additional temporary workspace beyond the Commission Information Collection Nathaniel J. Davis, Sr., existing facility boundary. Activities (FERC–542); Comment Deputy Secretary. Request [FR Doc. 2019–13239 Filed 6–20–19; 8:45 am] Background AGENCY: Federal Energy Regulatory BILLING CODE 6717–01–P On June 7, 2019 the Commission issued a Notice of Intent to Prepare an Commission, DOE. Environmental Assessment for the ACTION: Notice of information collection DEPARTMENT OF ENERGY Proposed Bernville Compressor Unit and request for comments. Replacement Project and Request for Federal Energy Regulatory SUMMARY: In compliance with the Comments on Environmental Issues Commission requirements of the Paperwork (NOI). The NOI was sent to affected Reduction Act of 1995, the Federal [Docket No. CP19–191–000] landowners; federal, state, and local Energy Regulatory Commission government agencies; elected officials; (Commission or FERC) is submitting its Texas Eastern Transmission, L.P.; environmental and public interest Notice of Schedule for Environmental information collection FERC–542 groups; Native American tribes; other (Pipeline Rates: Rate Tracking) to the Review of the Bernville Compressor interested parties; and local libraries Units Replacement Project Office of Management and Budget and newspapers. Comments on the NOI (OMB) for review of the information On April 18, 2019, Texas Eastern should be received by the Commission collection requirements. Any interested Transmission, L.P. (Texas Eastern) filed in Washington, DC on or before 5:00 person may file comments directly with an application in Docket No. CP19–191– p.m. Eastern Time on July 8, 2019. All OMB and should address a copy of 000 requesting a Certificate of Public substantive comments will be addressed those comments to the Commission as Convenience and Necessity pursuant to in the EA. explained below. The Commission Sections 7(b) and 7(c) of the Natural Gas Additional Information previously published a Notice in the Act to abandon, construct, and operate Federal Register (4/10/2019) requesting certain natural gas pipeline facilities at In order to receive notification of the issuance of the EA and to keep track of public comments. The Commission its existing Bernville Compressor received no public comments and is Station in Berks County, Pennsylvania. all formal issuances and submittals in specific dockets, the Commission offers making this notation in its submittal to The proposed project is known as the OMB. Bernville Compressor Units a free service called eSubscription. This can reduce the amount of time you DATES: Comments on the collection of Replacement Project (Project). information are due July 22, 2019. On April 30, 2019, the Federal Energy spend researching proceedings by Regulatory Commission (Commission or automatically providing you with ADDRESSES: Comments filed with OMB, FERC) issued its Notice of Application notification of these filings, document identified by the OMB Control No. for the Project. Among other things, that summaries, and direct links to the 1902–0070 (FERC–542), should be sent documents. Go to www.ferc.gov/docs- via email to the Office of Information notice alerted agencies issuing federal _ authorizations of the requirement to filing/esubscription.asp. and Regulatory Affairs: oira complete all necessary reviews and to Additional information about the [email protected], Attention: reach a final decision on a request for Project is available from the Federal Energy Regulatory Commission a federal authorization within 90 days of Commission’s Office of External Affairs Desk Officer. the date of issuance of the Commission at (866) 208–FERC or on the FERC A copy of the comments should also staff’s Environmental Assessment (EA) website (www.ferc.gov). Using the be sent to the Commission, in Docket for the Project. This instant notice ‘‘eLibrary’’ link, select ‘‘General Search’’ No. IC19–19–000, by either of the identifies the FERC staff’s planned from the eLibrary menu, enter the following methods: • eFiling at Commission’s website: schedule for the completion of the EA selected date range and ‘‘Docket http://www.ferc.gov/docs-filing/ for the Project. Number’’ excluding the last three digits (i.e., CP19–191), and follow the efiling.asp. Schedule for Environmental Review instructions. For assistance with access • Mail/Hand Delivery/Courier: Issuance of EA ...... September 30, 2019. to eLibrary, the helpline can be reached Federal Energy Regulatory Commission,

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Secretary of the Commission, 888 First OMB Control No.: 1902–0070. FERC–542 accounts for costs involving: Street NE, Washington, DC 20426. Type of Request: Three-year extension (1) Research, development, and Instructions: All submissions must be of the FERC–542 information collection deployment expenditures; (2) annual formatted and filed in accordance with requirements with no changes to the charge adjustments; and (3) periodic submission guidelines at: http:// current reporting requirements. rate adjustments. www.ferc.gov/help/submission- Abstract: The information collected FERC–542 filings may be submitted at guide.asp. For user assistance contact by FERC–542 is used by the any time or on a regularly scheduled FERC Online Support by email at Commission to implement the statutory basis in accordance with the pipeline [email protected], or by phone provisions of Title IV of the Natural Gas company’s tariff. Filings may be either: at: (866) 208–3676 (toll-free), or (202) Policy Act (NGPA), 15 U.S.C. 3301– (1) Accepted; (2) suspended and set for 502–8659 for TTY. 3432, and sections 4, 5, and 16 of the hearing; (3) minimal suspension; or (4) Docket: Users interested in receiving Natural Gas Act (NGA) (Pub. L.75–688) suspended for further review, such as automatic notification of activity in this (15 U.S.C. 717–717w). These statutes technical conference or some other type docket or in viewing/downloading allow the Commission to collect natural of Commission action. comments and issuances in this docket gas transmission cost information from The Commission implements these may do so at http://www.ferc.gov/docs- interstate natural gas pipelines for the filing requirements in the Code of filing/docs-filing.asp. purpose of verifying that these costs, Federal Regulations (CFR) under 18 CFR FOR FURTHER INFORMATION CONTACT: which are passed on to customers, are part 154, 154.107, 154.4, 154.7, 154.201, Ellen Brown may be reached by email just and reasonable. and 154.401–154.403. at [email protected], telephone Natural gas pipelines are required by Type of Respondents: Jurisdictional at (202) 502–8663, and fax at (202) 273– the Commission to track their Natural Gas Pipelines. 0873. transportation costs to allow for the Estimate of Annual Burden: 1 The SUPPLEMENTARY INFORMATION: Commission’s review and, where Commission estimates the total burden Title: FERC–542, Gas Pipelines Rates: appropriate, approve the pass-through and cost 2 for this information collection Rate Tracking. of these costs to pipeline customers. as follows:

FERC–542 (GAS PIPELINE RATES: RATE TRACKING)

Annual Total annual burden Number of number of Total number Average burden hours & total annual Cost ($) per FERC data collection respondents responses per of responses hours & cost cost ($) respondent respondent per response (rounded) (rounded)

(1) (2) (1) * (2) = (3) (4) (3) * (4) = (5) (5) ÷ (1)

FERC–542 ...... 90 2 180 2 hrs; $158 ...... 360 hrs; $28,440 ... $316

Total ...... 360 hrs; $28,440 ......

Comments: Comments are invited on: DEPARTMENT OF ENERGY (iii) a new delivery interconnect in (1) Whether the collection of Brooke County, West Virginia with the information is necessary for the proper Federal Energy Regulatory proposed power facility; and (iv) performance of the functions of the Commission additional ancillary facilities. The Tri- Commission, including whether the [Docket No. CP19–473–000; PF18–2–000] State Corridor Project is designed to information will have practical utility; provide up to 140,000 dekatherms per (2) the accuracy of the agency’s estimate Equitrans, L.P.; Notice of Application day of east to west firm capacity on Equitrans’ proposed Tri-State Corridor of the burden and cost of the collection Take notice that on May 31, 2019, System to deliver natural gas to a of information, including the validity of Equitrans, L.P. (Equitrans), 2200 Energy proposed power facility. Equitrans the methodology and assumptions used; Drive, Canonsburg, Pennsylvania 15317, estimates the cost of the Tri-State (3) ways to enhance the quality, utility filed in Docket No. CP19–473–000 an Corridor Project to be $ 96,249,417, all and clarity of the information collection; application pursuant to section 7(c) of and (4) ways to minimize the burden of the Natural Gas Act (NGA) requesting a as more fully described in the the collection of information on those certificate of public convenience and application which is on file with the who are to respond, including the use necessity to construct and operate new Commission and open to public inspection. of automated collection techniques or facilities as part of its Tri-State Corridor other forms of information technology. Project. Specifically, Equitrans proposes The filing is available for review at to construct: (i) Approximately 16.7 the Commission in the Public Reference Dated: June 13, 2019. miles of pipeline in Washington County, Room or may be viewed on the Nathaniel J. Davis, Sr., Pennsylvania and Brooke County, West Commission’s website web at http:// Deputy Secretary. Virginia; (ii) three new receipt www.ferc.gov using the ‘‘eLibrary’’ link. [FR Doc. 2019–13238 Filed 6–20–19; 8:45 am] interconnects in Washington County, Enter the docket number excluding the BILLING CODE 6717–01–P Pennsylvania with Rover Pipeline LLC last three digits in the docket number and two non-jurisdictional facilities; field to access the document. For

1 ‘‘Burden’’ is the total time, effort, or financial burden, refer to Title 5 Code of Federal Regulations costs. The cost figure is the FY2018 FERC average resources expended by persons to generate, 1320.3. annual salary plus benefits ($164,820/year or $79/ maintain, retain, or disclose or provide information 2 FERC staff estimates that industry costs for hour). to or for a Federal agency. For further explanation salary plus benefits are similar to Commission of what is included in the information collection

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assistance, contact FERC at status will be placed on the service list The Commission strongly encourages [email protected] or call maintained by the Secretary of the electronic filings of comments, protests toll-free, (886) 208–3676 or TYY, (202) Commission and will receive copies of and interventions in lieu of paper using 502–8659. all documents filed by the applicant and the ‘‘eFiling’’ link at http:// Any questions concerning this by all other parties. A party must submit www.ferc.gov. Persons unable to file application may be directed to Matthew 3 copies of filings made in the electronically should submit an original T. Eggerding, Assistant General Counsel, proceeding with the Commission and and 3 copies of the protest or Equitrans, L.P., 2200 Energy Drive, must provide a copy to the applicant intervention to the Federal Energy Canonsburg, PA 15317, by telephone at and to every other party. Only parties to Regulatory Commission, 888 First Street (412) 553–5786, or by email the proceeding can ask for court review NE, Washington, DC 20426. [email protected]; of Commission orders in the proceeding. Comment Date: July 5, 2019. or Michael R. Pincus, Van Ness However, a person does not have to Dated: June 13, 2019. Feldman LLP, 1050 Thomas Jefferson intervene in order to have comments Street NW, Seventh Floor, Washington, Nathaniel J. Davis, Sr., considered. The second way to Deputy Secretary. DC 20007, by telephone at 202–298– participate is by filing with the [FR Doc. 2019–13236 Filed 6–20–19; 8:45 am] 1800, or by email [email protected]. Secretary of the Commission, as soon as On October 20, 2017, the Commission possible, an original and two copies of BILLING CODE 6717–01–P staff granted Equitrans’ request to utilize comments in support of or in opposition the National Environmental Policy Act to this project. The Commission will (NEPA) Pre-Filing Process and assigned DEPARTMENT OF ENERGY consider these comments in Docket No. PF18- 2–000 to staff determining the appropriate action to be activities involving the Tri-State Federal Energy Regulatory taken, but the filing of a comment alone Corridor Project. Now, as of the filing of Commission will not serve to make the filer a party this application on May 31, 2019, the to the proceeding. The Commission’s [Docket No. CP19–477–000] NEPA Pre-Filing Process for this project rules require that persons filing has ended. From this time forward, this Mountain Valley Pipeline, LLC; Notice comments in opposition to the project proceeding will be conducted in Docket of Request Under Blanket provide copies of their protests only to No. CP19–473–000, as noted in the Authorization caption of this Notice. the party or parties directly involved in Pursuant to section 157.9 of the the protest. Take notice that on June 4, 2019, Commission’s rules, 18 CFR 157.9, Persons who wish to comment only Mountain Valley Pipeline, LLC within 90 days of this Notice the on the environmental review of this (Mountain Valley), 2200 Energy Drive, Commission staff will either: Complete project should submit an original and Canonsburg, Pennsylvania 15317, filed a its environmental assessment (EA) and two copies of their comments to the prior notice application pursuant to place it into the Commission’s public Secretary of the Commission. sections 157.205 and 157.208 of the record (eLibrary) for this proceeding; or Environmental commenters will be Federal Energy Regulatory issue a Notice of Schedule for placed on the Commission’s Commission’s (Commission) regulations Environmental Review. If a Notice of environmental mailing list and will be under the Natural Gas Act (NGA), and Schedule for Environmental Review is notified of any meetings associated with Mountain Valley’s blanket certificate issued, it will indicate, among other the Commission’s environmental review issued in Docket No. CP16–10–000. milestones, the anticipated date for the process. Environmental commenters Mountain Valley requests authorization Commission staff’s issuance of the final will not be required to serve copies of to install a new metering and regulating environmental impact statement EA for filed documents on all other parties. station, associated piping, and a tap site this proposal. The filing of the EA in the However, the non-party commenters in Monroe County, West Virginia to Commission’s public record for this will not receive copies of all documents allow Mountain Valley to deliver up to proceeding or the issuance of a Notice filed by other parties or issued by the approximately 1.0 billion cubic feet per of Schedule for Environmental Review Commission and will not have the right day to Columbia Gas Transmission, will serve to notify federal and state to seek court review of the LLC’s KA System, all as more fully set agencies of the timing for the Commission’s final order. forth in the application, which is open completion of all necessary reviews, and As of the February 27, 2018 date of to the public for inspection. The filing the subsequent need to complete all the Commission’s order in Docket No. may also be viewed on the web at http:// federal authorizations within 90 days of CP16–4–001, the Commission will www.ferc.gov using the ‘‘eLibrary’’ link. the date of issuance of the Commission apply its revised practice concerning Enter the docket number excluding the staff’s EA. out-of-time motions to intervene in any last three digits in the docket number There are two ways to become new Natural Gas Act section 3 or section field to access the document. For involved in the Commission’s review of 7 proceeding.1 Persons desiring to assistance, contact FERC at this project. First, any person wishing to become a party to a certificate [email protected] or call obtain legal status by becoming a party proceeding are to intervene in a timely toll-free, (866) 208–3676 or TTY, (202) to the proceedings for this project manner. If seeking to intervene out-of- 502–8659. should, on or before the comment date time, the movant is required to ‘‘show Any questions regarding this stated below file with the Federal good cause why the time limitation application should be directed to Energy Regulatory Commission, 888 should be waived,’’ and should provide Matthew T. Eggerding, Assistant First Street NE, Washington, DC 20426, justification by reference to factors set General Counsel, 2200 Energy Drive, a motion to intervene in accordance forth in Rule 214(d)(1) of the Canonsburg, PA 15317, or phone (412) with the requirements of the Commission’s Rules and Regulations.2 553–5786, or by email MEggerding@ Commission’s Rules of Practice and equitransmidstream.com. Procedure (18 CFR 385.214 or 385.211) 1 Tennessee Gas Pipeline Company, L.L.C., 162 Any person or the Commission’s staff and the Regulations under the NGA (18 FERC ¶ 61,167 at ¶ 50 (2018). may, within 60 days after issuance of CFR 157.10). A person obtaining party 2 18 CFR 385.214(d)(1). the instant notice by the Commission,

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file pursuant to Rule 214 of the www.ferc.gov. Persons unable to file Filed Date: 6/14/19. Commission’s Procedural Rules (18 CFR electronically should submit an original Accession Number: 20190614–5050. 385.214) a motion to intervene or notice and 5 copies of the protest or Comments Due: 5 p.m. ET 6/26/19. of intervention and pursuant to Section intervention to the Federal Energy Docket Numbers: RP19–1318–000. 157.205 of the regulations under the Regulatory Commission, 888 First Street Applicants: El Paso Natural Gas NGA (18 CFR 157.205), a protest to the NE, Washington, DC 20426. Company, L.L.C. request. If no protest is filed within the Dated: June 14, 2019. Description: § 4(d) Rate Filing: Non- time allowed therefore, the proposed Nathaniel J. Davis, Sr., Conforming Negotiated Rate Agreement activity shall be deemed to be Filing (Apache) to be effective 7/15/ Deputy Secretary. authorized effective the day after the 2019. time allowed for filing a protest. If a [FR Doc. 2019–13131 Filed 6–20–19; 8:45 am] Filed Date: 6/14/19. protest is filed and not withdrawn BILLING CODE 6717–01–P Accession Number: 20190614–5186. within 30 days after the allowed time Comments Due: 5 p.m. ET 6/26/19. for filing a protest, the instant request DEPARTMENT OF ENERGY The filings are accessible in the shall be treated as an application for Commission’s eLibrary system by authorization pursuant to section 7 of Federal Energy Regulatory clicking on the links or querying the the NGA. Commission docket number. Pursuant to section 157.9 of the Any person desiring to intervene or Commission’s rules, 18 CFR 157.9, Combined Notice of Filings protest in any of the above proceedings within 90 days of this Notice the must file in accordance with Rules 211 Commission staff will either: Complete Take notice that the Commission has and 214 of the Commission’s its environmental assessment (EA) and received the following Natural Gas Regulations (18 CFR 385.211 and place it into the Commission’s public Pipeline Rate and Refund Report filings: 385.214) on or before 5:00 p.m. Eastern record (eLibrary) for this proceeding, or Filings Instituting Proceedings time on the specified comment date. issue a Notice of Schedule for Protests may be considered, but Environmental Review. If a Notice of Docket Number: PR19–65–000. intervention is necessary to become a Applicants: Columbia Gas of Ohio, Schedule for Environmental Review is party to the proceeding. issued, it will indicate, among other Inc. eFiling is encouraged. More detailed Description: Tariff filing per milestones, the anticipated date for the information relating to filing 284.123(b),(e)/: COH Rates effective May Commission staff’s issuance of the final requirements, interventions, protests, 31 2019 to be effective 5/31/2019. environmental impact statement (FEIS) service, and qualifying facilities filings or EA for this proposal. The filing of the Filed Date: 6/13/19. can be found at: http://www.ferc.gov/ EA in the Commission’s public record Accession Number: 201906135093. docs-filing/efiling/filing-req.pdf. For for this proceeding or the issuance of a Comments/Protests Due: 5 p.m. ET 7/ other information, call (866) 208–3676 Notice of Schedule for Environmental 5/19. (toll free). For TTY, call (202) 502–8659. Review will serve to notify federal and Docket Numbers: RP19–1314–000. state agencies of the timing for the Applicants: Kinetica Deepwater Dated: June 17, 2019. completion of all necessary reviews, and Express, LLC. Nathaniel J. Davis, Sr., the subsequent need to complete all Description: Compliance filing Deputy Secretary. federal authorizations within 90 days of Compliance Filing—FERC Order No. [FR Doc. 2019–13235 Filed 6–20–19; 8:45 am] the date of issuance of the Commission 587–Y in Docket No. RM96–1–041 to be BILLING CODE 6717–01–P staff’s FEIS or EA. effective 8/1/2019. Persons who wish to comment only Filed Date: 6/13/19. on the environmental review of this Accession Number: 20190613–5035. DEPARTMENT OF ENERGY project should submit an original and Comments Due: 5 p.m. ET 6/25/19. two copies of their comments to the Docket Numbers: RP19–1315–000. Federal Energy Regulatory Secretary of the Commission. Applicants: Kinetica Energy Express, Commission Environmental commenters will be LLC. [Docket No. AD19–13–000] placed on the Commission’s Description: Compliance filing environmental mailing list, will receive Compliance Filing—FERC Order No. Reliability Technical Conference; copies of the environmental documents, 587–Y in Docket No. RM96–1–041 to be Supplemental Notice of Technical and will be notified of meetings effective 8/1/2019. Conference associated with the Commission’s Filed Date: 6/13/19. environmental review process. Accession Number: 20190613–5072. Take notice that the Federal Energy Environmental commenters will not be Comments Due: 5 p.m. ET 6/25/19. Regulatory Commission (Commission) required to serve copies of filed Docket Numbers: RP19–1316–000. will hold a Technical Conference on documents on all other parties. Applicants: Trailblazer Pipeline Thursday, June 27, 2019, from 9:00 a.m. However, the non-party commenter will Company LLC. to 5:00 p.m. This Commissioner-led not receive copies of all documents filed Description: § 4(d) Rate Filing: Neg conference will be held in the by other parties or issued by the Rate 2019–06–13 Tenaska and Koch to Commission Meeting Room at the Commission (except for the mailing of be effective 6/14/2019. Federal Energy Regulatory Commission, environmental documents issued by the Filed Date: 6/13/19. 888 First Street NE, Washington, DC Commission) and will not have the right Accession Number: 20190613–5160. 20426. The purpose of the conference is to seek court review of the Comments Due: 5 p.m. ET 6/25/19. to discuss policy issues related to the Commission’s final order. Docket Numbers: RP19–1317–000. reliability of the Bulk-Power System. The Commission strongly encourages Applicants: Equitrans, L.P. The final agenda with speakers for this electronic filings of comments, protests Description: § 4(d) Rate Filing: event is attached. and interventions in lieu of paper using Negotiated Rate Agreement—Eclipse 6– The conference will be open for the the ‘‘eFiling’’ link at http:// 14–2019 to be effective 6/14/2019. public to attend. There is no fee for

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attendance. However, members of the Take notice that the Commission Filed Date: 6/13/19. public are encouraged to preregister received the following exempt Accession Number: 20190613–5172. online at: http://www.ferc.gov/whats- wholesale generator filings: Comments Due: 5 p.m. ET 7/5/19. new/registration/06-27-19-form.asp. Docket Numbers: EG19–127–000. Docket Numbers: ER19–2131–000. Information on this event will be Applicants: West Columbia Storage Applicants: Southwest Power Pool, posted on the Calendar of Events on the LLC. Inc. Commission’s website, http:// Description: Notice of Self- Description: § 205(d) Rate Filing: www.ferc.gov, prior to the event. The Certification of Exempt Wholesale Attachment AF Revisions to Clarify conference will also be webcast and Generator Status of West Columbia Mitigated Transition State Offers to be transcribed. Anyone with internet Storage LLC. effective 8/14/2019. access who desires to listen to this event Filed Date: 6/13/19. Filed Date: 6/14/19. can do so by navigating to the Calendar Accession Number: 20190613–5176. Accession Number: 20190614–5028. of Events at http://www.ferc.gov and Comments Due: 5 p.m. ET 7/5/19. Comments Due: 5 p.m. ET 7/5/19. locating this event in the Calendar. The Take notice that the Commission Docket Numbers: ER19–2132–000. event will contain a link to the webcast. received the following electric rate Applicants: The Empire District The Capitol Connection provides filings: Electric Company. technical support for webcasts and Docket Numbers: ER10–2721–008. Description: § 205(d) Rate Filing: offers the option of listening to the Applicants: El Paso Electric Company. Revised Agreement for Wholesale meeting via phone-bridge for a fee. If Description: Supplement to December Distribution Service to be effective 6/15/ you have any questions, visit http:// 28, 2018 Updated Market Power 2019. www.CapitolConnection.org or call (703) Analysis of El Paso Electric Company. Filed Date: 6/14/19. 993–3100. Transcripts of the technical Filed Date: 6/14/19. Accession Number: 20190614–5041. conference will be available for a fee Accession Number: 20190614–5033. Comments Due: 5 p.m. ET 7/5/19. from Ace-Federal Reporters, Inc. at (202) Comments Due: 5 p.m. ET 7/5/19. Docket Numbers: ER19–2133–000. 347–3700. Applicants: Midcontinent Commission conferences are Docket Numbers: ER17–2575–003. Applicants: Allegheny Energy Supply Independent System Operator, Inc. accessible under section 508 of the Description: § 205(d) Rate Filing: Rehabilitation Act of 1973. For Company, LLC. Description: Compliance filing: 2019–06–14_SA 3321 METC-Isabella accessibility accommodations, please Renewables I & II E&P (J717 J728) to be send an email to [email protected] Allegheny Energy Supply Company Compliance Filing to be effective 1/3/ effective 6/5/2019. or call toll free 1 (866) 208–3372 (voice) Filed Date: 6/14/19. or (202) 502–8659 (TTY), or send a fax 2018. Filed Date: 6/14/19. Accession Number: 20190614–5051. to (202) 208–2106 with the required Comments Due: 5 p.m. ET 7/5/19. accommodations. Accession Number: 20190614–5053. Comments Due: 5 p.m. ET 7/5/19. Docket Numbers: ER19–2134–000. For more information about this Applicants: Wheelabrator Shasta technical conference, please contact Docket Numbers: ER19–81–001. Energy Company Inc. Lodie White (202) 502–8453, Applicants: Athens Energy, LLC. Description: § 205(d) Rate Filing: [email protected]. For information Description: Compliance filing: Offer Request for Category 1 Seller Status in related to logistics, please contact Sarah of Settlement (ER19–81) to be effective SW Region & Revised MBR Tariff to be McKinley at (202) 502–8368, N/A. effective 6/15/2019. [email protected]. Filed Date: 6/14/19. Accession Number: 20190614–5083. Filed Date: 6/14/19. Dated: June 13, 2019. Comments Due: 5 p.m. ET 7/5/19. Accession Number: 20190614–5052. Nathaniel J. Davis, Sr., Docket Numbers: ER19–1738–002. Comments Due: 5 p.m. ET 7/5/19. Deputy Secretary. Applicants: PSEG Fossil Sewaren Docket Numbers: ER19–2135–000. [FR Doc. 2019–13233 Filed 6–20–19; 8:45 am] Urban Renewal LLC. Applicants: Southern California BILLING CODE 6717–01–P Description: Tariff Amendment: Edison Company. Amendment to Application for MBR to Description: § 205(d) Rate Filing: be effective 6/30/2019. amended LGIA, Blythe Mesa Solar DEPARTMENT OF ENERGY Filed Date: 6/14/19. Project, SA 172 to be effective 6/15/ Accession Number: 20190614–5102. 2019. Federal Energy Regulatory Comments Due: 5 p.m. ET 7/5/19. Filed Date: 6/14/19. Commission Docket Numbers: ER19–2129–000. Accession Number: 20190614–5054. Combined Notice of Filings #1 Applicants: Southern California Comments Due: 5 p.m. ET 7/5/19. Edison Company. Docket Numbers: ER19–2136–000. Take notice that the Commission Description: Tariff Cancellation: Applicants: New York Independent received the following electric corporate Cancel LGIA AltasGas Sonoran Energy System Operator, Inc. filings: LLC SA No. 158 to be effective 6/24/ Description: § 205(d) Rate Filing: 205 Docket Numbers: EC19–101–000. 2019. filing of tariff revisions re: Changes to Applicants: Dominion Energy South Filed Date: 6/13/19. Cash Collateral Requirements to be Carolina, Inc. Accession Number: 20190613–5171. effective 8/14/2019. Description: Application for Comments Due: 5 p.m. ET 7/5/19. Filed Date: 6/14/19. Authorization Under Section 203 of the Docket Numbers: ER19–2130–000. Accession Number: 20190614–5056. Federal Power Act of Dominion Energy Applicants: Dominion Energy South Comments Due: 5 p.m. ET 7/5/19. South Carolina, Inc. Carolina, Inc. Docket Numbers: ER19–2137–000. Filed Date: 6/13/19. Description: § 205(d) Rate Filing: Applicants: ISO New England Inc., Accession Number: 20190613–5177. DOE_SRS 2015 Task Order Agr to be New England Power Pool Participants Comments Due: 5 p.m. ET 7/5/19. effective 8/13/2019. Committee.

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Description: § 205(d) Rate Filing: ISO– Description: § 205(d) Rate Filing: Applicants: Gilbert Power, LLC. NE & NEPOOL; Rev. to Offer Cap Req. Notice of Succession Filing to be Description: Baseline eTariff Filing: in Day-Ahead Energy Mkt. & Eff. Date effective 5/17/2019. New Baseline Reactive Tariff Filing to Chg to be effective 10/1/2019. Filed Date: 6/14/19. be effective 9/1/2019. Filed Date: 6/14/19. Accession Number: 20190614–5126. Filed Date: 6/14/19. Accession Number: 20190614–5057. Comments Due: 5 p.m. ET 7/5/19. Accession Number: 20190614–5160. Comments Due: 5 p.m. ET 7/5/19. Docket Numbers: ER19–2146–000. Comments Due: 5 p.m. ET 7/5/19. Docket Numbers: ER19–2138–000. Applicants: Warren Generation, LLC. Take notice that the Commission Applicants: Cabrillo Power II LLC. Description: § 205(d) Rate Filing: received the following electric securities Description: Tariff Cancellation: Notice of Succession to be effective 5/ filings: Notice of Cancellation to be effective 6/ 17/2019. Docket Numbers: ES19–31–000. 15/2019. Filed Date: 6/14/19. Filed Date: 6/14/19. Accession Number: 20190614–5130. Applicants: Duquesne Light Accession Number: 20190614–5097. Comments Due: 5 p.m. ET 7/5/19. Company. Comments Due: 5 p.m. ET 7/5/19. Description: Duquesne Light Co. Docket Numbers: ER19–2147–000. submits the application re section 204 of Docket Numbers: ER19–2139–000. Applicants: Mountain Power, LLC. the Federal Power Act for an Order Applicants: Dominion Energy South Description: § 205(d) Rate Filing: Authorizing the Issuance of short-term Carolina, Inc. Notice of Succession Filing to be indebtedness. Description: Baseline eTariff Filing: effective 5/17/2019. Filed Date: 6/11/19. Baseline OATT Filing to be effective 6/ Filed Date: 6/14/19. 15/2019. Accession Number: 20190614–5136. Accession Number: 20190614–0020. Filed Date: 6/14/19. Comments Due: 5 p.m. ET 7/5/19. Comments Due: 5 p.m. ET 7/2/19. Accession Number: 20190614–5108. Docket Numbers: ER19–2148–000. The filings are accessible in the Comments Due: 5 p.m. ET 7/5/19. Applicants: Heritage Power Commission’s eLibrary system by Docket Numbers: ER19–2140–000. Marketing, LLC. clicking on the links or querying the Applicants: Shawville Power, LLC. Description: § 205(d) Rate Filing: docket number. Description: § 205(d) Rate Filing: Notice of Succession to be effective 5/ Any person desiring to intervene or Notice of Succession Filing to be 17/2019. protest in any of the above proceedings effective 5/17/2019. Filed Date: 6/14/19. must file in accordance with Rules 211 Filed Date: 6/14/19. Accession Number: 20190614–5137. and 214 of the Commission’s Accession Number: 20190614–5109. Comments Due: 5 p.m. ET 7/5/19. Regulations (18 CFR 385.211 and Comments Due: 5 p.m. ET 7/5/19. Docket Numbers: ER19–2149–000. 385.214) on or before 5:00 p.m. Eastern Docket Numbers: ER19–2141–000. Applicants: Midcontinent time on the specified comment date. Applicants: New Castle Power, LLC. Independent System Operator, Inc. Protests may be considered, but Description: § 205(d) Rate Filing: Description: § 205(d) Rate Filing: intervention is necessary to become a Notice of Succession Filing to be 2019–06–14_Attachment X revisions party to the proceeding. effective 5/17/2019. relating to Shared Interconnection eFiling is encouraged. More detailed Filed Date: 6/14/19. Facilities to be effective 8/14/2019. information relating to filing Accession Number: 20190614–5110. Filed Date: 6/14/19. requirements, interventions, protests, Comments Due: 5 p.m. ET 7/5/19. Accession Number: 20190614–5146. service, and qualifying facilities filings Docket Numbers: ER19–2142–000. Comments Due: 5 p.m. ET 7/5/19. can be found at: http://www.ferc.gov/ docs-filing/efiling/filing-req.pdf. For Applicants: Brunot Island Power, Docket Numbers: ER19–2150–000. other information, call (866) 208–3676 LLC. Applicants: Shawville Power, LLC. (toll free). For TTY, call (202) 502–8659. Description: § 205(d) Rate Filing: Description: Baseline eTariff Filing: Notice of Succession to be effective 5/ New Baseline Reactive Tariff Filing to Dated: June 14, 2019. 17/2019. be effective 9/1/2019. Nathaniel J. Davis, Sr., Filed Date: 6/14/19. Filed Date: 6/14/19. Deputy Secretary. Accession Number: 20190614–5112. Accession Number: 20190614–5154. [FR Doc. 2019–13130 Filed 6–20–19; 8:45 am] Comments Due: 5 p.m. ET 7/5/19. Comments Due: 5 p.m. ET 7/5/19. BILLING CODE 6717–01–P Docket Numbers: ER19–2143–000. Docket Numbers: ER19–2151–000. Applicants: Gilbert Power, LLC. Applicants: New Castle Power, LLC. Description: § 205(d) Rate Filing: Description: Baseline eTariff Filing: DEPARTMENT OF ENERGY Notice of Succession Filing to be New Baseline Reactive Tariff Filing to effective 5/17/2019. be effective 9/1/2019. Federal Energy Regulatory Filed Date: 6/14/19. Filed Date: 6/14/19. Commission Accession Number: 20190614–5114. Accession Number: 20190614–5157. Comments Due: 5 p.m. ET 7/5/19. Comments Due: 5 p.m. ET 7/5/19. [Docket No. EL19–38–000] Docket Numbers: ER19–2144–000. Docket Numbers: ER19–2152–000. City and County of San Francisco v. Applicants: Sayreville Power, LLC. Applicants: Brunot Island Power, Pacific Gas and Electric Company; Description: § 205(d) Rate Filing: LLC. Notice of New Comment Date Notice of Succession Filing to be Description: Baseline eTariff Filing: effective 5/17/2019. New Baseline Reactive Tariff Filing to On January 28, 2019, City and County Filed Date: 6/14/19. be effective 9/1/2019. of San Francisco (San Francisco or Accession Number: 20190614–5117. Filed Date: 6/14/19. Complainant) filed a formal complaint Comments Due: 5 p.m. ET 7/5/19. Accession Number: 20190614–5159. (Complaint) against Pacific Gas and Docket Numbers: ER19–2145–000. Comments Due: 5 p.m. ET 7/5/19. Electric Company (PG&E) pursuant to Applicants: Portland Power, LLC. Docket Numbers: ER19–2153–000. sections 206, 306, and 309 of the

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Federal Power Act 1 and Rule 206 of the System rate schedules (P–13A, NFTS– Rayburn Dam and Robert D. Willis, two Federal Energy Regulatory 13A, and EE–13), Sam Rayburn Dam Corps hydropower projects that are Commission’s (Commission) Rules of rate schedule (SRD–15), and Robert D. isolated hydrologically, electrically, and Practice and Procedure,2 alleging that Willis rate schedule (RDW–15) are set to financially from the Integrated System, PG&E has violated its open-access expire September 30, 2019. are repaid by separate rate schedules. Wholesale Distribution Tariff (WDT) DATES: The consultation and comment Decision Rationale and that it is implementing its WDT in period will begin on June 21, 2019 and a manner that is unjust, unreasonable, will end on July 22, 2019. Written Southwestern’s current Integrated and unduly discriminatory. The comments are due on or before July 22, System rate schedules (P–13A, NFTS– Complaint was noticed with a comment 2019. 13A, and EE–13) are based on the 2013 Power Repayment Study (PRS). Each date of February 19, 2019. ADDRESSES: Comments should be On February 19, 2019, PG&E filed a submitted to Ms. Fritha Ohlson, subsequent annual PRS, through 2019, notice in this proceeding stating that it Director, Division of Resources and has indicated the need for a revenue filed a petition under Chapter 11 of the Rates, Office of Corporate Operations, adjustment that fell within a two Bankruptcy Code in the United States Southwestern Power Administration, percent range of the current revenue Bankruptcy Court for the Northern U.S. Department of Energy, One West estimate. It is Southwestern’s District of California, and thus the Third Street, Tulsa, Oklahoma 74103. established practice for the Administrator to defer, on a case by case automatic stay provision of section 362 FOR FURTHER INFORMATION CONTACT: Ms. of the Bankruptcy Code applied to stay basis, revenue adjustments for the Fritha Ohlson, Director, Division of Integrated System if such adjustments the instant proceeding. Subsequently, Resources and Rates, Office of Corporate on May 30, 2019, PG&E filed an answer are within plus or minus two percent of Operations, (918) 595–6684, the revenue estimated from the current to the Complaint (Answer). PG&E notes [email protected], or facsimile in its Answer that on May 15, 2019, the Integrated System rate schedules. transmission (918) 595–6684. Therefore, in line with the annual PRS Honorable Dennis Montali, the judge SUPPLEMENTARY INFORMATION: Originally presiding over PG&E’s bankruptcy results, the Administrator has deferred established by Order 1865, Secretary of revenue adjustments in 2014, 2015, proceeding, ruled that San Francisco the Interior, dated August 31, 1943 and ‘‘could continue to prosecute this 2016, 2017, 2018, and 2019. The most effective September 1, 1943 (8 FR 12142 recent deferral was in response to the Complaint and FERC could continue to (Sept. 3, 1943)), Southwestern is an hear it.’’ 3 2019 Integrated System PRS, which agency within the U.S. Department of concluded that the annual revenues Upon consideration, to provide other Energy created by section 302 of the interested persons with an opportunity needed to be increased by 0.8 percent. Department of Energy Organization Act, It was determined to be prudent to defer to move to intervene in this proceeding Public Law 95–91, dated August 4, 1977 and comment on the Complaint, the the increase and allow the current (42 U.S.C. 7152). Guidelines for Integrated System rate schedules, which comment date is hereby extended to and preparation of power repayment studies including June 27, 2019. are set to expire September 30, 2019, to are included in DOE Order No. RA remain in effect. The deferral of a Dated: June 17, 2019. 6120.2 (Sept. 20, 1979), entitled Power revenue adjustment (rate change) Nathaniel J. Davis, Sr., Marketing Administration Financial provides for rate stability and savings on Deputy Secretary. Reporting. Procedures for public the administrative cost of [FR Doc. 2019–13231 Filed 6–20–19; 8:45 am] participation in power and transmission implementation, and recognizes that the BILLING CODE 6717–01–P rate adjustments of the Power Marketing revenue sufficiency will be re-examined Administrations are found at title 10, in the following year’s PRS. part 903, subpart A of the Code of Similarly, Southwestern’s current rate DEPARTMENT OF ENERGY Federal Regulations (10 CFR part 903). schedules for the Sam Rayburn Dam and Procedures for the confirmation and Robert D. Willis isolated rate systems, Southwestern Power Administration approval of rates for the Power SRD–15 and RDW–15, are based on Marketing Administrations are found at their respective 2015 PRSs. Each Integrated System, Sam Rayburn Dam title 18, part 300, subpart L of the Code subsequent annual PRS, through 2019, and Robert D. Willis Rate Schedules of Federal Regulations (18 CFR part has indicated the need for a revenue AGENCY: Southwestern Power 300). adjustment within a five percent range Administration, DOE. Southwestern markets power from 24 of the current revenue estimate. It is multi-purpose reservoir projects with Southwestern’s established practice for ACTION: Notice of proposed extension hydroelectric power facilities the Administrator to defer, on a case by and opportunity for public review and constructed and operated by the U.S. case basis, revenue adjustments for an comment. Army Corps of Engineers (Corps). These isolated rate system if such adjustments SUMMARY: The Administrator, projects are located in the states of are within plus or minus five percent of Southwestern Power Administration Arkansas, Missouri, Oklahoma, and the revenue estimated from the current (Southwestern), is proposing a two-year Texas. Southwestern’s marketing area rate schedule. Therefore, in line with extension to the currently approved rate includes these states plus Kansas and the annual PRS results, the schedules for the Integrated System, the Louisiana. The costs associated with the Administrator has deferred revenue Sam Rayburn Dam, and the Robert hydropower facilities of 22 of the 24 adjustments for both Sam Rayburn Dam Douglas Willis Hydropower Project projects are repaid via revenues and Robert D. Willis in 2016, 2017, (Robert D. Willis) for the period October received under the Integrated System 2018, and 2019. The most recent 1, 2019 to September 30, 2021. rates, as are the costs associated with deferral was in response to the 2019 Southwestern’s current Integrated Southwestern’s transmission facilities PRSs, which concluded that the annual that consist of 1,380 miles of high- revenues needed to be increased by 1.7 1 16 U.S.C. 824e, 825e, and 825h. voltage transmission lines, 27 percent for Sam Rayburn Dam and 3.7 2 18 CFR 385.206. substations, and 46 microwave and VHF percent for Robert D. Willis. It was 3 Answer at n.4. radio sites. Costs associated with Sam determined to be prudent to defer the

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increase and allow the current rate to reflect the change to the initial rate EIS No. 20190131, Final, BLM, NV, schedules, which are set to expire schedule. The P–13A rate schedule Gemfield Mine Project, Review Period September 30, 2019, to remain in effect. change was placed into effect on an Ends: 07/22/2019, Contact: Kevin The deferral of a revenue adjustment interim basis by the Assistant Secretary Hurrell 775–635–4000 (rate change) provides for rate stability effective July 1, 2019, and has been EIS No. 20190132, Draft Supplement, and savings on the administrative cost submitted to FERC for confirmation and USFS, MT, Montanore Evaluation of implementation and recognizes that approval on a final basis. Project, Comment Period Ends: 08/08/ the revenue sufficiency will be re- The current Sam Rayburn Dam rate 2019, Contact: Craig Towery 406– examined in the following year’s PRS. schedule (SRD–15) was placed into 293–6211 Therefore, Southwestern is proposing effect on an interim basis by the Deputy EIS No. 20190133, Draft, USFS, ID, an extension of all current rate Secretary on December 17, 2015, and Huckleberry Landscape Restoration schedules, for the period October 1, was confirmed and approved by the Project, Comment Period Ends: 08/05/ 2019 to September 30, 2021. In FERC on a final basis on June 30, 2016, 2019, Contact: Ronda Bishop 208– accordance with 10 CFR 903.22(h), for a period that ends September 30, 253–0101 903.23(a)(3), and 903.23(b), as amended 2019. EIS No. 20190134, Draft, USFWS, CA, (84 FR 5347 (Feb. 21, 2019)), and DOE The current Robert D. Willis rate Placer County Conservation Program Redelegation Order No. 00–002.10D schedule (RDW–15) was placed into Environmental Impact Statement/ (June 4, 2019), the Assistant Secretary effect on an interim basis by the Deputy Environmental Impact Report, may extend existing and provisional Secretary of Energy on December 17, Comment Period Ends: 08/20/2019, rates on an interim basis beyond the 2015, and was confirmed and approved Contact: Mike Thomas 916–414–6600 period specified by the Federal Energy by the FERC on a final basis on June 15, EIS No. 20190135, Draft, BLM, ID, Regulatory Commission (FERC). 2016, for a period that ends September Programmatic EIS for Fuel Breaks in The Integrated System rate schedules 30, 2019. the Great Basin, Comment Period (P–13, NFTS–13 and EE–13) were The Administrator will review and Ends: 08/05/2019, Contact: Marlo placed into effect on an interim basis by consider all written comments and the Draper 208–373–3812 the Deputy Secretary of Energy effective information gathered when submitting EIS No. 20190136, Draft, BLM, CO, Draft September 1, 2013, and were confirmed the finalized Rate Schedules Extension Eastern Colorado Resource and approved by FERC on a final basis to the Assistant Secretary for Management Plan and Environmental on January 9, 2014, for a period that confirmation and approval on an Impact Statement, Comment Period ended September 30, 2017. interim basis. Ends: 09/20/2019, Contact: John Subsequently, a new section 2.3.6 was Dated: June 13, 2019. Smeins, Project Manager 719–269– added to the Non-Federal Transmission 8581 Mike Wech, Service (NFTS) rate schedule NFTS–13 EIS No. 20190138, Draft, FERC, CA, in order to replace a stated-rate for Administrator. Bucks Creek Hydropower Project, customers taking Southwest Power Pool [FR Doc. 2019–13227 Filed 6–20–19; 8:45 am] Comment Period Ends: 08/05/2019, (SPP) Network Integration Transmission BILLING CODE 6450–01–P Contact: Office of External Affairs Service (NITS) with a revenue- 866–208–3372 requirement based methodology that includes determining the SPP NITS ENVIRONMENTAL PROTECTION Amended Notice Annual Revenue Requirement (ARR) AGENCY EIS No. 20140102, Final, USFS, ID, Lost portion of Southwestern’s NFTS ARR. Creek-Boulder Creek Landscape The change had no impact on [ER–FRL–9045–4] Restoration Project, Review Period Southwestern’s Integrated System Environmental Impact Statements; Ends: 08/05/2019, Contact: Erin revenue requirements and the rate Phelps 208–347–0301 schedule was re-designated NFTS–13A Notice of Availability to reflect the change to the initial rate Revision to FR Notice Published 04/ Responsible Agency: Office of Federal schedule. The NFTS–13A rate schedule 04/2014; the U.S. Department of Activities, General Information 202– change was placed into effect on an Agriculture’s Forest Service is 564–5632 or https://www.epa.gov/ interim basis by the Deputy Secretary of reopening the review period to end 08/ nepa/. Energy effective January 1, 2017, and 05/2019 due to an errata to the Final confirmed and approved on a final basis Weekly receipt of Environmental Impact EIS. by FERC on March 9, 2017, under FERC Statements Dated: June 18, 2019. Docket No. EF14–1–001. A two-year Filed 06/10/2019 Through 06/14/2019 Robert Tomiak, extension of all Integrated System rate Pursuant to 40 CFR 1506.9. Director, Office of Federal Activities. schedules was approved on an interim Notice [FR Doc. 2019–13269 Filed 6–20–19; 8:45 am] basis September 13, 2017, by the Deputy BILLING CODE 6560–50–P Secretary for the period October 1, 2017 Section 309(a) of the Clean Air Act through September 30, 2019. Since the requires that EPA make public its Integrated System rate schedules were comments on EISs issued by other EXPORT-IMPORT BANK placed into effect and subsequently Federal agencies. EPA’s comment letters on EISs are available at: https:// extended, there has been one additional 2019 EXIM Bank Sub-Saharan Africa change with no impact on revenue cdxnodengn.epa.gov/cdx-enepa-public/ action/eis/search. Advisory Committee Nomination requirements. Southwestern added Process section 4.2 within the Hydro Peaking EIS No. 20190110, Draft, USFS, UT, Power rate schedule P–13 in order to High Uintas Wilderness Domestic Nominations are now being accepted effect a uniform shift in the time Sheep Analysis Project (Ashley and for EXIM Bank’s 2019 Sub-Saharan Southwestern requires its customers to UWC National Forests), Comment Africa Advisory Committee. The submit Peaking Energy schedules. The Period Ends: 08/05/2019, Contact: Congressionally-established Sub- rate schedule was re-designated P–13A Paul Cowley 801–999–2177 Saharan Africa Advisory Committee

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holds bi-annual meetings in which its considered for the Advisory Committee. DATES: Written comments should be primary task is to advise the Bank Self-nominations are permitted. All submitted on or before July 22, 2019. If concerning its policy and programs, in nomination forms must be completed you anticipate that you will be particular on the extent to which the and signed by all potential candidates. submitting comments, but find it Bank is supporting the expansion of the The candidate questionnaire form can difficult to do so within the period of its financial commitments in sub- be found at: https://www.exim.gov/ time allowed by this notice, you should Saharan Africa under its loan, about/leadership/advisory-committee. advise the contacts listed below as soon guarantee, and insurance programs. All nominations are due COB as possible. Pending approval by EXIM’s Board of Wednesday, July 24, 2019. Please email ADDRESSES: Direct all PRA comments to Directors, the first meeting of the 2019 the candidate questionnaire form and Nicholas A. Fraser, OMB, via email Sub-Saharan Africa Advisory additional information including [email protected]; and Committee is scheduled to be held in supporter letters on letterhead to: to Nicole Ongele, FCC, via email PRA@ October 2019. [email protected]. fcc.gov and to [email protected]. The nomination period will be open Joyce Brotemarkle Stone, Include in the comments the OMB for five weeks beginning Friday, June control number as shown in the Assistant Corporate Secretary. 21, 2019–Wednesday, July 24, 2019. SUPPLEMENTARY INFORMATION below. Companies and supporters of [FR Doc. 2019–13103 Filed 6–20–19; 8:45 am] FOR FURTHER INFORMATION CONTACT: For potential nominees must submit a letter BILLING CODE 6690–01–P additional information or copies of the on company letterhead stating reasons information collection, contact Nicole why their candidate should be Ongele at (202) 418–2991. To view a considered for the Sub-Saharan Africa FEDERAL COMMUNICATIONS copy of this information collection Advisory Committee. Self-nominations COMMISSION request (ICR) submitted to OMB: (1) Go are permitted. All nomination forms [OMB 3060–0775] to the web page , (2) look for potential candidates. The candidate Information Collection Being the section of the web page called questionnaire form can be found at: Submitted for Review and Approval to ‘‘Currently Under Review,’’ (3) click on https://www.exim.gov/about/ the Office of Management and Budget leadership/sub-saharan-africa-advisory- the downward-pointing arrow in the committee. AGENCY: Federal Communications ‘‘Select Agency’’ box below the All nominations are due COB Commission. ‘‘Currently Under Review’’ heading, (4) select ‘‘Federal Communications Wednesday, July 24, 2019. Please email ACTION: Notice and request for Commission’’ from the list of agencies the candidate questionnaire form and comments. additional information including presented in the ‘‘Select Agency’’ box, supporter letters on letterhead to: SUMMARY: As part of its continuing effort (5) click the ‘‘Submit’’ button to the [email protected]. to reduce paperwork burdens, and as right of the ‘‘Select Agency’’ box, (6) required by the Paperwork Reduction when the list of FCC ICRs currently Joyce Brotemarkle Stone, Act (PRA) of 1995, the Federal under review appears, look for the OMB Assistant Corporate Secretary. Communications Commission (FCC or control number of this ICR and then [FR Doc. 2019–13105 Filed 6–20–19; 8:45 am] the Commission) invites the general click on the ICR Reference Number. A BILLING CODE 6690–01–P public and other Federal agencies to copy of the FCC submission to OMB take this opportunity to comment on the will be displayed. following information collection. SUPPLEMENTARY INFORMATION: As part of EXPORT-IMPORT BANK Comments are requested concerning: its continuing effort to reduce Whether the proposed collection of paperwork burdens, and as required by 2019 EXIM Bank Advisory Committee information is necessary for the proper the Paperwork Reduction Act (PRA) of Nomination Process performance of the functions of the 1995 (44 U.S.C. 3501–3520), the Federal Nominations are now being accepted Commission, including whether the Communications Commission (FCC or for the Export-Import Bank’s 2019 information shall have practical utility; the Commission) invites the general Advisory Committee. The the accuracy of the Commission’s public and other Federal agencies to Congressionally-established Advisory burden estimate; ways to enhance the take this opportunity to comment on the Committee holds quarterly meetings in quality, utility, and clarity of the following information collection. which its primary task is to advise the information collected; ways to minimize Comments are requested concerning: Bank concerning its policy and the burden of the collection of Whether the proposed collection of programs, in particular on the extent to information on the respondents, information is necessary for the proper which the Bank is meeting its mandate including the use of automated performance of the functions of the to provide competitive financing that collection techniques or other forms of Commission, including whether the equips U.S. exporters to compete for information technology; and ways to information shall have practical utility; business in the global marketplace. further reduce the information the accuracy of the Commission’s Pending approval by EXIM’s Board of collection burden on small business burden estimate; ways to enhance the Directors, the first meeting of the 2019 concerns with fewer than 25 employees. quality, utility, and clarity of the Advisory Committee is scheduled to be The Commission may not conduct or information collected; ways to minimize held in September 2019. sponsor a collection of information the burden of the collection of The nomination period will be open unless it displays a currently valid information on the respondents, for five weeks beginning Friday, June Office of Management and Budget including the use of automated 21, 2019–Wednesday, July 24, 2019. (OMB) control number. No person shall collection techniques or other forms of Companies and supporters of be subject to any penalty for failing to information technology; and ways to potential nominees must submit a letter comply with a collection of information further reduce the information on company letterhead stating reasons subject to the PRA that does not display collection burden on small business why their candidate should be a valid OMB control number. concerns with fewer than 25 employees.

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OMB Control Number: 3060–0775. FEDERAL RESERVE SYSTEM (PRA) OMB submission, including the Title: Section 64.1903 Obligations of proposed reporting form and All Incumbent Local Exchange Carriers. Proposed Agency Information instructions, supporting statement, and Form Number: N/A. Collection Activities; Comment other documentation will be placed into Type of Review: Extension of a Request OMB’s public docket files, if approved. These documents will also be made currently approved collection. AGENCY: Board of Governors of the Respondents: Business or other for- Federal Reserve System. available on the Board’s public website at https://www.federalreserve.gov/apps/ profit. ACTION: Notice, request for comment. Number of Respondents and reportforms/review.aspx or may be Responses: 255 respondents; 255 SUMMARY: The Board of Governors of the requested from the agency clearance responses. Federal Reserve System (Board) invites officer, whose name appears below. Estimated Time per Response: 500– comment on a proposal to extend for Federal Reserve Board Clearance 6,056 hours. three years, with revision, the Payments Officer—Nuha Elmaghrabi—Office of Frequency of Response: Systems Surveys (FR 3054; OMB No. the Chief Data Officer, Board of Recordkeeping requirements. 7100–0332). Governors of the Federal Reserve Obligation to Respond: Mandatory. DATES: Comments must be submitted on System, Washington, DC 20551, (202) Statutory authority for this information or before August 20, 2019. 452–3829. collection is contained in 47 U.S.C. 151, ADDRESSES: You may submit comments, SUPPLEMENTARY INFORMATION: On June 152, 154, 201, 202, 251, 271, 272, and identified by FR 3054, by any of the 15, 1984, OMB delegated to the Board 303(r) of the Communications Act of following methods: authority under the PRA to approve and 1934, as amended. • Agency Website: https:// assign OMB control numbers to Total Annual Burden: 155,280 hours. www.federalreserve.gov. Follow the collection of information requests and Total Annual Cost: No Cost. instructions for submitting comments at requirements conducted or sponsored Privacy Act Impact Assessment: No https://www.federalreserve.gov/apps/ by the Board. In exercising this impact(s). foia/proposedregs.aspx. delegated authority, the Board is Nature and Extent of Confidentiality: • Email: regs.comments@ directed to take every reasonable step to There is no need for confidentiality. federalreserve.gov. Include OMB solicit comment. In determining Needs and Uses: The Commission number in the subject line of the whether to approve a collection of will submit this collection to the OMB message. information, the Board will consider all • for approval of an extension in order to FAX: (202) 452–3819 or (202) 452– comments received from the public and 3102. other agencies. obtain the three year clearance from • them. There is no change in the Mail: Ann E. Misback, Secretary, Board of Governors of the Federal Request for Comment on Information recordkeeping requirement. There is no Collection Proposal change in the Commission’s previous Reserve System, 20th Street and burden estimates. The Commission Constitution Avenue NW, Washington, The Board invites public comment on imposed recordkeeping requirements on DC 20551. the following information collection, independent local exchange carriers All public comments are available on which is being reviewed under (LECs). Independent incumbent LECs the Board’s website at https:// authority delegated by the OMB under wishing to offer international, www.federalreserve.gov/apps/foia/ the PRA. Comments are invited on the interexchange services must comply proposedregs.aspx as submitted, unless following: modified for technical reasons. with the requirements of the a. Whether the proposed collection of Accordingly, your comments will not be Competitive Carrier Fifth Report and information is necessary for the proper edited to remove any identifying or Order, CC Docket Nos. 96–149 and 96– performance of the Board’s functions, contact information. Public comments 61. One of the requirements is that the including whether the information has may also be viewed electronically or in independent incumbent LEC’s practical utility; paper form in Room 146, 1709 New international, interexchange affiliate (for b. The accuracy of the Board’s facilities-based providers of York Avenue NW, Washington, DC 20006, between 9:00 a.m. and 5:00 p.m. estimate of the burden of the proposed international, interexchange services) information collection, including the must maintain books of account on weekdays. For security reasons, the Board requires that visitors make an validity of the methodology and separate from such LEC’s local exchange assumptions used; and other activities. See 47 CFR 64.1903 appointment to inspect comments. You may do so by calling (202) 452–3684. c. Ways to enhance the quality, for the specific recordkeeping utility, and clarity of the information to requirements. Upon arrival, visitors will be required to present valid government-issued photo be collected; This recordkeeping requirement is identification and to submit to security d. Ways to minimize the burden of used by the Commission to ensure that screening in order to inspect and information collection on respondents, independent incumbent LECs that photocopy comments. including through the use of automated provide international, interexchange Additionally, commenters may send a collection techniques or other forms of services do so in compliance with the copy of their comments to the Office of information technology; and Communications Act, as amended, and Management and Budget (OMB) Desk e. Estimates of capital or startup costs with Commission policies and Officer—Shagufta Ahmed—Office of and costs of operation, maintenance, regulations. Information and Regulatory Affairs, and purchase of services to provide Federal Communications Commission. Office of Management and Budget, New information. Cecilia Sigmund, Executive Office Building, Room 10235, At the end of the comment period, the Federal Register Liaison Officer, Office of the 725 17th Street NW, Washington, DC comments and recommendations Secretary. 20503, or by fax to (202) 395–6974. received will be analyzed to determine [FR Doc. 2019–13212 Filed 6–20–19; 8:45 am] FOR FURTHER INFORMATION CONTACT: A the extent to which the Board should BILLING CODE 6712–01–P copy of the Paperwork Reduction Act modify the proposal.

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Proposal Under OMB Delegated obtained from the FR 3054 may be used (BHC Act), Regulation Y (12 CFR part Authority To Extend for Three Years, in support of the Board’s role in 225), and all other applicable statutes With Revision, the Following overseeing the Federal Reserve Banks’ and regulations to become a bank Information Collection provision of financial services to holding company and/or to acquire the Report title: Payments Systems depository institutions; developing assets or the ownership of, control of, or Surveys. policies and regulations to foster the the power to vote shares of a bank or Agency form number: FR 3054. efficiency and integrity of the U.S. bank holding company and all of the OMB control number: OMB No. 7100– payment system; working with other banks and nonbanking companies 0332. central banks and international owned by the bank holding company, Frequency: FR 3054a, five times per organizations to improve the payment including the companies listed below. year; FR 3054b, annually; FR 3054c, system more broadly; conducting The applications listed below, as well semi-annually; FR 3054d, quarterly; and research on payments issues; and as other related filings required by the FR 3054e, five times per year. working with other federal agencies on Board, are available for immediate Respondents: Financial institutions, currency design, quality issues, and to inspection at the Federal Reserve Bank including depository institutions, educate the global public on the security indicated. The applications will also be individuals, law enforcement, and features of Federal Reserve notes. available for inspection at the offices of nonfinancial businesses (banknote Therefore, the FR 3054 is authorized the Board of Governors. Interested equipment manufacturers, or global pursuant to the Board’s authority under persons may express their views in wholesale bank note dealers). Sections 11(d),1 11A,2 13,3 and 16 4 of writing on the standards enumerated in Estimated number of respondents: FR the Federal Reserve Act. The FR 3054 is the BHC Act (12 U.S.C. 1842(c)). If the 3054a, 4,000 respondents; FR 3054b, voluntary. proposal also involves the acquisition of 300 respondents; FR 3054c, 25 The questions asked on each survey a nonbanking company, the review also respondents; FR 3054d, 250 would vary, so the ability of the Board includes whether the acquisition of the respondents; and FR 3054e, 500 to maintain the confidentiality of nonbanking company complies with the respondents. information collected would be standards in section 4 of the BHC Act Estimated average hours per response: determined on a case by case basis. It is (12 U.S.C. 1843). Unless otherwise FR 3054a, 0.75 hours; FR 3054b, 0.50 possible that the information collected noted, nonbanking activities will be hours; FR 3054c, 30 hours; FR 3054d, would constitute confidential conducted throughout the United States. 2.5 hours; and FR 3054e, 0.50 hours. commercial or financial information, Unless otherwise noted, comments Estimated annual burden hours: FR which may be kept confidential under regarding each of these applications 3054a, 15,000 hours; FR 3054b, 150 exemption 4 of the Freedom of must be received at the Reserve Bank hours; FR 3054c, 1,500 hours; FR 3054d, Information Act (FOIA).5 In indicated or the offices of the Board of 2,500 hours; and FR 3054e, 1,250 hours. circumstances where the Board collects Governors not later than July 19, 2019. General description of report: The information related to individuals, A. Federal Reserve Bank of San Payments Systems Surveys are used to exemption 6 of the FOIA would protect Francisco (Gerald C. Tsai, Director, obtain information specifically tailored information ‘‘the disclosure of which Applications and Enforcement) 101 to the Federal Reserve’s operational and would constitute a clearly unwarranted Market Street, San Francisco, California fiscal agency responsibilities. invasion of personal privacy.’’ 6 To the 94105–1579: Proposed revisions: The Board extent the information collected relates 1. US Metro Bancorp, Inc. Garden proposes to revise the Ad Hoc Payments to examination, operating, or condition Grove, California; to become a bank Systems Survey (FR 3054a) to increase reports prepared for the use of an holding company by acquiring 100 the frequency of surveys from once per agency supervising financial percent of the voting shares US Metro year to five times annually, and reduce institutions, such information may be Bank, also of Garden Grove, California. the number of respondents from 20,000 kept confidential under exemption 8 of B. Federal Reserve Bank of Chicago to 4,000. The increase in frequency of the FOIA.7 (Colette A. Fried, Assistant Vice surveys will allow the Federal Reserve Board of Governors of the Federal Reserve President) 230 South LaSalle Street, System flexibility to respond to diverse System, June 17, 2019. Chicago, Illinois 60690–1414: needs for data by surveying smaller Ann Misback, 1. First American Bank Corporation, groups of respondents multiple times Elk Grove Village, Illinois; to acquire throughout a year. Under the Ad Hoc Secretary of the Board. [FR Doc. 2019–13107 Filed 6–20–19; 8:45 am] 100 percent of the voting shares of Payments Systems Survey, the Board Continental National Bank, Miami, BILLING CODE 6210–01–P plans to administer online or in person Florida. surveys, in-depth interviews, and observations of focus groups in order to Board of Governors of the Federal Reserve FEDERAL RESERVE SYSTEM System, June 18, 2019. answer critical programmatic questions Yao-Chin Chao, from U.S. currency stakeholders. In Formations of, Acquisitions by, and Assistant Secretary of the Board. addition, the Board proposes to Mergers of Bank Holding Companies implement one new survey, the [FR Doc. 2019–13244 Filed 6–20–19; 8:45 am] Currency Education Usability Survey The companies listed in this notice BILLING CODE P (FR 3054e). The Currency Education have applied to the Board for approval, Usability Survey would be conducted pursuant to the Bank Holding Company approximately five times per year to Act of 1956 (12 U.S.C. 1841 et seq.) FEDERAL RESERVE SYSTEM assess the usability of digital or online 1 Change in Bank Control Notices; education materials on U.S. currency. 12 U.S.C. 248(d). 2 Acquisitions of Shares of a Bank or The Currency Education Usability 12 U.S.C. 248a. 3 12 U.S.C. 342. Bank Holding Company Survey may be conducted by the Board 4 12 U.S.C. 411, 412, 413, 414, 415, 416, 417, 421. or a private firm. 5 5 U.S.C. 552(b)(4). The notificants listed below have Legal authorization and 6 5 U.S.C. 552(b)(6). applied under the Change in Bank confidentiality: The information 7 5 U.S.C. 552(b)(8). Control Act (‘‘Act’’) (12 U.S.C. 1817(j))

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and § 225.41 of the Board’s Regulation DEPARTMENT OF DEFENSE allow 30 days for posting of comments Y (12 CFR 225.41) to acquire shares of submitted by mail). a bank or bank holding company. The GENERAL SERVICES FOR FURTHER INFORMATION CONTACT: Ms. factors that are considered in acting on ADMINISTRATION Camara Francis, Procurement Analyst, the notices are set forth in paragraph 7 Office of Governmentwide Acquisition of the Act (12 U.S.C. 1817(j)(7)). NATIONAL AERONAUTICS AND Policy, GSA, 202–550–0935, or email SPACE ADMINISTRATION The notices are available for [email protected]. immediate inspection at the Federal [OMB Control No. 9000–0026; Docket No. SUPPLEMENTARY INFORMATION: 2019–0003; Sequence No. 12] Reserve Bank indicated. The notices A. Purpose also will be available for inspection at Information Collection; Change Order the offices of the Board of Governors. FAR 43.205 allows a contracting Accounting Interested persons may express their officer, whenever the estimated cost of views in writing to the Reserve Bank AGENCY: Department of Defense (DOD), a change or series of related changes indicated for that notice or to the offices General Services Administration (GSA), under a contract exceeds $100,000, to of the Board of Governors. Comments and National Aeronautics and Space assert the right in the clause at FAR must be received not later than July 3, Administration (NASA). 52.243–6, Change Order Accounting, to require the contractor to maintain 2019. ACTION: Notice. separate accounts for each change or A. Federal Reserve Bank of Dallas SUMMARY: Under the provisions of the series of related changes. Each account (Robert L. Triplett III, Senior Vice Paperwork Reduction Act, the shall record all incurred segregable, President) 2200 North Pearl Street, Regulatory Secretariat Division will be direct costs (less allocable credits) of Dallas, Texas 75201–2272: submitting to the Office of Management work, changed and unchanged, 1. Patricia H. Wallace, individually, and Budget (OMB) a request to review allocable to the change. These accounts and as trustee of the George S. Hawn and approve a revision and extension of are to be maintained until the parties Family Lifetime Trust, George S. Hawn, a previously approved information agree to an equitable adjustment for the Jr. Family 2011 GST Exempt Trust, JHC collection requirement concerning changes or until the matter is 2004 Electing Small Business Trust f/b/ change order accounting. conclusively disposed of under the o Benjamin B. Wallace, Jr., JHC 2004 DATES: Submit comments on or before Disputes clause. This requirement is Electing Small Business Trust f/b/o August 20, 2019. necessary in order to be able to account Patricia (’Tricia’) H. Wallace, and co- ADDRESSES: Submit comments properly for costs associated with trustee for the Wallace Family 2016 GST identified by Information Collection changes in supply and research and Exempt Trust, all of Corpus Christi, 9000–0026, Change Order Accounting, development contracts that are Texas; Benjamin B. Wallace, by any of the following methods: technically complex and incur individually and as co-trustee for the • Regulations.gov: http:// numerous changes. Wallace Family 2016 GST Exempt www.regulations.gov. Submit comments B. Annual Reporting Burden Trust, Corpus Christi, Texas; Christina via the Federal eRulemaking portal by Respondents: 8,850. H. Hawn, individually and as trustee of inputting ‘‘Information Collection 9000– the Christina H. Hawn Family 2016 GST Responses per Respondent: 12. 0026, Change Order Accounting’’ under Annual Responses: 106,200. Exempt Trust, Corpus Christi, Texas; the heading ‘‘Enter Keyword or ID’’ and Hours per Response: 1. John W. Wallace and Sally Wallace, selecting ‘‘Search’’. Select the link Total Burden Hours: 106,200. both of Corpus Christi, Texas; Christina ‘‘Submit a Comment’’ that corresponds Frequency of Collection: On occasion. H. Bonner, Corpus Christi, Texas; with ‘‘Information 9000–0026, Change Affected Public: Businesses or other Clayton J. Hoover, Jr., San Antonio, Order Accounting’’. Follow the for-profit entities and not-for-profit Texas; Gipson S. H. Dolan, as trustee of instructions provided at the ‘‘Submit a institutions. Gipson Sherman Hawn Dolan Revocable Comment’’ screen. Please include your Lifetime Trust, Naples, Florida; Hailey name, company name (if any), and C. Public Comments M. H. Brown, as trustee of Hailey ‘‘Information Collection 9000–0026, Public comments are particularly McCollough Hawn Brown Revocable Change Order Accounting’’ on your invited on: Whether this collection of Lifetime Trust, Charlotte, North attached document. information is necessary for the proper Carolina; Helena M.H. Perry, as trustee • Mail: General Services performance of functions of the FAR, of Helena McFarlin Hawn Perry Administration, Regulatory Secretariat and whether it will have practical Revocable Lifetime Trust, Vero Beach, Division (MVCB), 1800 F Street NW, utility; whether our estimate of the Florida; and Hewit H. Rome, as trustee Washington, DC 20405. ATTN: Ms. public burden of this collection of of Hewit Hawn Rome Revocable Lifetime Mandell/IC 9000–0026, Change Order information is accurate, and based on Trust, Naples, Florida; a group acting in Accounting. valid assumptions and methodology; concert to acquire and retain voting Instructions: Please submit comments ways to enhance the quality, utility, and shares of American Bank Holding only and cite Information Collection clarity of the information to be Corporation and indirectly, acquire and 9000–0026, Change Order Accounting, collected; and ways in which we can retain shares of American Bank, in all correspondence related to this minimize the burden of the collection of National Association, both of Corpus collection. Comments received generally information on those who are to Christi, Texas. will be posted without change to http:// respond, through the use of appropriate Board of Governors of the Federal Reserve www.regulations.gov, including any technological collection techniques or System, June 18, 2019. personal and/or business confidential other forms of information technology. information provided. To confirm Obtaining Copies of Proposals: Yao-Chin Chao, receipt of your comment(s), please Requesters may obtain a copy of the Assistant Secretary of the Board. check www.regulations.gov, information collection documents from [FR Doc. 2019–13243 Filed 6–20–19; 8:45 am] approximately two to three days after the General Services Administration, BILLING CODE P submission to verify posting (except Regulatory Secretariat Division (MVCB),

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1800 F Street NW, Washington, DC regarding the scope of the EIS and the (5) locations, a ‘‘smaller footprint’’ build 20405, telephone 202–501–4755. proposed facilities may be sent to the alternative for six (6) facilities at the Please cite OMB Control No. 9000– point of contact listed in the FOR same five (5) locations, and a ‘‘no 0026, Change Order Accounting, in all FURTHER INFORMATION section. action’’ alternative. The alternatives for correspondence. The meetings will be held at the the Two (2) Arizona locations are Dated: June 17, 2019. following locations: described below: • San Luis II, AZ Site, Holiday Inn Janet Fry, Express and Suites Yuma, 2044 S San Luis II LPOE, AZ Director, Federal Acquisition Policy Division, Avenue 3E, Yuma, AZ 85365, (928) Office of Governmentwide Acquisition Policy, The proposed truck inspection facility Office of Acquisition Policy, Office of 317–1400, • Nogales Mariposa, AZ Site, Holiday would be located on the northern edge Governmentwide Policy. of the LPOE property line. A portion of [FR Doc. 2019–13176 Filed 6–20–19; 8:45 am] Inn Express Nogales, 850 W Shell Road, Nogales, AZ 85621, telephone (520) the site work would be constructed on BILLING CODE 6820–EP–P 281–0123. newly acquired Federal land that will FOR FURTHER INFORMATION CONTACT: allow access from the site after hours. GENERAL SERVICES • Email: Osmahn Kadri at Site work would require the clearing of ADMINISTRATION [email protected], the existing site, extension of existing • Mail: Attn: Osmahn Kadri, NEPA utilities for electrical, sanitary sewer [Notice–PBS–2019–05; Docket No. 2019– Program Manager, 50 United Nations and water, paving of the truck path, and 0002; Sequence No. 14] Plaza, 3345, Mailbox #9, San Francisco, relocating the existing CBP impound lot. Notice of Intent To Prepare an CA 94102. Facility construction would include an • Environmental Impact Statement for Telephone: (415) 522–3617 (Please inspection canopy with pits and an Land Ports of Entry also call this number if special FMCSA administration building. The assistance is needed to attend and other build alternative would consist of AGENCY: Public Buildings Service (PBS), participate in the public scoping a smaller facility footprint on the same General Services Administration (GSA). meetings). location. ACTION: Revised Notice of Intent; SUPPLEMENTARY INFORMATION: meeting updates. Nogales Mariposa LPOE, AZ Background The proposed truck inspection facility SUMMARY: The Federal Motor Carrier The FMCSA mission includes Safety Administration (FMCSA) and the would be located on privately owned ensuring that commercial vehicles land, north of the existing LPOE. Site GSA have partnered to develop a entering the United States (U.S.) and program of projects at a number of Land work would require the clearing of the travelling on U.S. Highways are existing site, extension of existing Ports of Entry (LPOEs) so that FMCSA operating safely and within current U.S. agents can safely and effectively inspect utilities for electrical, sanitary sewer standards. To achieve this mission and and water, paving of the truck path. both commercial truck and bus traffic. ensure safety on public highways, Facility construction would include an GSA intends to prepare an FMCSA must inspect commercial and inspection canopy with pits and a Environmental Impact Statement (EIS) bus traffic at points of destination or to analyze the potential impacts from origin, the U.S.-Mexico Border being a FMCSA administration building. The the proposed construction of six (6) main point of origin. other build alternative would consist of inspection facilities at five (5) different FMCSA inspectors currently inspect a smaller facility footprint on the same LPOEs in both California and Arizona. both bus and commercial truck traffic at location. A NOI was published concerning the multiple LPOEs along the U.S.-Mexico The ‘‘no action’’ alternative assumes EIS and scoping meetings on May 23, Border in both California and Arizona at that no new facility would be 2019. The revised Notice of Intent is to facilities that were not built for their constructed at any of the sites and the notify interested parties that dates for needs and at sites which do not allow LPOEs and FMCSA operations would the scoping meetings have changed for for thorough, safe inspection of vehicles. the two (2) Arizona Sites. Meetings for continue to operate under current In April of 2018, FMCSA received conditions. the California scoping meetings have funding from the Committees of not changed. Congress to develop, design, and Dated: June 18, 2019. DATES: The views and comments of the construct facilities that will allow them Jared Bradley, public are necessary to help determine to meet their mission goals safely and Director, Portfolio Management Division, the scope and content of the effectively. Pacific Rim Region, Public Buildings Service. environmental analysis. Interested It has been determined that to achieve [FR Doc. 2019–13293 Filed 6–20–19; 8:45 am] parties are encouraged to attend and this mission, six (6) inspection facilities BILLING CODE 6820–YF–P provide written comments regarding the will be needed at five (5) different scope of the EIS and the proposed LPOEs in both California and Arizona. facilities by August 2, 2019. The two (2) Arizona LPOEs are Updated scoping meetings for the two described below: (2) Arizona sites are listed below: • Nogales Mariposa, AZ (Commercial • San Luis II, AZ, Wednesday, July Truck Inspection) 17, 2019, 4:00 p.m. to 6:00 p.m. • San Luis II, AZ (Commercial Truck • Nogales Mariposa, AZ, Thursday, Inspection) July 18, 2019, 4:00 p.m. to 6:00 p.m. ADDRESSES: The meetings will be Alternatives conducted in an open house format, The EIS will consider three where project information will be Alternatives; a ‘‘preferred build presented and distributed. Comments alternative’’ for six (6) facilities at five

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DEPARTMENT OF DEFENSE Washington, DC 20405. ATTN: Lois 1. 15.407–2(e), Make-or-buy programs. Mandell/IC 9000–0078, Certain Federal When prospective contractors are GENERAL SERVICES Acquisition Regulation Part 15 required to submit proposed make-or- ADMINISTRATION Requirements. buy program plans for negotiated Instructions: All items submitted acquisitions, paragraph (e) requires the NATIONAL AERONAUTICS AND must cite Information Collection 9000– following information in their proposal: SPACE ADMINISTRATION 0078, Certain Federal Acquisition A description of each major item or [OMB Control No. 9000–0078; Docket No. Regulation Part 15 Requirements. work effort; categorization of each major 2019–0003; Sequence No. 25] Comments received generally will be item or work effort as ‘‘must make,’’ posted without change to http:// ‘‘must buy, or ‘‘can either make or buy;’’ Information Collection; Certain Federal www.regulations.gov, including any for each item or work effort categorized Acquisition Regulation Part 15 personal and/or business confidential as ‘‘can either make or buy,’’ a proposal Requirements information provided. To confirm either to ‘‘make’’ or to ‘‘buy;’’ reasons receipt of your comment(s), please for categorizing items and work efforts AGENCY: Department of Defense (DOD), check www.regulations.gov, as ‘‘must make’’ or ‘‘must buy,’’ and General Services Administration (GSA), approximately two to three days after proposing to ‘‘make’’ or to ‘‘buy’’ those and National Aeronautics and Space submission to verify posting (except categorized as ‘‘can either make or buy;’’ Administration (NASA). allow 30 days for posting of comments designation of the plant or division ACTION: Notice and request for submitted by mail). proposed to make each item or perform comments. FOR FURTHER INFORMATION CONTACT: each work effort, and a statement as to SUMMARY: In accordance with the Zenaida Delgado, Procurement Analyst, whether the existing or proposed new Paperwork Reduction Act of 1995, and at telephone 202–969–7207, or facility is in or near a labor surplus area; the Office of Management and Budget [email protected]. identification of proposed (OMB) regulations, DoD, GSA, and SUPPLEMENTARY INFORMATION: subcontractors, if known, and their NASA invite the public to comment on location and size status; any A. OMB Control Number, Title, and recommendations to defer make-or-buy a revision and renewal concerning Any Associated Form(s) certain Federal Acquisition Regulation decisions when categorization of some part 15 requirements. DoD, GSA, and 9000–0078, Certain Federal items or work efforts is impracticable at NASA invite comments on: Whether the Acquisition Regulation Part 15 the time of submission; and any other proposed collection of information is Requirements. information the contracting officer requires in order to evaluate the necessary for the proper performance of B. Need and Uses the functions of Federal Government program. DoD, GSA, and NASA are in the 2. 52.215–9, Changes or Additions to acquisitions, including whether the process of combining OMB control Make-or-Buy Program. This clause information will have practical utility; numbers for the Federal Acquisition requires the contractor to submit, in the accuracy of the estimate of the Regulation (FAR) by FAR part. This writing, for the contracting officer’s burden of the proposed information consolidation is expected to improve advance approval a notification and collection; ways to enhance the quality, industry’s ability to easily and justification of any proposed change in utility, and clarity of the information to efficiently identify all burdens the make-or-buy program incorporated be collected; ways to minimize the associated with a given FAR part. The in the contract. burden of the information collection on review of the information collections by 3. 52.215–19, Notification of respondents, including the use of FAR part allows improved oversight to Ownership Changes. This clause automated collection techniques or ensure there is no redundant or requires contractors to notify the other forms of information technology; unaccounted for burden placed on administrative contracting officer when and whether the proposed consolidation industry. Lastly, combining information the contractor becomes aware that a of the information collections is collections in a given FAR part is also change in its ownership has occurred, or problematic. OMB has approved this expected to reduce the administrative is certain to occur, that could result in information collection for use through burden associated with processing changes in the valuation of its July 31, 2019. DoD, GSA, and NASA multiple information collections. capitalized assets in the accounting propose that OMB extend its approval This justification supports revision records. Notice of changes of ownership for use for three additional years beyond and extension of the expiration date of are necessary to adequately administer the current expiration date. OMB control number 9000–0078 and the cost principle at FAR 31.205–52, DATES: DoD, GSA, and NASA will combines it with the previously Asset valuations, which addresses the consider all comments received by approved information collections OMB allowability of certain costs resulting August 20, 2019. control numbers 9000–0115 and 9000– from asset valuations following business ADDRESSES: DoD, GSA, and NASA 0173, with the new title ‘‘Certain combinations. invite interested persons to submit Federal Acquisition Regulation Part 15 4. 52.215–22, Limitations on Pass- comments on this collection by either of Requirements’’. Upon approval of this Through Charges—Identification of the following methods: consolidated information collection, Subcontract Effort. This provision • Federal eRulemaking Portal: This OMB control numbers 9000–0115 and requires offerors submitting a proposal website provides the ability to type 9000–0173 will be discontinued. The for a contract, task order, or delivery short comments directly into the burden requirements previously order to provide the following comment field or attach a file for approved under the discontinued information with their proposal: (1) The lengthier comments. Go to http:// numbers will be covered under OMB total cost of the work to be performed www.regulations.gov and follow the control number 9000–0078. by the offeror, and the total cost of the instructions on the site. This clearance covers the information work to be performed by each • Mail: General Services that offerors/contractors must submit to subcontractor; (2) if the offeror intends Administration, Regulatory Secretariat comply with the following FAR to subcontract more than 70 percent of Division (MVCB), 1800 F Street NW, requirements: the total cost of work to be performed,

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the amount of the offeror’s indirect costs Dated: June 17, 2019. check www.regulations.gov, and profit/fee applicable to the work to Janet Fry, approximately two-to-three days after be performed by the subcontractor(s), Director, Federal Acquisition Policy Division, submission to verify posting (except and a description of the value added by Office of Governmentwide Acquisition Policy, allow 30 days for posting of comments the offeror as related to the work to be Office of Acquisition Policy, Office of submitted by mail). Governmentwide Policy. performed by the subcontractor(s); and FOR FURTHER INFORMATION CONTACT: Mr. (3) if any subcontractor proposed [FR Doc. 2019–13140 Filed 6–20–19; 8:45 am] Kevin Funk, Procurement Analyst, intends to subcontract to a lower-tier BILLING CODE 6820–EP–P Office of Governmentwide Acquisition subcontractor more than 70 percent of Policy, GSA at 202–357–5805 or the total cost of work to be performed [email protected]. DEPARTMENT OF DEFENSE the amount of the subcontractor’s SUPPLEMENTARY INFORMATION: indirect costs and profit/fee applicable GENERAL SERVICES A. Solicitation of Public Comment to the work to be performed by the ADMINISTRATION lower-tier subcontractor(s), and a Written comments and suggestions description of the added value provided NATIONAL AERONAUTICS AND from the public should address one or by the subcontractor as related to the SPACE ADMINISTRATION more of the following four points: work to be performed by the lower-tier (1) Evaluate whether the collection of subcontractor(s). [OMB Control No. 9000–0074; Docket No. information is necessary for the proper 2019–0003; Sequence No. 14] 5. 52.215–23, Limitations on Pass- performance of the functions of the Through Charges. This clause requires Information Collection; Contract agency, including whether the contractors to provide a description of Funding—Limitation of Costs/Funds information will have practical utility; the value added by the contractor or (2) Evaluate the accuracy of the subcontractor, as applicable, as related AGENCY: Department of Defense (DOD), agency’s estimate of the burden of the to the subcontract effort if this effort General Services Administration (GSA), proposed collection of information, changes from the amount identified in and National Aeronautics and Space including the validity of the the proposal such that it exceeds 70 Administration (NASA). methodology and assumptions used; percent of the total cost of work to be ACTION: Notice and request for (3) Enhance the quality, utility, and performed. The following contract types comments. clarity of the information to be collected; and are excluded from this information SUMMARY: In accordance with the collection requirement: A firm-fixed- (4) Minimize the burden of the Paperwork Reduction Act of 1995 and collection of information on those who price contract awarded on the basis of the Office of Management and Budget adequate price competition; a fixed- are to respond, including through the (OMB) regulations, the Federal use of appropriate automated, price contract with economic price Acquisition Regulation (FAR) Council adjustment awarded on the basis of electronic, mechanical, or other invites the public to comment upon an technological collection techniques or adequate price competition; a firm- extension of a previously approved fixed-price contract for the acquisition other forms of information technology information collection requirement (e.g. permitting electronic submission of of a commercial item; a fixed-price concerning limitation of costs/funds. contract with economic price responses). DATES: Submit comments on or before adjustment, for the acquisition of a August 20, 2019. B. Purpose commercial item; a fixed-price incentive ADDRESSES: In accordance with FAR 52.232–20 contract awarded on the basis of The FAR Council invites interested persons to submit comments and 52.232–22, firms performing under adequate price competition; or a fixed- on this collection by either of the fully funded or incrementally funded price incentive contract for the following methods: cost-reimbursement Federal contracts acquisition of a commercial item. • Federal eRulemaking Portal: This are required to notify the contracting C. Annual Reporting Burden website provides the ability to type officer in writing whenever they have short comments directly into the reason to believe— Respondents/Recordkeepers: 4,653. comment field or attach a file for (1) The costs the contractors expect to Total Annual Responses: 29,953. lengthier comments. Go to http:// incur under the contracts in the next 60 www.regulations.gov and follow the days, when added to all costs previously Total Burden Hours: 62,241 (62,236 instructions on the site. incurred, will exceed 75 percent of the reporting hours + 5 recordkeeping • Mail: General Services estimated cost of the contracts; or (2) hours). Administration, Regulatory Secretariat The total cost for the performance of the Affected Public: Businesses or other Division (MVCB), 1800 F Street NW, contracts will be greater or substantially for-profit and not-for-profit institutions. Washington, DC 20405. ATTN: Ms. less than estimated. Frequency: On occasion. Mandell/IC 9000–0074, Contract As a part of the notification, the Funding—Limitation of Costs/Funds. contractors must provide a revised Obtaining Copies: Requesters may Instructions: Please submit comments estimate of total cost. The frequency of obtain a copy of the information only and cite Information Collection this collection of information is collection documents from the General 9000–0074, Contract Funding— variable, contingent upon both funding Services Administration, Regulatory Limitation of Costs/Funds, in all and spending patterns. Secretariat Division (MVCB), 1800 F correspondence related to this Street NW, Washington, DC 20405, collection. Comments received generally C. Annual Reporting Burden telephone 202–501–4755. will be posted without change to http:// Respondents: 1,928. Please cite OMB control number www.regulations.gov, including any Responses per Respondent: 6. 9000–0078, Certain Federal Acquisition personal and/or business confidential Total Annual Responses: 11,568. Regulation Part 15 Requirements, in all information provided. To confirm Hours per Response: 0.33. correspondence. receipt of your comment(s), please Total Burden Hours: 3,817.

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Obtaining Copies of Proposals: Authority: Pub. L. 114–10, Sec. 101(e), 129 DEPARTMENT OF HEALTH AND Requesters may obtain a copy of the Stat. 87, 115 (2015). HUMAN SERVICES information collection documents from Gene L. Dodaro, Food and Drug Administration the General Services Administration, Comptroller General of the United States. Regulatory Secretariat Division (MVCB), [Docket No. FDA–2019–N–2778] 1800 F Street NW, Washington, DC [FR Doc. 2019–13249 Filed 6–20–19; 8:45 am] 20405, telephone 202–501–4755. BILLING CODE 1610–02–P Agency Information Collection Please cite OMB Control No. 9000– Activities; Proposed Collection; 0074, Contract Funding—Limitation of Comment Request; Threshold of Costs/Funds, in all correspondence. DEPARTMENT OF HEALTH AND Regulation for Substances Used in HUMAN SERVICES Dated: June 14, 2019. Food-Contact Articles Janet Fry, Centers for Disease Control and AGENCY: Food and Drug Administration, Director, Federal Acquisition Policy Division, Prevention HHS. Office of Governmentwide Acquisition Policy, ACTION: Notice. Office of Acquisition Policy, Office of Notice of Closed Meeting Governmentwide Policy. SUMMARY: The Food and Drug Pursuant to section 10(d) of the [FR Doc. 2019–13138 Filed 6–20–19; 8:45 am] Administration (FDA or Agency) is Federal Advisory Committee Act, as BILLING CODE 6820–EP–P announcing an opportunity for public amended, notice is hereby given of the comment on the proposed collection of following meeting. certain information by the Agency. The meeting will be closed to the Under the Paperwork Reduction Act of public in accordance with the GOVERNMENT ACCOUNTABILITY 1995 (PRA), Federal Agencies are provisions set forth in sections OFFICE required to publish notice in the 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Federal Register concerning each as amended, and the Determination of Request for Nominations for the proposed collection of information, the Chief Operating Officer, CDC, Physician-Focused Payment Model including each proposed extension of an pursuant to Public Law 92–463. The Technical Advisory Committee (PTAC) existing collection of information, and grant applications and the discussions to allow 60 days for public comment in AGENCY: Government Accountability could disclose confidential trade secrets response to the notice. This notice Office (GAO). or commercial property such as solicits comments on requests for data patentable material, and personal ACTION: Request for letters of needed to evaluate requests for information concerning individuals nomination and resumes. threshold of regulation exemptions for associated with the grant applications, substances used in food-contact articles. SUMMARY: The Medicare Access and the disclosure of which would DATES: CHIP Reauthorization Act of 2015 constitute a clearly unwarranted Submit either electronic or established the Physician-Focused invasion of personal privacy. written comments on the collection of Payment Model Technical Advisory Name of Committee: Disease, information by August 20, 2019. Committee to provide comments and Disability, and Injury Prevention and ADDRESSES: You may submit comments recommendations to the Secretary of Control Special Emphasis Panel (SEP)— as follows. Please note that late, Health and Human Services on RFA–TS–19–002, Multi-Site Study of untimely filed comments will not be physician payment models and gave the the Health Implications of Exposure to considered. Electronic comments must Comptroller General responsibility for PFAS-Contaminated Drinking Water. be submitted on or before August 20, appointing its members. GAO is now Date: July 24–25, 2019. 2019. The https://www.regulations.gov accepting nominations of individuals Time: 8:30 a.m.–5:00 p.m., EDT. electronic filing system will accept for this committee. Place: W Atlanta-Buckhead, 3377 comments until 11:59 p.m. Eastern Time DATES: Letters of nomination and Peachtree Rd, NE, Atlanta, GA 30326. at the end of August 20, 2019. resumes should be submitted no later Agenda: To review and evaluate grant Comments received by mail/hand than July 19, 2019, to ensure adequate applications. delivery/courier (for written/paper opportunity for review and For Further Information Contact: submissions) will be considered timely consideration of nominees prior to Mikel Walters, Ph.D., Scientific Review if they are postmarked or the delivery appointment. Appointments will be Official, NCIPC, CDC, 4770 Buford service acceptance receipt is on or made in October 2019. Highway NE, Mailstop F–63, Atlanta, before that date. Georgia 30341, Telephone (404) 639– ADDRESSES: Submit letters of Electronic Submissions 0913, [email protected]. nomination and resumes by either of the The Chief Operating Officer, Centers Submit electronic comments in the following methods: for Disease Control and Prevention, has following way: Email: [email protected]. • been delegated the authority to sign Federal eRulemaking Portal: Include PTAC Nominations in the Federal Register notices pertaining to https://www.regulations.gov. Follow the subject line of the message, or Mail: U.S. announcements of meetings and other instructions for submitting comments. GAO, Attn: PTAC Nominations, 441 G committee management activities, for Comments submitted electronically, Street NW, Washington, DC 20548. both the Centers for Disease Control and including attachments, to https:// FOR FURTHER INFORMATION CONTACT: Greg Prevention and the Agency for Toxic www.regulations.gov will be posted to Giusto at (202) 512–8268 or giustog@ Substances and Disease Registry. the docket unchanged. Because your gao.gov if you do not receive an comment will be made public, you are acknowledgement within a week of Sherri Berger, solely responsible for ensuring that your submission or if you need additional Chief Operating Officer, Centers for Disease comment does not include any information. For general information, Control and Prevention. confidential information that you or a contact GAO’s Office of Public Affairs, [FR Doc. 2019–13178 Filed 6–20–19; 8:45 am] third party may not wish to be posted, (202) 512–4800. BILLING CODE 4163–18–P such as medical information, your or

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anyone else’s Social Security number, or available, you can provide this the quality, utility, and clarity of the confidential business information, such information on the cover sheet and not information to be collected; and (4) as a manufacturing process. Please note in the body of your comments and you ways to minimize the burden of the that if you include your name, contact must identify this information as collection of information on information, or other information that ‘‘confidential.’’ Any information marked respondents, including through the use identifies you in the body of your as ‘‘confidential’’ will not be disclosed of automated collection techniques, comments, that information will be except in accordance with 21 CFR 10.20 when appropriate, and other forms of posted on https://www.regulations.gov. and other applicable disclosure law. For information technology. • If you want to submit a comment more information about FDA’s posting with confidential information that you of comments to public dockets, see 80 Threshold of Regulation for Substances do not wish to be made available to the FR 56469, September 18, 2015, or access Used in Food-Contact Articles—21 CFR public, submit the comment as a the information at: https://www.gpo.gov/ 170.39 written/paper submission and in the fdsys/pkg/FR-2015-09-18/pdf/2015- OMB Control Number 0910–0298— manner detailed (see ‘‘Written/Paper 23389.pdf. Extension Submissions’’ and ‘‘Instructions’’). Docket: For access to the docket to Under section 409(a) of the Federal Written/Paper Submissions read background documents or the Food, Drug, and Cosmetic Act (FD&C electronic and written/paper comments Act) (21 U.S.C. 348(a)), the use of a food Submit written/paper submissions as received, go to https:// follows: additive is deemed unsafe unless one of • www.regulations.gov and insert the the following is applicable: (1) It Mail/Hand delivery/Courier (for docket number, found in brackets in the written/paper submissions): Dockets conforms to an exemption for heading of this document, into the investigational use under section 409(j) Management Staff (HFA–305), Food and ‘‘Search’’ box and follow the prompts Drug Administration, 5630 Fishers of the FD&C Act; (2) it conforms to the and/or go to the Dockets Management terms of a regulation prescribing its use; Lane, Rm. 1061, Rockville, MD 20852. Staff, 5630 Fishers Lane, Rm. 1061, • For written/paper comments or (3) in the case of a food additive Rockville, MD 20852. submitted to the Dockets Management which meets the definition of a food- Staff, FDA will post your comment, as FOR FURTHER INFORMATION CONTACT: contact substance in section 409(h)(6) of well as any attachments, except for Domini Bean, Office of Operations, the FD&C Act, there is either a information submitted, marked and Food and Drug Administration, Three regulation authorizing its use in identified, as confidential, if submitted White Flint North, 10A–12M, 11601 accordance with section 409(a)(3)(A) or as detailed in ‘‘Instructions.’’ Landsdown St., North Bethesda, MD an effective notification in accordance Instructions: All submissions received 20852, 301–796–5733, PRAStaff@ with section 409(a)(3)(B). must include the Docket No. FDA– fda.hhs.gov. The regulations in § 170.39 (21 CFR 2019–N–2778 for ‘‘Agency Information SUPPLEMENTARY INFORMATION: Under the 170.39) established a process that Collection Activities; Proposed PRA (44 U.S.C. 3501–3520), Federal provides the manufacturer with an Collection; Comment Request; Agencies must obtain approval from the opportunity to demonstrate that the Threshold of Regulation for Substances Office of Management and Budget likelihood or extent of migration to food Used in Food-Contact Articles.’’ (OMB) for each collection of of a substance used in a food-contact Received comments, those filed in a information they conduct or sponsor. article is so trivial that the use need not timely manner (see ADDRESSES), will be ‘‘Collection of information’’ is defined be the subject of a food additive listing placed in the docket and, except for in 44 U.S.C. 3502(3) and 5 CFR regulation or an effective notification. those submitted as ‘‘Confidential 1320.3(c) and includes Agency requests The Agency has established two Submissions,’’ publicly viewable at or requirements that members of the thresholds for the regulation of https://www.regulations.gov or at the public submit reports, keep records, or substances used in food-contact articles. Dockets Management Staff between 9 provide information to a third party. The first exempts those substances used a.m. and 4 p.m., Monday through Section 3506(c)(2)(A) of the PRA (44 in food-contact articles where the Friday. U.S.C. 3506(c)(2)(A)) requires Federal resulting dietary concentration would • Confidential Submissions—To Agencies to provide a 60-day notice in be at or below 0.5 part per billion (ppb). submit a comment with confidential the Federal Register concerning each The second exempts regulated direct information that you do not wish to be proposed collection of information, food additives for use in food-contact made publicly available, submit your including each proposed extension of an articles where the resulting dietary comments only as a written/paper existing collection of information, exposure is 1 percent or less of the submission. You should submit two before submitting the collection to OMB acceptable daily intake for these copies total. One copy will include the for approval. To comply with this substances. To determine whether the information you claim to be confidential requirement, FDA is publishing notice intended use of a substance in a food- with a heading or cover note that states of the proposed collection of contact article meets the threshold ‘‘THIS DOCUMENT CONTAINS information set forth in this document. criteria, certain information specified in CONFIDENTIAL INFORMATION.’’ The With respect to the following § 170.39(c) must be submitted to FDA. Agency will review this copy, including collection of information, FDA invites This information includes the following the claimed confidential information, in comments on these topics: (1) Whether components: (1) The chemical its consideration of comments. The the proposed collection of information composition of the substance for which second copy, which will have the is necessary for the proper performance the request is made; (2) detailed claimed confidential information of FDA’s functions, including whether information on the conditions of use of redacted/blacked out, will be available the information will have practical the substance; (3) a clear statement of for public viewing and posted on utility; (2) the accuracy of FDA’s the basis for the request for exemption https://www.regulations.gov. Submit estimate of the burden of the proposed from regulation as a food additive; (4) both copies to the Dockets Management collection of information, including the data that will enable FDA to estimate Staff. If you do not wish your name and validity of the methodology and the daily dietary concentration resulting contact information to be made publicly assumptions used; (3) ways to enhance from the proposed use of the substance;

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(5) results of a literature search for We use this information to determine and suppliers of substances used in toxicological data on the substance and whether the food-contact substance food-contact articles (i.e., food its impurities; and (6) information on meets the threshold criteria: packaging and food processing the environmental impact that would Description of Respondents: equipment) or of the articles themselves. result from the proposed use. Respondents to this information We estimate the burden of this collection are individual manufacturers collection of information as follows:

TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN 1

Number of Average 21 CFR 170.39 Number of responses per Total annual burden per Total hours respondents respondent responses response

Threshold of regulation for substances used in food-contact articles...... 4 1 4 48 192 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

Based on a review of the information granted an exemption from the food • Federal eRulemaking Portal: collection since our last request for additive listing regulation requirement. https://www.regulations.gov. Follow the OMB approval, we have made Dated: June 14, 2019. instructions for submitting comments. Comments submitted electronically, adjustments to decrease our burden Lowell J. Schiller, estimate due to the decrease in the including attachments, to https:// Principal Associate Commissioner for Policy. number of respondents. The adjustment www.regulations.gov will be posted to resulted in decreases of 3 responses and [FR Doc. 2019–13117 Filed 6–20–19; 8:45 am] the docket unchanged. Because your 144 total burden hours. BILLING CODE 4164–01–P comment will be made public, you are We estimate that approximately 4 solely responsible for ensuring that your requests per year will be submitted comment does not include any DEPARTMENT OF HEALTH AND confidential information that you or a under the threshold of regulation HUMAN SERVICES exemption process of § 170.39, for a third party may not wish to be posted, total of 192 hours. The threshold of Food and Drug Administration such as medical information, your or regulation process offers an advantage anyone else’s Social Security number, or over the premarket notification process [Docket No. FDA–2019–D–1536] confidential business information, such for food-contact substances established as a manufacturing process. Please note Opioid Analgesic Drugs: by section 409(h) of FD&C Act (OMB that if you include your name, contact Considerations for Benefit-Risk control number 0910–0495) in that the information, or other information that Assessment Framework; Draft use of a substance exempted by FDA is identifies you in the body of your Guidance for Industry; Availability not limited to only the manufacturer or comments, that information will be posted on https://www.regulations.gov. supplier who submitted the request for AGENCY: Food and Drug Administration, • an exemption. Other manufacturers or HHS. If you want to submit a comment with confidential information that you suppliers may use exempted substances ACTION: Notice of availability. in food-contact articles as long as the do not wish to be made available to the conditions of use (e.g., use levels, SUMMARY: The Food and Drug public, submit the comment as a temperature, type of food contacted, Administration (FDA or Agency) is written/paper submission and in the etc.) are those for which the exemption announcing the availability of a draft manner detailed (see ‘‘Written/Paper was issued. As a result, the overall guidance for industry entitled ‘‘Opioid Submissions’’ and ‘‘Instructions’’). burden on both Agency and the Analgesic Drugs: Considerations for Written/Paper Submissions Benefit-Risk Assessment Framework.’’ regulated industry would be Submit written/paper submissions as The purpose of this guidance is to significantly less in that other follows: describe the benefit-risk framework the manufacturers and suppliers would not • Mail/Hand delivery/Courier (for have to prepare, and we would not have Agency uses in evaluating applications written/paper submissions): Dockets to review, similar submissions for for opioid analgesic drugs. This Management Staff (HFA–305), Food and identical components of food-contact guidance summarizes the information Drug Administration, 5630 Fishers articles used under identical conditions. that should be included in a new drug Lane, Rm. 1061, Rockville, MD 20852. Manufacturers and other interested application (NDA) for an opioid • For written/paper comments persons can easily access an up-to-date analgesic drug to facilitate the Agency’s submitted to the Dockets Management list of exempted substances which is on benefit-risk assessment. Staff, FDA will post your comment, as display at FDA’s Dockets Management DATES: Submit either electronic or well as any attachments, except for Staff and on the internet at https:// written comments on the draft guidance information submitted, marked and www.fda.gov/food/packaging-food- by August 20, 2019 to ensure that the identified, as confidential, if submitted contact-substances-fcs/threshold- Agency considers your comment on this as detailed in ‘‘Instructions.’’ regulation-exemptions-substances-used- draft guidance before it begins work on Instructions: All submissions received food-contact-articles. Having the list of the final version of the guidance. must include the Docket No. FDA– exempted substances publicly available ADDRESSES: You may submit comments 2019–D–1536 for ‘‘Opioid Analgesic decreases the likelihood that a company on any guidance at any time as follows: Drugs: Considerations for Benefit-Risk would submit a food additive petition or Assessment Framework.’’ Received a notification for the same type of food- Electronic Submissions comments will be placed in the docket contact application of a substance for Submit electronic comments in the and, except for those submitted as which the Agency has previously following way: ‘‘Confidential Submissions,’’ publicly

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viewable at https://www.regulations.gov Evaluation and Research, Food and DEPARTMENT OF HEALTH AND or at the Dockets Management Staff Drug Administration, 10903 New HUMAN SERVICES between 9 a.m. and 4 p.m., Monday Hampshire Ave., Bldg. 22, Rm. 3170, through Friday. Silver Spring, MD 20993–0002, 301– Food and Drug Administration • Confidential Submissions—To 796–1225. [Docket No. FDA–2019–N–1620] submit a comment with confidential SUPPLEMENTARY INFORMATION: information that you do not wish to be Pediatric Oncology Subcommittee of made publicly available, submit your I. Background the Oncologic Drugs Advisory comments only as a written/paper Committee; Amendment of Notice submission. You should submit two FDA is announcing the availability of copies total. One copy will include the a draft guidance for industry entitled AGENCY: Food and Drug Administration, information you claim to be confidential ‘‘Opioid Analgesic Drugs: HHS. with a heading or cover note that states Considerations for Benefit-Risk ACTION: Notice. ‘‘THIS DOCUMENT CONTAINS Assessment Framework.’’ The purpose CONFIDENTIAL INFORMATION.’’ The of this guidance is to describe the SUMMARY: The Food and Drug Agency will review this copy, including benefit-risk framework the Agency uses Administration (FDA) is announcing an amendment to the notice of meeting of the claimed confidential information, in in evaluating applications for opioid the Pediatric Oncology Subcommittee of its consideration of comments. The analgesic drugs. This guidance the Oncologic Drugs Advisory second copy, which will have the summarizes the information that should claimed confidential information Committee. This meeting was be included in an NDA for an opioid announced in the Federal Register of redacted/blacked out, will be available analgesic drug to facilitate the Agency’s for public viewing and posted on May 6, 2019. The amendment is being benefit-risk assessment. https://www.regulations.gov. Submit made to reflect a change in the DATES, both copies to the Dockets Management This draft guidance is being issued Agenda, and Procedure portions of the Staff. If you do not wish your name and consistent with FDA’s good guidance document. There are no other changes. contact information to be made publicly practices regulation (21 CFR 10.115). FOR FURTHER INFORMATION CONTACT: available, you can provide this The draft guidance, when finalized, will Lauren Tesh Hotaki, Center for Drug information on the cover sheet and not represent the current thinking of FDA Evaluation and Research, Food and in the body of your comments and you on ‘‘Opioid Analgesic Drugs: Drug Administration, 10903 New must identify this information as Considerations for Benefit-Risk Hampshire Ave., Bldg. 31, Rm. 2417, ‘‘confidential.’’ Any information marked Assessment Framework.’’ It does not Silver Spring, MD 20993–0002, 301– as ‘‘confidential’’ will not be disclosed establish any rights for any person and 796–9001, Fax: 301–847–8533, email: except in accordance with 21 CFR 10.20 is not binding on FDA or the public. [email protected]; or FDA Advisory and other applicable disclosure law. For You can use an alternative approach if Committee Information Line, 1–800– more information about FDA’s posting it satisfies the requirements of the 741–8138 (301–443–0572 in the of comments to public dockets, see 80 applicable statutes and regulations. This Washington, DC area). Please call the FR 56469, September 18, 2015, or access guidance is not subject to Executive Information Line for up-to-date the information at: https://www.gpo.gov/ Order 12866. information on this meeting. fdsys/pkg/FR-2015-09-18/pdf/2015- SUPPLEMENTARY INFORMATION: In the 23389.pdf. II. Paperwork Reduction Act of 1995 Federal Register of May 6, 2019 (84 FR Docket: For access to the docket to This draft guidance refers to 19788), FDA announced that a meeting read background documents or the of the Pediatric Oncology Subcommittee previously approved collections of electronic and written/paper comments of the Oncologic Drugs Advisory information found in FDA regulations. received, go to https:// Committee would be held on June 20, www.regulations.gov and insert the These collections of information are 2019. On page 19788, in the first docket number, found in brackets in the subject to review by the Office of column, the DATES portion of the heading of this document, into the Management and Budget (OMB) under document is changed to read as follows: ‘‘Search’’ box and follow the prompts the Paperwork Reduction Act of 1995 Dates: The meeting will be held on and/or go to the Dockets Management (44 U.S.C. 3501–3520). The collections June 20, 2019, from 9 a.m. to 3:30 p.m. Staff, 5630 Fishers Lane, Rm. 1061, of information in 21 CFR parts 312 and On page 19789, in the second column, Rockville, MD 20852. 314 have been approved under OMB the second paragraph of the Agenda You may submit comments on any control numbers 0910–0014 and 0910– portion of the document is changed to guidance at any time (see 21 CFR 0001, respectively. read as follows: 10.115(g)(5)). During the afternoon session, III. Electronic Access Submit written requests for single information will be presented to gauge copies of the draft guidance to the Persons with access to the internet investigator interest in exploring Division of Drug Information, Center for may obtain the draft guidance at either potential pediatric development plans Drug Evaluation and Research, Food https://www.fda.gov/Drugs/Guidance for one product in early stages of and Drug Administration, 10001 New ComplianceRegulatoryInformation/ development for adult cancer Hampshire Ave., Hillandale Building, indications. The subcommittee will 4th Floor, Silver Spring, MD 20993– Guidances/default.htm or https:// www.regulations.gov. consider and discuss issues concerning 0002. Send one self-addressed adhesive diseases to be studied, patient label to assist that office in processing Dated: June 17, 2019. populations to be included, and your requests. See the SUPPLEMENTARY Lowell J. Schiller, possible study designs in the INFORMATION section for electronic Principal Associate Commissioner for Policy. development of these products for access to the draft guidance document. [FR Doc. 2019–13221 Filed 6–20–19; 8:45 am] pediatric use. The discussion will also FOR FURTHER INFORMATION CONTACT: BILLING CODE 4164–01–P provide information to the Agency Sharon Hertz, Center for Drug pertinent to the formulation of written

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requests for pediatric studies, if at the end of August 20, 2019. • Confidential Submissions—To appropriate. The product under Comments received by mail/hand submit a comment with confidential consideration is ONC201, presentation delivery/courier (for written/paper information that you do not wish to be by Oncoceutics Inc. submissions) will be considered timely made publicly available, submit your On page 19789, in the third column, if they are postmarked or the delivery comments only as a written/paper the third sentence of the Procedure service acceptance receipt is on or submission. You should submit two portion of the document is changed to before that date. copies total. One copy will include the read as follows: information you claim to be confidential Oral presentations from the public Electronic Submissions with a heading or cover note that states will be scheduled between Submit electronic comments in the ‘‘THIS DOCUMENT CONTAINS approximately 10:50 a.m. and 11:20 a.m. following way: CONFIDENTIAL INFORMATION.’’ The and 1:50 p.m. and 2:20 p.m. • Federal eRulemaking Portal: Agency will review this copy, including This notice is issued under the https://www.regulations.gov. Follow the the claimed confidential information, in Federal Advisory Committee Act (5 instructions for submitting comments. its consideration of comments. The U.S.C. app. 2) and 21 CFR part 14, Comments submitted electronically, second copy, which will have the relating to the advisory committees. including attachments, to https:// claimed confidential information www.regulations.gov will be posted to Dated: June 14, 2019. redacted/blacked out, will be available the docket unchanged. Because your for public viewing and posted on Lowell J. Schiller, comment will be made public, you are https://www.regulations.gov. Submit Principal Associate Commissioner for Policy. solely responsible for ensuring that your both copies to the Dockets Management [FR Doc. 2019–13142 Filed 6–20–19; 8:45 am] comment does not include any Staff. If you do not wish your name and BILLING CODE 4164–01–P confidential information that you or a contact information to be made publicly third party may not wish to be posted, available, you can provide this such as medical information, your or information on the cover sheet and not DEPARTMENT OF HEALTH AND anyone else’s Social Security number, or in the body of your comments and you HUMAN SERVICES confidential business information, such must identify this information as as a manufacturing process. Please note Food and Drug Administration ‘‘confidential.’’ Any information marked that if you include your name, contact as ‘‘confidential’’ will not be disclosed [Docket No. FDA–2019–N–2313] information, or other information that except in accordance with 21 CFR 10.20 identifies you in the body of your and other applicable disclosure law. For Agency Information Collection comments, that information will be more information about FDA’s posting Activities; Proposed Collection; posted on https://www.regulations.gov. of comments to public dockets, see 80 Comment Request; Study of Oncology • If you want to submit a comment FR 56469, September 18, 2015, or access Indications in Direct-to-Consumer with confidential information that you the information at: https://www.gpo.gov/ Television Advertising do not wish to be made available to the fdsys/pkg/FR-2015-09-18/pdf/2015- AGENCY: Food and Drug Administration, public, submit the comment as a 23389.pdf. HHS. written/paper submission and in the Docket: For access to the docket to manner detailed (see ‘‘Written/Paper read background documents or the ACTION: Notice. Submissions’’ and ‘‘Instructions’’). electronic and written/paper comments SUMMARY: The Food and Drug Written/Paper Submissions received, go to https:// Administration (FDA) is announcing an www.regulations.gov and insert the opportunity for public comment on the Submit written/paper submissions as docket number, found in brackets in the proposed collection of certain follows: heading of this document, into the • Mail/Hand delivery/Courier (for information by the Agency. Under the ‘‘Search’’ box and follow the prompts written/paper submissions): Dockets Paperwork Reduction Act of 1995 and/or go to the Dockets Management Management Staff (HFA–305), Food and (PRA), Federal Agencies are required to Staff, 5630 Fishers Lane, Rm. 1061, Drug Administration, 5630 Fishers publish notice in the Federal Register Rockville, MD 20852. Lane, Rm. 1061, Rockville, MD 20852. concerning each proposed collection of • For written/paper comments FOR FURTHER INFORMATION CONTACT: Ila information and to allow 60 days for submitted to the Dockets Management S. Mizrachi, Office of Operations, Food public comment in response to the Staff, FDA will post your comment, as and Drug Administration, Three White notice. This notice solicits comments on well as any attachments, except for Flint North, 10 a.m.–12 p.m., 11601 research entitled ‘‘Study of Oncology information submitted, marked and Landsdown St., North Bethesda, MD Indications in Direct-to-Consumer identified, as confidential, if submitted 20852, 301–796–7726, PRAStaff@ Television Advertising.’’ This research as detailed in ‘‘Instructions.’’ fda.hhs.gov. For copies of the consists of two studies examining the Instructions: All submissions received questionnaire contact: Office of presentation of oncology indications in must include the Docket No. FDA– Prescription Drug Promotion (OPDP) direct-to-consumer (DTC) television ads. 2019–N–2313 for ‘‘Study of Oncology Research Team, DTCresearch@ DATES: Submit either electronic or Indications in Direct-to-Consumer fda.hhs.gov. written comments on the collection of Television Advertising.’’ Received SUPPLEMENTARY INFORMATION: Under the information by August 20, 2019. comments, those filed in a timely PRA (44 U.S.C. 3501–3520), Federal ADDRESSES: You may submit comments manner (see ADDRESSES), will be placed Agencies must obtain approval from the as follows: Please note that late, in the docket and, except for those Office of Management and Budget untimely filed comments will not be submitted as ‘‘Confidential (OMB) for each collection of considered. Electronic comments must Submissions,’’ publicly viewable at information they conduct or sponsor. be submitted on or before August 20, https://www.regulations.gov or at the ‘‘Collection of information’’ is defined 2019. The https://www.regulations.gov Dockets Management Staff between 9 in 44 U.S.C. 3502(3) and 5 CFR electronic filing system will accept a.m. and 4 p.m., Monday through 1320.3(c) and includes Agency requests comments until 11:59 p.m. Eastern Time Friday. or requirements that members of the

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public submit reports, keep records, or research quality. Through the evaluation for Consumer Reporting of Drug Product provide information to a third party. of advertising features we assess how Side Effects in Direct-to-Consumer Section 3506(c)(2)(A) of the PRA (44 elements such as graphics, format, and Television Advertisements for U.S.C. 3506(c)(2)(A)) requires Federal disease and product characteristics Prescription Drugs, and 0910–0772— Agencies to provide a 60-day notice in impact the communication and Eye Tracking Study of Direct-to- the Federal Register concerning each understanding of prescription drug risks Consumer Prescription Drug proposed collection of information and benefits; focusing on target Advertisement Viewing) to the context before submitting the collection to OMB populations allows us to evaluate how of indication statements. This previous for approval. To comply with this understanding of prescription drug risks research supports the use of dual requirement, FDA is publishing notice and benefits may vary as a function of modality to increase consumers’ of the proposed collection of audience; and our focus on research understanding of risk information information set forth in this document. quality aims at maximizing the quality (January 27, 2012, 77 FR 4273) (Refs. 2 With respect to the following of research data through analytical and 3). collection of information, FDA invites methodology development and We plan to conduct two rounds (one comments on these topics: (1) Whether investigation of sampling and response for each objective) of nine 1-hour in- the proposed collection of information issues. This study falls under the topic person cognitive interviews of adults 18 is necessary for the proper performance of advertising features (content and years of age or older to refine the of FDA’s functions, including whether format). questionnaires and stimuli (18 the information will have practical Oncology products are increasingly participants total). We plan to conduct utility; (2) the accuracy of FDA’s being promoted to consumers via DTC two pretests (one for each objective) not estimate of the burden of the proposed television advertising. Oncology longer than 20 minutes, administered collection of information, including the indications are often complicated and via internet panel, to test the validity of the methodology and supported by different clinical experimental manipulations and pilot assumptions used; (3) ways to enhance endpoints such as overall survival, the main study procedures. the quality, utility, and clarity of the overall response rate, and progression- We plan to conduct two main studies information to be collected; and (4) free survival (Ref. 1) that are referenced (one for each objective) not longer than ways to minimize the burden of the in the DTC TV ads. The first objective 20 minutes, administered via internet collection of information on of this project is to determine whether panel. For Study 1, we will create two respondents, including through the use disclosing information about the nature television ads for fictitious oncology of automated collection techniques, of the endpoints that support the prescription drugs to increase the when appropriate, and other forms of indications for oncology products helps generalizability of the results (one solid information technology. consumers understand the drug’s tumor indication and one hematology efficacy. This objective complements indication). The ads will include audio Study of Oncology Indications in OPDP’s research examining disclosing claims about overall survival, overall Direct-to-Consumer Television information about FDA’s accelerated response rate with and without a Advertising approval pathway to consumers (May 8, disclosure, or progression-free survival (OMB Control Number 0910–NEW) 2019, 84 FR 20148) and OPDP’s research with and without a disclosure (see table on disclosing oncology information to 1 for the Study 1 design). I. Background healthcare professionals (OMB control Some current television ads for Section 1701(a)(4) of the Public number 0910–0864—Disclosures of oncology products include disclosures Health Service Act (42 U.S.C. Descriptive Presentations in that are intended to help consumers 300u(a)(4)) authorizes FDA to conduct Professional Oncology Prescription Drug differentiate surrogate endpoints like research relating to health information. Promotion). Although these studies all progression-free survival and overall Section 1003(d)(2)(C) of the Federal contribute to our knowledge of the response rate from overall survival. Food, Drug, and Cosmetic Act (FD&C communication of cancer treatment Examples include ‘‘At the time of Act) (21 U.S.C. 393(d)(2)(C)) authorizes information, the current study analysis, overall survival comparison FDA to conduct research relating to specifically examines particular was not yet available’’ and ‘‘Clinical drugs and other FDA regulated products endpoints that are well-known to the trials are ongoing to determine if there in carrying out the provisions of the professional oncology community and is an overall survival benefit.’’ The FD&C Act. are now used in DTC advertising. disclosure we use in the study will be OPDP’s mission is to protect the Because of the length of some based on disclosures currently in use public health by helping to ensure that indications, sponsors sometimes convey and will be informed by consumer prescription drug information is some of the indication in superimposed feedback elicited in focus groups truthful, balanced, and accurately text rather than in the audio in the TV conducted prior to the cognitive testing communicated, so that patients and ads. The second objective is to test (approved under OMB control number healthcare providers can make informed whether consumers adequately 0910–0695). For example, the study decisions about treatment options. comprehend indication statements disclosure may include language such OPDP’s research program provides when portions of the indication are as ‘‘We currently do not know if Drug scientific evidence to help ensure that presented only in the superimposed text X helps people live longer.’’ our policies related to prescription drug of television ads while other Participants will be randomly promotion will have the greatest benefit information is conveyed in the audio. assigned to view one prescription drug to public health. Toward that end, we This objective extends OPDP’s previous television ad and then complete a have consistently conducted research to research on the use of dual-modality questionnaire that assesses whether evaluate the aspects of prescription drug risk presentations (presenting the participants noticed the disclosure, their promotion that we believe are most information in two modes at the same interpretations of the disclosure, their central to our mission, focusing in time; OMB control numbers 0910– retention of the endpoint, and their particular on three main topic areas: 0634—Experimental Evaluation of the perceptions of the drug’s benefits and Advertising features, including content Impact of Distraction, 0910–0652— risks. We will also measure covariates and format; target populations; and Experimental Study: Toll-Free Number such as demographics, cancer history,

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and literacy. Without a disclosure, we condition; see tables 2 and 3 for the logistic regression and analysis of hypothesize that participants will not Study 2 design). Participants will be variance. differentiate between overall survival, randomly assigned to view a The questionnaires are available upon overall response rate, and progression- prescription drug television ad and then request from [email protected]. free survival. We hypothesize that a complete a questionnaire that assesses For all phases of this research, we will disclosure will help participants their retention and comprehension of recruit a general population sample of understand the surrogate endpoints (i.e., the information. Following previous overall response rate and progression- adult volunteers 18 years of age or older. research on dual-modality We will exclude individuals who work free survival) and thus will lead to presentations, we hypothesize that greater understanding of the drug’s for the Department of Health and participants who view an ad with the efficacy compared with conditions Human Services or work in the material information in the audio and without the disclosure. We will explore healthcare, marketing, or unintended effects of the disclosure, text will have greater retention of that pharmaceutical industries. We will use such as whether the disclosure lowers information than participants in any literacy quotas to ensure that our sample perceived efficacy compared with the other condition. We also hypothesize includes participants with a range of overall survival condition. that participants who view an ad with literacy skills. We will also exclude For the second objective, in Study 2 the material information in the audio pretest participants from the main we will vary the presentation of the only will have greater retention of that studies, and participants will not be products’ indication, such that material information than participants in the able to participate in both Studies 1 and information related to the indication superimposed text condition and the 2. With the sample sizes described will appear in superimposed text only, control condition. To test Study 1 and below, we will have sufficient power to in the audio only, in both superimposed 2 hypotheses, we will conduct detect small-sized effects in Studies 1 text and audio, or in neither (the control inferential statistical tests such as and 2 (table 4).

TABLE 1—STUDY 1 DESIGN

Overall Overall Progression-free Indication Overall response response rate Progression- survival with survival rate with disclosure free survival disclosure

Solid Tumor ...... Hematology ...... Note: The solid tumor condition will be non-small cell lung cancer. The hematology condition will be multiple myeloma. Claims and disclosures are TBD, based on focus group feedback. Overall survival and progression-free survival claims will be the same for both indications. Study 1 will use the control ad from Study 2.

TABLE 2—STUDY 2 DESIGN: SOLID TUMOR

Indication presentation Material information not in Material information in Material information in audio only Material information in superimposed text or audio superimposed text only superimposed text + audio (control)

Audio: Drug X is for adults with ad- Audio: Drug X is for adults with Audio: Drug X is for adults with Audio: Drug X is for adults with vanced non-small cell lung can- advanced non-small cell lung advanced non-small cell lung advanced non-small cell lung cer. cancer previously treated with cancer previously treated with cancer. Superimposed text: Drug X is for platinum-based chemotherapy, platinum-based chemotherapy, Superimposed text: Drug X is for adults with advanced non-small who have a certain type of ALK who have a certain type of ALK adults with advanced non-small cell lung cancer previously treat- gene. gene. cell lung cancer. ed with platinum-based chemo- Superimposed text: Drug X is for Superimposed text: Drug X is for therapy, who have a certain type adults with advanced non-small adults with advanced non-small of ALK gene. cell lung cancer. cell lung cancer previously treated with platinum-based chemotherapy, who have a certain type of ALK gene. Note. Study 2 will use the overall survival ad from Study 1.

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TABLE 3—STUDY 2 DESIGN: HEMATOLOGY

Indication presentation Material information not in super- Material information in Material information in audio only Material information in imposed text or audio superimposed text only superimposed text + audio (Control)

Audio: Drug Y is used to treat mul- Audio: Drug Y is used to treat Audio: Drug Y is used to treat Audio: Drug Y is used to treat tiple myeloma. multiple myeloma in combina- multiple myeloma in combina- multiple myeloma. Superimposed text: Drug Y is used tion with dexamethasone, in tion with dexamethasone, in Superimposed text: Drug Y is to treat multiple myeloma in people who have received at people who have received at used to treat multiple myeloma. combination with dexametha- least three prior medicines to least three prior medicines to sone, in people who have re- treat multiple myeloma. treat multiple myeloma. ceived at least three prior medi- Superimposed text: Drug Y is Superimposed text: Drug Y is cines to treat multiple myeloma. used to treat multiple myeloma. used to treat multiple myeloma in combination with dexamethasone, in people who have received at least three prior medicines to treat multiple myeloma. Note. Study 2 will use the overall survival ad from Study 1.

FDA estimates the burden of this collection of information as follows:

TABLE 4—ESTIMATED ANNUAL REPORTING BURDEN 1

Number of Total Activity Number of responses per annual Average burden per Total respondents respondent responses response hours

Cognitive Interview screener ...... 30 1 30 0.08 (5 minutes) ...... 2.4 Cognitive Interviews ...... 18 1 18 1 (60 minutes) ...... 18 Pretests 1 and 2 screener ...... 200 1 200 0.08 (5 minutes) ...... 16 Pretests 1 and 2 ...... 120 1 120 0.33 (20 minutes) ...... 39.6 Study 1 screener ...... 1,167 1 1,167 0.08 (5 minutes) ...... 93.36 Study 1 ...... 700 1 700 0.33 (20 minutes) ...... 231 Study 2 screener ...... 867 1 867 0.08 (5 minutes) ...... 69.36 Study 2 ...... 520 1 520 0.33 (20 minutes) ...... 171.6

Total ...... 641.32 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

II. References for Consumer Reporting of Side Effects DEPARTMENT OF HEALTH AND in Direct-to-Consumer Television HUMAN SERVICES The following references are on Advertisements.’’ Journal of Public display with the Dockets Management Policy & Marketing, 35(1):108–123, 2016. Food and Drug Administration Staff (see ADDRESSES) and are available 3. Sullivan, H.W., V. Boudewyns, A.C. [Docket No. FDA–2012–N–0021] for viewing by interested persons O’Donoghue, et al., ‘‘Attention to and between 9 a.m. and 4 p.m., Monday Distraction from Risk Information in Agency Information Collection through Friday; these are not available Prescription Drug Advertising: An Eye- Activities; Submission for Office of electronically at https:// Tracking Study.’’ Journal of Public Policy Management and Budget Review; www.regulations.gov as these references & Marketing, 36(2):236–245, 2017. Comment Request; Substances are copyright protected. Some may be Dated: June 14, 2019. Generally Recognized as Safe: available at the website address, if Notification Procedure listed. FDA has verified the website Lowell J. Schiller, addresses, as of the date this document Principal Associate Commissioner for Policy. AGENCY: Food and Drug Administration, publishes in the Federal Register, but [FR Doc. 2019–13128 Filed 6–20–19; 8:45 am] HHS. websites are subject to change over time. BILLING CODE 4164–01–P ACTION: Notice. 1. Kim, J., J. Gao, L. Amiri-Kordestani, et al., ‘‘Patient-Friendly Language to Facilitate SUMMARY: The Food and Drug Treatment Choice for Patients with Administration (FDA) is announcing Cancer.’’ The Oncologist, 10.1634/ that a proposed collection of theoncologist.2018-0761, 2019. Available information has been submitted to the from: http:// Office of Management and Budget theoncologist.alphamedpress.org/ (OMB) for review and clearance under content/early/2019/05/16/ the Paperwork Reduction Act of 1995. theoncologist.2018-0761.short?rss=1. 2. Aikin, K.J., A.C. O’Donoghue, C.M. Squire, DATES: Fax written comments on the et al., ‘‘An Empirical Examination of the collection of information by July 22, FDAAA-Mandated Toll-Free Statement 2019.

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ADDRESSES: To ensure that comments on Substances Generally Recognized as procedure for notifying FDA about a the information collection are received, Safe (GRAS): Notification Procedure— conclusion that a substance is GRAS OMB recommends that written 21 CFR Part 170, Subpart E and 21 CFR under the conditions of its intended use comments be faxed to the Office of Part 570, Subpart E in human food or animal food. The Information and Regulatory Affairs, OMB Control Number 0910–0342— information submitted to us in a GRAS OMB, Attn: FDA Desk Officer, Fax: 202– Extension notice is necessary to allow us to 395–7285, or emailed to oira_ administer efficiently the FD&C Act’s The Federal Food, Drug, and Cosmetic [email protected]. All various provisions that apply to the use Act (FD&C Act) requires that all food of substances added to food, specifically comments should be identified with the additives (as defined by section 201(s) OMB control number 0910–0342. Also with regard to whether a substance is (21 U.S.C. 321(s)) be approved by FDA GRAS under the conditions of its include the FDA docket number found before they are marketed. Section 409 of in brackets in the heading of this intended use or is a food additive the FD&C Act (21 U.S.C. 349) subject to premarket review. We use the document. establishes a premarket approval information collected through the GRAS requirement for ‘‘food additives.’’ FOR FURTHER INFORMATION CONTACT: notification procedures to complete our Section 201(s) of the FD&C Act provides evaluation within specific timelines. Domini Bean, Office of Operations, an exclusion to the definition of food Food and Drug Administration, Three additive and thus from the premarket Description of Respondents: The White Flint North, 10A–12M, 11601 approval requirement, for uses of respondents to this collection of Landsdown St., North Bethesda, MD substances that are GRAS by qualified information are manufacturers of 20852, 301–796–5733, PRAStaff@ experts. The GRAS provision of section substances used in human food and fda.hhs.gov. 201(s) of the FD&C Act is implemented animal food and feed. in (part 170) 21 CFR part 170 and (part In the Federal Register of March 12, SUPPLEMENTARY INFORMATION: In 570) 21 CFR part 570 for human food 2019 (84 FR 8876), we published a 60- compliance with 44 U.S.C. 3507, FDA and animal food, respectively. Part 170, day notice requesting public comment has submitted the following proposed subpart E and part 570, subpart E on the proposed collection of collection of information to OMB for provide a standard format for the information. No comments were review and clearance. submission of a notice. This collection received. We estimate the burden of the utilizes a voluntary administrative information collection as follows:

TABLE 1—ESTIMATED ANNUAL REPORTING BURDEN 1

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

GRAS notification procedure for human food; 170.210– 170.280 (part 170, subpart E) ...... 100 1 100 170 17,000 GRAS notification procedure for animal food and animal feed; 570.210–570.280 (part 570, subpart E) ...... 25 1 25 170 4,250

Total ...... 75 ...... 21,250 1 There are no capital costs or operating and maintenance costs associated with this collection of information.

Our estimated burden reflects an DEPARTMENT OF HEALTH AND (OMB). Prior to submitting the ICR to overall increase of 8,500 hours, which HUMAN SERVICES OMB, HRSA seeks comments from the corresponds to an increase in GRAS public regarding the burden estimate, submissions for human food from 50 to Health Resources and Services below, or any other aspect of the ICR. Administration 100 we have received over the last 2 DATES: Comments on this Information years. Agency Information Collection Collection Request must be received no Dated: June 17, 2019. Activities: Proposed Collection: Public later than August 20, 2019. Lowell J. Schiller, Comment Request Information ADDRESSES: Submit your comments to Principal Associate Commissioner for Policy. Collection Request Title: Small Rural [email protected] or mail the HRSA Hospital Transition Project (SRHT), [FR Doc. 2019–13220 Filed 6–20–19; 8:45 am] Information Collection Clearance OMB No. 0906–0026—Extension BILLING CODE 4164–01–P Officer, Room 14N136B, 5600 Fishers AGENCY: Health Resources and Services Lane, Rockville, Maryland 20857. Administration (HRSA), Department of FOR FURTHER INFORMATION CONTACT: To Health and Human Services. request more information on the ACTION: Notice. proposed project or to obtain a copy of the data collection plans and draft SUMMARY: In compliance with the instruments, email [email protected] requirement for opportunity for public or call Lisa Wright-Solomon, the HRSA comment on proposed data collection Information Collection Clearance Officer projects of the Paperwork Reduction Act at (301) 443–1984. of 1995, HRSA announces plans to submit an Information Collection SUPPLEMENTARY INFORMATION: When Request (ICR), described below, to the submitting comments or requesting Office of Management and Budget information, please include the

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information request collection title for participants in health care systems that organization (e.g., leadership, strategic reference. focus on quality, rather than the planning, operations, and processes). Information Collection Request Title: quantity of care provided to patients. Likely Respondents: The likely Small Rural Hospital Transition Project The Small Rural Hospital Transition respondents are small rural hospitals (SRHT), OMB No. 0906–0026— (SRHT), also funded by Section 330A, located in a rural community. Hospitals Extension. assists small rural hospitals facing these must be (1) rural, as defined by FORHP Abstract: Under Section 330A of the challenges. The purpose of the project is and reside in a persistent poverty Public Health Service Act (42 U.S.C. to provide on-site technical assistance to county or (2) reside in the rural census 254c), the Federal Office of Rural Health nine small rural hospitals residing in tract of a metro county (non-rural Policy (FORHP) funds grant programs persistent poverty counties. Technical county) that is also a persistent poverty supporting expanding access to, assistance is provided in the areas of: (1) county and have 49 staffed beds or less coordinating, restraining the cost of, and Conducting financial assessments, (2) as reported on the hospital’s most improving the quality of essential health creating a quality-focused environment, recently filed Medicare Cost Report. care services in rural and frontier (3) aligning services to community need, communities. Small rural hospitals are Hospitals may be for-profit or not-for- and (4) to the extent that financial and profit. facing many challenges in the new quality core areas have been stabilized, health care environment including the Burden Statement: Burden in this providing assistance to help recipients concurrent need to better measure and context means the time expended by of technical assistance consider factors account for quality of care in all persons to generate, maintain, retain, that would make them logical settings, improve transitions of care as disclose, or provide the information participants in health care systems that patients move from one care setting to requested. This includes the time focus on value (e.g., ACOs, shared another, the evolution of new payment needed to review instructions; to approaches such as value-based savings programs, and primary care develop, acquire, install, and utilize purchasing, and new approaches to care medical homes). technology and systems for the purpose delivery such as accountable care Need and Proposed Use of the of collecting, validating, and verifying organizations (ACO) and patient- Information: This information collection information, processing and centered medical homes. Success in this request consists of two forms: The SRHT maintaining information, and disclosing new environment will require bridging Online Application and the Assessment. and providing information; to train the gaps between the current system and The application form is designed to personnel and to be able to respond to the newly emerging system of solicit information that will be scored a collection of information; to search healthcare delivery and payment. and ranked to aid in the selection of data sources; to complete and review Because little is known about how these nine small rural hospitals to receive on- the collection of information; and to new models might impact rural site technical assistance. The transmit or otherwise disclose the communities, there is a need to help assessment determines applicant information. The total annual burden hospitals understand and consider those capacity in specific key areas leading to hours estimated for this ICR are factors that would make them logical performance excellence across the summarized in the table below.

TOTAL ESTIMATED ANNUALIZED BURDEN HOURS

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

SRHT Online Application ...... 30 1 30 .50 15.0 Assessment: Performance Excellence for Rural Hospitals 30 1 30 .25 7.5

Total ...... * 30 ...... 60 ...... 22.5 * The same individuals complete the SRHT Online Application and the Assessment for a total of 30 respondents.

HRSA specifically requests comments DEPARTMENT OF HEALTH AND (1) Advise the Secretary, acting through on: (1) The necessity and utility of the HUMAN SERVICES the HRSA Administrator, on all aspects proposed information collection for the of organ donation, procurement, proper performance of the agency’s Health Resources and Services allocation, and transplantation, and on functions; (2) the accuracy of the Administration such other matters that the Secretary determines; (2) advise the Secretary on estimated burden; (3) ways to enhance Solicitation of Nominations for the quality, utility, and clarity of the federal efforts to maximize the number Membership To Serve on the Advisory of deceased donor organs made information to be collected; and (4) the Committee on Organ Transplantation use of automated collection techniques available for transplantation and to or other forms of information AGENCY: Health Resources and Services support the safety of living organ technology to minimize the information Administration (HRSA), Department of donation; (3) at the request of the Secretary, review significant proposed collection burden. Health and Human Services (HHS). ACTION: Request for nominations. Organ Procurement and Transplantation Maria G. Button, Network (OPTN) policies submitted for Director, Division of the Executive Secretariat. SUMMARY: HRSA is seeking nominations the Secretary’s approval to recommend [FR Doc. 2019–13195 Filed 6–20–19; 8:45 am] of qualified candidates to be considered whether they should be made for appointment as members of the enforceable; and (4) provide expert BILLING CODE 4165–15–P Advisory Committee on Organ input to the Secretary on the latest Transplantation (ACOT). ACOT shall: advances in the science of

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transplantation, the OPTN’s system of serve as members. SGEs shall not serve any required remedial action needed to collecting, disseminating, and ensuring while they are also serving on the OPTN address the potential conflict. the validity, accuracy, timeliness, and Board of Directors. Interested applicants Maria G. Button, usefulness of data, and additional may self-nominate or be nominated by Director, Division of the Executive Secretariat. medical, public health, patient safety, another individual or organization. ethical, legal, financial coverage, social [FR Doc. 2019–13213 Filed 6–20–19; 8:45 am] Individuals selected for appointment science, and socioeconomic issues that BILLING CODE 4165–15–P are relevant to transplantation. to ACOT will be invited to serve for up- Authority: As provided by 42 CFR to 4 years. Members appointed as SGEs 121.12, the Secretary established ACOT. receive a stipend and reimbursement for DEPARTMENT OF HEALTH AND ACOT is governed by the Federal per diem and travel expenses incurred HUMAN SERVICES Advisory Committee Act (FACA; 5 for attending ACOT meetings and/or U.S.C. Appendix 2), which sets forth conducting other business on behalf of Privacy Act of 1974; Matching Program standards for the formation and use of ACOT, as authorized by 5 U.S.C. 5703 AGENCY: Office of Child Support advisory committees. of the Federal Travel Regulation for Enforcement, Administration for DATES: Written nominations for persons employed intermittently in Children and Families, Department of membership on the ACOT will be government service. Health and Human Services. received continuously. The following information must be ACTION: Notice of a new matching ADDRESSES: Nomination packages must included in the package of materials program. be submitted to the Executive Secretary, submitted for each individual being SUMMARY: In accordance with the ACOT, Healthcare Systems Bureau, nominated for consideration: (1) A letter Privacy Act of 1974, as amended, the HRSA, Room 08W60, 5600 Fishers of nomination stating the name, Lane, Rockville, Maryland 20857. Department of Health and Human affiliation, and contact information for Services (HHS), Administration for Federal Express, Airborne, UPS, etc., the nominee, the basis for the mail delivery should be addressed to Children and Families (ACF), Office of nomination (i.e., what specific Child Support Enforcement (OCSE), is Executive Secretary, Advisory attributes, perspectives, and/or skills Committee on Organ Transplantation, providing notice of a re-established does the individual possess that would matching program between HHS/ACF/ Healthcare Systems Bureau, HRSA, at benefit the workings of ACOT), and the the above address, or sent via email to: OCSE and state agencies administering nominee’s field(s) of expertise; (2) a [email protected]. the Supplemental Nutrition Assistance biographical sketch of the nominee; (3) FOR FURTHER INFORMATION CONTACT: Program (SNAP). The matching program the name, address, daytime telephone compares state SNAP agency records Robert Walsh, Executive Secretary, number, and email address at which the ACOT, at (301) 443–6839 or email with new hire, quarterly wage, and nominator can be contacted; and (4) a [email protected]. A copy of the ACOT unemployment insurance information current copy of the nominee’s charter and list of current membership maintained in the National Directory of curriculum vitae. Nomination packages may be accessed through the ACOT New Hires (NDNH). The outcomes of website at https://www.organdonor.gov/ may be submitted directly by the the comparisons help state agencies about-dot/acot.html. individual being nominated or by the with establishing or verifying eligibility person/organization recommending the for applicants and recipients of SNAP SUPPLEMENTARY INFORMATION: ACOT was candidate. benefits; reducing SNAP benefit errors; established by the Amended Final Rule and, maintaining program integrity. of the Organ Procurement and HRSA will try to ensure that ACOT DATES: Transplantation Network (OPTN) (42 membership of is balanced in terms of The deadline for comments on CFR part 121) and, by Public Law 92– points of view represented. this notice is July 22, 2019. The re- 463, was chartered on September 1, Accordingly, the Agency will consider established matching program will 2000. ACOT meets up to three times for membership individuals from broad commence not sooner than 30 days after during the fiscal year. and diverse backgrounds, representing publication of this notice, provided no Nominations: HRSA is requesting various geographic areas, gender, ethnic, comments are received that warrant a change to this notice. The matching nominations for voting members to and minority groups, as well as program will be conducted for an initial serve as Special Government Employees individuals with disabilities. term of 18 months (from approximately (SGEs) on ACOT. The Secretary Appointments shall be made without appoints ACOT SGEs with the expertise August 16, 2019 through February 15, discrimination on the basis of age, 2021) and, within three months of needed to fulfill the duties of the ethnicity, gender, sexual orientation, or committee. HRSA is seeking nominees expiration, may be renewed for one cultural, religious, or socioeconomic additional year if the parties make no knowledgeable in such fields as status. deceased and living organ donation, change to the matching program and health care public policy, Individuals selected to be considered certify that the program has been transplantation medicine and surgery, for appointment will be required to conducted in compliance with the critical care medicine and other medical provide detailed information regarding agreement. specialties involved in the identification their financial holdings, consultancies, ADDRESSES: Interested parties may and referral of donors, non-physician and research grants or contracts. submit written comments on this notice transplant professions, nursing, Disclosure of this information is to Linda Boyer, Director, Division of epidemiology, immunology, law and required for HRSA ethics officials to Federal Systems, Office of Child bioethics, behavioral sciences, determine whether there is a conflict Support Enforcement, Administration economics, and statistics. HRSA is also between the SGE’s public duties as a for Children and Families, by email at seeking transplant candidates, member of ACOT and their private [email protected], or by mail at transplant recipients, living organ interests, including an appearance of a Mary E. Switzer Building, 330 C St. SW, donors, and family members of loss of impartiality as defined by federal 5th Floor, Washington, DC 20201. deceased and living organ donors to laws and regulations, and to identify Comments received will be available for

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public inspection at this address from Dated: June 17, 2019. The specific data elements that will be 9:00 a.m. to 5:00 p.m. ET, Monday Scott M. Lekan, provided to HHS/ACF/OCSE in a state through Friday. Commissioner, OCSE. agency input file are: • Submitting state code (2-digit Federal FOR FURTHER INFORMATION CONTACT: Participating Agencies Information Processing Standard General questions about the matching The Office of Child Support code) program may be submitted to Linda Enforcement (OCSE) is the source • Date stamp (input file transmission Boyer, Director, Division of Federal agency, and state agencies administering date) Systems, Office of Child Support the Supplemental Nutrition Assistance • Adult SNAP caseload month and year Enforcement, Administration for Program (SNAP) are non-federal of adult SNAP applicants and Children and Families, by email at (recipient) agencies. recipients [email protected], or by mail at • Authority for Conducting the Matching Adult SNAP applicant/recipient Mary E. Switzer Building, 330 C St. SW, Program Social Security number 5th Floor, Washington, DC 20201 or by • Adult SNAP applicant/recipient’s telephone at 202–401–5410. The authority for conducting the first, middle, and last name matching program is contained in • Name/Social Security number SUPPLEMENTARY INFORMATION: The section 453(j)(10) of the Social Security verification request Privacy Act of 1974, as amended (5 Act (42 U.S.C. 653(j)(10)). The Optional: U.S.C. 552a), provides certain Agriculture Act of 2014, Public Law • Passback data (state agency protections for individuals applying for 113–079, amended section 11(e) of the information used to identify and receiving federal benefits. The law Food and Nutrition Act of 2008 (7 individuals within the input file to be governs the use of computer matching U.S.C. 2020(e)(24)) by adding the returned on the output file) by federal agencies when records in a requirement that the state agency shall • Same state data indicator (indicates system of records, which contains request wage data directly from the whether the state agency requests information about individuals that are National Directory of New Hires NDNH new hire, quarterly wage, or retrieved by name or other personal established under section 453(i) of the unemployment insurance even if the identifier, are matched with records of Social Security Act (42 U.S.C. 653(i)) information was provided by that other federal, state, or local government relevant to determining eligibility to same state) records. The Privacy Act requires receive supplemental nutrition assistance program benefits and HHS/ACF/OCSE will compare the agencies involved in a matching Social Security numbers in the state program to: determining the correct amount of those benefits at the time of certification. agency input file to the Social Security 1. Obtain approval of a Computer numbers in the NDNH, and will provide Matching Agreement, prepared in Purpose(s) the state agency with any available new accordance with the Privacy Act, by the The purpose of the matching program hire, quarterly wage, and available Data Integrity Board of any federal is to provide each participating state unemployment insurance information agency participating in a matching agency administering SNAP with new in NDNH pertaining to the individuals program. hire, quarterly wage, and whose records are contained in the state unemployment insurance information agency input file. The NDNH data 2. Enter into a written Computer elements that HHS/ACF/OCSE will Matching Agreement from OCSE’s National Directory of New Hires (NDNH) system of records to assist return to the state agency are as follows: 3. Provide a report of the matching them in establishing or verifying SNAP a. New Hire File program to Congress and the Office of applicants’ and recipients’ eligibility for Management and Budget (OMB), and • New hire processed date assistance, reducing payment errors, • make it available to the public, as and maintaining program integrity, Employee name and address • Employee date and state of hire required by 5 U.S.C. 552a(o), (u)(3)(A), including determining whether • Federal and state employer and (u)(4). duplicate participation exists or if the identification numbers 4. Publish a notice of the matching applicant or recipient resides in another • Department of Defense code program in the Federal Register as state. The state SNAP agencies may also • Employer name and address required by 5 U.S.C. 552a(e)(12) after use the NDNH information for the • Transmitter agency code OMB and Congress complete their secondary purpose of updating the • Transmitter state code review of the report, as provided by recipients’ reported participation in • Transmitter state or agency name OMB Circular A–108, work activities and updating recipients’ and their employers’ contact b. Quarterly Wage File 5. Notify the individuals whose information maintained by the state • Quarterly wage processed date information will be used in the SNAP agencies. • Employee name matching program that the information • Categories of Individuals Federal and state employer they provide is subject to verification identification numbers through matching, as required by 5 The categories of individuals involved • Department of Defense code U.S.C. 552a(o)(1)(D). in the matching program are adult • Employer name and address 6. Verify match findings before members of households who have • Employee wage amount • suspending, terminating, reducing, or applied for or receive SNAP benefits. Quarterly wage reporting period • Transmitter agency code making a final denial of an individual’s Categories of Records • benefits or payments or taking other Transmitter state code The categories of records involved in • Transmitter state or agency name adverse action against the individual, as the matching program, which may required by 5 U.S.C. 552a(p). include personal identifiers, are new c. Unemployment Insurance File This matching program meets these hire, quarterly wage, and • Unemployment insurance processed requirements. unemployment insurance information. date

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• Claimant name and address DEPARTMENT OF HEALTH AND Dated: June 17, 2019. • Claimant benefit amount HUMAN SERVICES Melanie J. Pantoja, • Unemployment insurance reporting Program Analyst, Office of Federal Advisory period National Institutes of Health Committee Policy. • Transmitter state code [FR Doc. 2019–13168 Filed 6–20–19; 8:45 am] • Transmitter state or agency name National Cancer Institute; Notice of BILLING CODE 4140–01–P Closed Meeting System(s) of Records The NDNH data used in this matching Pursuant to section 10(d) of the DEPARTMENT OF HEALTH AND program will be disclosed from the Federal Advisory Committee Act, as HUMAN SERVICES following OCSE system of records, as amended, notice is hereby given of the authorized by routine use 15: ‘‘OCSE following meeting. National Institutes of Health National Directory of New Hires,’’ no. The meeting will be closed to the National Institute of Diabetes and 09–80–0381, last published in full at 80 public in accordance with the FR 17906 (Apr. 2, 2015) and partially Digestive and Kidney Diseases; Notice provisions set forth in sections of Closed Meetings updated at 83 FR 6591 (Feb. 14, 2018). 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., [FR Doc. 2019–13242 Filed 6–20–19; 8:45 am] as amended. The grant applications and Pursuant to section 10(d) of the BILLING CODE 4184–42–P the discussions could disclose Federal Advisory Committee Act, as confidential trade secrets or commercial amended, notice is hereby given of the property such as patentable material, following meetings. DEPARTMENT OF HEALTH AND and personal information concerning The meetings will be closed to the HUMAN SERVICES individuals associated with grant public in accordance with the applications, the disclosure of which provisions set forth in sections National Institutes of Health would constitute a clearly unwarranted 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., National Institute on Aging; Notice of invasion of personal privacy. as amended. The grant applications and the discussions could disclose Closed Meeting Name of Committee: National Cancer Institute Special Emphasis Panel; confidential trade secrets or commercial Pursuant to section 10(d) of the Cooperative Agreements for Traceback property such as patentable material, Federal Advisory Committee Act, as Testing. and personal information concerning amended, notice is hereby given of the Date: July 16, 2019. individuals associated with the grant following meeting. Time: 10:00 a.m. to 1:00 p.m. applications, the disclosure of which The meeting will be closed to the Agenda: To review and evaluate grant would constitute a clearly unwarranted public in accordance with the applications. invasion of personal privacy. provisions set forth in sections Place: NCI Shady Grove, 9609 Medical Name of Committee: National Institute of 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Center Drive, Room 7W112, Rockville, MD Diabetes and Digestive and Kidney Diseases as amended. The grant applications and 20850 (Telephone Conference Call). Special Emphasis Panel; Silvio O. Conte the discussions could disclose Contact Person: Jennifer C. Schiltz, Ph.D., Digestive Diseases Research Core Centers. confidential trade secrets or commercial Scientific Review Officer, Special Review Date: July 22, 2019. property such as patentable material, Branch, Division of Extramural Activities, Time: 8:30 a.m. to 6:00 p.m. and personal information concerning National Cancer Institute, NIH, 9609 Medical Agenda: To review and evaluate grant Center Drive, Room 7W112 Bethesda, MD applications. individuals associated with the grant Place: Hyatt Regency Bethesda, One applications, the disclosure of which 20892–9750, 240–276–5864, Jennifer.schiltz@ nih.gov. Bethesda Metro Center, 7400 Wisconsin would constitute a clearly unwarranted Avenue, Bethesda, MD 20814. invasion of personal privacy. Name of Committee: National Cancer Contact Person: Thomas A. Tatham, Ph.D., Institute Special Emphasis Panel; R13 Scientific Review Officer, Review Branch, Name of Committee: National Institute on Conference Grant Review. DEA, NIDDK National Institutes of Health, Aging Special Emphasis Panel, Microbiome Date: July 25, 2019. Room 7021, 6707 Democracy Boulevard, and Aging ZAG1 ZIJ–8 (O2). Time: 1:00 p.m. to 4:30 p.m. Bethesda, MD, 20892–5452 (301) 594–3993, Date: July 8, 2019. Agenda: To review and evaluate grant [email protected]. Time: 10:00 a.m. to 1:30 p.m. applications. Agenda: To review and evaluate grant Name of Committee: National Institute of Place: NCI Shady Grove, 9609 Medical applications. Diabetes and Digestive and Kidney Diseases Center Drive, Room 7W554, Rockville, MD Place: National Institute on Aging, Special Emphasis Panel; NIDDK Clinical Gateway Building, 7201 Wisconsin Avenue, 20850 (Telephone Conference Call). Centers Review. Bethesda, MD 20814, (Telephone Conference Contact Person: Christopher L. Hatch, Date: July 23, 2019. Time: 9:00 a.m. to 2:00 p.m. Call). Ph.D., Chief, Program Coordination & Agenda: To review and evaluate grant Contact Person: Alicja L. Markowska, Referral Branch, Division of Extramural applications. Ph.D., DSC, Scientific Review Branch, Activities, National Cancer Institute, NIH, Place: National Institutes of Health, Two National Institute on Aging, 7201 Wisconsin 9609 Medical Center Drive, Room 7W554, Democracy Plaza, 6707 Democracy Avenue, Suite 2C212, Bethesda, MD 20892, Bethesda, MD 20892–9750, 240–276–6454 [email protected]. Boulevard, Bethesda, MD 20892 (Telephone 301–496–9666, [email protected]. Conference Call). (Catalogue of Federal Domestic Assistance (Catalogue of Federal Domestic Assistance Contact Person: Elena Sanovich, Ph.D., Program Nos. 93.866, Aging Research, Program Nos. 93.392, Cancer Construction; Scientific Review Officer, Review Branch, National Institutes of Health, HHS) 93.393, Cancer Cause and Prevention DEA, NIDDK National Institutes of Health, Dated: June 17, 2019. Research; 93.394, Cancer Detection and Room 7351, 6707 Democracy Boulevard, Diagnosis Research; 93.395, Cancer Bethesda, MD 20892–2542 (301) 594–8886 Melanie J. Pantoja, Treatment Research; 93.396, Cancer Biology [email protected]. Program Analyst, Office of Federal Advisory Research; 93.397, Cancer Centers Support; Name of Committee: National Institute of Committee Policy. 93.398, Cancer Research Manpower; 93.399, Diabetes and Digestive and Kidney Diseases, [FR Doc. 2019–13167 Filed 6–20–19; 8:45 am] Cancer Control, National Institutes of Health, Special Emphasis Panel; NIDDK Phase II BILLING CODE 4140–01–P HHS) Clinical Trial SBIR.

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Date: July 23, 2019. would constitute a clearly unwarranted Agenda: To review and evaluate grant Time: 1:00 p.m. to 3:00 p.m. invasion of personal privacy. applications. Agenda: To review and evaluate grant Place: Marriott Wardman Park Washington applications. Name of Committee: National Institute on DC Hotel, 2660 Woodley Road NW, Place: National Institutes of Health, Two Alcohol Abuse and Alcoholism Special Washington, DC 20008. Democracy Plaza, 6707 Democracy Emphasis Panel, NIAAA Member Conflict Contact Person: Jason D. Hoffert, Ph.D., Boulevard, Bethesda, MD 20892 (Telephone Applications—Clinical & Treatment Services. Scientific Review Officer, Review Branch, Conference Call). Date: July 15, 2019. DEA, NIDDK, National Institutes of Health, Time: 10:00 a.m. to 12:30 p.m. Contact Person: Thomas A. Tatham, Ph.D., Room 7343, 6707 Democracy Boulevard, Agenda: To review and evaluate grant Scientific Review Officer, Review Branch, Bethesda, MD 20817, (301) 496–9010, applications. DEA, NIDDK National Institutes of Health, [email protected]. Place: National Institutes of Health, Room 7021, 6707 Democracy Boulevard, National Institute on Alcohol Abuse and This notice is being published less than 15 Bethesda, MD 20892–5452 (301) 594–3993, Alcoholism, 6700B Rockledge Drive, Room days prior to the meeting due to the timing [email protected]. 2120, Bethesda, MD 20892, (Telephone limitations imposed by the review and Name of Committee: National Institute of Conference Call). funding cycle. Diabetes and Digestive and Kidney Diseases, Contact Person: Anna Ghambaryan, M.D., Name of Committee: National Institute of Special Emphasis Panel; PAR–18–108: Ph.D., Scientific Review Officer, Extramural Diabetes and Digestive and Kidney Diseases NIDDK Exploratory Clinical Trials for Small Project Review Branch, Office of Extramural Special Emphasis Panel; Beta Cell Program Business (R44). Activities, National Institute on Alcohol Project. Date: July 24, 2019. Abuse and Alcoholism, 6700B Rockledge Date: July 16, 2019. Time: 11:30 a.m. to 1:30 p.m. Drive, Room 2120, Bethesda, MD 20892, 301– Time: 12:00 p.m. to 3:00 p.m. Agenda: To review and evaluate grant 443–4032, [email protected]. Agenda: To review and evaluate grant applications. (Catalogue of Federal Domestic Assistance applications. Place: National Institutes of Health, Two Program Nos. 93.271, Alcohol Research Place: National Institutes of Health, Two Democracy Plaza, 6707 Democracy Career Development Awards for Scientists Democracy Plaza, 6707 Democracy Boulevard, Bethesda, MD 20892 (Telephone and Clinicians; 93.272, Alcohol National Boulevard, Bethesda, MD 20892, (Telephone Conference Call). Research Service Awards for Research Conference Call). Contact Person: Ann A. Jerkins, Ph.D., Training; 93.273, Alcohol Research Programs; Contact Person: Michele L. Barnard, Ph.D., Scientific Review Officer, Review Branch, 93.891, Alcohol Research Center Grants; Scientific Review Officer, Review Branch, DEA, NIDDK National Institutes of Health, 93.701, ARRA Related Biomedical Research DEA, NIDDK, National Institutes of Health, Room 7119, 6707 Democracy Boulevard, and Research Support Awards, National Room 7353, 6707 Democracy Boulevard, Bethesda, MD, 20892–5452 (301) 594–2242, Institutes of Health, HHS) Bethesda, MD 20892–2542, (301) 594–8898, [email protected]. [email protected]. Dated: June 17, 2019. (Catalogue of Federal Domestic Assistance This notice is being published less than 15 Melanie J. Pantoja, Program Nos. 93.847, Diabetes, days prior to the meeting due to the timing Endocrinology and Metabolic Research; Program Analyst, Office of Federal Advisory limitations imposed by the review and 93.848, Digestive Diseases and Nutrition Committee Policy. funding cycle. Research; 93.849, Kidney Diseases, Urology [FR Doc. 2019–13171 Filed 6–20–19; 8:45 am] Name of Committee: National Institute of and Hematology Research, National Institutes BILLING CODE 4140–01–P Diabetes and Digestive and Kidney Diseases of Health, HHS) Special Emphasis Panel; NIDDK, Exploratory Clinical Trials for Small Business (R44 Dated: June 17, 2019. Clinical Trial Required). Melanie J. Pantoja, DEPARTMENT OF HEALTH AND HUMAN SERVICES Date: July 16, 2019. Program Analyst, Office of Federal Advisory Time: 12:00 p.m. to 1:30 p.m. Committee Policy. National Institutes of Health Agenda: To review and evaluate grant [FR Doc. 2019–13169 Filed 6–20–19; 8:45 am] applications. Place: National Institutes of Health, Two BILLING CODE 4140–01–P National Institute of Diabetes and Democracy Plaza, 6707 Democracy Digestive and Kidney Diseases; Notice Boulevard, Bethesda, MD 20892, (Telephone of Closed Meetings Conference Call). DEPARTMENT OF HEALTH AND Contact Person: Jason D. Hoffert, Ph.D., HUMAN SERVICES Pursuant to section 10(d) of the Federal Advisory Committee Act, as Scientific Review Officer, Review Branch, DEA, NIDDK, National Institutes of Health, National Institutes of Health amended, notice is hereby given of the Room 7343, 6707 Democracy Boulevard, following meetings. Bethesda, MD 20817, (301) 496–9010, National Institute on Alcohol Abuse The meetings will be closed to the [email protected]. and Alcoholism; Notice of Closed public in accordance with the This notice is being published less than 15 Meeting provisions set forth in sections days prior to the meeting due to the timing 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., limitations imposed by the review and Pursuant to section 10(d) of the as amended. The grant applications and funding cycle. Federal Advisory Committee Act, as the discussions could disclose Name of Committee: National Institute of amended, notice is hereby given of the confidential trade secrets or commercial Diabetes and Digestive and Kidney Diseases following meeting. property such as patentable material, Special Emphasis Panel; NIDDK IBDGC The meeting will be closed to the and personal information concerning Ancillary Studies. public in accordance with the individuals associated with the grant Date: July 18, 2019. provisions set forth in sections applications, the disclosure of which Time: 11:00 a.m. to 2:00 p.m. 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., Agenda: To review and evaluate grant would constitute a clearly unwarranted applications. as amended. The grant applications and invasion of personal privacy. the discussions could disclose Place: National Institutes of Health, Two Democracy Plaza, 6707 Democracy confidential trade secrets or commercial Name of Committee: National Institute of Diabetes and Digestive and Kidney Diseases Boulevard, Bethesda, MD 20892, (Telephone property such as patentable material, Special Emphasis Panel; O’Brien Urology Conference Call). and personal information concerning Centers. Contact Person: Jian Yang, Ph.D., Scientific individuals associated with the grant Date: July 10–11, 2019. Review Officer, Review Branch, DEA, applications, the disclosure of which Time: 8:00 a.m. to 12:30 p.m. NIDDK, National Institutes of Health, Room

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7111, 6707 Democracy Boulevard, Bethesda, To facilitate public participation, TMAC makes recommendations to the MD 20892–5452, (301) 594–7799, yangj@ members of the public are invited to FEMA Administrator on: (1) How to extra.niddk.nih.gov. provide written comments on the issues improve, in a cost-effective manner, the This notice is being published less than 15 to be considered by the TMAC, as listed (a) accuracy, general quality, ease of use, days prior to the meeting due to the timing in the SUPPLEMENTARY INFORMATION and distribution and dissemination of limitations imposed by the review and section below. Associated meeting funding cycle. flood insurance rate maps and risk data; materials will be available at and (b) performance metrics and (Catalogue of Federal Domestic Assistance www.fema.gov/TMAC for review by Program Nos. 93.847, Diabetes, milestones required to effectively and Endocrinology and Metabolic Research; Friday, July 26, 2019. Written comments efficiently map flood risk areas in the 93.848, Digestive Diseases and Nutrition to be considered by the committee at the United States; (2) mapping standards Research; 93.849, Kidney Diseases, Urology time of the meeting must be submitted and guidelines for (a) flood insurance and Hematology Research, National Institutes and received by Friday, July 26, 2019, rate maps, and (b) data accuracy, data of Health, HHS) identified by Docket ID FEMA–2014– quality, data currency, and data 0022, and submitted by one of the Dated: June 17, 2019. eligibility; (3) how to maintain, on an Melanie J. Pantoja, following methods: • Federal eRulemaking Portal: http:// ongoing basis, flood insurance rate maps Program Analyst, Office of Federal Advisory www.regulations.gov. Follow the and flood risk identification; (4) Committee Policy. instructions for submitting comments. procedures for delegating mapping [FR Doc. 2019–13172 Filed 6–20–19; 8:45 am] • Email: Address the email to: FEMA- activities to State and local mapping BILLING CODE 4140–01–P [email protected]. Include the partners; and (5)(a) methods for docket number in the subject line of the improving interagency and message. Include name and contact intergovernmental coordination on DEPARTMENT OF HOMELAND information in the body of the email. flood mapping and flood risk SECURITY • Mail: Regulatory Affairs Division, determination, and (b) a funding Office of Chief Counsel, FEMA, 500 C strategy to leverage and coordinate Federal Emergency Management Street SW, Room 8NE, Washington, DC budgets and expenditures across Federal Agency 20472–3100. agencies. Furthermore, the TMAC is [Docket ID FEMA–2014–0022] Instructions: All submissions received required to submit an annual report to must include the words ‘‘Federal the FEMA Administrator that contains: Technical Mapping Advisory Council Emergency Management Agency’’ and (1) A description of the activities of the the docket number for this action. AGENCY: Federal Emergency Council; (2) an evaluation of the status Comments received will be posted Management Agency, DHS. and performance of flood insurance rate without alteration at http:// ACTION: maps and mapping activities to revise Committee Management; Notice www.regulations.gov, including any and update Flood Insurance Rate Maps; of Federal Advisory Committee Meeting. personal information provided. and (3) a summary of recommendations SUMMARY: The Federal Emergency Docket: For docket access to read background documents or comments made by the Council to the FEMA Management Agency (FEMA) Technical Administrator. Mapping Advisory Council (TMAC) will received by the TMAC, go to http:// meet in person on Wednesday, July 31, www.regulations.gov and search for the Agenda: During the two-day meeting, 2019 and Thursday, August 1, 2019 in Docket ID FEMA–2014–0022. TMAC members will conduct a final Arlington, VA. The meeting will be A public comment period will be held review and discussion of the TMAC open to the public. on Wednesday, July 31, 2019, from 4 2018 Annual Report and vote to submit p.m. to 4:30 p.m. EDT and again on DATES: The TMAC will meet on to FEMA. Day 2 of the meeting will Wednesday, July 31, 2019 from 8:45 Thursday, August 1, 2019, from 1 p.m. focus on tasking to the TMAC for 2019. a.m.–5 p.m. Eastern Daylight Time to 1:30 p.m. EDT. Speakers are The TMAC will also receive public (EDT), and Thursday, August 1, 2019 requested to limit their comments to no input on the report recommendations from 8:45 a.m.–5 p.m. EDT. Please note more than three minutes. The public and content; the recommendations and that the meeting will close early if the comment period will not exceed 30 content will be posted to the FEMA TMAC has completed its business. minutes. Please note that the public TMAC site prior to the meeting to comment period may end before the ADDRESSES: provide the public an opportunity to The meeting will be held at time indicated, following the last call review the materials. The full agenda AECOM at 3101 Wilson Blvd., Ste 900, for comments. Contact the individual and related meeting materials will be Arlington, VA 22201. Members of the listed below to register as a speaker by public who wish to attend the meeting close of business on Friday, July 26, posted for review by Friday, July 26, must register in advance by sending an 2019. 2019 at http://www.fema.gov/TMAC. email to [email protected] (Attention: Michael Nakagaki) by 11 FOR FURTHER INFORMATION CONTACT: Michael M. Grimm, p.m. EDT on Tuesday, July 30, 2019. Michael Nakagaki, Designated Federal Assistant Administrator for Risk Members of the public must check in at Officer for the TMAC, FEMA, 400 C Management, Federal Emergency the front desk of 3101 Wilson Street SW, Washington, DC 20024, Management Agency. Boulevard, Arlington, Virginia 22201 telephone (202) 212–2148, and email [FR Doc. 2019–13170 Filed 6–20–19; 8:45 am] and will be provided with an escort to [email protected]. The BILLING CODE 9110–12–P the ninth floor; photo identification is TMAC website is: http://www.fema.gov/ required. TMAC. For information on facilities or SUPPLEMENTARY INFORMATION: Notice of services for individuals with disabilities this meeting is given under the Federal or to request special assistance at the Advisory Committee Act, 5 U.S.C. App. meeting, contact the person listed below In accordance with the Biggert-Waters as soon as possible. Flood Insurance Reform Act of 2012, the

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DEPARTMENT OF THE INTERIOR Western Placer County Habitat from activities covered under the draft Conservation Plan and Natural plan. Fish and Wildlife Service Community Conservation Plan (draft Background Information [FWS–R8–ES–2019–N062; FF08ESMF00– plan) and draft EIS/EIR from the FXES11140800000–190] Sacramento Fish and Wildlife Office Section 9 of the ESA and Federal website at http://www.fws.gov/ regulations (50 CFR part 17) prohibit the Joint Draft Environmental Impact sacramento. Copies of these documents taking of fish and wildlife species listed Statement and Environmental Impact are also available for public inspection, as endangered or threatened under Report, Joint Draft Habitat by appointment, during regular business section 4 of the ESA. Regulations Conservation Plan and Natural hours, at the following locations: governing permits for endangered and Community Conservation Plan; Placer • Sacramento Fish and Wildlife threatened species are set forth at 50 County, California Office (see address above, under CFR 17.22 and 17.32, respectively. For Submitting Comments); more about the Federal habitat AGENCY: Fish and Wildlife Service, • City of Lincoln Planning conservation plan program, go to http:// Interior. Department, 600 5th Street, Lincoln, CA www.fws.gov/endangered/esa-library/ ACTION: Notice of availability of permit 95648; pdf/hcp.pdf. As cooperating agencies, application; request for comments. • Lincoln Public Library, 485 Twelve NMFS may use the EIS analysis to Bridges Drive, Lincoln, CA 95648; support a decision as to whether to SUMMARY: We, the U.S. Fish and • Placer County Community issue an ITP to the applicants, and the Wildlife Service, announce the Development Resource Agency, 3091 Corps may use the EIS analysis to availability of a joint draft County Center Drive, Auburn, CA support decisions made associated with environmental impact statement and 95603; and implementing the Clean Water Act (33 draft environmental impact report (draft • Certain Placer County Library U.S.C. 1251 et seq.). EIS/EIR) under the National branch locations (350 Nevada Street, Environmental Policy Act of 1967, as Proposed Action Alternative Auburn, CA 95603; 6475 Douglas amended. We also announce receipt of Boulevard, Granite Bay, CA 95746; and FWS and NMFS would issue ITPs to applications for an incidental take 2215 Rippey Road, Penryn, CA 95650). the applicants for a period of 50 years permit under the Endangered Species FOR FURTHER INFORMATION CONTACT: for certain covered activities (described Act of 1973, as amended, and receipt of below). The applicants have requested a draft habitat conservation plan and Stephanie Jentsch, Senior Wildlife Biologist, Conservation Planning ITPs for 14 covered animal species natural community conservation plan. (described below), of which 7 are listed The National Marine Fisheries Service Division, Sacramento Fish and Wildlife Office (see ADDRESSES), (916) 414–6600 as endangered or threatened under the and U.S. Army Corps of Engineers are ESA. cooperating agencies on the draft EIS/ (telephone). If you use a EIR. telecommunications device for the deaf, Plan Area please call the Federal Relay Service at The geographic scope of the draft plan DATES: Submitting Comments: To ensure (800) 877–8339. consideration, written comments must includes two plan areas. Plan Area A SUPPLEMENTARY INFORMATION: The U.S. be received by August 20, 2019. encompasses approximately 209,000 Public Meetings: We will hold public Fish and Wildlife Service (FWS), along acres of the City of Lincoln and meetings on the following dates: with the National Marine Fisheries unincorporated lands in western Placer 1. Placer County Planning Service (NMFS) and the U.S. Army County and is the focus of the draft Commission, Thursday, August 1, 2019 Corps of Engineers (Corps), announce plan. Plan Area B includes additional at 6:00–8:00 p.m. the availability of a joint draft specific areas in Placer and Sutter 2. Lincoln City Hall, Thursday, environmental impact statement and Counties that are not included in Plan August 15, 2019 at 6:00–8:00 p.m. draft environmental impact report (draft Area A. Combined, Plan Areas A and B ADDRESSES: Submitting Comments: EIS/EIR), prepared pursuant to the cover approximately 260,000 acres. Please address written comments to National Environmental Policy Act of Covered Activities Mike Thomas, Chief, Conservation 1967, as amended (NEPA; 42 U.S.C. Planning Division: 4321 et seq.), and its implementing The proposed ESA section 10 ITPs • By U.S. mail or hand-delivery at regulations in the Code of Federal would allow take of 14 covered species U.S. Fish and Wildlife Service, Regulations (CFR) at 40 CFR 1506.6. resulting from certain covered activities Sacramento Fish and Wildlife Office, We also announce the receipt of in the proposed plan areas. The draft 2800 Cottage Way, W–2605, applications from Placer County, the plan includes the following seven Sacramento, CA 95825; if you are hand- City of Lincoln, South Placer Regional general categories of covered activities delivering your comments, please call Transportation Authority (SPRTA), (collectively, covered activities): (916) 414–6600 to make an appointment Placer County Water Agency (PCWA), 1. Valley potential future growth. during regular business hours to deliver and the Placer County Authority (PCA) 2. Valley conservation and rural your comments; or (collectively, applicants) for a 50-year development. • By facsimile to (916) 414–6713. incidental take permit (ITP) under the 3. Foothills potential future growth. Public Meetings: We will hold public Endangered Species Act of 1973, as 4. Foothills conservation and rural meetings at the following locations: amended (ESA; 16 U.S.C. 1531 et seq.). development. 1. Placer County Planning In support of the applications, the 5. Regional public programs. Commission, 3091 County Center Drive, applicants prepared a draft habitat 6. In-stream programs. Auburn, California 95603. conservation plan and natural 7. Conservation programs. 2. Lincoln City Hall, First Floor community conservation plan (draft Covered activities include urban and Community Room, 600 6th Street, plan) pursuant to section 10(a)(1)(B) of rural development, water management, Lincoln, California 95648. the ESA. The applicants are requesting conservation measures, facilities Reviewing Documents: You may the authorization of incidental take for maintenance, and other actions. The obtain electronic copies of the draft 14 covered species that could result first four categories encompass future

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growth and rural development in the National Environmental Policy Act covered activities, covered species, and valley and foothills in Plan Area A. The Compliance plan area as the proposed action final three categories occur throughout The draft EIS/EIR was prepared to alternative under this alternative; the plan areas and are defined primarily analyze the impacts of issuing ITPs however, under this alternative, the by similar habitat features or based on the draft plan and to inform permit term would be 30 years instead programmatic objectives. the public of the proposed action, of 50. Longer-term projects would not be alternatives, and associated impacts and covered under this alternative, which Covered Species to disclose any irreversible would result in lower levels of urban and suburban development within the Covered species are those 14 species commitments of resources. FWS and NMFS published a notice of reduced permit term. Because impacts addressed in the draft plan for which on covered species would be about 40 conservation actions will be intent (NOI) to prepare a joint environmental impact statement and percent lower, less funding would be implemented and for which the available to implement conservation applicants are seeking ITPs, and include environmental impact report in the Federal Register on March 7, 2005 (70 measures, and overall fewer certain species listed under the ESA, FR 11022). The NOI announced a 30- conservation measures would be species listed under the California day public scoping period, during implemented to meet the issuance Endangered Species Act (CESA), and which the public was invited to provide criteria (such as land acquisition, species that are not currently listed but written comments and attend three management, monitoring, and that have the potential to become listed public scoping meetings that were held restoration actions). during the proposed 50-year permit on March 15, 16, and 17, 2005. term. Public Comments No-Action Alternative The following wildlife species We request data, comments, new information, or suggestions from other federally listed as endangered are Under the no-action alternative, FWS concerned governmental agencies, the proposed to be covered by the draft plan and NMFS would not issue ITPs to the scientific community, Tribes, industry, under an ITP from the FWS: applicants, and the draft plan would not or any other interested party on this Conservancy fairy shrimp (Branchinecta be implemented. Under this alternative, individual projects carried out by or notice, the draft EIS/EIR, or the draft conservatio) and vernal pool tadpole plan. We particularly seek comments on shrimp (Lepidurus packardi). approved by one or more of the applicants that may take federally listed biological information concerning The following wildlife species species would result in project-level covered species, current or planned federally listed as threatened are consultation with the FWS and NMFS activities in the subject area, and proposed to be covered by the draft plan pursuant to section 7 or section 10 of identification of other environmental under an ITP from the FWS: Giant garter the ESA. Because the applicants and issues that should be considered in snake (Thamnophis gigas), California private developers would generate regard to the proposed development and red-legged frog (Rana draytonii), valley environmental documentation and permit action. elderberry longhorn beetle (Desmocerus comply with the ESA on a project-by- You may submit your comments and californicus dimorphus), and vernal project basis, there would not be a materials by one of the methods listed pool fairy shrimp (Branchinecta lynchi). comprehensive program to coordinate in ADDRESSES. Comments and materials The following wildlife species that are and standardize requirements under the we receive will be available for public inspection by appointment, Monday not federally listed are also proposed to ESA within the plan area. through Friday from 8 a.m. to 4:30 p.m., be covered by the draft plan: Swainson’s Reduced Take/Reduced Fill Alternative at the Sacramento Fish and Wildlife hawk (Buteo swainsoni), California The reduced take/reduced fill Office (see ADDRESSES). black rail (Laterallus jamaicensis alternative would include the same coturniculus), western burrowing owl categories of covered activities as the Public Availability of Comments (Athene cunicularia hypugaea), proposed action alternative (see Covered Before including your address, phone tricolored blackbird (Agelaius tricolor), Activities under Proposed Action number, or other personal identifying western pond turtle (Actinemys Alternative, above); however, under this information in your comment, you marmorata), and foothill yellow-legged alternative, the Valley Potential Growth should be aware that your entire frog (Rana boylii). Area (A1) would reduce vernal pool comment—including your personal Two species of fish are proposed to be complex land (including waters identifying information—might be made covered by the draft plan under an ITP protected by the Clean Water Act) publicly available at any time. While from NMFS: The Central Valley conversion by 1,250 acres you can ask us in your comment to steelhead (distinct population segment; (approximately 10 percent). To maintain withhold your personal identifying Oncorhynchus mykiss irideus), which is similar levels of development as the information from public review, we federally listed as threatened; and the proposed action alternative, more cannot guarantee that we will be able to Central Valley fall/late-fall run Chinook grasslands and agricultural types would do so. be developed (about a 4-percent salmon (evolutionarily significant unit; Next Steps Oncorhynchus tshawytscha), which is increase) to compensate. Other aspects Issuance of an ITP is a Federal not listed. of covered activities, covered species, plan implementation, and conservation proposed action subject to compliance Collectively, these 14 species measures would remain the same as the with NEPA. The FWS and NMFS will comprise the covered species addressed proposed action alternative under this evaluate the application, associated by the draft plan. All species included alternative. There would be no changes documents, and any public comments on the ITPs would receive assurances to other areas within the plan area. we receive to determine whether the under FWS’ ‘‘No Surprises’’ regulations application meets the requirements of at 50 CFR 17.22(b)(5) and 17.32(b)(5) Reduced Permit Term Alternative NEPA regulations and section 10(a) of and NMFS ‘‘No Surprises’’ regulations The reduced permit term alternative the ESA. If FWS and NMFS determine at 50 CFR 222.307(g). would include the same categories of that those requirements are met, we will

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issue permits to the applicants for the Court in Rice v. Rehner, 463 U.S. 713 9.40.030 General prohibition. incidental take of the covered species. (1983), the Secretary of the Interior shall It shall be a violation of Tribal law to Permit decisions will be made no sooner certify and publish in the Federal manufacture for sale, to sell, offer or than 30 days after the publication of the Register notice of adopted liquor keep for sale, possess, transport or notice of availability for the final plan, ordinances for the purpose of regulating conduct any transaction involving any final EIS/EIR, and completion of the liquor transactions in Indian country. alcoholic beverage except in compliance record of decision. This notice is published in with the terms, conditions, limitations, Authority accordance with the authority delegated and restrictions specified in this chapter by the Secretary of the Interior to the We publish this notice under the Assistant Secretary—Indian Affairs. I 9.40.040 Tribal control of alcoholic National Environmental Policy Act of certify that the Confederated Tribes of beverages. 1969, as amended (42 U.S.C. 4321 et the Chehalis Reservation adopted The Business Committee shall have seq.), and its implementing regulations Resolution Number: 2019–025 (Liquor the sole and exclusive right to authorize at 40 CFR part 1500 through 1508, as Control Ordinance) on February 26, the manufacture of alcoholic beverages, well as in compliance with section 10(c) 2019. The statute repeals and replaces including distilleries, breweries, of the Endangered Species Act of 1973, the previous liquor control ordinance wineries and cideries, within or as amended (16 U.S.C. 1531 et seq.), and published in the Federal Register on importation of alcoholic beverages into its implementing regulations at 40 CFR July 13, 2010 (60 FR 36564). the Chehalis Reservation and Indian 17.22. Dated: June 6, 2019. Country over which the Chehalis Tribe Michael Fris, Tara Sweeney, has jurisdiction for sale or for the Assistant Regional Director, U.S. Fish and Assistant Secretary—Indian Affairs. purpose of conducting transactions Wildlife Service, Pacific Southwest Region, therewith, and no person or Sacramento, California. Chapter 9.40 organization shall so manufacture such [FR Doc. 2019–13390 Filed 6–20–19; 8:45 am] LIQUOR CONTROL alcoholic beverages within or import BILLING CODE 4333–15–P any such alcoholic beverages into the 9.40.010 Public policy declared. Chehalis Reservation or Indian Country This Ordinance is authorized and over which the Chehalis Tribe has DEPARTMENT OF THE INTERIOR approved pursuant to Article IV, Section jurisdiction unless authorized by the 1 and Article V, Section 1(h) and 1(i) of Business Committee to do so. Bureau of Indian Affairs the Constitution and Bylaws of the 9.40.050 Community on-site sales. [190 A2100DD/AAKC001030/ Confederated Tribes of the Chehalis A0A501010.999900] Reservation. The Business Committee shall This Tribal Liquor Control Ordinance establish and maintain within the Confederated Tribes of the Chehalis shall be cited as the ‘‘Chehalis Tribal Chehalis Reservation a casino, including Reservation Liquor Ordinance; Repeal Liquor Control Ordinance’’ (the full-service restaurant, deli and bar, all and Replace ‘‘Ordinance’’). Under the inherent of which are located within the casino facility, which shall be authorized to AGENCY: Bureau of Indian Affairs, sovereignty of the Confederated Tribes store and sell alcoholic beverages in Interior. of the Chehalis Reservation (the conjunction with the operation of the ACTION: Notice. ‘‘Tribe’’), this chapter shall be deemed an exercise of the Tribe’s power for the restaurant, deli and bar and in SUMMARY: This notice publishes the protection of the welfare, health, peace, accordance with the provisions of this Confederated Tribes of the Chehalis morals and safety of the members of the chapter. The Business Committee shall Reservation Liquor Ordinance. The Tribe. It is further the Tribe’s policy to set the prices of alcoholic beverages Ordinance certifies the Confederated assure that any transaction, sold. Tribes of the Chehalis Reservation’s manufacture, importation, distribution, 9.40.060 State of Washington licenses Liquor licensing laws to regulate and sale or consumption involving an and agreements. control the possession, sale, and alcoholic beverage, while within the consumption of liquor within the Tribe’s jurisdiction, shall occur in strict The Tribe may negotiate an agreement jurisdiction of the Confederated Tribes compliance with this chapter, the laws and/or the licensee may obtain a State of the Chehalis Reservation. The of the United States and where of Washington liquor license for any Ordinance repeals and replaces the applicable, the State of Washington. Tribally operated establishment that previous liquor control ordinance manufactures or sells alcoholic 9.40.020 Definitions. published in the Federal Register on beverages or conducts transactions involving alcoholic beverages to the July 17, 1995 (60 FR 36564), and any The stated terms are defined as extent required by applicable law in and all previous statutes. follows: order to allow the Tribe to manufacture, DATES: This Ordinance takes effect June ‘‘Alcoholic beverage’’ shall mean any sell or otherwise conduct transactions 21, 2019. intoxicating liquor, beer or any wine, as involving alcoholic beverages on the FOR FURTHER INFORMATION CONTACT: Mr. defined under the provisions of this Reservation or in Indian Country under Greg Norton, Tribal Government chapter or other applicable law; its control. Specialist, Northwest Regional Office, ‘‘Legal age’’ shall mean the age Bureau of Indian Affairs, 911 NE 11th requirements, as defined in CTC 9.40.070 Applicability of State law. Avenue, Portland, OR 97232, Phone: 9.40.080. Except as may be otherwise (503) 231–6702; Fax: (503) 231–2201. ‘‘Sale’’ shall mean the serving of any authorized by agreement between the SUPPLEMENTARY INFORMATION: Pursuant contents of any bagged, bottled, boxed, Tribe and the State of Washington, the to the Act of August 15, 1953, Public canned or kegged alcoholic beverage by Tribe and its agents shall act in Law 83–277, 67 Stat. 586, 18 U.S.C. any means whatsoever for a conformity with Washington State laws 1161, as interpreted by the Supreme consideration of currency exchange regarding the sale of liquor to the extent

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required by applicable Federal law, subject to the conditions in this chapter, sovereign immunity of the Confederated including 18 U.S.C. Section 1161 issue or refuse to issue the license Tribes of the Chehalis Reservation. applied for upon payment of such fee as 9.40.080 Persons under 21 years of 9.40.180. Effective date. the Business Committee may prescribe. age—Restrictions. C. Every license shall be issued in the The ordinance codified in this chapter The Tribe shall comply with the State name of the applicant and no license shall be effective upon the date that the of Washington’s laws regarding shall be transferable or assignable Secretary of the Interior certifies the restrictions on the sale of alcoholic without the written approval of the ordinance codified in this chapter and beverages to persons under the age of 21 Business Committee, nor shall the publishes it in the Federal Register. years in any Tribal establishment licensee allow any other person or 9.40.190 Jurisdiction, State and Tribal operating pursuant to the provisions of entity to use the license. law. this chapter. D. The Business Committee may, for violations of this chapter, suspend or Notwithstanding anything in this 9.40.090 Restrictions on intoxicated cancel any license. A license is a chapter to the contrary, nothing herein persons. privilege and no person shall have is intended, nor shall it be construed, as No Tribally operated or licensed vested rights therein. Prior to a grant of jurisdiction from the establishment shall sell, give, or furnish cancellation or suspension of a license, Confederated Tribes of the Chehalis any alcoholic beverage or in any way the Business Committee shall send Indian Reservation to the State of allow any alcoholic beverage to be sold, notice of its intent to cancel or suspend Washington beyond that provided by given or furnished to a person who is the license to the licensee. A licensee applicable law. The Tribe shall operate obviously intoxicated. whose liquor license is cancelled or in conformity with State law and Tribal law to the extent provided pursuant to 9.40.100 Hours and days of sale. suspended by the Business Committee shall be entitled to appeal the 18 U.S.C. Section 1161. Any Tribally operated or licensed cancellation or suspension within 10 9.40.200 Tribal court jurisdiction. establishment shall sell or furnish days of the receipt from the Business alcoholic beverages for on-site Committee of such notice by filing a Jurisdiction for all matters and actions consumption only during hours or on notice of appeal with the Clerk of the under this Liquor Ordinance, including days which are in compliance with Tribal Court. The appeal of any such without limitation, challenges to any applicable Washington State law notice shall be determined by the Tribal portion of this Ordinance and actions revoking any authority to do business 9.40.110 Power to license and tax. Court in accordance with the ordinances of the Tribe governing Tribal Court on the Chehalis Reservation under this The power to establish Tribal licenses actions and the decision of the Tribal Ordinance, shall lie exclusively with the and levy taxes under the provisions of Court, including any appeal within the Chehalis Tribal Court. this chapter is vested exclusively with Tribal Court system, shall be final and 9.40.210 Violations of this Ordinance the Tribe’s Business Committee. If the binding on the parties. and Any Promulgated Regulations. Business Committee enters into any E. No license issued under this Violations of this Ordinance and any agreements with the State regarding the chapter shall be valid for a period longer promulgated regulations shall be civil sale of liquor, the agreement shall be than one year. deemed to constitute Tribal Law violations subject to civil enforcement 9.40.140 Regulations. and penalties except where an 9.40.120 Tribally owned individual or entity is either establishments. The Business Committee may, consistent with this chapter, adopt manufacturing, importing, selling or The Business Committee can issue, by regulations it deems necessary to exporting products subject to this resolution, an appropriate license to a implement this chapter. Ordinance without having received a Tribally owned establishment upon liquor license as set forth herein, which determining the site for the 9.40.150 Severability. such actions shall constitute criminal establishment and obtaining the If any part of this Ordinance , or the act(s). necessary licensing or agreement from application thereof to any party, person, A. Any individual or entity who shall the State of Washington. or entity or to any circumstances, shall be charged by the Tribe with a civil violation of this Ordinance and / or 9.40.130 Licensing. be held invalid for any reason whatsoever, the remainder of the section regulations promulgated under this A. The Business Committee shall have or Ordinance shall not be affected Ordinance shall have the right to obtain the power to issue licenses to any Tribal thereby, and shall remain in full force a hearing challenging the claimed or State chartered corporation, and effect as though no part thereof had violation(s) and / or the penalties to be individual or partnership or other entity been declared to be invalid. imposed before the Chehalis Tribal to undertake any manufacture, sale or Court. transaction of alcoholic beverages, 9.40.160. Amendment or repeal of B. The civil charge shall be including distilleries, breweries, ordinance. commenced by a writing / Notice from wineries and cideries within the This chapter may be amended or the Tribe signed by either the Chehalis Reservation or Indian Country repealed by a majority vote of the Department Director responsible for over which the Chehalis Tribe has Business Committee. Any amendment administering this Ordinance or the jurisdiction which the Tribe itself has to this Liquor Ordinance shall be Chairman of the Tribe. The writing shall the power to undertake under this published as required pursuant to specify the violation(s), the Ordinance chapter. Federal law. and / or regulations violated, the B. Applications for a license shall be opportunity to cure, if any, within a submitted in the form prescribed by the 9.40.170. Sovereign immunity. specified timeframe, and the right to Business Committee or its authorized Nothing in this Ordinance is appeal. employees. The Business Committee intended, nor shall anything contained C. Civil violations of this Ordinance may, within its sole discretion and in it be construed, as a waiver of the and / or promulgated regulations shall

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be subject to the potential of cease and L. All provisions of the Tribe’s Texas trust lands in conformity with the desist notices, injunctive relief, and / or criminal codes shall apply to this Federal laws and of the State of Texas fines of $500.00 and possible proceeding except that all trials shall be where applicable and necessary. The suspension of the license for 10 days for bench trials. enactment of this Ordinance will the first offense, $1,000.00 and M. Should an individual or entity be provide and important source of tax automatic suspension for 30 days for the found guilty of criminal violations of revenue for the continued operation and second offense, and, if the individual or this Ordinance, then, in the case of an strengthening the Kickapoo Traditional entity is not a Chehalis Tribal member, individual, the individual shall be Tribes of Texas government and the license revocation and / or exclusion sentenced to not less than 6 months of delivery of Tribal government services from the Reservation for any subsequent jail time for a first offense and not less and, the economic viability of Tribal violation. If exclusion is not an option than 11 months and 25 days of jail time enterprises. Although, the Kickapoo under the terms of this Ordinance, then for each subsequent conviction. If an Traditional Tribe of Texas Liquor for each violation after the second entity is found guilty of a criminal Ordinance was adopted on October 1, violation, the fine shall increase by violation, then the sentence shall be 2018, it does not become effective until $500.00 and / or license revocation. exclusion from the Reservation. D. The request for a hearing N. Notwithstanding anything herein published in the Federal Register. challenging the claimed violation(s) and to the contrary, a defendant in a DATES: This ordinance shall take effect / or penalties shall take the form of a criminal matter may appeal any on July 22, 2019. pleading filed with the Tribal Court conviction to the Chehalis Court of denominating the challenging party as Appeals pursuant to the rules of the FOR FURTHER INFORMATION CONTACT: Ms. plaintiff and the Tribe as defendant and Tribe’s Code governing such appeals. Sherry Lovin, Tribal Government the pleading and a summons shall be O. Any individual or entity violating Officer, Southern Plains Regional Office, served under the Tribal Court rules the criminal provisions of this Bureau of Indian Affairs, P.O. Box 368, upon the Chairman of the Tribe with a Ordinance shall be subject to the search Anadarko, Oklahoma 73005; telephone: copy to the Office of Tribal Attorney. and seizure provisions of the Tribe’s (405) 247–1534 or (405) 247–6673, fax: E. In order to be heard by the Tribal criminal code permitting searches of (405) 247–9240. Court, the aforementioned pleading any premises where there is good cause SUPPLEMENTARY INFORMATION: Pursuant must be filed and served within 30 days to believe that a criminal violation is to the Act of August 15, 1953, Public of the end of the period, if any, occurring and seizure of any products or Law 83–277, 67 Stat. 586, 18 U.S.C. identified in the writing / Notice as the equipment involved in the alleged 1161, as interpreted by the Supreme cure period. This timeframe constitutes criminal violation(s). a statute of limitation and shall not be P. Upon trial of a criminal charge, if Court in Rice v. Rehner, 463 U.S. 713 tolled. the Defendant is found guilty, any (1983), the Secretary of the Interior shall F. In hearing the appeal, the Chehalis products or equipment shall be forfeited certify and publish in the Federal Tribal Court shall follow its normal to the Tribe as part of any sentence. Register notice of adopted liquor rules of procedure and the applicability ordinances for the purpose of regulating [FR Doc. 2019–13264 Filed 6–20–19; 8:45 am] of Chehalis Tribal Law and any other liquor transactions in Indian Country. procedural requirements as specified in BILLING CODE 4337–15–P On October 1, 2018, the Kickapoo the Tribal Codes for the Court. Traditional Tribe of Texas Traditional G. All decisions of the Chehalis Tribal DEPARTMENT OF THE INTERIOR Council duly adopted the Kickapoo Court are final and non-appealable. Traditional Tribe of Texas Liquor H. The burden of proof in any civil Bureau of Indian Affairs Ordinance by Resolution 2018–058, proceeding shall be upon the Tribe which will repeal, upon its effective which, in order to prevail, must be by [190A2100DD/AAKC001030/ A0A501010.999900 253G] date, the Kickapoo Traditional Tribe of a preponderance of the evidence. Texas Beer and Liquor Tax Ordinance, I. Any allegation that an individual or Kickapoo Traditional Tribe of Texas Resolution No. 2011–892, which was entity has violated the criminal law Liquor Ordinance; Repeal and Replace published in the Federal Register on with respect to this Ordinance shall be February 22, 2012 (77 FR 10547). referred to the Tribal Prosecutor of the AGENCY: Bureau of Indian Affairs, Tribe for review and if appropriate filing Interior. This notice is published in of a criminal complaint. ACTION: Notice. accordance with the delegated authority J. Should the Prosecutor determine to by the Secretary of the Interior to the proceed, the Prosecutor shall file a SUMMARY: This notice publishes the Assistant Secretary—Indian Affairs. I criminal complaint against the Kickapoo Traditional Tribe of Texas certify that the Kickapoo Traditional Defendant and have the Defendant Liquor Ordinance which repeals and Tribe of Texas Traditional Council duly served. replaces the Kickapoo Traditional Tribe adopted the Kickapoo Traditional Tribe K. The Tribe’s Prosecutor and / or of Texas Beer and Liquor Tax Ordinance of Texas Liquor Ordinance by Chief of Police may refer an potential and any and all previous statutes. Resolution No. 2018–058 on October 1, criminal violation to the US Attorney in The Kickapoo Traditional Tribe of 2018. Seattle provided that if the matter is Texas Liquor Ordinance regulates and referred, but the US Attorney shall controls the possession, sale, Dated: May 17, 2019. decline to proceed, then the Prosecutor manufacture, and distribution of liquor Tara Sweeney, shall retain the jurisdiction to proceed. on the Kickapoo Traditional Tribe of Assistant Secretary—Indian Affairs.

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Kickapoo Traditional Tribe of Texas Liquor Ordinance Table of Contents Section 1—INTRODUCTION ...... 4 Section 1.1—Authority ...... 4 Section 1.2—Short Title ...... 4 Section 1.3—Definitions ...... 4 Section 1.4—Purpose ...... 5 Section 1.5—Jurisdiction ...... 5 Section 1.6—Application of 18 U.S.C. § 1161 ...... 5 Section 1.7—Declaration of Public Policy & Findings ...... 5 Section 2—LIQUOR SALES, POSSESSION, AND MANUFACTURE ...... 6 Section 2.1—Possession ...... 6 Section 2.2—Retail Sales ...... 6 Section 2.3—Manufacture ...... 7 Section 2.4—Age Limits ...... 7 Section 3—LICENSING ...... 7 Section 3.1—Licensing ...... 7 Section 4—ENFORCEMENT ...... 7 Section 4.1—Enforcement ...... 7 Section 5—TAXATION ...... 8 Section 5.1—Taxation ...... 8 Section 6—MISCELLANEOUS PROVISIONS ...... 9 Section 6.1—Sovereign Immunity Preserved ...... 9 Section 6.2—Conformance with Applicable Laws ...... 9 Section 6.3—Effective Date ...... 9 Section 6.4—Repeal of Prior Acts ...... 9 Section 6.5—Amendments ...... 9 Section 6.6—Severability and Savings Clause ...... 10 Section 1—INTRODUCTION governing body of the Kickapoo the sale, manufacturing, distribution, Section 1.1—Authority Traditional Tribe of Texas, in possession, and consumption of liquor accordance with the provisions of the while ensuring that such activity This ordinance is enacted pursuant to KTTT Constitution. conforms with applicable laws of the the Act of August 15, 1953, 67 Stat. 586, (G) Tribe—The term ‘‘Tribe’’ means State of Texas as required by 18 U.S.C. codified at 18 U.S.C. § 1161, by the the Kickapoo Traditional Tribe of Texas. § 1161 and the United States. authority of the Traditional Council enumerated in Article VII §§ (g), (h), (j), Section 1.4—Purpose Section 1.7—Declaration of Public (k), and (n) of the Constitution of the The purpose of this ordinance is to Policy & Findings Kickapoo Traditional Tribe of Texas regulate and control the possession, The Traditional Council enacts this (‘‘KTTT’’) to enact legislation and sale, manufacture, and distribution of KTTT Liquor Ordinance based on the regulate activities of businesses liquor within the KTTT’s reservation, following findings: operating on KTTT lands, and in trust lands, and all Indian Country as (A) The manufacture, distribution, conformity with applicable Texas State defined in 18 U.S.C. § 1151, in order to possession, sale, and consumption of laws and all attendant agreements. permit liquor sales by tribally-owned liquor within KTTT Lands are matters of Section 1.2—Short Title and operated enterprises and lessees special concern to the Tribe and the and at other tribally-approved special Traditional Council. This ordinance shall be known as the events. The enactment of the KTTT (B) Federal law currently prohibits the ‘‘KTTT Liquor Ordinance.’’ Liquor Ordinance will increase the introduction of liquor into or the ability of the KTTT to control the Section 1.3—Definitions manufacture of liquor in Indian manufacture, distribution, sale, and Country, except as provided in 18 (A) Indian Country—The term possession of liquor on the Tribe’s lands U.S.C. § 1161, except in accordance ‘‘Indian Country’’ means the definition and will provide an important source of with State law and the duly enacted law provided in 18 U.S.C. § 1151. tax revenue for the continued operation of the Tribe. (B) Liquor—The term ‘‘Liquor’’ shall and strengthening of the KTTT mean any alcoholic beverage including government, the delivery of tribal (C) The KTTT believes that it should but not limited to any malt, spirituous, governmental services, and the regulate and control liquor transactions or vinous liquor, including beer, ale, economic viability of tribal enterprises. within its lands because of the many and wine, or any ardent or other potential problems associated with the intoxicating liquor of any kind Section 1.5—Jurisdiction unregulated or inadequately regulated whatsoever. The KTTT Liquor Ordinance shall manufacture, distribution, sale, (C) KTTT—The term ‘‘KTTT’’ means apply to all lands now or in the future possession, and consumption of liquor. the Kickapoo Traditional Tribe of Texas. under the governmental authority of the The Traditional Council finds that tribal (D) KTTT Lands—The term ‘‘KTTT KTTT, including the Tribe’s reservation, control and regulation of liquor is Lands’’ means the Tribe’s reservation, trust lands, and Indian Country as necessary to protect the health and trust lands, and all other lands as defined under 18 U.S.C. § 1151. welfare of KTTT tribal citizens, to defined in 18 U.S.C. § 1151. address specific concerns relating to (E) State—The term ‘‘State’’ means the Section 1.6—Application of 18 U.S.C. liquor use, and to achieve maximum State of Texas. § 1161 economic benefit to the Tribe. (F) Traditional Council—The term By adopting the KTTT Liquor (D) It is in the best interests of the ‘‘Traditional Council’’ means the Ordinance, the Tribe hereby regulates Tribe to enact this KTTT Liquor

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Ordinance to govern liquor transactions enacted pursuant to the KTTT Liquor Section 6.3—Effective Date on its lands. Ordinance may include provisions for The KTTT Liquor Ordinance shall be suspension or revocation of KTTT Section 2—LIQUOR SALES, effective as of the date on which the liquor licenses, reasonable search and POSSESSION, AND MANUFACTURE Secretary of the Interior certifies it and seizure provisions, and civil and publishes the same in the Federal Section 2.1—Possession criminal penalties for violations of the Register. The introduction and possession of KTTT Liquor Ordinance to the full Section 6.4—Repeal of Prior Acts liquor shall be lawful within KTTT extent permitted by Federal law and Lands, provided that such introduction consistent with due process. All prior enactments of the or possession is in conformity with the (B) KTTT law enforcement personnel, Traditional Council, including tribal laws of the Tribe and the applicable and security personnel duly authorized resolutions, policies, regulations, or laws of the State. by the Traditional Council, shall have statues pertaining to the subject matter the authority to enforce the KTTT set forth in the KTTT Liquor Ordinance Section 2.2—Retail Sales Liquor Ordinance by confiscating any are hereby rescinded. Specifically, the The sale of liquor shall be lawful liquor sold, possessed, distributed, KTTT Beer and Liquor Tax Ordinance, within KTTT Lands, provided that such manufactured, or introduced within Resolution No. 2011-982 (Mar. 30, 2011) sales are in conformity with the laws of KTTT Lands in violation of the KTTT approved by the Secretary of the Interior the Tribe and the applicable laws of the Liquor Ordinance or of any regulations on February 9, 2012 (77 Fed. Reg. State. duly adopted pursuant to the KTTT 10548) is repealed. Section 2.3—Manufacture Liquor Ordinance. Section 6.5—Amendments (C) The Tribal Council shall have the The manufacture of liquor shall be exclusive jurisdiction to hold hearings The KTTT Liquor Ordinance may lawful within KTTT Lands, provided on violations of the KTTT Liquor only be amended pursuant to an that such manufacture is in conformity Ordinance and any procedures or amendment duly enacted by the with the laws of the Tribe and the regulations adopted pursuant to the Traditional Council and certification by applicable laws of the State. KTTT Liquor Ordinance; to promulgate the Secretary of the Interior and Section 2.4—Age Limits appropriate procedures governing such publication in the Federal Register, if required. The legal age for possession or hearings; to determine and enforce consumption of liquor within KTTT penalties or damages for violations of Section 6.6—Severability and Lands shall be the same as that of the the KTTT Liquor Ordinance; and to Savings Clause delegate to a subordinate hearing officer State, which is currently 21 years. No If any part or provision of the KTTT or panel or to the KTTT Tribal Court the person under the age of 21 years of age Liquor Ordinance is held invalid, void, authority to take any or all of the shall purchase, possess, or consume any or unenforceable by a court of foregoing actions on its behalf. liquor. competent jurisdiction, such adjudication shall not be held to render Section 3—LICENSING Section 5—TAXATION Section 5.1—Taxation such provisions inapplicable to other Section 3.1—Licensing persons or circumstances. Further, the The Traditional Council shall have The KTTT retains the sovereign remainder of the KTTT Liquor the power to establish procedures and authority to tax liquor within KTTT Ordinance shall not be affected and standards for tribal licensing of liquor Lands by appropriate statute. Nothing shall continue to remain in full force manufacture, distribution, and sale contained in in the KTTT Liquor and effect. within KTTT Lands, including setting of Ordinance is intended to, nor does it in [FR Doc. 2019–13263 Filed 6–20–19; 8:45 am] a license fee schedule, and shall have any way, limit or restrict the Tribe’s BILLING CODE 4337–15–P the power to publish and enforce such ability to impose any tax upon the sale standards. For license applicants that or consumption of liquor. are not tribally-owned, no tribal license Section 6—MISCELLANEOUS DEPARTMENT OF THE INTERIOR shall be issued except upon showing of PROVISIONS satisfactory proof that the applicant is Bureau of Indian Affairs Section 6.1—Sovereign Immunity duly licensed by the State. The fact that [190A2100DD/AAKC001030/ an applicant for a tribal license Preserved A0A51010.999900] possesses a license issued by the State Nothing contained in the KTTT shall not provide the applicant with an Liquor Ordinance is intended to, nor Land Acquisitions; the Delaware Tribe entitlement or expectation to a tribal does in any way, limit, alter, restrict, or of Indians license. waive the sovereign immunity of the AGENCY: Bureau of Indian Affairs, Section 4—ENFORCEMENT KTTT or any of its agencies, agents, or Interior. officials from uncontested suit or action ACTION: Notice. Section 4.1—Enforcement of any kind. SUMMARY: The Principal Deputy (A) The Traditional Council shall Section 6.2—Conformance with Assistant Secretary—Indian Affairs has have the power to develop, enact, Applicable Laws promulgate, and enforce regulations as made a final determination to acquire necessary for the enforcement of the All acts and transactions under the 3.133 acres, more or less, into trust for KTTT Liquor Ordinance and to protect KTTT Liquor Ordinance shall be in the Delaware Tribe of Indians on June the public health, welfare, and safety of conformity with the laws of the Tribe 6, 2019. the Tribe, provided that all such and the laws of the State to the extent FOR FURTHER INFORMATION CONTACT: Ms. regulations conform to and do not required by 18 U.S.C. § 1161 and with Sharlene M. Round Face, Bureau of conflict with any applicable KTTT, all Federal laws regarding liquor in Indian Affairs, Division of Real Estate Federal, or State law. Regulations Indian Country. Services, 1849 C Street NW, MS–4624–

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MIB, Washington, DC 20240, telephone DEPARTMENT OF THE INTERIOR FURTHER INFORMATION CONTACT). A copy (505) 563–3132. of the Phase V.3 RP/SEA is also [FWS–R4–ES–2019–N078; available for review at the Santa Rosa SUPPLEMENTARY INFORMATION: FVHC98220410150–XXX–FF04H00000] This County Public Library. notice is published in the exercise of Submitting Comments: You may authority delegated by the Secretary of Deepwater Horizon Oil Spill Natural Resource Damage Assessment, submit comments on the draft Phase V.3 the Interior to the Principal Deputy Florida Trustee Implementation Group RP/SEA by one of the following Assistant Secretary—Indian Affairs by Phase V.3 Florida Coastal Access methods: • part 209 of the Departmental Manual, Project: Draft Restoration Plan and Via the Web: http://www.gulfspill and is published to comply with the Supplemental Environmental restoration.noaa.gov/restoration-areas/ requirement of 25 CFR 151.12(c)(2)(ii) Assessment florida. that notice of the decision to acquire • Via U.S. Mail: U.S. Fish and land in trust be promptly published in AGENCY: Department of the Interior. Wildlife Service, P.O. Box 29649, the Federal Register. ACTION: Notice of availability; request Atlanta, GA 30345. In order to be On June 6, 2019, the Principal Deputy for public comments. considered, mailed comments must be postmarked on or before the comment Assistant Secretary—Indian Affairs SUMMARY: In accordance with the Oil issued a decision to accept land in trust deadline given in DATES. Pollution Act of 1990 (OPA), the • In Person: Verbal comments may be for the Delaware Tribe of Indians under National Environmental Policy Act of provided at the public meeting in the authority of Section 5 of the Indian 1969 (NEPA), the Deepwater Horizon Navarre, Florida, on July 18, 2019. Reorganization Act of 1934 (25 U.S.C. Oil Spill Final Programmatic Damage 5108). FOR FURTHER INFORMATION CONTACT: Assessment Restoration Plan and Final Nanciann Regalado, via email at Legal Description Programmatic Environmental Impact [email protected], via Statement (Final PDARP/PEIS), Record telephone at 678–296–6805, or via the A tract of land located in a portion of of Decision, and Consent Decree, the Federal Relay Service at 800–877–8339. the S1⁄2SW1⁄4NE1⁄4NE1⁄4 of Section 13, Federal and State natural resource SUPPLEMENTARY INFORMATION: Township 35 South, Range 13 East of trustee agencies for the Florida Trustee the 6th Principal Meridian, City of Implementation Group (FL TIG) have Introduction prepared a Phase V.3 Florida Coastal Caney, Montgomery County, Kansas; The Florida Coastal Access Project Access Project: Draft Restoration Plan more particularly described as follows: was selected for funding and and Supplemental Environmental Commencing at the East Quarter Corner implementation in Phase V of DWH Assessment (Phase V.3 RP/SEA). The FL of Section 13; thence N 89°37′03″ W, early restoration. In the 2011 Framework TIG is proposing a third phase of the along the South line of the SE1⁄4NE1⁄4, Agreement for Early Restoration Florida Coastal Access Project, a distance of 1,297.83 feet to the Addressing Injuries Resulting from the including the acquisition of a coastal Southwest corner thereof; thence N Deepwater Horizon Oil Spill inholding parcel within the Navarre ° ′ ″ (Framework Agreement), BP agreed to 00 38 28 W, along the West line of the Beach Marine Park in Santa Rosa 1 1 provide to the Trustees up to $1 billion SE ⁄4NE ⁄4, a distance of 1,333.20 feet to County, Florida, as the preferred toward early restoration projects in the the Northwest corner thereof; thence S alternative. This would continue the ° ′ ″ Gulf of Mexico to address injuries to 89 06 35 E, along the South line of the process of restoring lost recreational use 1 1 natural resources caused by the DWH NE ⁄4NE ⁄4, a distance of 30.01 feet, to in the Florida Restoration Area resulting oil spill. The Framework Agreement the East Right of Way Line of High from the Deepwater Horizon (DWH) oil represented a preliminary step toward Street, for the True Point of Beginning: spill. We invite comments on the draft the restoration of injured natural Thence N 00°29′47″ W, along said East Phase V.3 RP/SEA. resources and was intended to expedite Right of Way Line of High Street, a DATES: distance of 328.07 feet to the North line the start of restoration in the Gulf in Submitting Comments: We will advance of the completion of the injury of the S1⁄2SW1⁄4NE1⁄4NE1⁄4 of Section 13; consider public comments on the draft assessment process. In the five phases of thence S 89°11′40″ E, along said North Phase V.3 RP/SEA received on or before the early restoration process, the line, a distance of 420.34 feet; thence S July 22, 2019. ° ′ ″ Trustees selected, and BP agreed to 01 07 05 W, a distance of 328.58 feet to Public Meeting: The FL TIG will host fund, a total of 65 early restoration the South line of the NE1⁄4NE1⁄4; thence a public meeting on July 18, 2019, at the ° ′ ″ projects expected to cost a total of N 89 06 35 W, along said South line, a Navarre Beach Marine Science Station, approximately $877 million, including distance of 411.09 feet to the Point of 8638 Blue Heron Court, Navarre, FL. An the Florida Coastal Access Project for Beginning and containing 3.133 acres, open house will begin at 5:30 p.m., approximately $45.4 million. The more or less. Surface only. followed by the public meeting from 6 Trustees selected these projects after to 7:30 p.m. Dated: June 6, 2019. public notice, public meetings, and ADDRESSES: Obtaining Documents: You John Tahsuda, consideration of public comments. may download the draft Phase V.3 RP/ The Consent Decree, as discussed in Principal Deputy Assistant Secretary—Indian SEA from any of the following websites: the ‘‘Background’’ section below, Affairs. • http://www.doi.gov/deepwater terminated and replaced the Framework [FR Doc. 2019–13262 Filed 6–20–19; 8:45 am] horizon/adminrecord Agreement and provided that the BILLING CODE 4337–15–P • http:// Trustees shall use remaining early www.gulfspillrestoration.noaa.gov/ restoration funds as specified in the restoration-areas/florida early restoration plans and in • http://dep.state.fl.us/deepwater accordance with the Consent Decree. horizon/default.htm The Trustees have determined that Alternatively, you may request a CD of decisions concerning any unexpended the draft Phase V.3 RP/SEA (see FOR early restoration funds are to be made

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by the appropriate TIG, in this case the • State of Alabama Department of approximately $2 million in Florida FL TIG. Conservation and Natural Resources and Coastal Access Project remaining funds. Geological Survey of Alabama; Background • State of Florida Department of Next Steps On April 20, 2010, the mobile Environmental Protection and Fish and As described above, the Trustees will offshore drilling unit Deepwater Wildlife Conservation Commission; and hold a public meeting to facilitate the Horizon, which was being used to drill • State of Texas: Texas Parks and public review and comment process. a well for BP Exploration and Wildlife Department, Texas General After the public comment period ends, Production, Inc. (BP), in the Macondo Land Office, and Texas Commission on the Trustees will consider and address prospect (Mississippi Canyon 252– Environmental Quality. the comments received before issuing a MC252), experienced a significant The Trustees reached and finalized a final Phase V.3 RP/SEA. explosion, fire, and subsequent sinking settlement of their natural resource Public Availability of Comments in the Gulf of Mexico, resulting in an damage claims with BP in an April 4, unprecedented volume of oil and other 2016, Consent Decree approved by the Before including your address, phone discharges from the rig and from the U.S. District Court for the Eastern number, email address, or other wellhead on the seabed. The Deepwater District of Louisiana. Pursuant to that personal identifying information in your Horizon oil spill is the largest oil spill Consent Decree, restoration projects in comment, you should be aware that in U.S. history, discharging millions of the Florida Restoration Area are now your entire comment—including your barrels of oil over a period of 87 days. chosen and managed by the FL TIG. The personal identifying information—may In addition, well over 1 million gallons FL TIG is composed of the following six be made publicly available at any time. of dispersants were applied to the Trustees: State of Florida Department of While you can ask us in your comment waters of the spill area in an attempt to Environmental Protection and Fish and to withhold your personal identifying disperse the spilled oil. An Wildlife Conservation Commission; information from public review, we undetermined amount of natural gas DOI; NOAA; EPA; and USDA. cannot guarantee that we will be able to was also released into the environment Overview of the FL TIG Draft Phase V.3 do so. as a result of the spill. RP/SEA Administrative Record The Trustees conducted the natural resource damage assessment (NRDA) for The draft Phase V.3 RP/SEA is being The documents comprising the the Deepwater Horizon oil spill under released in accordance with OPA NRDA Administrative Record for the Phase V.3 the Oil Pollution Act 1990 (OPA; 33 regulations found in the Code of Federal RP/SEA can be viewed electronically at U.S.C. 2701 et seq.). Pursuant to OPA, Regulations (CFR) at 15 CFR part 990, https://www.doi.gov/deepwaterhorizon/ Federal and State agencies act as NEPA and its implementing regulations adminrecord. trustees on behalf of the public to assess found at 40 CFR parts 1500–1508, the Final PDARP/PEIS, and the Consent Authority natural resource injuries and losses and Decree. The Phase V.3 RP/SEA provides to determine the actions required to The authority of this action is the Oil an OPA analysis for the proposed third compensate the public for those injuries Pollution Act of 1990 (33 U.S.C. 2701 et phase of the Florida Coastal Access and losses. The OPA further instructs seq.), its implementing Natural Resource Project and supplements the NEPA the designated trustees to develop and Damage Assessment regulations found analysis completed in the first and implement a plan for the restoration, at 15 CFR part 990, and the National second phases of the project (2016 Final rehabilitation, replacement, or Environmental Policy Act of 1969 (42 Phase V Early Restoration Plan and acquisition of the equivalent of the U.S.C. 4321 et seq.) and its Environmental Assessment and the injured natural resources under their implementing regulations found at 40 2017 Final Phase V.2 Restoration Plan trusteeship, including the loss of use CFR parts 1500–1508. and Supplemental Environmental and services from those resources from Assessment, respectively). In the draft Mary Josie Blanchard, the time of injury until the completion Phase V.3 RP/SEA, the FL TIG proposes Director of Gulf of Mexico Restoration, of restoration to baseline (the resource the acquisition of the Navarre Beach Department of the Interior. quality and conditions that would exist Park Addition—an approximately 4.75- [FR Doc. 2019–13224 Filed 6–20–19; 8:45 am] if the spill had not occurred). acre privately owned inholding parcel BILLING CODE 4333–15–P The Deepwater Horizon trustees are: • U.S. Department of the Interior within the existing Navarre Beach Marine Park, a county park in Santa (DOI), as represented by the National DEPARTMENT OF THE INTERIOR Park Service, U.S. Fish and Wildlife Rosa County—as the preferred alternative. The proposal consists of Service, and Bureau of Land Bureau of Land Management Management; land acquisition only; construction of • National Oceanic and Atmospheric recreational amenities is not proposed. [19X.LLID930000.L11100000.DF0000. LXSGPL000000.241A.4500132602] Administration (NOAA), on behalf of The parcel would become part of the Navarre Beach Marine Park and would the U.S. Department of Commerce; Notice of Availability of the Draft • U.S. Department of Agriculture be owned by Santa Rosa County, who would be responsible for maintaining it Programmatic Environmental Impact (USDA); Statement for Fuel Breaks in the Great • U.S. Environmental Protection as part of the Santa Rosa County Park Basin; Idaho, Washington, Oregon, Agency (EPA); System. Deed restrictions would ensure California, Nevada, and Utah • State of Louisiana Coastal the property remains in the Santa Rosa Protection and Restoration Authority, County Park System in perpetuity. AGENCY: Bureau of Land Management, Oil Spill Coordinator’s Office, Acquisition of the Navarre Beach Interior. Department of Environmental Quality, Marine Park Addition would continue ACTION: Notice of Availability. Department of Wildlife and Fisheries, the process of restoring natural and Department of Natural Resources; resources and services injured or lost as SUMMARY: In accordance with the • State of Mississippi Department of a result of the DWH oil spill. This National Environmental Policy Act of Environmental Quality; would be accomplished using 1969, as amended, the Bureau of Land

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Management (BLM) has prepared a Draft frequency of wildfires throughout the Authority: 40 CFR 1506.6, 40 CFR 1506.10 Programmatic Environmental Impact western United States in recent years. John F. Ruhs, Statement (EIS) for Fuel Breaks in the The fires have impacted healthy Great Basin and by this notice is rangelands, sagebrush communities, and Idaho State Director, Bureau of Land Management. announcing the opening of the comment the general productivity of the lands. [FR Doc. 2019–13021 Filed 6–20–19; 8:45 am] period. Efforts to suppress these wildfires have DATES: To ensure comments will be cost approximately $1.7 billion dollars BILLING CODE 4310–GG–P considered, the BLM must receive between 2007 and 2017. These wildfires written comments on the Draft have resulted in increased numbers of DEPARTMENT OF THE INTERIOR Programmatic EIS for Fuel Breaks in the injuries and fatalities among wildland Great Basin within 45 days following firefighters, destruction of private Bureau of Land Management the date the Environmental Protection property, degradation and loss of Agency publishes its Notice of rangelands, loss of recreational Availability in the Federal Register. The [LLORV00000.L18200000. XZ0000. opportunities, and habitat loss for a BLM will announce future meetings or LXSS020H0000. 19X.HAG 19–0060] hearings and any other public variety of species, including the involvement activities at least 15 days conversion of native habitats to invasive Change of Hours of Operation for the in advance through public notices, annual grasses. The conversion of Lakeview Interagency Office, Oregon media releases, and/or mailings. rangeland habitats to invasive annual ADDRESSES: You may submit comments grasslands further impedes rangeland AGENCY: Bureau of Land Management, related to the Draft Programmatic EIS for health and productivity by slowing or Interior. preventing the recovery of sagebrush Fuel Breaks in the Great Basin by any ACTION: Notice of change in office hours. of the following methods: website: ecosystems. https://go.usa.gov/xnQcG, Email: The preferred alternative (Alternative _ SUMMARY: The Lakeview Interagency GRSG [email protected], Fax: 208–373– D) would authorize a full suite of tools Office, which includes the Bureau of 3805, Mail: Bureau of Land to construct approximately 11,000 miles Land Management Lakeview District Management, Idaho State Office, ATTN: of new fuel breaks within the Office and the Fremont-Winema Fuel Breaks Draft PEIS, 1387 South 223,000,000-acre planning area. Impacts National Forest Supervisor’s Office, will Vinnell Way, Boise ID 83709. would include those to native plant implement new hours of operation, Copies of the Draft Programmatic EIS communities that are currently resistant for Fuel Breaks in the Great Basin are weekdays, excluding Federal holidays, to invasive annual plants, but may available in the BLM Idaho State at the from 8:00 a.m. to 4:30 p.m. The hours become vulnerable through repeated above address; additional copies can be of operation for all other Lakeview BLM made available at the California, fires. Potential tools would include Offices will not change. Nevada, Oregon/Washington, and Utah manual, chemical, mechanical, prescribed fire, reseeding, and targeted DATES: The new hours of operation take State Offices upon request. effect on July 1, 2019. FOR FURTHER INFORMATION CONTACT: grazing. Fuel break types would include Marlo Draper, telephone 208–373–3812; green strips (areas planted with low- ADDRESSES: The Lakeview Interagency address BLM Idaho State Office, 1387 statured, fire-resistant vegetation), Office is located at 1301 S G St., South Vinnell Way, Boise ID 83709; brown strips (areas where all vegetation Lakeview, OR 97630. email [email protected]. Persons who is removed), mowed fuel breaks, and targeted grazing fuel breaks (where FOR FURTHER INFORMATION CONTACT: use a telecommunications device for the Seana Lammers, Administrative Officer, deaf (TDD) may call the Federal Relay livestock grazing is managed to reduce 1301 S G St., Lakeview, Oregon 97630; Service (FRS) at 1–800–877–8339 to vegetation). telephone: 541–947–6202; email: contact the above individual during Please note that public comments and [email protected]. Persons who normal business hours. The FRS is information submitted including names, use a telecommunications device for the available 24 hours a day, 7 days a week, street addresses, and email addresses of to leave a message or question with the deaf (TDD) may call the Federal Relay persons who submit comments will be Service (FRS) at 1–800–877–8339 to above individual. You will receive a available for public review and reply during normal business hours. contact the above individual during disclosure at the above address during normal business hours. The FRS is SUPPLEMENTARY INFORMATION: The regular business hours (8 a.m. to 4 p.m.), purpose of a system of strategically available 24 hours a day, 7 days a week, Monday through Friday, except to leave a message or question. You will placed fuel breaks in the Great Basin holidays. region is to slow the spread of wildfires receive a reply during normal business and provide firefighters with the best Before including your address, phone hours. number, email address, or other opportunity to catch rapidly moving SUPPLEMENTARY INFORMATION: This personal identifying information in your fires and establish an anchor point, change is intended to better serve the comment, you should be aware that thereby reducing wildfire size and public—based on a long-term review of your entire comment—including your improving firefighter safety while calls received and the number of public engaging in fire suppression. Fuel personal identifying information—may visits between 7:45 and 8 a.m.—and to breaks would also offer greater be made publicly available at any time. improve staffing efficiency. protection of human life and property, While you can ask us in your comment sagebrush communities, and habitat to withhold your personal identifying (Authority: 43 CFR 1821.11) restoration investments. Reducing fire information from public review, we Todd Forbes, size helps to reduce the expansion of cannot guarantee that we will be able to Lakeview District Manager. invasive species, such as cheatgrass and do so. medusahead. The need for fuel breaks [FR Doc. 2019–13088 Filed 6–20–19; 8:45 am] relates to the increased size and BILLING CODE 4310–33–P

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DEPARTMENT OF THE INTERIOR Tonopah, Nevada, and approximately and Title V FLPMA. A Plan of 0.5 miles north of the town of Goldfield, Development that describes these Bureau of Land Management Nevada. Goldfield is located amendments was submitted to the BLM [LLNVB0l000. L51100000.GN0000. approximately 30 miles south of in July 2013 (amended May 2017). LVEMF1402780 14X MO: 4500134784] Tonopah and 174 miles northwest of These amendments would be necessary Las Vegas, Nevada. to accommodate the development and Notice of Availably of the Final Approximately 1,935.9 acres of land operation of the proposed Gemfield Environmental Impact Statement for lies within the Plan boundary, including Mine. approximately 1,214.2 acres of BLM- the Proposed Gemfield Mine Project, Primary concerns identified in the Esmeralda County, NV administered land that is managed by the Tonopah Field Office of the Battle Final EIS include potential impacts to AGENCY: Bureau of Land Management, Mountain District and 721.7 acres of water management over the life of the Interior. private land. The proposed Project project, cultural resources, and land use ACTION: Notice of availability. would result in approximately 1,337.3 and realty. The primary issues related to acres of surface disturbance, of which water resources and geochemistry, SUMMARY: In compliance with the 969.4 acres would occur on BLM- cultural resources, and land use and National Environmental Policy Act of administered land and 367.9 acres realty include: (1) Reduction in 1969, as amended (NEPA), and the would occur on private land. If the groundwater quantity from pit Federal Land Policy and Management Project is approved, GRL estimates the dewatering; (2) Impacts related to the Act of 1976, as amended (FLPMA), the mine life would be approximately 12 water quality of the post-mining pit Bureau of Land Management (BLM), years. lakes; (3) Impacts to cultural resource Tonopah Field Office, has prepared a The Proposed Project includes the sites from mine development; and (4) Final Environmental Impact Statement construction and operation of a Impacts to land use and realty with the (EIS) for the Gemfield Mine Project and conventional open-pit mining operation realignments of US Highway 95, by this notice is announcing its to extract and recover gold. The utilities, and county roads. In addition availability. Proposed Project would include the to the Proposed Project, three DATES: The BLM will not issue a final following new components: Open pit; alternatives were analyzed: The decision on the proposal for a minimum crushing facilities, conveyors, and Reduced Mine Plan Alternative, the of 30 days after the date that the associated stockpiles; waste rock Partial Backfill Alternative, and the No Environmental Protection Agency disposal areas; overburden stockpile; Action Alternative. publishes its Notice of Availability in stormwater diversions channels, The Draft EIS was made available for the Federal Register. sediment basins, and berms; heap leach a 45-day public comment period that ADDRESSES: Copies of the Final EIS for pad, processing facilities, and ponds; ended on April 22, 2019. A public the Gemfield Mine Project and other water supply and dewatering wells and meeting was held on March 28, 2019, in documents pertinent to this proposal delivery/storage system; haul and Goldfield, Nevada. A total of 15 may be examined at the Mount Lewis secondary roads; exploration activities; comments were received during the and ancillary facilities including: Power Field Office, 50 Bastian Road, Battle public comment period. Responses to supply; reagent, fuel, and explosives Mountain, Nevada 89820 or at the comments are included in the Final EIS. Tonopah Field Office, 1553 South Main storage; buildings including administration, change house, The BLM has utilized and Street, Tonopah, Nevada 89049. The coordinated the NEPA scoping and document is also available for download laboratory, security, warehouse, and parking; water supply and septic comment process to help fulfill the at https://go.usa.gov/xE8q6. systems; maintenance shop; ready line; public involvement requirements under FOR FURTHER INFORMATION CONTACT: vehicle wash; communications the National Historic Preservation Act Kevin Hurrell, Project Manager; facilities; plant growth media stockpiles; (NHPA) (54 U.S.C. 306108) as provided telephone: 775–635–4000; address: 50 area for temporary storage of petroleum- in 36 CFR 800.2(d)(3), and the agency Bastian Road, Battle Mountain, Nevada continues to do so. The information _ _ _ _ contaminated soils; groundwater 89820; or email: blm nv bmdo mlfo monitoring wells; water-supply about historical and cultural resources [email protected]. Contact Mr. pipelines and facilities, borrow areas; within the area potentially affected by Hurrell to have your name added to fencing; yards; and stormwater controls the Proposed Project has assisted the BLM’s mailing list. Persons who use a and diversion structures. BLM in identifying and evaluating telecommunications device for the deaf Proposed right-of-way (ROW) impacts to such resources in the context (TDD) may call the Federal Relay amendments to existing BLM of both NEPA and the NHPA. Service (FRS) at 1–800–877–8339 to authorizations (relinquishments and The BLM has consulted and continues contact Mr. Hurrell during normal amendments to existing authorizations) to consult with Indian tribes on a business hours. The FRS is available 24 include the Nevada Department of government-to-government basis in hours a day, 7 days a week, to leave a Transportation (NDOT); AT&T; accordance with Executive Order 13175 message or question. You will receive a Esmeralda County; Sierra Pacific Power reply during normal business hours. Company (SPPCo) doing business as NV and other policies. Tribal concerns, including impacts to Indian trust assets SUPPLEMENTARY INFORMATION: Gemfield Energy; and Nevada Hospital Resources, Ltd. (GRL) proposes to Association/SWITCH. Several ROW and potential impacts to cultural construct and operate a conventional actions would require amendments to resources have been analyzed in the open-pit mining operation in the existing FLPMA grants, in accordance Final EIS. Goldfield Mining District of Esmeralda with 43 CFR 2800. New ROW actions (Authority: 40 CFR 1506.6, 40 CFR 1506.10) County, Nevada, as described in the include issuance of a grant to NDOT; Plan of Operations (Plan) submitted by authorizations of an east access road to Doug Furtado, GRL for the Gemfield Mine Project Esmeralda County, and short-term Battle Mountain District Manager. (Project). The proposed Project is construction ROWs for SPPCo DBA NV [FR Doc. 2019–13259 Filed 6–20–19; 8:45 am] located approximately 30 miles south of Energy in accordance with 43 CFR 2800 BILLING CODE 4310–HC–P

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DEPARTMENT OF THE INTERIOR The plat and field notes of the Management (BLM) has prepared a Draft dependent resurvey and survey of a Resource Management Plan (RMP) and Bureau of Land Management portion of Rocky Mountain National Draft Environmental Impact Statement [LLCO956000 L14400000.BJ0000 19X] Park in Township 5 North, Range 73 (EIS) for the Royal Gorge Field Office West, Sixth Principal Meridian, and by this notice is announcing the Notice of Filing of Plats of Survey, Colorado, were accepted on May 23, opening of the comment period. Colorado 2019. DATES: To ensure that comments will be The plat and field notes of the considered, the BLM must receive AGENCY: Bureau of Land Management, dependent resurvey and subdivision of written comments on the Draft RMP/ Interior. section 6 in partially surveyed Draft EIS within 90 days following the ACTION: Notice of official filing. Township 2 South, Range 90 West, date the Environmental Protection SUMMARY: The plats of survey of the Sixth Principal Meridian, Colorado, Agency publishes its notice of following described lands are scheduled were accepted on May 29, 2019. availability in the Federal Register. The to be officially filed in the Bureau of A person or party who wishes to BLM will announce future meetings or Land Management (BLM), Colorado protest any of the above surveys must hearings and any other public State Office, Lakewood, Colorado, 30 file a written notice of protest within 30 participation activities at least 15 days calendar days from the date of this calendar days from the date of this in advance through public notices, publication. The surveys, which were publication at the address listed in the media releases, and/or mailings. executed at the request of the U.S. Fish ADDRESSES section of this notice. A ADDRESSES: Comments related to the and Wildlife Service, the U.S. Forest statement of reasons for the protest may Draft Eastern Colorado RMP/EIS must Service, the U.S. National Park Service, be filed with the notice of protest and be submitted by the following methods: • and the BLM, are necessary for the must be filed within 30 calendar days Electronic comments must be management of these lands. after the protest is filed. If a protest submitted via the ePlanning website at against the survey is received prior to DATES: Unless there are protests of this https://go.usa.gov/xQcZT. the date of official filing, the filing will • action, the plats described in this notice Hard copy comments must be will be filed on July 22, 2019. be stayed pending consideration of the submitted via mail or hand-delivered to protest. A plat will not be officially filed the Royal Gorge Field Office, 3028 E. ADDRESSES: You may submit written until the day after all protests have been Main St., Can˜ on City, CO 81212. protests to the BLM Colorado State dismissed or otherwise resolved. Office, Cadastral Survey, 2850 A copy of the Draft Eastern Colorado Before including your address, phone RMP/EIS is available at the Royal Gorge Youngfield Street, Lakewood, CO number, email address, or other 80215–7093. Field Office at the address above or on personal identifying information in your the RMP ePlanning website at: https:// FOR FURTHER INFORMATION CONTACT: protest, please be aware that your entire go.usa.gov/xQcZT. Click the Documents Randy Bloom, Chief Cadastral Surveyor protest, including your personal & Reports link on the left side of the for Colorado, (303) 239–3856; rbloom@ identifying information, may be made screen to find the electronic version of blm.gov. Persons who use a publicly available at any time. While these materials. telecommunications device for the deaf you can ask us in your comment to may call the Federal Relay Service at 1– FOR FURTHER INFORMATION CONTACT: John withhold your personal identifying Smeins, Project Manager, telephone: 800–877–8339 to contact the above information from public review, we individual during normal business 719–269–8581; email: [email protected]. cannot guarantee that we will be able to Persons who use a telecommunications hours. The Service is available 24 hours do so. a day, seven days a week, to leave a device for the deaf (TDD) may call the message or question with the above Authority: 43 U.S.C. Chap. 3. Federal Relay Service (FRS) at 1–800– 877–8339 to contact Mr. Smeins during individual. You will receive a reply Randy A. Bloom, during normal business hours. normal business hours. FRS is available Chief Cadastral Surveyor. 24 hours a day, 7 days a week, to leave SUPPLEMENTARY INFORMATION: The plat [FR Doc. 2019–13153 Filed 6–20–19; 8:45 am] and field notes of the dependent a message or question. You will receive BILLING CODE 4310–JB–P resurvey and survey in Township 7 a reply during normal business hours. North, Range 79 West, Sixth Principal SUPPLEMENTARY INFORMATION: The BLM prepared the Draft Eastern Colorado Meridian, Colorado, were accepted on DEPARTMENT OF THE INTERIOR March 25, 2019. RMP/EIS to evaluate and revise the The plat and field notes of the Bureau of Land Management management strategy for resources, dependent resurvey and subdivision of resource uses, and special designations sections in Township 7 North, Range 80 [LLCOF02000.L16100000.DP0000.19X] within the Royal Gorge Field Office, which is the planning area for the RMP. West, Sixth Principal Meridian, Notice of Availability of the Draft Existing management decisions for Colorado, were accepted on March 25, Eastern Colorado Resource public lands and resources in the Royal 2019. Management Plan and Draft The plat incorporating the field notes Gorge Field Office are currently Environmental Impact Statement for of the dependent resurvey in the NW1⁄4 described in two documents: The 1986 the Royal Gorge Field Office, Colorado of section 27 in Township 5 North, Northeast RMP, as amended; and the Range 72 West, Sixth Principal AGENCY: Bureau of Land Management, 1996 Royal Gorge RMP, as amended. Meridian, Colorado, was accepted on Interior. The Royal Gorge Field Office April 25, 2019. ACTION: Notice of availability. encompasses approximately 35 million The plat, in 2 sheets, incorporating acres of land under various the field notes of the dependent SUMMARY: In accordance with the jurisdictions, including the BLM, U.S. resurvey and survey in Township 36 National Environmental Policy Act of Forest Service, National Park Service, North, Range 7 West, New Mexico 1969, as amended, and the Federal Land State of Colorado, and local and private Principal Meridian, Colorado, was Policy and Management Act of 1976, as lands in 37 counties across south- accepted on May 20, 2019. amended, the Bureau of Land central and eastern Colorado. The

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Browns Canyon National Monument is in any of the alternatives analyzed in expand two existing ACECs into a single not part of the planning area for this the Draft. area—South Pikes Peak (40,400 acres). RMP/EIS. The Eastern Colorado RMP Alternative A retains the current • Alternative C would retain three will determine management for management goals, objectives, and current ACECs in their current size— approximately 658,200 acres of BLM- direction specified in the 1986 Cucharas Canyon (1,400 acres), Garden administered surface land and Northeast RMP and the 1996 Royal Park (2,700 acres) and Top of the World approximately 3,311,900 acres of BLM- Gorge RMP. Alternative B emphasizes (Mosquito Pass existing) (4,200 acres); administered mineral estate located improving, rehabilitating, and restoring reduce three existing ACECs—Arkansas throughout south-central and eastern resources; sustaining the ecological Canyonlands (18,700 acres), Grape Colorado. Planning decisions for integrity of habitats for all priority plant, Creek (2,300 acres) and Phantom Federal minerals underlying National wildlife and fish species; and allowing Canyon (5,500 acres); and eliminate Forests and Grasslands are contained in appropriate development scenarios for three ACECs—Beaver Creek (12,100 separate documents prepared by the allowable uses (such as mineral leasing, acres), Droney Gulch (700 acres) and U.S. Forest Service. recreation, communication sites and Ruby Mountain/Railroad Gulch (1,800 The formal public scoping process for livestock grazing). Alternative C acres). the Eastern Colorado RMP/EIS began on emphasizes a mix of uses that • Alternative D would retain one June 1, 2015, with the publication of a maximizes utilization of resources while ACEC in its current size—Droney Gulch Notice of Intent in the Federal Register protecting land health. The (700 acres); propose one new ACEC— (80 FR 31063). The BLM held eight development scenarios for allowable Castle Gardens (300 acres); expand three open-house scoping meetings in June uses in this alternative emphasize existing ACECs—Cucharas Canyon and July 2015. The BLM used public maximizing resource production in an (6,100), Garden Park (3,100 acres) and scoping comments to help identify environmentally responsible manner Top of the World (8,700 acres); reduce planning issues to formulate alternatives while maintaining the basic protection three existing ACECs—Arkansas and frame the scope of analysis in the needed to sustain resources, including Canyonlands (19,600 acres), Grape Draft RMP/EIS. The BLM also used the mitigating impacts on land health. Creek (2,300 acres) and Phantom scoping process to introduce the public Alternative D emphasizes balancing Canyon (5,500 acres); and eliminate two to the preliminary planning criteria, resources and resource use among existing ACECs—Beaver Creek (12,100 which defined the scope of the Draft competing human interests, land uses, acres) and portions of the Browns and the conservation of natural and RMP/EIS. Following the formal scoping Canyon ACEC outside the National cultural resource values, while period, the BLM made the Preliminary Monument (Ruby Mountain/Railroad sustaining and enhancing ecological Alternatives and Draft Basis for Analysis Gulch (1,800 acres). integrity across the landscape, including available for public review to obtain The following management plant, wildlife, and fish habitat. This feedback on the alternatives and the prescriptions may apply to the alternative has four geographic analysis strategy. The BLM held eight landscapes with distinct management, individual ACECs under consideration public meetings to review the and incorporates a balanced level of if designated: Avoid rights-of-way, close alternatives. Based on information protection, restoration and or restrict fluid mineral development, received during this review, the BLM enhancement, as well as use of close to mineral material disposal, modified the alternatives and the resources and services to meet ongoing restrict vehicles and bicycles to analysis. programs and land uses with an designated roads and trails, prohibit Major issues considered in the Draft emphasis on local community visions fuelwood permits and retain in public RMP/EIS are management of biological for the future of public lands. ownership. Please note that public resources, special status species, Pursuant to 43 CFR 3461.2–1(a)(2), comments and information submitted, renewable and nonrenewable energy, this notice announces a concurrent including names, street addresses, and minerals, human activities, and uses public comment period on the email addresses of persons who submit including recreation and livestock application of unsuitability criteria to comments, will be available for public grazing, utility/energy corridors and lands with coal development potential. review and disclosure at the above rights-of-way, and cultural resources. Maps and other information describing address during regular business hours (8 The RMP also considers decisions the results of the application of a.m. to 4 p.m.), Monday through Friday, regarding wild and scenic rivers, areas unsuitability criteria are available on the except holidays. of critical environmental concern RMP ePlanning website and at the BLM Before including your address, phone (ACECs), and management of lands with Royal Gorge Field Office (see contact number, email address, or other wilderness characteristics. The Draft information above). personal identifying information in your RMP/EIS evaluates in detail the No Pursuant to 43 CFR 1610.7–2(b), this comment, you should be aware that Action Alternative (Alternative A) and notice announces a concurrent public your entire comment—including your three action alternatives (Alternatives B, comment period on the proposed personal identifying information—may C and D). The BLM identified designation of ACECs. The BLM be made publicly available at any time. Alternative D as the Preferred analyzed ten potential ACECs meeting While you can ask us in your comment Alternative. This alternative, however, the relevance and importance criteria to withhold your personal identifying does not represent the final agency within the range of action alternatives: information from public review, we direction. After the public comment • Alternative B would retain four cannot guarantee that we will be able to period closes, the BLM will prepare a ACECs in their current size—Arkansas do so. Proposed RMP, which may reflect Canyonlands (23,700 acres), Droney (Authority: 40 CFR 1506.6, 40 CFR 1506.10, changes or adjustments based on Gulch (700 acres), Grape Creek (16,600 43 CFR 1610.2) information received during public acres) and Ruby Mountain/Railroad comment on the Draft RMP/EIS, new Gulch (1,800 acres); would expand three Jamie E. Connell, information, or changes in BLM policies existing ACECs—Cucharas Canyon BLM Colorado State Director. or priorities. The Proposed RMP may (6,100 acres), Garden Park (3,100 acres) [FR Doc. 2019–13087 Filed 6–20–19; 8:45 am] include objectives and actions described and Top of the World (8,700 acres); and BILLING CODE 4310–JB–P

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DEPARTMENT OF THE INTERIOR 707–468–4000; address Bureau of Land 2. The plan amendment(s) will Management, 940 2nd Ave., Marina, CA recognize valid existing rights. Bureau of Land Management 93933; email blm_ca_uk_walker You may submit comments on issues [LLCAC05000.L51010000.ER0000 [email protected]. Contact Ms. and planning criteria in writing to the .LVRWB18B6770.18XL1109AF Nafus to have your name added to our BLM at any public scoping meeting, or (MO#4500134877)] mailing list. Persons who use a you may submit them to the BLM using telecommunications device for the deaf one of the methods listed in the Notice of Intent To Prepare an (TDD) may call the Federal Relay ADDRESSES section earlier. To be most Environmental Impact Statement for Service (FRS) at 1–800–877–8339 to helpful, you should submit comments the Proposed Walker Ridge Wind contact Ms. Nafus during normal by the close of the 30-day scoping Energy Project and a Potential business hours. The FRS is available 24 period or within 15 days after the last Amendment to the Ukiah Resource hours a day, 7 days a week, to leave a public meeting, whichever is later. Management Plan, Colusa and Lake message or question. You will receive a The BLM will utilize and coordinate Counties, CA reply during normal business hours. the NEPA scoping process to help fulfill the public involvement process under AGENCY: Bureau of Land Management, SUPPLEMENTARY INFORMATION: Colusa Wind LLC is requesting a right-of-way the National Historic Preservation Act Interior. (54 U.S.C. 306108 as provided in 36 ACTION: Notice of intent. grant to erect up to 42 wind turbines on approximately 2,270 acres of public CFR 800.2(d)(3)). The information about SUMMARY: In accordance with the land along Walker Ridge, within the historic and cultural resources within National Environmental Policy Act of Indian Valley Management Area in the area potentially affected by the 1969, as amended (NEPA), and the northern California. The proposed proposed action will assist the BLM in Federal Land Policy and Management project includes widening Walker Ridge identifying and evaluating impacts to Act of 1976, as amended, the Bureau of Road, constructing a substation, and such resources. The BLM will consult with Indian Land Management (BLM) Ukiah Field burying a collection line and tie-in to tribes on a government-to-government Office, Ukiah, California, intends to the existing Pacific Gas and Electric basis in accordance with Executive prepare an Environmental Impact transmission line. Order 13175 and other policies. Tribal Statement (EIS) and a potential This document provides notice that concerns, including impacts on Indian Resource Management Plan (RMP) the BLM Ukiah Field Office, intends to trust assets and potential impacts to amendment for the Ukiah Resource prepare an EIS and potential cultural resources, will be given due Management Plan. The EIS will analyze amendment for the Ukiah RMP, consideration. Federal, State, and local the impacts of a proposal by Colusa announces the beginning of the scoping agencies, along with tribes and other Wind LLC to build a Type III wind process, and seeks public input on stakeholders that may be interested in or energy project called the Walker Ridge issues and planning criteria. The affected by the proposed action that the Wind Energy Project in Colusa and Lake planning area is located in Colusa and BLM is evaluating, are invited to counties. This notice announces the Lake counties, California, and participate in the scoping process and, beginning of the scoping process to encompasses approximately 2,270 acres if eligible, may request or be requested solicit public comments and identify of public land. The purpose of the by the BLM to participate in the issues. public scoping process is to determine development of the environmental relevant issues that will influence the DATES: This notice initiates the public analysis as a cooperating agency. scoping process for the EIS. Comments scope of the environmental analysis, With respect to the potential RMP on issues may be submitted in writing including alternatives, and guide the amendment, the BLM will evaluate until July 22, 2019. The date(s) and planning process. Preliminary issues for identified issues to be addressed in the location(s) of any scoping meetings will the plan amendment area have been plan amendment, and will place them be announced at least 15 days in identified by BLM personnel; Federal, into one of three categories: advance on the BLM website at https:// State, and local agencies; and other 1. Issues to be resolved in the plan www.blm.gov/california. stakeholders. The issues include: Air amendment; In order to be included in the quality and atmospheric values; 2. Issues to be resolved through policy analysis, all comments must be received biological resources, including special or administrative action; or prior to the close of the 30-day scoping status wildlife and vegetation species; 3. Issues beyond the scope of this plan period. We will provide additional cultural resources; geology and soils; amendment. opportunities for public participation as hazards and hazardous materials; The BLM will provide an explanation appropriate. hydrology and water quality; lands and in the Draft EIS as to why an issue was ADDRESSES: You may submit comments realty; mineral resources; noise; placed in category two or three. The related to the Walker Ridge Wind paleontological resources; recreation; public is also encouraged to help Energy Project by any of the following socioeconomics and environmental identify any management questions and methods: justice; special designations; concerns that should be addressed in • Website: https://go.usa.gov/xmtGu. transportation and travel management; the EIS and potential land use plan • Email: blm_ca_uk_walkerridgewind visual resources; and wildland fire amendments. The BLM will work [email protected]. ecology. If an RMP amendment is collaboratively with interested parties to • Mail: BLM Ukiah Field Office, Attn: necessary, the BLM will integrate the identify the management decisions that Walker Ridge Wind Energy Project, 2550 land use planning process with the are best suited to local, regional, and N State Street, Suite 2, Ukiah, CA NEPA process. Preliminary planning national needs and concerns. 95482. criteria include: The BLM will use an interdisciplinary Documents pertinent to this proposal 1. The plan amendments will be approach to develop the EIS and may be examined at the BLM Ukiah completed in compliance with FLPMA, potential land use plan amendments in Field Office listed earlier. NEPA, and all other relevant Federal order to consider the variety of resource FOR FURTHER INFORMATION CONTACT: laws, executive orders, and BLM issues and concerns identified. Aleta Nafus, Project Manager, telephone policies; Specialists with expertise in the

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following disciplines will be involved investigations was scheduled by the to lead to continuation or recurrence of in the planning process: Minerals and Commission following notification of material injury. On June 10, 2019, the geology, outdoor recreation, preliminary determinations by Department of Commerce published archaeology, paleontology, wildlife and Commerce that imports of glycine from notice that it was revoking the orders botany, lands and realty, hydrology, China and India were subsidized within effective June 24, 2019, because the soils, sociology, and economics. the meaning of section 703(b) of the Act domestic interested parties did not Before including your address, phone (19 U.S.C. 1671b(b)) and imports of participate in these sunset reviews (84 number, email address, or other glycine from India and Japan were being FR 26816, June 10, 2019). Accordingly, personally identifiable information in sold at LTFV within the meaning of the subject reviews are terminated. your comment, you should be aware 733(b) of the Act (19 U.S.C. 1673b(b)). DATES: June 14, 2019. that your entire comment—including Notice of the scheduling of the final FOR FURTHER INFORMATION CONTACT: your personally identifiable phase of the Commission’s Mary Messer (202–205–3193), Office of information—may be made publicly investigations and of a public hearing to Investigations, U.S. International Trade available at any time. While you can ask be held in connection therewith was Commission, 500 E Street SW, us in your comment to withhold your given by posting copies of the notice in Washington, DC 20436. Hearing- personally identifiable information from the Office of the Secretary, U.S. impaired individuals are advised that public review, we cannot guarantee that International Trade Commission, information on this matter can be we will be able to do so. Washington, DC, and by publishing the obtained by contacting the (Authority: 40 CFR 1501.7 and 43 CFR notice in the Federal Register on Commission’s TDD terminal on 202– 1610.2) December 3, 2018 (83 FR 62345). A 205–1810. Persons with mobility revised notice of the scheduling of the impairments who will need special Danielle Chi, final phase of the Commission’s assistance in gaining access to the Deputy State Director, Fire and Resources. investigations was published on Commission should contact the Office [FR Doc. 2019–13248 Filed 6–20–19; 8:45 am] February 12, 2019 (84 FR 3486). The of the Secretary at 202–205–2000. BILLING CODE 4310–40–P hearing was held in Washington, DC, on General information concerning the April 30, 2019, and all persons who Commission may also be obtained by requested the opportunity were accessing its internet server (https:// INTERNATIONAL TRADE permitted to appear in person or by www.usitc.gov). COMMISSION counsel. Authority: These reviews are being The Commission made these [Investigation Nos. 701–TA–603–604 and terminated under authority of title VII of 731–TA–1413–1414 (Final)] determinations pursuant to sections the Tariff Act of 1930 and pursuant to 705(b) and 735(b) of the Act (19 U.S.C. section 751(c) of the Tariff Act of 1930 Glycine From China, India, and Japan; 1671d(b) and 19 U.S.C. 1673d(b)). It (19 U.S.C. 1675(c)). This notice is Determinations completed and filed its determinations published pursuant to section 207.69 of in these investigations on June 14, 2019. the Commission’s rules (19 CFR 207.69). On the basis of the record 1 developed The views of the Commission are By order of the Commission. in the subject investigations, the United contained in USITC Publication 4900 States International Trade Commission (June 2019) entitled Glycine from China, Issued: June 17, 2019. (‘‘Commission’’) determines, pursuant India, and Japan: Investigation Nos. Lisa Barton, to the Tariff Act of 1930 (‘‘the Act’’), 701–TA–603–604 and 731–TA–1413– Secretary to the Commission. that an industry in the United States is 1414 (Final). [FR Doc. 2019–13164 Filed 6–20–19; 8:45 am] materially injured by reason of imports BILLING CODE 7020–02–P By order of the Commission. of glycine (provided for in subheadings 2922.49.43 and 2922.49.80 of the Issued: June 14, 2019. Harmonized Tariff Schedule of the Lisa Barton, INTERNATIONAL TRADE United States) from India and Japan that Secretary to the Commission. COMMISSION the U.S. Department of Commerce [FR Doc. 2019–13120 Filed 6–20–19; 8:45 am] [Investigation No. 337–TA–1082] (‘‘Commerce’’) has determined are sold BILLING CODE 7020–02–P in the United States at less than fair Certain Gas Spring Nailer Products value (‘‘LTFV’’) and imports of glycine and Components Thereof; Notice of that Commerce has determined are INTERNATIONAL TRADE Request for Statements on the Public subsidized by the governments of China COMMISSION Interest and India. [Investigation Nos. 731–TA–1207–1208 AGENCY: U.S. International Trade (Review)] Background Commission. The Commission, pursuant to sections Prestressed Concrete Steel Rail Tie ACTION: Notice. 705(b) and 735(b) of the Act (19 U.S.C. Wire From China and Mexico; SUMMARY: Notice is hereby given that 1671d(b) and 19 U.S.C. 1673d(b)), Termination of Five-Year Reviews instituted these investigations effective the presiding administrative law judge March 28, 2018, following receipt of AGENCY: United States International (‘‘ALJ’’) has issued an Initial petitions filed with the Commission and Trade Commission. Determination on Violation of Section Commerce by Chattem Chemicals Inc., ACTION: Notice. 337 and Recommended Determination Chattanooga, Tennessee, and GEO on Remedy and Bond in the above- SUMMARY: Specialty Chemicals, Inc., Lafayette, The Commission instituted captioned investigation. The Indiana. The final phase of the the subject five-year reviews in May Commission is soliciting comments on 2019 to determine whether revocation of public interest issues raised by the 1 The record is defined in sec. 207.2(f) of the the antidumping duty orders on recommended relief should the Commission’s Rules of Practice and Procedure (19 prestressed concrete steel rail tie wire Commission find a violation of section CFR 207.2(f)). from China and Mexico would be likely 337. This notice is soliciting public

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interest comments from the public only. Recommended Determination on confidential written submissions will be Parties are to file public interest Remedy and Bond issued in this available for public inspection at the submissions pursuant to Commission investigation on June 7, 2019. Office of the Secretary and on EDIS. rules. Comments should address whether This action is taken under authority of FOR FURTHER INFORMATION CONTACT: issuance of remedial orders in this section 337 of the Tariff Act of 1930, as Clint A. Gerdine, Office of the General investigation would affect the public amended, 19 U.S.C. 1337, and part 210 Counsel, U.S. International Trade health and welfare in the United States, of the Commission’s Rules of Practice Commission, 500 E Street SW, competitive conditions in the United and Procedure (19 CFR part 210). Washington, DC 20436, telephone (202) States economy, the production of like By order of the Commission. 708–2310. Copies of non-confidential or directly competitive articles in the Issued: June 17, 2019. United States, or United States documents filed in connection with this Lisa Barton, investigation are or will be available for consumers. In particular, the Commission is Secretary to the Commission. inspection during official business [FR Doc. 2019–13166 Filed 6–20–19; 8:45 am] hours (8:45 a.m. to 5:15 p.m.) in the interested in comments that: (i) Explain how the articles BILLING CODE 7020–02–P Office of the Secretary, U.S. potentially subject to the recommended International Trade Commission, 500 E orders are used in the United States; Street SW, Washington, DC 20436, (ii) identify any public health, safety, INTERNATIONAL TRADE telephone (202) 205–2000. General or welfare concerns in the United States COMMISSION information concerning the Commission relating to the recommended orders; [Investigation No. 337–TA–1086] may also be obtained by accessing its (iii) indicate the extent to which like internet server at http://www.usitc.gov. or directly competitive articles are Certain Mounting Apparatuses for The public record for this investigation produced in the United States or are Holding Portable Electronic Devices may be viewed on the Commission’s otherwise available in the United States, and Components Thereof; Final electronic docket (EDIS) at http:// with respect to the articles potentially Commission Determination of edis.usitc.gov. Hearing-impaired subject to the recommended orders; Violation; Issuance of a General persons are advised that information on (iv) indicate whether Complainant, Exclusion Order; Termination of the this matter can be obtained by Complainant’s licensees, and/or third Investigation contacting the Commission’s TDD party suppliers have the capacity to terminal on (202) 205–1810. replace the volume of articles AGENCY: U.S. International Trade SUPPLEMENTARY INFORMATION: Section potentially subject to the recommended Commission. 337 of the Tariff Act of 1930 provides orders within a commercially ACTION: Notice. that if the Commission finds a violation reasonable time; and it shall exclude the articles concerned (v) explain how the recommended SUMMARY: Notice is hereby given that from the United States unless, after orders would impact consumers in the the U.S. International Trade considering the effect of such exclusion United States. Commission has terminated the above- upon the public health and welfare, Written submissions must be filed by captioned investigation with a finding competition conditions in the United the close of business on Tuesday, July of violation of section 337, and has States economy, the production of like 2, 2019. issued a general exclusion order or directly competitive articles in the Persons filing written submissions (‘‘GEO’’) directed against infringing United States consumers, it finds that must file the original document mounting apparatuses for holding such articles should not be excluded electronically on or before the deadline portable electronic devices and from entry. 19 U.S.C. 1337(d)(1). A stated above and submit eight true paper components thereof. The Commission similar provision applies to cease and copies to the Office of the Secretary has terminated the investigation. desist orders. 19 U.S.C. 1337(f)(1). pursuant to Commission Rule 210.4(f), FOR FURTHER INFORMATION CONTACT: The Commission is soliciting CFR part 210.4(f). Submissions should Clint Gerdine, Esq., Office of the comments on public interest issues refer to the investigation number (‘‘Inv. General Counsel, U.S. International raised by the recommended relief. The No. 337–TA–1082’’) in a prominent Trade Commission, 500 E Street SW, ALJ recommended, should the place on the cover page and/or the first Washington, DC 20436, telephone (202) Commission find a violation, that the page. ((See Handbook on Filing 708–2310. Copies of non-confidential Commission issue a limited exclusion Procedures, https://www.usitc.gov/ documents filed in connection with this order directed against certain gas spring documents/handbook_on_filing_ investigation are or will be available for nailer products and components thereof procedures.pdf). Persons with questions inspection during official business imported, sold for importation, and/or regarding filing should contact the hours (8:45 a.m. to 5:15 p.m.) in the sold after importation by respondent Secretary at (202) 205–2000. Office of the Secretary, U.S. Hitachi Koki U.S.A., Ltd. (‘‘Hitachi’’) of Any person desiring to submit a International Trade Commission, 500 E Braselton, Georgia, and a cease and document to the Commission in Street SW, Washington, DC 20436, desist order directed against Hitachi. confidence must request confidential telephone (202) 205–2000. General The Commission is interested in treatment unless the information has information concerning the Commission further development of the record on already been granted such treatment may also be obtained by accessing its the public interest in its investigations. during the proceedings. All such internet server at https://www.usitc.gov. Accordingly, parties are to file public requests should be directed to the The public record for this investigation interest submissions pursuant to 19 CFR Secretary of the Commission and must may be viewed on the Commission’s 210.50(a)(4). In addition, members of include a full statement of the reasons electronic docket (EDIS) at https:// the public are invited to file why the Commission should grant such edis.usitc.gov. Hearing-impaired submissions of no more than five (5) treatment. See 19 CFR part 210.6. persons are advised that information on pages, inclusive of attachments, Documents for which confidential this matter can be obtained by concerning the public interest in light of treatment by the Commission is sought contacting the Commission’s TDD the administrative law judge’s will be treated accordingly. All non- terminal on (202) 205–1810.

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SUPPLEMENTARY INFORMATION: The infringe the ’086 trademark as patent; claim 1 of the ’148 patent; and Commission instituted this investigation established by substantial, reliable, and the ’086 trademark. on November 28, 2017, based on a probative evidence in accordance with The Commission further determined complaint filed on behalf of National 19 U.S.C. 1337(g)(2) and Commission that the public interest factors Products Inc. (‘‘NPI’’) of Seattle, rule 210.16(c)(2). Regarding the ’161 enumerated in section 337(d)(1) (19 Washington. 82 FR 56266–67 (Nov. 28, patent, NPI alleged induced and U.S.C. 1337(d)(1)) do not preclude 2017). The complaint alleges violations contributory infringement of claim 1 of issuance of the GEO. Finally, the of section 337 of the Tariff Act of 1930, this patent with respect to the accused Commission determined that there shall as amended, 19 U.S.C. 1337, by reason WUPP X-Grip Mount. The ID finds that be a bond in the amount of 100 percent of infringement of certain claims of U.S. NPI did not establish direct of the entered value of the covered Patent Nos. 8,544,161 (‘‘the ’161 infringement of this claim by products to permit temporary patent’’), D703,657 (‘‘the D’657 patent’’), substantial, reliable, and probative importation during the period of 8,186,636 (‘‘the ’636 patent’’), D571,278 evidence. The ID also contains the ALJ’s Presidential review (19 U.S.C. 1337(j)). (‘‘the D’278 patent’’), D574,204 (‘‘the recommended determination (‘‘RD’’) on The Commission’s order and opinion D’204 patent’’), and 9,568,148 (‘‘the ’148 remedy and bonding. The RD were delivered to the President and to patent’’); and U.S. Trademark recommends issuance of a general the United States Trade Representative Registration No. 4,254,086 (‘‘the ’086 exclusion order with respect to the on the day of their issuance. The trademark’’). The Commission’s notice asserted intellectual property. Commission has terminated the of investigation named the following On March 18, 2019, the Commission investigation. respondents: Shenzhen Chengshuo issued notice of its determination: (1) To The authority for the Commission’s Technology Co., Ltd., d/b/a WUPP review the ID’s finding that direct determination is contained in section (‘‘WUPP’’) of Zhejiang, China; Foshan infringement was not established with 337 of the Tariff Act of 1930, as City Qishi Sporting Goods, Technology respect to claim 1 of the ’161 patent; and amended, 19 U.S.C. 1337, and in Part Co., Ltd., Guangzhou Kean Products Co., (2) on review, to reverse this finding and 210 of the Commission’s Rules of Ltd., Gangzhou Kaicheng Metal Produce remand to the ALJ the issue of whether Practice and Procedure, 19 CFR part Co., Shenzhen Smilin Electronic NPI has established induced and 210. Technology, Co., Ltd., and Shenzhen contributory infringement of this claim. By order of the Commission. New Dream Intelligent Plastic, Co., Ltd., The Commission determined not to Issued: June 17, 2019. all of Guangdong, China; Chengdu review the remainder of the ID. See Lisa Barton, MWUPP Technology Co., Ltd. of Comm’n Notice (Mar. 18, 2019); Secretary to the Commission. Sichuan Province, China; and Shenzhen Comm’n Order (Mar. 18, 2019) [FR Doc. 2019–13161 Filed 6–20–19; 8:45 am] Yingxue Technology Co., Ltd., d/b/a (containing the Commission’s reasoning BILLING CODE 7020–02–P Yingxue Tech. (‘‘Yingxue Technology’’), for reversing the ID in part). Shenzhen Shunsihang Technology Co., On April 16, 2019, the ALJ issued a Ltd., d/b/a BlueFire, and Prolech remand initial determination (‘‘RID’’) INTERNATIONAL TRADE Electronics Limited, all of Shenzhen, finding a violation of section 337 with COMMISSION China (collectively, ‘‘the defaulting respect to claim 1 of the ’161 patent. respondents’’). The Office of Unfair Specifically, the RID finds that NPI has [Investigation No. 731–TA–752 (Fourth Import Investigations (‘‘OUII’’) is also a shown induced and contributory Review)] party to the investigation. All infringement of this claim by Crawfish Tail Meat From China; respondents in the investigation have respondents WUPP and Yingxue Termination of Five-Year Review been found in default, and the D’278 Technology by substantial, reliable, and patent has been terminated from the probative evidence. No party petitioned AGENCY: United States International investigation. See Order No. 9 (May 8, for review of the RID. Trade Commission. 2018), unreviewed by Comm’n Notice On May 10, 2019, the Commission ACTION: Notice. (June 5, 2018); Order No. 10 (June 22, issued notice of its determination not to 2018), unreviewed by Comm’n Notice review the RID. 84 FR 22162–64 (May SUMMARY: The Commission instituted (July 18, 2018). 16, 2019). On the same date, the the subject five-year review in April On November 28, 2018, the presiding Commission requested written 2019 to determine whether revocation of administrative law judge (‘‘ALJ’’) issued submissions on the issues of remedy, the antidumping duty order on crawfish an initial determination (‘‘ID’’) granting the public interest, and bonding from tail meat from China would be likely to in part NPI’s motion (as supplemented the parties and interested non-parties. lead to continuation or recurrence of on July 10, July 19, and September 14, Id. On May 17, 2019, NPI and OUII each material injury. On June 7, 2019, the 2018) for summary determination of filed a brief regarding remedy, the Department of Commerce published violation of section 337 by the public interest, and bonding, and on notice that it was revoking the order defaulting respondents and request for May 24, 2019, OUII filed a reply brief. effective May 16, 2019, because no issuance of a GEO. The ID finds that all The Commission has made its domestic interested party responded to defaulting respondents met the determination on the issues of remedy, its sunset review notice of initiation by importation requirement and that NPI the public interest, and bonding. The the applicable deadline (84 FR 26647). satisfied the domestic industry Commission has determined that the Accordingly, the subject review is requirement. See 19 U.S.C. appropriate form of relief is a GEO terminated. 1337(a)(1)(B), (a)(2), and (a)(3). The ID prohibiting the unlicensed entry of DATES: June 17, 2019. also finds that a violation of section 337 mounting apparatuses for holding FOR FURTHER INFORMATION CONTACT: has occurred based on its finding that portable electronic devices and Christopher W. Robinson (202–205– each of the defaulting respondents’ components thereof that infringe one or 2542), Office of Investigations, U.S. accused products infringe one or more more of: Claim 1 of the ’161 patent; the International Trade Commission, 500 E of the asserted claims of the patents at claim of the D’657 patent; claim 1 of the Street SW, Washington, DC 20436. issue (except for the ’161 patent) and ’636 patent; the claim of the D’204 Hearing-impaired individuals are

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advised that information on this matter of the Secretary at 202–205–2000. SWEDEN; BSB Recycling, Braubach, can be obtained by contacting the General information concerning the GERMANY; C&D Trojan Battery Commission’s TDD terminal on 202– Commission may also be obtained by Company, Blue Bell, PA; Cabot 205–1810. Persons with mobility accessing its internet server (https:// Corporation, Billerica, MA; Calder impairments who will need special www.usitc.gov). Industrial Materials, Chester, UNITED assistance in gaining access to the Authority: These reviews are being KINGDOM; Campine Recycling, Beerse, Commission should contact the Office terminated under authority of title VII of BELGUIM; Cookson Group, London, of the Secretary at 202–205–2000. the Tariff Act of 1930 and pursuant to UNITED KINGDOM; CoplosaSA, General information concerning the section 751(c) of the Tariff Act of 1930 Barcelona, SPAIN; Crown Battery Mfg. Commission may also be obtained by (19 U.S.C. 1675(c)). This notice is Co., Fremont, IL; Daramic, LLC, accessing its internet server (https:// published pursuant to section 207.69 of Owensboro, KY; Doe Run Company, St. www.usitc.gov). the Commission’s rules (19 CFR 207.69). Louis, MO; East Penn Manufacturing, Authority: This review is being By order of the Commission. Lyon Station, PA; ECOBAT terminated under authority of title VII of Issued: June 18, 2019. Technologies, Derbyshire, UNITED the Tariff Act of 1930 and pursuant to Lisa Barton, KINGDOM; Electric Applications section 751(c) of the Tariff Act of 1930 Secretary to the Commission. Incorporated, Phoenix, AZ; EnerG2 (19 U.S.C. 1675(c)). This notice is [FR Doc. 2019–13266 Filed 6–20–19; 8:45 am] Technologies, Inc., Seattle, WA; published pursuant to section 207.69 of BILLING CODE 7020–02–P EnerSys, Reading, PA; EnerSys, the Commission’s rules (19 CFR 207.69). Newport, UNITED KINGDOM; Engitec By order of the Commission. Technologies SpA, Novate Milanese, Issued: June 17, 2019. DEPARTMENT OF JUSTICE ITALY; EnviroWales, Gwent, UNITED Lisa Barton, KINGDOM; Exide Technologies Secretary to the Commission. Antitrust Division Recycling II, Lda, Azambuja, PORTUGAL; Excide Technologies SLU, [FR Doc. 2019–13160 Filed 6–20–19; 8:45 am] Notice Pursuant to the National BILLING CODE 7020–02–P Cooperative Research and Production Poznan, POLAND; Furukawa Battery Act of 1993—Consortium for Battery Co., Ltd., Iwaki City, JAPAN; Glencore, Innovation Baar, SWITZERLAND; Gopher INTERNATIONAL TRADE Resource, Eagan, MN; Gravita India, COMMISSION Notice is hereby given that, on May Jaipur, INDIA; H Folke Sandelin AB, 28, 2019, pursuant to Section 6(a) of the [Investigation Nos. 701–TA–448 and 731– Motala, SWEDEN; HJ Enthoven & Sons, TA–1117 (Second Review)] National Cooperative Research and Derbyshire, UNITED KINGDOM; Production Act of 1993, 15 U.S.C. 4301 Hakurnas Lead Works, Ahood, ISRAEL; Certain Off-the-Road Tires From China; et seq. (‘‘the Act’’), Consortium for Hammond Group, Inc., Hammond, IN; Termination of Five-Year Reviews Battery Innovation (‘‘CBI’’) has filed Hoppecke Batterien GmbH & Co. KG, written notifications simultaneously Brilon-Hoppecke, GERMANY; Interstate AGENCY: United States International with the Attorney General and the Batteries, Dallas, TX; JCI (Europe), Trade Commission. Federal Trade Commission disclosing Hannover, GERMANY; KCM SA, ACTION: Notice. (1) the identities of the parties to the Plovdiv, BULGARIA; Kovohute Pribam, venture and (2) the nature and SUMMARY: The Commission instituted Pribram, CZECH REPUBLIC; LignoTech objectives of the venture. The USA, Rothschild, WI; Livguard Batteries the subject five-year reviews in January notifications were filed for the purpose Private Limited, Gurgaon, INDIA; 2019 to determine whether revocation of of invoking the Act’s provisions limiting Lundin Mining, Stockholm, SWEDEN; the antidumping and countervailing the recovery of antitrust plaintiffs to Metallo Belgium N.V., Beerse, duty orders on certain off-the-road tires actual damages under specified from China would be likely to lead to circumstances. BELGUIM; Microporous, LLC, Piney continuation or recurrence of material Pursuant to Section 6(b) of the Act, Flats, TN; Microtex Energy Private injury. On May 10, 2019, the the identities of the parties to the Limited, Bangalore, INDIA; MPI Department of Commerce published venture are: Acumuladores Moura S.A., Reciklaza, Cra Na Koroskem, notice that it was revoking the orders Belo Jardim, BRAZIL; Addenda SLOVENIA; Muldenhutten Recycling effective February 4, 2019, because it Corporation, Indianapolis, IN; und Umwelttechnik GmbH, Bobritzsch- did not receive a notice of intent to Advanced Battery Concepts, Clare, MI; Hilbersdorf, GERMANY; Orion participate from the domestic interested AFEMS, Brussels, BELGUIM; Affinerie Engineered Carbons GmbH, Cologne, parties (84 FR 20616). Accordingly, the de Pont Sainte Maxence, Brenouille, GERMANY; Penox GmbH, Ohrdrufr, subject reviews are terminated. FRANCE; Akkumulatorenfabrik MOLL, GERMANY; Recylex, Nordenham, DATES: June 17, 2019. Bad Staffelstein, GERMANY; Amer-Sil, GERMANY; Rombat, Bistrita-Nasaud, FOR FURTHER INFORMATION CONTACT: Kehlen, LUXEMBOURG; ArcActive ROMANIA; RSR Corporation, Dallas, Nathanael Comly (202–205–3174), Limited, Christchurch, NEW ZEALAND; TX; South32, Singapore, SINGAPORE; Office of Investigations, U.S. As Batteriretur, Borgenhaugen, STCM, Bazoches-les-Gallerandes, International Trade Commission, 500 E NORWAY; Atomized Products Group, FRANCE; Superior Graphite, Chicago, Street SW, Washington, DC 20436. Inc., Chesapeake, VA; Aurubis AG, IL; TBS Engineering Ltd., Brockworth, Hearing-impaired individuals are Hamburg, GERMANY; Banner GmbH, UNITED KINGDOM; Teck Resources advised that information on this matter Linz, AUSTRIA; Battery Energy Power Limited, Anchorage, AL; Tydrolyte LLC, can be obtained by contacting the Solutions, Pty. Ltd., Fairfield, Troy, MI; WL Gore and Associates, Commission’s TDD terminal on 202– AUSTRALIA; Berzelius Metall GmbH, Elkton, MD; WaveTech GmbH, 205–1810. Persons with mobility Braubach, GERMANY; Black Diamond Rheinbach, GERMANY; and Zhejiang impairments who will need special Structures, Austin, TX; BMG Metall & Narada Power Source Co. Ltd., assistance in gaining access to the Recycling, GmbH, Arnoldstein, Hangzhou, PEOPLE’S REPUBLIC OF Commission should contact the Office AUSTRIA; Boliden AB, Stockholm, CHINA.

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Participants will provide economic SUMMARY: The Department of Justice, 4. Affected public who will be asked support, advice, and other assistance to Federal Bureau of Investigation is or required to respond, as well as a brief CBI, which, as an ILA project, is subject submitting the following information abstract: This form is needed for to the oversight of the ILA Board of collection request to the Office of obtaining medical information for non Directors. Management and Budget (OMB) for FBI personnel, for which the FBI has ILA’s current membership consists review and approval in accordance with been requested to obtain medical release primarily of lead producers and other the Paperwork Reduction Act of 1995. information. For instance, when the FBI companies having a direct interest in DATES: The Department of Justice has been requested to conduct lead and its use. ILA is a non-profit, tax- encourages public comment and will background investigations on non-FBI exempt research organization whose accept input until August 20, 2019. employees applying for positions with functions include the management of FOR FURTHER INFORMATION CONTACT: If other government agencies, sometimes research to improve existing uses and you have additional comments medical information must be obtained. advance new applications for lead. The especially on the estimated public When it occurs, the non-FBI employee CBI program has been established by burden or associated response time, applying for the position is asked to ILA to carry out research and suggestions, or need a copy of the complete the medical release form so development of lead-based battery proposed information collection the FBI has the authority to seek the technologies. The CBI participants instrument with instructions or medical information. include companies who are not additional information, please contact 5. An estimate of the total number of members of ILA. Gabrielle Fournet, Unit Chief, Federal respondents and the amount of time The general area of CBI’s planned Bureau of Investigation, 935 estimated for an average respondent to activity is to serve the needs of its Pennsylvania Avenue NW, Washington, respond: It is estimated that not more members by supporting cutting edge DC, [email protected], 202– than 50 people would need to complete pre-competitive scientific research and 651–2906. this form in a year. It should only take promoting innovation in lead battery SUPPLEMENTARY INFORMATION: Written each person about 15 minutes to technology to maximize the market comments and suggestions from the complete the form. potential for lead batteries and the public and affected agencies concerning 6. An estimate of the total public prosperity of actors in the lead battery the proposed collection of information burden (in hours) associated with the value chain. CBI’s vision is to be are encouraged. Your comments should collection: There is an estimated 12.5 recognized by all stakeholders as the address one or more of the following total annual burden hours associated trusted global center for collaborative, four points: with this collection hours anticipated pre-competitive lead battery research ➢ Evaluate whether the proposed for the collection. and authoritative voice on lead battery collection of information is necessary If additional information is required innovation by taking a leadership role in for the proper performance of the contact: Melody Braswell, Department supporting lead battery research functions of the Federal Bureau of Clearance Officer, United States investment and the promotion of Investigation, including whether the Department of Justice, Justice innovation. Membership in the information will have practical utility; Management Division, Policy and Consortium includes lead producers; ➢ Evaluate the accuracy of the Planning Staff, Two Constitution battery manufacturers; battery agency’s estimate of the burden of the Square, 145 N Street NE, 3E.405A, equipment, material and component proposed collection of information, Washington, DC 20530. manufacturers/suppliers; commodity including the validity of the Dated: June 18, 2019. traders; end users; research, testing and methodology and assumptions used; other services; universities; and ➢ Evaluate whether and if so how the Melody Braswell, affiliates. Consortium membership quality, utility, and clarity of the Department Clearance Officer for PRA, U.S. remains open, and the parties intend to information to be collected can be Department of Justice. file additional written notification enhanced; and [FR Doc. 2019–13187 Filed 6–20–19; 8:45 am] disclosing all changes in membership to ➢ Minimize the burden of the BILLING CODE 4410–02–P CBI. collection of information on those who are to respond, including through the Suzanne Morris, use of appropriate automated, DEPARTMENT OF JUSTICE Chief, Premerger and Division Statistics Unit, electronic, mechanical, or other Antitrust Division. [OMB Number 1105–0092] technological collection techniques or [FR Doc. 2019–13157 Filed 6–20–19; 8:45 am] other forms of information technology, Agency Information Collection BILLING CODE 4410–11–P e.g., permitting electronic submission of Activities; Proposed eCollection responses. eComments Requested; Extension DEPARTMENT OF JUSTICE Overview of This Information Without Change of a Previously Collection Approved Collection; September 11th Federal Bureau of Investigation Victim Compensation Fund Claim 1. Type of Information Collection: Form [OMB Number 1110–New] New collection. 2. The Title of the Form/Collection: AGENCY: September 11th Victim Agency Information Collection Background Investigation Medical Compensation Fund, Department of Activities; Proposed eCollection Release Forms. Justice. eComments Requested; New 3. The agency form number, if any, ACTION: 30-Day notice. Collection; Background Investigation and the applicable component of the Medical Release Forms Department sponsoring the collection: SUMMARY: The Department of Justice AGENCY: Federal Bureau of FD–1152 and FD–1153. The applicable (DOJ), Civil Division, September 11th Investigation, Department of Justice. component within the Department of Victim Compensation Fund (‘‘VCF’’ or Justice is the Federal Bureau of ‘‘Fund’’), will be submitting the ACTION: 60-Day notice. Investigation. following information collection request

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to the Office of Management and Budget abstract: The September 11th Victim Dated: June 18, 2019. (OMB) for review and approval in Compensation Fund provides Melody Braswell, accordance with the Paperwork compensation to any individual (or Department Clearance Officer for PRA, U.S. Reduction Act of 1995. This proposed beneficiary of a deceased individual) Department of Justice. information collection was previously who was physically injured or killed as [FR Doc. 2019–13190 Filed 6–20–19; 8:45 am] published in the Federal Register, a result of the terrorist-related aircraft BILLING CODE 4410–12–P allowing for a 60 day comment period. crashes of September 11, 2001. The DATES: Comments are encouraged and information collected from the VCF will be accepted for 30 days until July Claim Form will be used to determine DEPARTMENT OF JUSTICE 22, 2019. whether claimants are eligible for Bureau of Alcohol, Tobacco, Firearms FOR FURTHER INFORMATION CONTACT: If compensation from the Fund, and if so, and Explosives you have additional comments the amount of compensation they will especially on the estimated public be awarded. The Form consists burden or associated response time, primarily of two main sections: [OMB Number 1140–0010] suggestions, or need a copy of the Eligibility and Compensation. Agency Information Collection proposed information collection The Eligibility section seeks the Activities; Proposed eCollection instrument with instructions or information required by the James eComments Requested; Revision of a additional information, please contact Zadroga 9/11 Health and Compensation Currently Approved Collection; Jordana H. Feldman, Deputy Special Act of 2010 (‘‘Zadroga Act’’), Public Law Application To Transport Interstate or Master, September 11th Victim 111–347 (January 2, 2011), as amended Temporarily Export Certain National Compensation Fund, P.O. Box 34500, by James Zadroga 9/11 Victim Firearms Act (NFA) Firearms—ATF F Washington, DC 20043 (phone: 1–855– Compensation Fund Reauthorization 5320.20 885–1555). Act, Public Law 114–113 (December 18, 2015) (‘‘Reauthorization Act’’) to SUPPLEMENTARY INFORMATION: Written AGENCY: Bureau of Alcohol, Tobacco, determine whether a claimant is eligible comments and suggestions from the Firearms and Explosives, Department of for the Fund, including information public and affected agencies concerning Justice. related to: Participation in lawsuits the proposed collection of information ACTION: 60-Day notice. are encouraged. Your comments should related to September 11, 2001; presence at a 9/11 crash site between September address one or more of the following SUMMARY: The Department of Justice 11, 2001 and May 30, 2002; and four points: (DOJ), Bureau of Alcohol, Tobacco, physical harm suffered as a result of the Firearms and Explosives (ATF), will —Evaluate whether the proposed air crashes and/or debris removal. collection of information is necessary submit the following information The Compensation section seeks the for the proper performance of the collection request to the Office of information required by the Zadroga functions of the Fund, including Management and Budget (OMB) for Act, as reauthorized, to determine the whether the information will have review and approval in accordance with amount of compensation for which the practical utility; the Paperwork Reduction Act of 1995. claimant is eligible. Specifically, the —Evaluate the accuracy of the agency’s The proposed collection OMB 1140– section seeks information regarding the estimate of the burden of the 0010 Application to Transport Interstate claimant’s loss of earnings or proposed collection of information, or Temporarily Export Certain National replacement services that are including the validity of the Firearms Act (NFA) Firearms (ATF attributable to the 9/11 air crashes or methodology and assumptions used; Form 5320.20) is being revised due to an —Evaluate whether and, if so, how the debris removal; and any collateral increase in the number of respondents, quality, utility, and clarity of the source payments (such as insurance burden hours and cost burden information to be collected can be payments) that the claimant received or associated with this IC. is entitled to receive and are attributable enhanced; and DATES: Comments are encouraged and —Minimize the burden of the collection to the 9/11 air crashes or debris removal efforts. will be accepted for 60 days until of information on those who are to August 20, 2019. respond, including through the use of (5) An estimate of the total number of FOR FURTHER INFORMATION CONTACT: If appropriate automated, electronic, respondents and the amount of time you have additional comments, mechanical, or other technological estimated for an average respondent to regarding the estimated public burden collection techniques or other forms respond: It is estimated that 65,000 or associated response time, of information technology, e.g., respondents will complete the form in suggestions, or need a copy of the permitting electronic submission of an average of 10 hours, including the proposed information collection responses. time needed to gather the required supporting documentation. instrument with instructions, or Overview of This Information (6) An estimate of the total public additional information, please contact: Collection burden (in hours) associated with the James Chancey, National Firearms Act (1) Type of Information Collection: collection: The estimated public burden Division either by mail at 244 Needy Extension of a currently approved associated with this collection is Road, Martinsburg, WV 25405, by email collection. 650,000 hours. at [email protected], or by (2) The Title of the Form/Collection: If additional information is required, telephone at 304–616–4500. VCF Claim Form. contact Melody Braswell, Department SUPPLEMENTARY INFORMATION: Written (3) The agency form number, if any, Clearance Office, United States comments and suggestions from the and the applicable component of the Department of Justice, Justice public and affected agencies concerning Department sponsoring the collection: Management Division, Policy and the proposed collection of information N/A. Civil Division. Planning staff, Two Constitution Square, are encouraged. Your comments should (4) Affected public who will be asked 145 N Street NE, 3E, 405A, Washington, address one or more of the following or required to respond, as well as a brief DC 20530. four points:

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—Evaluate whether the proposed approximately 20 minutes to complete FOR FURTHER INFORMATION CONTACT: If collection of information is necessary their responses. you have additional comments for the proper performance of the (6) An estimate of the total public especially on the estimated public functions of the agency, including burden (in hours) associated with the burden or associated response time, whether the information will have collection: The estimated annual public suggestions, or need a copy of the practical utility; burden associated with this collection is proposed information collection —Evaluate the accuracy of the agency’s 5,610 hours, which is equal to 17,000 (# instrument with instructions or estimate of the burden of the of responses) * 1 (# of responses per additional information, please contact proposed collection of information, respondent) * .33 (20 minutes). Shelby Jones Crawford, (202) 532–3612, including the validity of the (7) An Explanation of the Change in Program Manager, Office for Victims of methodology and assumptions used; Estimates: An estimated increase in the Crime, Office of Justice Programs, —Evaluate whether and if so how the total respondents to this IC in 2019 has Department of Justice, 810 7th Street quality, utility, and clarity of the caused a rise in both the number of NW, Washington, DC 20530. Written information to be collected can be responses and burden hours for this IC comments and/or suggestions can also enhanced; and by 7,000 and 2,310 hours respectively. be sent to the Office of Management and —Minimize the burden of the collection The cost burden for this IC is also Budget, Office of Information and of information on those who are to expected to increase by $4,130. Regulatory Affairs, Attention respond, including through the use of If additional information is required Department of Justice Desk Officer, appropriate automated, electronic, contact: Melody Braswell, Department Washington, DC 20503 or sent to OIRA_ mechanical, or other technological Clearance Officer, United States [email protected]. collection techniques or other forms Department of Justice, Justice SUPPLEMENTARY INFORMATION: Written of information technology, e.g., Management Division, Policy and comments and suggestions from the permitting electronic submission of Planning Staff, Two Constitution public and affected agencies concerning responses. Square, 145 N Street NE, 3E.405A, the proposed collection of information Overview of This Information Washington, DC 20530. are encouraged. Your comments should Collection Dated: June 18, 2019. address one or more of the following four points: (1) Type of Information Collection Melody Braswell, (check justification or form 83): Department Clearance Officer for PRA, U.S. —Evaluate whether the proposed Revision of a currently approved Department of Justice. collection of information is necessary collection. [FR Doc. 2019–13188 Filed 6–20–19; 8:45 am] for the proper performance of the (2) The Title of the Form/Collection: BILLING CODE 4410–FY–P functions of the Office of Justice Application to Transport Interstate or Programs, Office for Victims of Crime Temporarily Export Certain National including whether the information Firearms Act (NFA) Firearms. DEPARTMENT OF JUSTICE will have practical utility; (3) The agency form number, if any, —Evaluate the accuracy of the agency’s and the applicable component of the Office of Justice Programs estimate of the burden of the Department sponsoring the collection: [OMB Number 1121–0341] proposed collection of information, Form number (if applicable): ATF F including the validity of the 5320.20. Agency Information Collection methodology and assumptions used; Component: Bureau of Alcohol, Activities; Proposed eCollection —Evaluate whether and if so how the Tobacco, Firearms and Explosives, U.S. eComments Requested: Revision of a quality, utility, and clarity of the Department of Justice. Currently Approved Collection; Office information to be collected can be (4) Affected public who will be asked for Victims of Crime Training and enhanced; and or required to respond, as well as a brief Technical Assistance Center (OVC —Minimize the burden of the collection abstract: TTAC) Feedback Form Package of information on those who are to Primary: Individuals or households. respond, including through the use of Other (if applicable): Business or AGENCY: Office for Victims of Crime, appropriate automated, electronic, other for-profit, Federal Government, Office of Justice Programs, Department mechanical, or other technological and State, Local, or Tribal Government of Justice. collection techniques or other forms Abstract: Certain National Firearms ACTION: 30-Day notice. of information technology, e.g., Act firearms may not be transported permitting electronic submission of interstate or temporarily exported by SUMMARY: The Department of Justice, responses. any person, other than a qualified Office of Justice Programs, Office for Federal firearms licensee, without Victims of Crime will submit the Overview of This Information approval from ATF. The associated following information collection request Collection regulation requires a written request. to the Office of Management and Budget 1. Type of Information Collection: The Application to Transport Interstate (OMB) for review and approval in Revision of Existing Collection. or Temporarily Export Certain National accordance with the Paperwork 2. The Title of the Form/Collection: Firearms Act (NFA)—ATF Form Reduction Act of 1995. The proposed OVC TTAC Feedback Form Package. 5320.20 provides for the regulatory information collection is published to 3. The agency form number: N/A. requirements, and may be used as a obtain comments from the public and Office for Victims of Crime, Office of written request. affected agencies. This proposed Justice Programs, Department of Justice. (5) An estimate of the total number of information collection was previously 4. Affected public who will be asked respondents and the amount of time published in the Federal Register, or required to respond, as well as a brief estimated for an average respondent to allowing for a 60 day comment period. abstract: Primary: State, Local, or Tribal respond: An estimated 17,000 DATES: The purpose of this notice is to agencies/organizations. Other: Federal respondents will utilize the form once, allow for an additional 30 days for Government; Individuals or households; and it will take each respondent public comment until July 22, 2019. Not-for-profit institutions; Businesses or

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other for-profit. Abstract: The Office for SUMMARY: The Department of Labor’s demonstrate that specified performance Victims of Crime Training and (DOL), Employment and Training levels are achieved. Technical Assistance Center (OVC Administration (ETA) is soliciting The data collections in this ICR fulfill TTAC) Feedback Form Package is comments concerning a proposed requirements in WIOA Sec. 116(d)(1), designed to collect the data necessary to revision to the authority to conduct the which mandates that the Secretaries of continuously assess the satisfaction and information collection request (ICR) Labor and Education develop a template outcomes of assistance provided titled, ‘‘DOL-only Performance for the annual performance reports to be through OVC TTAC for both monitoring Accountability, Information, and used by States, local boards, and eligible and accountability purposes to Reporting System.’’ This comment providers of training services for continuously meet the needs of the request is part of continuing reporting on outcomes achieved by the victim services field. OVC TTAC will Departmental efforts to reduce WIOA core programs. Pursuant to WIOA give these forms to recipients of training paperwork and respondent burden in sec. 116(d)(2), required annual data for and technical assistance, scholarship accordance with the Paperwork the core programs include, among applicants, users of the website and call Reduction Act of 1995 (PRA). others, those related to primary performance indicators, participant center, consultants/instructors DATES: Consideration will be given to all counts and costs, and barriers to providing training, agencies requesting written comments received by August employment. These data collections also services, and other professionals 20, 2019. receiving assistance from OVC TTAC. assist DOL in carrying out its mission ADDRESSES: A copy of this ICR with The purpose of this data collection will under the National Apprenticeship Act. applicable supporting documentation, be to capture important feedback on the DOL proposes to amend the DOL-only including a description of the likely respondents’ satisfaction and outcomes information collection by making respondents, proposed frequency of of the resources provided. The data will changes to the Participant Individual response, and estimated total burden, then be used to advise OVC on ways to Record Layout (ETA–9172), and the may be obtained free by contacting improve the support that it provides to (Program) Performance Report (ETA– Andrea Hill by telephone at 202–693– the victim services field at-large. 9173–APPSHP) to facilitate State and 3542 (this is not a toll-free number), 5. An estimate of the total number of grantee quarterly performance reporting. TTY 1–877–889–5627 (this is not toll- respondents and the amount of time DOL is also adding a new information free number), or by email at estimated for an average respondent to collection requirement to this ICR, the [email protected], respond: There are approximately Apprenticeship Employer Record with ‘‘Federal Register comment’’ in the 25,425 respondents who will require an Layout. Particularly, as part of its effort subject line. Submit written comments average of 10 minutes (ranging from 5 to to streamline program performance about, or requests for a copy of, this ICR 15 minutes across all forms) to respond reporting, DOL is adding the by: to a single form each year. performance information collection • Mail or courier to requirements for ETA grants with 6. An estimate of the total public Æ burden (in hours) associated with the U.S. Department of Labor, significant apprenticeship components collection: The total annual public Employment and Training as a primary goal of the program burden hours for this information Administration Office of (Apprenticeship Grants). This notice includes the ETA collection are estimated to be 4,609 Apprenticeship, 200 Constitution (Program) Performance Report hours (1,152 hours per year). Avenue NW, Room C–5311, specifically for Apprenticeship Grants, If additional information is required Washington, DC 20210; • the Participant Individual Record contact: Melody Braswell, Department by email to: Æ Layout (PIRL), and the Apprenticeship Clearance Officer, United States Apprenticeship.Grants-ETA@ DOL.gov. Employer Record Layout. The DOL Department of Justice, Justice requires States and grantees to certify Authority: 44 U.S.C. 3506 (c)(2)(A). Management Division, Policy and and submit the ETA (Program) Planning Staff, Two Constitution SUPPLEMENTARY INFORMATION: DOL, as Performance Report to ETA on a Square, 145 N Street NE, 3E.405A, part of continuing efforts to reduce quarterly basis. ETA will aggregate the Washington, DC 20530. paperwork and respondent burden, information the States and grantees Dated: June 18, 2019. conducts a pre-clearance consultation to submit through the PIRL to populate the Melody Braswell, provide the general public and Federal ETA (Program) Performance Report. In Department Clearance Officer for PRA, U.S. agencies an opportunity to comment on addition, DOL is seeking approval to Department of Justice. proposed and/or continuing collections require grantees to certify and submit [FR Doc. 2019–13186 Filed 6–20–19; 8:45 am] of information before submitting them the Apprenticeship Employer Record to the Office of Management and Budget BILLING CODE 4410–14–P Layout to ETA on a quarterly basis. (OMB) for final approval. This The ETA (Program) Performance consultation helps to ensure requested Report has been designed to maximize data can be provided in the desired the value of the reports for workers, DEPARTMENT OF LABOR format, reporting burden (time and jobseekers, employers, local elected financial resources) is minimized, officials, State officials, Federal Employment and Training collection instruments are clearly policymakers, and other key Administration understood, and the impact of collection stakeholders. The PIRL has been requirements can be properly assessed. designed to reflect the specific Agency Information Collection Section 116 of WIOA requires States requirements of the annual reports as Activities; Comment Request; DOL- that operate core programs of the described in WIOA section 116(d)(2) Only Performance Accountability, publicly-funded workforce system to through (4). Information, and Reporting System comply with common performance ETA will use the data to track total (OMB Control Number 1205–0521) accountability requirements. As such, participants, characteristics, services, States that operate core programs must training strategies and outcomes for ACTION: Notice. submit common performance data to employed, unemployed and long-term

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unemployed participants. This data for OMB approval of the final ICR. In Total Estimated Annual Other Cost collection format permits program order to help ensure appropriate Burden: $224,393,569. offices to evaluate program consideration, comments should Molly E. Conway, effectiveness, monitor compliance with mention DOL-only Performance statutory requirements, and analyze Accountability, Information, and Acting Assistant Secretary for Employment and Training. participant activity and grantee Reporting System OMB Control No. performance while complying with 1205–0521. [FR Doc. 2019–13162 Filed 6–20–19; 8:45 am] OMB efforts to streamline Federal Submitted comments will also be a BILLING CODE 4510–FR–P performance reporting. matter of public record to this ICR and Under WIOA section 116(d)(6), the posted on the internet, without Secretary of Labor is required to redaction. DOL encourages commenters NATIONAL AERONAUTICS AND annually make available (including by not to include personally identifiable SPACE ADMINISTRATION electronic means), in an easily information, confidential business data, [Notice: (19–035)] understandable format, (a) the State or other sensitive statements/ Annual Performance Reports containing information in any comments. DOL is Notice of Information Collection: NASA the information described in WIOA particularly interested in comments Safety Reporting System section 116(d)(2) and (b) a summary of that: the reports, and the reports required AGENCY: National Aeronautics and • Evaluate whether the proposed under WIOA section 116(d)(6) (the State Space Administration (NASA). collection of information is necessary Performance, Local Area, and Eligible ACTION: Notice of information for the proper performance of the Training Provider Reports), to the collection—Extension of a currently Committee on Education and the functions of the agency, including approved collection. Workforce of the House of whether the information will have SUMMARY: Representatives and the Committee on practical utility; The National Aeronautics and • Health, Education, Labor, and Pensions Evaluate the accuracy of the Space Administration, as part of its of the Senate. agency’s estimate of the burden of the continuing effort to reduce paperwork The reports and other analyses of the proposed collection of information, and respondent burden, invites the data will be made available to the public including the validity of the general public and other Federal through publication and other methodology and assumptions used; agencies to take this opportunity to appropriate methods and to the • Enhance the quality, utility, and comment on proposed and/or appropriate congressional committees clarity of the information to be continuing information collections. through copies of such reports. In collected; and DATES: All comments should be addition, information obtained through • Minimize the burden of the submitted within 60 calendar days from the DOL-only Performance collection of information on those who the date of this publication. Accountability, Information, and are to respond, including through the ADDRESSES: All comments should be Reporting System will be used at the use of appropriate automated, addressed to Gatrie Johnson, National national level during budget and electronic, mechanical, or other Aeronautics and Space Administration, allocation hearings for DOL compliance technological collection techniques or 300 E Street SW, Washington, DC with the Government Performance and other forms of information technology, 20546–0001. Results Act and other legislative (e.g., permitting electronic submission FOR FURTHER INFORMATION CONTACT: requirements, and during legislative of responses). Requests for additional information or authorization proceedings. Agency: DOL–ETA. copies of the information collection As mentioned above, as part of DOL’s instrument(s) and instructions should effort to improve program performance Type of Review: Revision to include the Apprenticeship Grants. be directed to Gatrie Johnson, NASA reporting, DOL added the performance Clearance Officer, NASA Headquarters, Title of Collection: DOL-only information collection requirements for 300 E Street SW, JF0000, Washington, Performance Accountability, Apprenticeship Grants to this DC 20546 or email Gatrie.Johnson@ Information, and Reporting System. information collection. NASA.gov. This information collection is subject Form: Participant Individual Record to the PRA. A Federal agency generally Layout (ETA–9172), (Program) SUPPLEMENTARY INFORMATION: cannot conduct or sponsor a collection Performance Report (ETA–9173– I. Abstract of information, and the public is APPSHP), and Apprenticeship This collection provides a means by generally not required to respond to an Employer Record Layout. which NASA contractors can information collection, unless it is OMB Control Number: 1205–0521. voluntarily and anonymously report any approved by OMB under the PRA and Affected Public: State, Local, and safety concerns or hazards pertaining to displays a currently valid OMB Control Tribal Governments; Individuals or NASA programs, projects, or operations. Number. In addition, notwithstanding Households; and Private Sector— any other provisions of law, no person businesses or other for-profits and not- II. Methods of Collection shall generally be subject to penalty for for-profit institutions. The current, paper-based reporting failing to comply with a collection of Estimated Number of Respondents: system ensures the protection of a information that does not display a 17,583,145. submitter’s anonymity and secure valid Control Number. See 5 CFR Frequency: Varies. submission of the report by way of the 1320.5(a) and 1320.6. U.S. Postal Service. Interested parties are encouraged to Total Estimated Annual Responses: provide comments to the contact shown 35,166,446. III. Data in the ADDRESSES section. Comments Estimated Average Time per Title: NASA Safety Reporting System. must be written to receive Response: Varies. OMB Number: 2700–0063. consideration, and they will be Estimated Total Annual Burden Type of Review: Extension of a summarized and included in the request Hours: 9,808,425 hours. currently approved collection.

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Affected Public: Business or other for- sexual abuse and assault, escapes, attachments, to the public docket profit. deaths while in agency custody, unchanged. Because comments are Average Expected Annual Number of telephone rates charged to detainees, public, you are responsible for ensuring Activities: 75. alternatives to detention, logs and that you do not include any confidential Average Number of Respondents per reports on status of detainees and or other information that you or a third Activity: 1. detention facilities, and location and party may not wish to be publicly Annual Responses: 75. segregation of detainees.’’ We received posted. We will consider all comments Frequency of Responses: As needed. comments on this records schedule and submitted by the posted deadline and Average Minutes per Response: 15 are providing a consolidated reply on consult as needed with the Federal minutes. those comments on regulations.gov at agency seeking the disposition Burden Hours: 19. docket NARA–19–0007. We are also authority. After considering comments, IV. Request for Comments inviting public comment on the reply. we will post on regulations.gov a second DATES: Submit any comments in writing consolidated reply, summarizing the Comments are invited on: (1) Whether no later than August 5, 2019. We will comments, responding to them, and the proposed collection of information not consider late comments. noting any changes we have made to the is necessary for the proper performance ADDRESSES: You can find and read the proposed records schedule. We will of the functions of NASA, including then send the schedule for final whether the information collected has consolidated reply on regulations.gov under docket number NARA–19–0007. approval by the Archivist of the United practical utility; (2) the accuracy of States. NASA’s estimate of the burden You may submit comments by either of the following methods: You may elect at regulations.gov to (including hours and cost) of the receive updates on the docket, including proposed collection of information; (3) Federal eRulemaking Portal: http:// www.regulations.gov, docket number an alert when we post the second ways to enhance the quality, utility, and consolidated reply, whether or not you clarity of the information to be NARA–19–0007. Mail: Records Appraisal and Agency submit a comment. You may request collected; and (4) ways to minimize the additional information about the burden of the collection of information Assistance (ACR); National Archives and Records Administration; 8601 disposition process through the contact on respondents, including automated information listed above. collection techniques or the use of other Adelphi Road, College Park, MD 20740– 6001. You must cite the control number NARA does not control access to forms of information technology. records in the legal custody of ICE or Comments submitted in response to DAA–0567–2015–0013 in your comment. any other agency. The Freedom of this notice will be summarized and Information Act (FOIA) and agency included in the request for OMB FOR FURTHER INFORMATION CONTACT: policy govern the right to access approval of this information collection. Records Management Operations by information in these executive branch They will also become a matter of email at [email protected], by agency records. public record. mail at the address above, or by phone Laurence Brewer, Gatrie Johnson, at 301.837.1799. For information on this notice, contact Kimberly Keravuori by Chief Records Officer for the U.S. NASA PRA Clearance Officer. email at regulation_comments@ Government. [FR Doc. 2019–13215 Filed 6–20–19; 8:45 am] nara.gov. [FR Doc. 2019–13085 Filed 6–20–19; 8:45 am] BILLING CODE 7510–13–P BILLING CODE 7515–01–P SUPPLEMENTARY INFORMATION: We have revised this proposed records schedule based on public comments and NATIONAL ARCHIVES AND RECORDS NATIONAL SCIENCE FOUNDATION ADMINISTRATION discussions with the agency proposing the schedule. We are now inviting STEM Education Advisory Panel; [FDMS Docket NARA–19–0007; NARA– follow-on public comments on the Notice of Meeting 2019–028] appropriateness of the disposition instructions and retention periods for In accordance with the Federal Changes to Agency Records Schedule; the items that remain on the revised Advisory Committee Act (Pub. L. 92– Request for Comments schedule. 463, as amended), the National Science AGENCY: National Archives and Records Your written comments on this Foundation (NSF) announces the Administration (NARA). proposed records schedule should be following meeting: ACTION: Notice of consolidated reply to specific, should be confined to issues Name and Committee Code: STEM comments on records schedule DAA– pertinent to the records schedule, and Education Advisory Panel (#2624). 0567–2015–0013 (DHS–ICE-Detainee should explain your reason(s) for any Date and Time: July 19, 2019; 8:30 Records), and request for comments. change you recommend to the schedule. a.m.–5 p.m. Where possible, you should reference Place: National Aeronautical and SUMMARY: We are publishing a the specific item you are addressing. We Space Administration, 300 E Street SW, consolidated reply to public comments will accept only comments submitted Washington, DC 20546. submitted on a previously open through www.regulations.gov or mail Type of Meeting: Part-Open. proposed records schedule. On July 14, and will not consider comments filed Contact Person: Anyone planning to 2017, NARA published notice in the after the deadline. attend this meeting must provide their Federal Register of proposed records We will post another consolidated names to Keaven Stevenson, Directorate schedule DAA–0567–2015–0013. The reply to all comments we receive during Administrative Coordinator, Room C Department of Homeland Security, this comment period, which will be 11044, National Science Foundation, Immigration and Customs Enforcement posted to the same docket on 2415 Eisenhower Avenue, Alexandria, (ICE), Detainee Records submitted this regulations.gov. VA 22314 by 12 noon on Monday, July proposed schedule for ‘‘records related We will post comments, including 15, 2019. Contact Information: 703–292– to detainees, including incidents of any personal information and 8663/[email protected].

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Purpose of Meeting: To share and to Regulatory Guide (RG) 4.13, email: [email protected], and collect information in support of ‘‘Environmental Dosimetry-Performance Harriet Karagiannis, Office of Nuclear members’ role in advising the Specifications, Testing, and Data Regulatory Research, telephone: 301– Committee on Science, Technology, Analysis.’’ Revision 2 provides updated 415–2493, email: Harriet.Karagiannis@ Engineering, and Mathematics guidance that the NRC staff considers nrc.gov. Both are staff of the U.S. Education (CoSTEM). acceptable for performing surveys and Nuclear Regulatory Commission, Agenda: STEM Education Advisory evaluations of public dose in the Washington, DC 20555–0001. Panel agenda attached. Please check the unrestricted area and the controlled area SUPPLEMENTARY INFORMATION: website for any additional updates prior of a licensed facility from direct to the meeting at https://nsf.gov/ehr/ radiation using environmental I. Discussion STEMEdAdvisory.jsp. dosimetry. The RG endorses the The NRC is issuing a revision to an Reason for Closing: The panel will American National Standards Institute/ existing guide in the NRC’s ‘‘Regulatory review and discuss a draft government Health Physics Society (ANSI/HPS) Guide’’ series. This series was report during closed portions of the N13.37–2014, ‘‘Environmental developed to describe and make meeting. This discussion must be kept Dosimetry-Criteria for System Design available to the public information confidential. These matters are exempt and Implementation.’’ regarding methods that are acceptable to under 5 U.S.C. 552b(c), (9)(B) of the DATES: Revision 2 to RG 4.13 is available the NRC staff for implementing specific Government in the Sunshine Act. on June 21, 2019. parts of the agency’s regulations, Dated: June 18, 2019. ADDRESSES: Please refer to Docket ID techniques that the NRC staff uses in Crystal Robinson, NRC–2018–0232 when contacting the evaluating specific issues or postulated Committee Management Officer. NRC about the availability of events, and data that the NRC staff information regarding this document. needs in its review of applications for STEM Education Advisory Panel You may obtain publicly-available permits and licenses. Committee Meeting Agenda information related to this document, Revision 2 of RG 4.13 was issued with a temporary identification of Draft Friday, July 19, 2019 using the following methods: • Federal Rulemaking Website: Go to Regulatory Guide, DG–4019, to provide Location: National Aeronautical and http://www.regulations.gov and search updated guidance that the NRC staff Space Administration, 300 E Street for Docket ID NRC–2018–0232. Address considers acceptable for performing SW, Washington, DC 20546 questions about NRC docket IDs in surveys and evaluations of public dose 8:30 a.m.–9 a.m. Introductions Regulations.gov to Jennifer Borges; in the unrestricted area and the 9 a.m.–10:15 a.m. Discussion of telephone: 301–287–9127; email: controlled area of a licensed facility Internal Government Draft Report [email protected]. For technical from direct radiation using (CLOSED) questions, contact the individuals listed environmental dosimetry. 10:15 a.m.–10:30 a.m. Break This revision also provides updated in the FOR FURTHER INFORMATION 10:30 a.m.–11:30 a.m. FC–STEM IWG NRC guidance on an acceptable CONTACT section of this document. Presentations • NRC’s Agencywide Documents dosimetry program by endorsing ANSI/ 11:30 a.m.–12:30 p.m. Working Lunch HPS N13.37–2014. The 2014 ANSI/HPS 12:30 p.m.–12:45 p.m. Prepare for Access and Management System (ADAMS): You may obtain publicly- standard provides up-to-date CoSTEM Members environmental dosimetry system design 12:45 p.m.–1 p.m. Welcome from available documents online in the ADAMS Public Documents collection at criteria and dosimeter laboratory test OSTP Director protocols and data-analysis methods 1 p.m.–2:15 p.m. Remarks from and Q http://www.nrc.gov/reading-rm/ adams.html. To begin the search, select suitable to assess potential facility- and A with CoSTEM Leadership related radiation doses. and Members ‘‘Begin Web-based ADAMS Search.’’ For 2:15 p.m.–2:30 p.m. Break problems with ADAMS, please contact II. Additional Information 2:30 p.m.–4:15 p.m. Subcommittee the NRC’s Public Document Room (PDR) The NRC published a notice of the Meetings (CLOSED) reference staff at 1–800–397–4209, 301– availability of DG–4019 in the Federal 4:15 p.m.–4:45 p.m. Report back to 415–4737, or by email to pdr.resource@ Register on October 17, 2018 (83 FR Panel nrc.gov. The ADAMS accession number 52576) for a 60-day public comment 4:45 p.m.–5 p.m. Closing Remarks for each document referenced in this period. The public comment period Current as of: June 18, 2019. notice (if that document is available in closed on December 17, 2018. Public [FR Doc. 2019–13174 Filed 6–20–19; 8:45 am] ADAMS) is provided the first time that comments on DG–4019 and the staff a document is referenced. Revision 2 to BILLING CODE 7555–01–P responses to the public comments are Regulatory Guide 4.13 and the available under ADAMS under regulatory analysis may be found in Accession No. ML19044A594. NUCLEAR REGULATORY ADAMS under Accession Nos. III. Congressional Review Act COMMISSION ML19044A595 and ML18087A167 respectively. This RG is a rule as defined in the • [NRC–2018–0232] NRC’s PDR: You may examine and Congressional Review Act (5 U.S.C. purchase copies of public documents at 801–808). However, the Office of Environmental Dosimetry-Performance the NRC’s PDR, Room O1–F21, One Management and Budget has not found Specifications, Testing, and Data White Flint North, 11555 Rockville it to be a major rule as defined in the Analysis Pike, Rockville, Maryland 20852. Congressional Review Act. AGENCY: Nuclear Regulatory Regulatory guides are not IV. Backfitting and Issue Finality Commission. copyrighted, and NRC approval is not required to reproduce them. ACTION: Regulatory guide; issuance. This RG provides guidance on FOR FURTHER INFORMATION CONTACT: establishing and conducting an SUMMARY: The U.S. Nuclear Regulatory Steven Garry, Office of Nuclear Reactor environmental dosimetry program that Commission (NRC) is issuing Revision 2 Regulation, telephone: 301–415–2766, the NRC staff considers acceptable for

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monitoring direct radiation released into additional thirty (30) days for public documentation for the application is an the unrestricted area and the controlled comments to be submitted. Comments important requirement. Language was area of a licensed facility. The NRC are being solicited on the need for the added to DFC–003 requiring the regards these requirements as information; the accuracy of the burden applicant to demonstrate how it will constituting information collection and estimate; the quality, practical utility, monitor a project to avoid harm to reporting requirements. The NRC has and clarity of the information to be project-affected communities, consult long taken the position that information collected; and ways to minimize the with project-affected communities, and collection and reporting requirements reporting burden, including automated provide access to remedy for project- are not subject to the NRC’s backfitting collection techniques and uses of other affected communities in the case of and issue finality regulations in title 10 forms of technology. negative impacts. In DFC–004, the of the Code of Federal Regulations DATES: DFC intends to begin use of this agency added and amended language on (CFR) 50.109, 10 CFR 70.76, 10 CFR collection on October 1, 2019. accountability practices. No changes 72.62, 10 CFR 76.76 and 10 CFR part 52 Comments must be received by July 15, were made to the remaining collections. (e.g., ‘‘Material Control and Accounting 2019. Summary Forms Under Review Methods,’’ December 23, 2002 (67 FR ADDRESSES: Comments and requests for Title of Collection: Application for 78130); and ‘‘Regulatory Improvements copies of the subject information to the Nuclear Materials Management Debt Financing. collection may be sent by any of the Type of Review: New information and Safeguards System,’’ June 9, 2008 following methods: (73 FR 32453)). Therefore, the NRC has • collection. Mail: Catherine F.I. Andrade, Agency Form Number: DFC–001. determined that its backfitting and issue Agency Submitting Officer, Overseas OMB Form Number: Not assigned, finality regulations do not apply to this Private Investment Corporation, 1100 new information collection. RG because the RG does not include any New York Avenue NW, Washington, DC Frequency: Once per investor per provisions within the scope of matters 20527. project. covered by the backfitting provisions in • Email: [email protected]. Affected Public: Business or other for- 10 CFR parts 50, 70, 72, or 76, or the Instructions: All submissions received profit; not-for-profit institutions; issue finality provisions of 10 CFR part must include the agency name and individuals. 52. agency form number for the referenced Total Estimated Number of Annual Dated at Rockville, Maryland, this 18th day information collection(s). Electronic Number of Respondents: 220. of June 2019. submissions must include the full Estimated Time per Respondent: 1.5 For the Nuclear Regulatory Commission. agency form number(s) in the subject hours. line to ensure proper routing. Please Total Estimated Number of Annual Thomas H. Boyce, note that all written comments received Burden Hours: 330 hours. Chief, Regulatory Guidance and Generic in response to this notice will be Abstract: The Application for Debt Issues Branch, Division of Engineering, Office Financing will be the principal of Nuclear Regulatory Research. considered public records. document used by the agency to [FR Doc. 2019–13277 Filed 6–20–19; 8:45 am] FOR FURTHER INFORMATION CONTACT: Agency Submitting Officer: Catherine determine the investor’s and the BILLING CODE 7590–01–P F.I. Andrade, (202) 336–8768. project’s eligibility for debt financing SUPPLEMENTARY INFORMATION: The Better and will collect information for Utilization of Investments Leading to financial underwriting analysis. OVERSEAS PRIVATE INVESTMENT Title of Collection: Registration for CORPORATION Development (BUILD) Act of 2018, Public Law 115–254 creates the U.S. Political Risk Insurance. [DFC–001; DFC–002; DFC–003; DFC–004, International Development Finance Type of Review: New information DFC–005, DFC–006, DFC–007; DFC–009; Corporation (DFC) by bringing together collection. DFC–010; DFC–012] the Overseas Private Investment Agency Form Number: DFC–002. OMB Form Number: Not assigned, Corporation (OPIC) and the Submission for OMB Review; new information collection. Comments Request Development Credit Authority (DCA) Frequency: Once per investor per office of the U.S. Agency for project. AGENCY: US International Development International Development (USAID). Affected Public: Business or other for- Finance Corporation (DFC), Overseas Section 1465(a) of the Act tasks OPIC profit; not-for-profit institutions; Private Investment Corporation (OPIC). staff with assisting DFC in the individuals. ACTION: Notice of information collection; transition. Section 1466(a)–(b) provides Total Estimated Number of Annual request for comment. that all completed administrative Number of Respondents: 175. actions and all pending proceedings Estimated Time per Respondent: 0.5 SUMMARY: Under the provisions of the shall continue through the transition to hours. Paperwork Reduction Act, agencies are the DFC. Accordingly, OPIC is issuing Total Estimated Number of Annual required to publish a Notice in the this Paperwork Reduction Act notice Burden Hours: 87.5 hours. Federal Register notifying the public and request for comments on behalf of Abstract: The Registration for Political that the agency is creating a new the DFC. The agency received comments Risk Insurance will be used by the information collection for OMB review to DFC–001, DFC–003, DFC–004, DFC– agency to screen investors and projects and approval and requests public 006, DFC–007, DFC–009, and DFC–010, for political risk insurance. Investors review and comment on the submission. in response to the sixty (60) day notice will be asked to register their intention The agency received no comments to published in Federal Register volume to apply for insurance prior to making DFC–002, DFC–005, or DFC–012 in 84 page 10843 on March 22, 2019. The an irrevocable investment. DFC–002 response to the sixty (60) day notice. agency amended the instructions to will serve as proof of this intention and The agency did receive comments to DFC–001 to make it clear that an any investments made prior to the DFC–001, DFC–003, DFC–004, DFC– explanation of the project’s social- submission of a DFC–002 may be 006, DFC–007, DFC–009, and DFC–010. developmental goals was a requirement ineligible for political risk insurance The purpose of this notice is to allow an to submission and that supporting from the agency.

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Title of Collection: Application for documentation to the agency’s Agency Form Number: DFC–009. Political Risk Insurance. Application for Debt Financing (DFC– OMB Form Number: Not assigned, Type of Review: New information 001). The information provided will be new information collection. collection. used by the agency to determine if Frequency: Once per investor. Agency Form Number: DFC–003. individuals who are providing equity Affected Public: Business or other for- OMB Form Number: Not assigned, investment in or credit support to a profit; not-for-profit institutions; new information collection. project have sufficient financial individuals. Frequency: Once per investor per wherewithal to meet their expected Total Estimated Number of Annual project. obligations under the proposed terms of Number of Respondents: 50. Affected Public: Business or other for- the agency’s financing. Estimated Time per Respondent: 0.33 profit; not-for-profit institutions; Title of Collection: Personal hours. Total Estimated Number of Annual individuals. Identification Form. Total Estimated Number of Annual Type of Review: New information Burden Hours: 16.5 hours. Abstract: The Aligned Capital Number of Respondents: 45. collection. Estimated Time per Respondent: 3 Agency Form Number: DFC–006. Investor Screener is a document used to hours. OMB Form Number: Not assigned, screen potential investors interested in Total Estimated Number of Annual new information collection. participating in the agency’s Aligned Burden Hours: 135 hours. Frequency: Once per party per project. Capital Program and, if they qualify, to Abstract: The Application for Political Affected Public: Business or other for- place their information into the Risk Insurance will be the principal profit; not-for-profit institutions; program. The Aligned Capital Program document used by the agency to individuals. is designed to align development determine the investor’s and the Total Estimated Number of Annual finance with other capital, including project’s eligibility for political risk Number of Respondents: 500. philanthropic, socially responsible and insurance and will collect information Estimated Time per Respondent: 1 impact investment, to enable effective for underwriting analysis. hours. deployment of that capital towards Title of Collection: Investment Funds Total Estimated Number of Annual projects in the countries and sectors in Application. Burden Hours: 500 hours. which the agency works. In order to Abstract: The Personal Identification Type of Review: New information participate, investors must meet the Form will used by the agency in its collection. specified criteria. Character Risk Due Diligence Agency Form Number: DFC–004. Title of Collection: Aligned Capital OMB Form Number: Not assigned, procedures, which are similar to a Investee Opt-In. new information collection. commercial bank’s Know Your Type of Review: New information Frequency: Once per investor per Customer procedures. The agency will collection. project. perform a robust due diligence review Agency Form Number: DFC–010. Affected Public: Business or other for- on each party that has a significant OMB Form Number: Not assigned, profit; not-for-profit institutions; relationship to the projects the agency new information collection. Frequency: Once per investor per individuals. supports and this collection is one Total Estimated Number of Annual aspect of that review. project. Affected Public: Business or other for- Number of Respondents: 150. Title of Collection: DFC Impact profit; not-for-profit institutions; Estimated Time per Respondent: 1 Assessment Questionnaire. individuals. hours. Type of Review: New information Total Estimated Number of Annual Total Estimated Number of Annual collection. Number of Respondents: 75. Burden Hours: 150 hours. Agency Form Number: DFC–007. OMB Form Number: Not assigned, Estimated Time per Respondent: 0.5 Abstract: The Investment Funds hours. Application will be the principal new information collection. Frequency: Once per investor per Total Estimated Number of Annual document used by the agency to project. Burden Hours: 37.5 hours. determine the investor’s and the Affected Public: Business or other for- Abstract: The Aligned Capital project’s eligibility for funding and will profit; not-for-profit institutions; Investee Opt-In is a document used by collect information for underwriting individuals. companies seeking investments or grant analysis. Total Estimated Number of Annual funding to place their information into Title of Collection: Personal Financial Number of Respondents: 230. the agency’s Aligned Capital Program. Statement. Estimated Time per Respondent: 2.8 The Aligned Capital Program is Type of Review: New information hours. designed to align development finance collection. Total Estimated Number of Annual with other capital, including Agency Form Number: DFC–005. Burden Hours: 644 hours. philanthropic, socially responsible and OMB Form Number: Not assigned, Abstract: The DFC Impact Assessment impact investment, to enable effective new information collection. Questionnaire is the principal document deployment of that capital towards Frequency: Once per investor per used by the agency to initiate the projects in the countries and sectors in project. assessment of the project’s development which the agency works. Affected Public: Individuals. impact, as well as the project’s ability to Title of Collection: Economic Total Estimated Number of Annual comply with environmental and social Questionnaire. Number of Respondents: 75. policies, including labor and human Type of Review: New information Estimated Time per Respondent: 1 rights, as consistent with the agency’s collection. hours. authorizing legislation. Agency Form Number: DFC–012. Total Estimated Number of Annual Title of Collection: Aligned Capital OMB Form Number: Not assigned, Burden Hours: 75 hours. Investor Screener. new information collection. Abstract: The Personal Financial Type of Review: New information Frequency: Once per investor per Statement will be supporting collection. project.

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Affected Public: Business or other for- modification of an existing product Public Representative: Christopher C. profit; not-for-profit institutions; currently appearing on the market Mohr; Comments Due: June 24, 2019. individuals. dominant or the competitive product This Notice will be published in the Total Estimated Number of Annual list. Federal Register. Number of Respondents: 100. Section II identifies the docket Stacy L. Ruble, Estimated Time per Respondent: 1.5 number(s) associated with each Postal Secretary. hours. Service request, the title of each Postal Total Estimated Number of Annual Service request, the request’s acceptance [FR Doc. 2019–13106 Filed 6–20–19; 8:45 am] Burden Hours: 150 hours. date, and the authority cited by the BILLING CODE 7710–FW–P Abstract: The Economic Postal Service for each request. For each Questionnaire is to be used on an as request, the Commission appoints an needed basis to collect information officer of the Commission to represent EXECUTIVE OFFICE OF THE about potential exports of DFC- the interests of the general public in the PRESIDENT supported projects. proceeding, pursuant to 39 U.S.C. 505 Office of Science and Technology (Public Representative). Section II also Dated: June 17, 2019. Policy Genevieve Stubbs, establishes comment deadline(s) pertaining to each request. Senior Administrative Counsel, Department National Research Strategy for the of Legal Affairs. The public portions of the Postal President’s Roadmap To Empower Service’s request(s) can be accessed via [FR Doc. 2019–13104 Filed 6–20–19; 8:45 am] Veterans and End the National Tragedy the Commission’s website (http:// of Suicide (PREVENTS) BILLING CODE 3210–01–P www.prc.gov). Non-public portions of the Postal Service’s request(s), if any, AGENCY: Office of Science and can be accessed through compliance Technology Policy (OSTP), Executive POSTAL REGULATORY COMMISSION with the requirements of 39 CFR Office of the President. [Docket Nos. MC2019–153 and CP2019–170; 3007.301.1 ACTION: Request for information. CP2019–171] The Commission invites comments on whether the Postal Service’s request(s) SUMMARY: To advance the President’s New Postal Products in the captioned docket(s) are consistent vision of a National Roadmap to Empower Veterans and End Suicide, AGENCY: Postal Regulatory Commission. with the policies of title 39. For request(s) that the Postal Service states OSTP and VA will lead development of ACTION: Notice. concern market dominant product(s), a National Research Strategy to improve the coordination, monitoring, SUMMARY: The Commission is noticing a applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 benchmarking, and execution of public- recent Postal Service filing for the and private-sector research related to Commission’s consideration concerning U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) the factors that contribute to veteran negotiated service agreements. This suicide. Through this RFI, we seek input notice informs the public of the filing, that the Postal Service states concern competitive product(s), applicable on ways to increase knowledge about invites public comment, and takes other factors influencing suicidal behaviors administrative steps. statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, and ways to prevent suicide; inform the DATES: Comments are due: June 24, 39 U.S.C. 3642, 39 CFR part 3015, and development of a robust and forward 2019. 39 CFR part 3020, subpart B. Comment looking research agenda; coordinate ADDRESSES: Submit comments deadline(s) for each request appear in relevant research efforts across the electronically via the Commission’s section II. Nation; and measure progress on these Filing Online system at http:// efforts. The public input provided in www.prc.gov. Those who cannot submit II. Docketed Proceeding(s) response to this RFI will inform the comments electronically should contact 1. Docket No(s).: MC2019–153 and Veteran Wellness, Empowerment, and the person identified in the FOR FURTHER CP2019–170; Filing Title: USPS Request Suicide Prevention Task Force, who INFORMATION CONTACT section by to Add Priority Mail Contract 534 to will develop and implement the telephone for advice on filing Competitive Product List and Notice of National Research Strategy. alternatives. Filing Materials Under Seal; Filing DATES: Response Deadline: July 15, 2019. FOR FURTHER INFORMATION CONTACT: Acceptance Date: June 14, 2019; Filing David A. Trissell, General Counsel, at Authority: 39 U.S.C. 3642, 39 CFR FOR FURTHER INFORMATION CONTACT: 202–789–6820. 3020.30 et seq., and 39 CFR 3015.5; Jennifer Shieh at 202–456–4444. Emails Public Representative: Christopher C. SUPPLEMENTARY INFORMATION: may be addressed to Mohr; Comments Due: June 24, 2019. [email protected]. Questions, Table of Contents 2. Docket No(s).: CP2019–171; Filing comments or RFI submissions via email Title: Notice of United States Postal I. Introduction should include ‘‘RFI Response: National II. Docketed Proceeding(s) Service of Filing a Functionally Research Strategy for the President’s Equivalent Global Reseller Expedited Roadmap to Empower Veterans and End I. Introduction Package 2 Negotiated Service Agreement the National Tragedy of Suicide The Commission gives notice that the and Application for Non-Public (PREVENTS)’’ in the subject line of the Postal Service filed request(s) for the Treatment of Materials Filed Under message. Please designate the Commission to consider matters related Seal; Filing Acceptance Date: June 14, question(s) you are answering by to negotiated service agreement(s). The 2019; Filing Authority: 39 CFR 3015.5; providing the letter and number of the request(s) may propose the addition or specific question(s) below prior to 1 See Docket No. RM2018–3, Order Adopting providing your answer(s). removal of a negotiated service Final Rules Relating to Non-Public Information, agreement from the market dominant or June 27, 2018, Attachment A at 19–22 (Order No. SUPPLEMENTARY INFORMATION: On March the competitive product list, or the 4679). 5, 2019, President Trump signed

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Executive Order (E.O.) 13861 mandating v. Draw upon technology to capture suicidal behavior in veterans? Consider the development of the President’s and use health data from non-clinical associated conditions such as mental Roadmap to Empower Veterans and End settings to advance behavioral and illness, traumatic brain injury (TBI), the National Tragedy of Suicide mental health research to the extent chronic traumatic encephalopathy (PREVENTS). The Roadmap will practicable; (CTE), posttraumatic stress disorder include a National Research Strategy to vi. Improve coordination among (PTSD), and depression, as well as advance efforts to improve quality of life research efforts, prevent unnecessarily social determinants of health and and reduce the rate of suicide among duplicative efforts, identify barriers to or research in intervention and post- veterans by better coordinating research gaps in research, and facilitate intervention strategies. within and beyond the Federal opportunities for improved 3. How can various disciplines (e.g., government, and enhancing the consolidation, integration, and neurology, endocrinology, psychology) integration of research across the social, alignment; and work together to better understand and behavioral, and biological determinants vii. Develop public-private address individual risk factors that lead of wellness and brain health. collaboration models to foster to veteran suicide? How can different We aim to understand the full innovative and effective research that disciplines work together to develop spectrum of factors influencing veteran accelerates these efforts. individual intervention strategies? suicide. Efforts are needed that would Further Instructions: All public comments are welcome and should be B. How can we develop and improve allow early detection of trauma in the individual interventions that increase brains of living people and improve our submitted by July 15, 2019 in order to ensure they are considered in the overall veteran quality of life and understanding and ability to prevent decrease the veteran suicide rate? conditions or factors that contribute to National Research Strategy. Responses suicide. We aim to incorporate public may be submitted online at https:// 4. How might we better understand health approaches that target prevention www.research.va.gov/PREVENTS/. the progression of veterans as they strategies and address intervention for Response to this RFI is voluntary, and transition from military to civilian life individuals, communities, and the respondents need not reply to all in a way that supports identification of broader population. questions. Each individual or institution suicide risk factors, protective factors, Reducing the rate of suicide in the is requested to submit only one and opportunities for intervention that veteran population will require an response, and to indicate whether it is addresses veterans at various stages of innovative, concerted approach to an individual or organizational transition, before the point of crisis? public health, with wide stakeholder response. Comments containing 5. What are currently known effective input. The Federal government alone references, studies, research, and other and promising or emerging practices for cannot address these challenges; empirical data that are not widely suicide prevention? What factors make therefore, we seek to involve the published should include copies or these practices effective? What Nation’s full research and development electronic links of the referenced additional research is needed to (R&D) ecosystem, and collaborate with materials. Comments containing demonstrate the effectiveness of state, local, territorial, and tribal profanity, vulgarity, threats, or other promising practices? governments, as well as community inappropriate language or content will 6. What tools, platforms, methods, or members, industry, non-profit not be considered. technologies are needed to advance: organizations, and academic institutions All submissions, including • Understanding of suicide risk factors to ensure that veterans have access to attachments and other supporting • Assessment of individuals most likely effective suicide prevention services. materials, will become part of the public to be at risk of suicide Our collective efforts begin with the record and are subject to public • Evaluation of protective factors common understanding that suicide is disclosure. Responses to this RFI, leading to the prevention of suicide preventable, and that prevention without change, may be posted on a • Improvements in social connection requires ongoing support prior to and Federal website. Therefore, no business and community engagement of beyond intervention at the point of proprietary information, copyrighted veterans crisis. To end veteran suicide, we must information, or personally identifiable • Identification of opportunities for develop a holistic understanding of the information should be submitted in intervention far before the point of underlying factors that determine the response to this RFI. Please note that the crisis U.S. Government will not pay for overall health and well-being of our 7. What are barriers to the adoption of response preparation, or for the use of Nation’s veterans. existing tools, platforms, methods, or any information contained in the The National Research Strategy shall technologies that identify suicide risk response. include milestones and metrics factors or provide effective designed to: Questions To Inform Development of interventions? i. Improve our ability to identify the National Research Strategy individual veterans and groups of C. How can we develop strategies to veterans at greater risk of suicide; A. How can we improve our ability to better ensure the latest research ii. Develop and improve individual identify individual veterans and groups discoveries are translated into practical interventions that increase overall of veterans at greater risk of suicide? applications and implemented quickly? veteran quality of life and decrease the 1. What are the most critical near-term 8. What types of organizations should veteran suicide rate; and long-term areas for research into be engaged in developing and iii. Develop strategies to better ensure factors influencing veteran suicide and implementing the National Research the latest research discoveries are methods to assess an individual’s risk of Strategy? Which existing consortia or translated into practical applications suicide? partnerships should be involved, and and implemented quickly; 2. What are the biggest gaps in why? Are there existing organizations iv. Establish relevant data-sharing capability to identify and address the that have been effective in identifying protocols across Federal agencies that social, behavioral, and biological and mitigating veteran suicide risks? align with community collaborators; determinants of health leading to Are there programs and resources

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within communities that have been 18. Are there especially promising Form F–8 (17 CFR 239.38) may be successful? What factors made these strategies for improving care of patients used to register securities of certain programs successful? with social risk? Canadian issuers under the Securities 9. How can the Federal government 19. How are costs for targeting and Act of 1933 (15 U.S.C. 77a et seq.) that strengthen the public health system, providing those services evaluated? will be used in an exchange offer or including mental health and crisis What are the additional costs to business combination. The information intervention education and training services, such as case management, and collected is intended to ensure that the programs, to ensure an adequate, well- to provide additional services (e.g., information required to be filed by the trained medical workforce that is well- transportation)? What is the return on Commission permits verification of equipped to respond to the challenge of investment in improved outcomes or compliance with securities law veteran suicide? reduced healthcare concern? requirements and assures the public availability of such information. The 10. What are the primary barriers to F. How can we improve coordination information provided is mandatory and adoption of current best practices for the among research efforts, prevent all information is made available to the assessment, evaluation and unnecessarily duplicative efforts, public upon request. We estimate that implementation of public health identify barriers to or gaps in research, Form F–8 takes approximately one hour approaches targeting suicide and facilitate opportunities for per response to prepare and is filed by prevention? improved consolidation, integration, approximately 5 respondents. We 11. What are effective methods to and alignment? estimate that 25% of one hour per quickly transition promising practices G. How can we develop a public-private response (15 minutes) is prepared by the into clinical and community practice? collaboration model to foster innovative company for a total annual reporting Where have these methods been and effective research that accelerates burden of one hour (15 minutes/60 demonstrated to work previously? these efforts? minutes per response × 5 responses = 12. What are methods and models to H. Please provide any additional 1.25 hours rounded to nearest whole evaluate and measure outcomes and number). effectiveness of interventions? information not addressed by previous questions that is crucial to the creation, An agency may not conduct or 13. What are the key elements in implementation, and success of a sponsor, and a person is not required to building a robust and forward looking National Research Strategy to improve respond to, a collection of information research agenda, in addition to the coordination, monitoring, unless it displays a currently valid translating research outcomes? benchmarking, and execution of public- control number. D. How best to establish relevant data- and private-sector research related to The public may view the background sharing protocols across Federal the factors that contribute to service documentation for this information partners that align with community member and veteran suicide. collection at the following website, partners? www.reginfo.gov. Comments should be Thank you sincerely for contributing directed to: (i) Desk Officer for the 14. How can Federal data, such as that to efforts to end Veteran suicide. Securities and Exchange Commission, from the Federal Interagency Traumatic (Authority: Executive Order 13861) Office of Information and Regulatory Brain Injury Research (FITBIR) Affairs, Office of Management and informatics system, be best leveraged in Stacy Murphy, Budget, Room 10102, New Executive combination with local or regional data Operations Manager. Office Building, Washington, DC 20503, to provide new insights into trauma or [FR Doc. 2019–13287 Filed 6–20–19; 8:45 am] or by sending an email to: the progression of disease? Are there BILLING CODE 3270–F9–P [email protected]; and (ii) technological limitations that prevent Charles Riddle, Acting Director/Chief use of Federal data from generating Information Officer, Securities and information to predict outcomes? SECURITIES AND EXCHANGE Exchange Commission, c/o Candace 15. What data or types of data are COMMISSION Kenner, 100 F Street NE, Washington, _ required to advance research efforts? [SEC File No. 270–332, OMB Control No. DC 20549 or send an email to: PRA Are there existing sources of data or 3235–0378] [email protected]. Comments must be validated datasets related to veteran submitted to OMB within 30 days of suicide, mental health, risk Submission for OMB Review; this notice. determination, brain injury, or other Comment Request Dated: June 18, 2019. relevant areas that have been previously Eduardo A. Aleman, underutilized in Federal efforts? Upon Written Request Copies Available From: Securities and Exchange Deputy Secretary. E. How should we draw upon Commission, Office of FOIA Services, [FR Doc. 2019–13280 Filed 6–20–19; 8:45 am] technology to capture and use health 100 F Street NE, Washington, DC BILLING CODE 8011–01–P data from non-clinical settings to 20549–2736 advance behavioral and mental health Extension: research to the extent practicable? Form F–8 SECURITIES AND EXCHANGE COMMISSION 16. How can both clinical and non- Notice is hereby given that, pursuant clinical data be better used to inform to the Paperwork Reduction Act of 1995 [SEC File No. 270–255, OMB Control No. research efforts, and enhance current (44 U.S.C. 3501 et seq.), the Securities 3235–0305] models of predictive analytics? and Exchange Commission Submission for OMB Review; 17. Are social determinants or risk (‘‘Commission’’) has submitted to the Comment Request factors being used to target services or Office of Management and Budget this provide outreach? If so, how? How are request for extension of the previously Upon Written Request Copies Available the beneficiaries with social risk approved collection of information From: Securities and Exchange identified? discussed below. Commission, Office of FOIA Services,

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100 F Street NE, Washington, DC Dated: June 18, 2019. Budget, Room 10102, New Executive 20549–2736 Eduardo A. Aleman, Office Building, Washington, DC 20503, Extension: Deputy Secretary. or by sending an email to: Rule 13e–1 [FR Doc. 2019–13281 Filed 6–20–19; 8:45 am] [email protected]; and (ii) BILLING CODE 8011–01–P Charles Riddle, Acting Director/Chief Notice is hereby given that, pursuant Information Officer, Securities and to the Paperwork Reduction Act of 1995 Exchange Commission, c/o Candace (44 U.S.C. 3501 et seq.), the Securities SECURITIES AND EXCHANGE Kenner, 100 F Street NE, Washington, _ and Exchange Commission COMMISSION DC 20549 or send an email to: PRA (‘‘Commission’’) has submitted to the [email protected]. Comments must be [SEC File No. 270–069, OMB Control No. submitted to OMB within 30 days of Office of Management and Budget this 3235–0069] request for extension of the previously this notice. approved collection of information Submission for OMB Review; Dated: June 18, 2019. discussed below. Comment Request Eduardo A. Aleman, Rule 13e–1 (17 CFR 240.13e–1) under Upon Written Request Copies Available Deputy Secretary. the Securities Exchange Act of 1934 From: Securities and Exchange [FR Doc. 2019–13283 Filed 6–20–19; 8:45 am] (U.S.C. 78 et seq.) makes it unlawful for Commission, Office of FOIA Services, BILLING CODE 8011–01–P an issuer who has received notice that 100 F Street NE, Washington, DC it is the subject of a tender offer made 20549–2736 under Section 14(d)(1) of the Exchange Extension: SECURITIES AND EXCHANGE Act to purchase any of its equity Industry Guides COMMISSION securities during the tender offer, unless Notice is hereby given that, pursuant it first files a statement with the to the Paperwork Reduction Act of 1995 [Release No. 34–86121; File No. SR– Commission containing information (44 U.S.C. 3501 et seq.), the Securities NYSEArca–2019–42] required by the rule. This rule is in and Exchange Commission Self-Regulatory Organizations; NYSE keeping with the Commission’s (‘‘Commission’’) has submitted to the Arca, Inc.; Notice of Filing and statutory responsibility to prescribe Office of Management and Budget this Immediate Effectiveness of Proposed rules and regulations that are necessary requests for extension of the previously Rule Change To Amend the NYSE Arca for the protection of investors. Public approved collection of information Equities Fees and Charges companies are the respondents. We discussed below. estimate that it takes approximately 10 Industries Guides are used by June 17, 2019. burden hours per response to provide registrants in certain industries as Pursuant to Section 19(b)(1) 1 of the the information required under Rule disclosure guidelines to be followed in Securities Exchange Act of 1934 (the 13e–1 and that the information is filed presenting information to investors in ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 by approximately 10 respondents. We registration statements and reports under the Securities Act (15 U.S.C. 77a notice is hereby given that, on June 3, estimate that 25% of the 10 hours per 2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ or response (2.5 hours) is prepared by the et seq.) and Exchange Act (15 U.S.C. 78a et seq.). The paperwork burden from the the ‘‘Exchange’’) filed with the company for a total annual reporting Securities and Exchange Commission burden of 25 hours (2.5 hours per Industry Guides is imposed through the forms that are subject to the disclosure (the ‘‘Commission’’) the proposed rule response × 10 responses). requirements in the Industry Guides and change as described in Items I, II, and An agency may not conduct or is reflected in the analysis of these III below, which Items have been sponsor, and a person is not required to documents. To avoid a Paperwork prepared by the self-regulatory respond to, a collection of information Reduction Act inventory reflecting organization. The Commission is unless it displays a currently valid duplicative burdens and for publishing this notice to solicit control number. administrative convenience, the comments on the proposed rule change from interested persons. The public may view the background Commission estimates the total annual documentation for this information burden imposed by the Industry Guides I. Self-Regulatory Organization’s collection at the following website, to be one hour. The information Statement of the Terms of Substance of www.reginfo.gov. Comments should be required by the Industry Guides is filed the Proposed Rule Change directed to: (i) Desk Officer for the on occasion and is mandatory. All information is provided to the public. The Exchange proposes to amend the Securities and Exchange Commission, The Industry Guides do not directly NYSE Arca Equities Fees and Charges Office of Information and Regulatory impose any disclosure burden. (‘‘Fee Schedule’’) to modify the per Affairs, Office of Management and An agency may not conduct or share credit associated with the Retail Budget, Room 10102, New Executive sponsor, and a person is not required to Order Step-Up Tier 2. The Exchange Office Building, Washington, DC 20503, respond to, a collection of information proposes to implement the fee change or by sending an email to: unless it displays a currently valid effective June 3, 2019. The proposed [email protected]; and (ii) control number. rule change is available on the Charles Riddle, Acting Director/Chief The public may view the background Exchange’s website at www.nyse.com, at Information Officer, Securities and documentation for this information the principal office of the Exchange, and Exchange Commission, c/o Candace collection at the following website, at the Commission’s Public Reference Kenner, 100 F Street NE, Washington, www.reginfo.gov. Comments should be Room. DC 20549 or send an email to: PRA_ directed to: (i) Desk Officer for the [email protected]. Comments must be Securities and Exchange Commission, 1 15 U.S.C. 78s(b)(1). submitted to OMB within 30 days of Office of Information and Regulatory 2 15 U.S.C. 78a. this notice. Affairs, Office of Management and 3 17 CFR 240.19b–4.

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II. Self-Regulatory Organization’s forces in determining prices and SRO Financial and Charles Schwab routed Statement of the Purpose of, and revenues and, also, recognized that more than 77% and more than 90%,14 Statutory Basis for, the Proposed Rule current regulation of the market system respectively, of its limit orders to off- Change ‘‘has been remarkably successful in exchange venues. In its filing with the Commission, the promoting market competition in its The Exchange thus needs to compete self-regulatory organization included broader forms that are most important to in the first instance with non-exchange statements concerning the purpose of, investors and listed companies.’’ 7 venues for Retail Order flow, and with and basis for, the proposed rule change As the Commission itself recognized, the 12 other exchange venues for that and discussed any comments it received the market for trading services in NMS Retail Order flow that is not directed on the proposed rule change. The text stocks has become ‘‘more fragmented off-exchange. This competition is 8 of those statements may be examined at and competitive.’’ Indeed, equity particularly acute for non-marketable the places specified in Item IV below. trading is currently dispersed across 13 Retail Orders, i.e., Retail Orders that The Exchange has prepared summaries, exchanges,9 32 alternative trading provide liquidity, and even more set forth in sections A, B, and C below, systems,10 and numerous broker-dealer fiercely for non-marketable Retail of the most significant parts of such internalizers and wholesalers, all Orders that provide displayed liquidity statements. competing for order flow. Based on on an exchange. Accordingly, publicly-available information, no competitive forces compel the Exchange A. Self-Regulatory Organization’s single exchange has more than 18% to use exchange transaction fees and Statement of the Purpose of, and the market share (whether including or credits, particularly as they relate to Statutory Basis for, the Proposed Rule excluding auction volume).11 Therefore, competing for Retail Order flow, Change no exchange possesses significant because market participants can readily 1. Purpose pricing power in the execution of equity trade on competing venues if they deem order flow. More specifically, in the first pricing levels at those other venues to The Exchange currently provides quarter of 2019, the Exchange averaged be more favorable. credits to ETP Holders, including less than 9% market share of executed To respond to this competitive Market Makers, who enter Retail volume of equity trades.12 The environment, the Exchange has Orders 4 on the Exchange.5 The Exchange believes that the ever-shifting established Retail Order Step-Up tiers, Exchange has multiple levels of such market share among the exchanges from which are designed to provide an credits that are based on an ETP month to month demonstrates that incentive for ETP Holders to route Retail Holder’s 6 trading volume of Retail market participants can shift order flow, Orders that provide displayed liquidity Orders on the Exchange. The Exchange to the Exchange by providing higher proposes to amend the Fee Schedule to or discontinue or reduce use of certain categories of products, in response to fee credits correlated to an ETP Holder’s decrease the per share credit under the higher trading volume in Retail Orders Retail Order Step-Up Tier 2 for changes. The competition for Retail Order flow on the Exchange. Specifically, to qualify displayed liquidity in Retail Orders. The is even more stark, particularly as it for the Retail Order Step-Up Tier 2, an Exchange proposes to implement the fee relates to exchange versus off-exchange ETP Holder must: change effective June 3, 2019. venues. For example, the Exchange (1) submit an average daily share volume Background examined Rule 606 disclosures from per month of resting limit orders (i.e., three prominent retail brokerages: E- provide liquidity) in an amount equal to or The Exchange operates in a highly 15 Trade, TD Ameritrade and Charles greater than 1.10% or more of US CADV, competitive environment. The and Commission has repeatedly expressed Schwab. For securities listed on the (2) execute during the month, Retail Orders its preference for competition over New York Stock Exchange LLC in the with a time-in-force of Day that is an increase regulatory intervention in determining first quarter of 2019, TD Ameritrade of 0.35% or more of the US CADV from the prices, products, and services in the routed 80% of its limit orders to off- ETP Holder’s April 2018 ADV, taken as a securities markets. Specifically, in exchange venues.13 Similarly, E-Trade percentage of US CADV. Regulation NMS, the Commission Currently, if an ETP Holder meets the highlighted the importance of market 7 See Securities Exchange Act Release No. 51808 Retail Order Step-Up Tier 2 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 8 qualifications, such ETP Holder is 4 See Securities Exchange Act Release No. 51808, A Retail Order is an agency order or a riskless 84 FR 5202, 5253 (February 20, 2019) (File No. S7– eligible to earn a credit of $0.0038 per principal order that meets the criteria of Financial 05–18) (Transaction Fee Pilot for NMS Stocks Final share for Retail Orders in Tape A, Tape Industry Regulatory Authority, Inc. Rule 5320.03 Rule) (‘‘Transaction Fee Pilot’’). that originates from a natural person and is B and Tape C Securities that provide 9 See Cboe U.S Equities Market Volume Summary displayed liquidity to the Book. submitted to the Exchange by a Retail Member _ Organization (‘‘RMO’’), provided that no change is at https://markets.cboe.com/us/equities/market made to the terms of the order with respect to price share. Proposed Rule Change 10 or side of market and the order does not originate See FINRA ATS Transparency Data (May 6, The Exchange proposes to reduce the from a trading algorithm or any other computerized 2019), available at https://otctransparency. methodology. See Securities Exchange Act Release finra.org/otctransparency/AtsIssueData. Although credit that would be paid to an ETP No. 74947 (May 13, 2015), 80 FR 28735 (May 19, 54 alternative trading systems were registered with 2015) (SR–NYSEArca–2015–39). RMO is defined in the Commission as of April 30, 2019, only 32 are 14 See https://content.etrade.com/etrade/ Rule 7.44–E(a)(2) as an ETP Holder that is approved currently trading. A list of alternative trading powerpage/pdf/OrderRouting11AC6.pdf. See also by the Exchange to submit Retail Orders. This systems registered with the Commission is available https://www.schwab.com/public/schwab/nn/legal_ reference to Retail Orders in the Retail Order Step- at https://www.sec.gov/foia/docs/atslist.htm. compliance/important_notices/order_routing.html. Up Tier 2 qualifications means orders that are not 11 See Cboe Global Markets U.S. Equities Market 15 US CADV means United States Consolidated executed in the Retail Liquidity Program. Volume Summary (May 31, 2019), available at Average Daily Volume for transactions reported to _ 5 See Retail Order Tier, Retail Order Step-Up Tier http://markets.cboe.com/us/equities/market share/. the Consolidated Tape, excluding odd lots through 1 and Retail Order Step-Up Tier 2 on the Fee 12 Based on Cboe U.S. Equities Market Volume January 31, 2014 (except for purposes of Lead Schedule at https://www.nyse.com/publicdocs/ Summary, the Exchange’s market share of intraday Market Maker pricing), and excludes volume on nyse/markets/nyse-arca/NYSE_Arca_Marketplace_ trading (excluding auctions) for the months of days when the market closes early and on the date Fees.pdf. January 2019, February 2019 and March 2019 was of the annual reconstitution of the Russell 6 All references to ETP Holders in connection 9.01%, 8.33% and 9.02%, respectively. Investments Indexes. Transactions that are not with the Retail Order Step-Up Tiers include Market 13 See https://www.tdameritrade.com/retail- reported to the Consolidated Tape are not included Makers. en_us/resources/pdf/AMTD2054.pdf. in US CADV.

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Holder that qualifies for the Retail Order on the Exchange from ETP Holders more closely align with the credits Step-Up Tier 2 to $0.0035. To date, only qualifying for this tier versus the credits available for other Retail Orders that one ETP Holder has qualified for the available to Retail Orders that provide provide liquidity on the Exchange. Retail Order Step-Up Tier 2 rates. The displayed liquidity on the Exchange With this proposed change, the proposed change would reduce the from other ETP Holders. The Exchange following credits would be available to differences in credits available to Retail believes that by lowering the credit ETP Holders that provide liquidity in Orders that provide displayed liquidity available under this tier, it would be Retail Orders.16

Tier Credit for providing liquidity

Basic Rate ...... $0.0030 (all Tapes). Retail Order Tier ...... $0.0033 (all Tapes). Retail Order Step-Up Tier 1 ...... $0.0033 (all Tapes). Retail Order Step-Up Tier 2 ...... $0.0035 (all Tapes) (displayed liquidity).

As noted above, under the Retail The Commission has repeatedly categories of products, in response to fee Order Step-Up Tier 1, an ETP Holder expressed its preference for competition changes. This competition is that meets the applicable qualifications over regulatory intervention in particularly acute for non-marketable, or is eligible for a credit of $0.0033 per determining prices, products, and limit, retail orders, i.e., retail orders that share for Retail Orders that provide services in the securities markets. can provide liquidity on an exchange. liquidity to the Book. The Exchange Specifically, in Regulation NMS, the That competition is even more fierce for believes that the continued difference in Commission highlighted the importance retail limit orders that provide per share credit that would be available of market forces in determining prices displayed liquidity on an exchange. under the Retail Order Step-Up Tier 2 and SRO revenues and, also, recognized Accordingly, competitive forces ($0.0035) as compared to both the Retail that current regulation of the market constrain exchange transaction fees, Order Tier ($0.0033) and the Retail system ‘‘has been remarkably successful particularly as they relate to competing Order Step-Up Tier 1 ($0.0033) would in promoting market competition in its for retail orders. continue to promote the display of a broader forms that are most important to The Exchange believes that the greater number of Retail Orders on the investors and listed companies.’’ 19 proposed change is reasonable because Exchange. As the Commission itself recognized, the new, lower credit under the Retail The proposed changes are not the market for trading services in NMS Order Step-Up Tier 2 would continue to otherwise intended to address any other stocks has become ‘‘more fragmented encourage ETP Holders to send Retail issues, and the Exchange is not aware of and competitive.’’ 20 Indeed, equity Orders to the Exchange to qualify for the any significant problems that market trading is currently dispersed across 13 pricing tier. As noted above, the participants would have in complying exchanges,21 32 alternative trading Exchange operates in a highly with the proposed changes. systems,22 and numerous broker-dealer competitive environment, particularly internalizers and wholesalers, all for attracting Retail Order flow that 2. Statutory Basis competing for order flow. Based on provides displayed liquidity on an The Exchange believes that the publicly-available information, no exchange. The Exchange believes it is proposed rule change is consistent with single exchange has more than 18% reasonable to continue to provide a Section 6(b) of the Act,17 in general, and market share (whether including or higher credit for Retail Orders that furthers the objectives of Sections excluding auction volume).23 Therefore, provide displayed liquidity if an ETP 6(b)(4) and (5) of the Act,18 in particular, no exchange possesses significant Holder meets the qualifications for the because it provides for the equitable pricing power in the execution of equity Retail Order Step-Up Tier 2. allocation of reasonable dues, fees, and order flow. More specifically, in the first The Exchange further believes it is an other charges among its members, quarter of 2019, the Exchange averaged equitable allocation of reasonable fees to issuers and other persons using its less than 9% market share of executed reduce the credit that would be facilities and does not unfairly volume of equity trades (excluding available under the Retail Order Step- discriminate between customers, auction volume).24 Up Tier 2 because it would reduce the issuers, brokers or dealers. As noted above, the competition for difference in credits available for Retail The Exchange believes that the Retail Order flow is stark given the Orders that provide liquidity, while still proposed rule change provides for the amount of retail limit orders that are providing an increased credit to provide equitable allocation of reasonable dues routed to non-exchange venues. The an incentive for ETP Holders to route and fees and is not unfairly Exchange believes that the ever-shifting displayed liquidity to the Exchange. discriminatory for the following market share among the exchanges from Further, given the competitive market reasons. month to month demonstrates that for attracting Retail Order flow, the As noted above, the Exchange market participants can shift order flow, Exchange notes that with this proposed operates in a highly competitive market. or discontinue to reduce use of certain rule change, the Exchange’s pricing for

16 The Exchange’s Fee Schedule is available here: 21 See Cboe U.S Equities Market Volume Commission is available at https://www.sec.gov/ https://www.nyse.com/publicdocs/nyse/markets/ Summary at https://markets.cboe.com/us/equities/ foia/docs/atslist.htm. nyse-arca/NYSE_Arca_Marketplace_Fees.pdf. market_share. 23 See Cboe Global Markets U.S. Equities Market 17 15 U.S.C. 78f(b). 22 See FINRA ATS Transparency Data (May 6, Volume Summary (May 31, 2019), available at 18 15 U.S.C. 78f(b)(4) and (5). 2019), available at https:// http://markets.cboe.com/us/equities/market_share/. 19 See Securities Exchange Act Release No. 51808 otctransparency.finra.org/otctransparency/ 24 Based on Cboe U.S. Equities Market Volume (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). AtsIssueData. Although 54 alternative trading Summary, the Exchange’s market share of intraday 20 See Securities Exchange Act Release No. 51808, systems were registered with the Commission as of trading (excluding auctions) for the months of 84 FR 5202, 5253 (February 20, 2019) (File No. S7– April 30, 2019, only 32 are currently trading. A list January 2019, February 2019 and March 2019 was 05–18) (Final rule). of alternative trading systems registered with the 9.01%, 8.33% and 9.02%, respectively.

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Retail Orders would be comparable to share, and the credit for Retail Orders Finally, the Exchange believes that it credits currently in place on other that do not qualify for any of the Retail is subject to significant competitive exchanges that the Exchange competes Order pricing tiers, $0.0030 per share, is forces, as described below in the with for order flow. For example, the $0.0005, or 15%, which the Exchange Exchange’s statement regarding the Nasdaq Stock Market LLC (‘‘Nasdaq’’) believes is small given the requirements burden on competition. provides its members with a credit of that ETP Holders are required to meet to For the foregoing reasons, the $0.0033 per share if such member has qualify for the higher credit. Similarly, Exchange believes that the proposal is an 85% add to total volume (adding with this proposed rule change, the consistent with the Act. liquidity and removing liquidity) ratio difference in the highest credit for Retail B. Self-Regulatory Organization’s during a billing month.25 Cboe BZX Orders, $0.0035 per share, and the Statement on Burden on Competition Exchange, Inc. (‘‘BZX’’) provides its credit provided for Retail Orders to members with a credit of $0.0032 per those ETP Holders qualifying for the In accordance with Section 6(b)(8) of share for retail orders that add liquidity Retail Order Tier or Retail Order Step- the Act,28 the Exchange believes that the to that market.26 Also, until recently, the Up Tier 1, $0.0033 per share, would proposed rule change would not impose Exchange’s current credit of $0.0038 per only be $0.0002 per share, or 6%. any burden on competition that is not share was comparable to the Retail Therefore, the Exchange believes the necessary or appropriate in furtherance Volume Tier that was in place on Cboe proposed change to the Retail Order of the purposes of the Act. Instead, as EDGX Exchange, Inc. (‘‘EDGX’’), which Step-Up Tier 2 pricing tier is equitable discussed above, the Exchange believes provided members of that exchange a and not unfairly discriminatory because that the proposed change would credit of $0.0037 per share. EDGX it is available to all ETP Holders on an encourage the submission of additional recently eliminated the Retail Volume equal basis and provides discounts that liquidity to a public exchange, thereby Tier.27 This proposed rule change is a are reasonably related to the value to the promoting market depth, price competitive response to the EDGX Exchange’s market quality associated discovery and transparency and filing, and lowers the credit by 9% from with higher volumes. In today’s enhancing order execution the current level. competitive marketplace, order flow opportunities for ETP Holders. As a The Exchange believes the proposed providers have a choice of where to result, the Exchange believes that the change is also reasonable because it is direct liquidity-providing order flow, proposed change furthers the designed to attract higher volumes of and while only one ETP Holder has Commission’s goal in adopting Retail Orders transacted on the qualified to date for these rates, the Regulation NMS of fostering Exchange by ETP Holders which would Exchange believes there are additional competition among orders, which benefit all market participants by ETP Holders that could qualify if they promotes ‘‘more efficient pricing of offering greater price discovery, chose to direct their order flow to the individual stocks for all types of orders, increased transparency, and an Exchange. large and small.’’ 29 increased opportunity to trade on the The Exchange believes that Intramarket Competition. The Exchange. recalibrating the credits for providing proposed change is designed to attract The Exchange believes that the liquidity will continue to attract order additional order flow to the Exchange. proposed change is equitable and not flow and liquidity to the Exchange, The Exchange believes that the unfairly discriminatory because it thereby contributing to price discovery proposed reduced credit would would apply to all ETP Holders on an on the Exchange and benefiting continue to incentivize market equal and non-discriminatory basis. The investors generally. participants to submit orders that Exchange further believes that the The Exchange believes that the qualify as Retail Orders to the Exchange. proposed rule change is equitable and proposed change is equitable and not Greater liquidity benefits all market not unfairly discriminatory because unfairly discriminatory because it is participants on the Exchange by maintaining or increasing the reasonably related to the value to the providing more trading opportunities proportion of Retail Orders in exchange- Exchange’s market quality associated and encourages ETP Holders to send listed securities that are executed on a with higher volume in Retail Orders. orders, thereby contributing to robust registered national securities exchange The Exchange notes that currently 12 levels of liquidity, which benefits all (rather than relying on certain available firms submit Retail Orders that add market participants. The proposed off-exchange execution methods) would liquidity on the Exchange and of those credits would be available to all contribute to investors’ confidence in 12 firms, just one qualifies for the Retail similarly-situated market participants, the fairness of their transactions and and, as such, the proposed change Order Step-Up Tier 2 when one or more would benefit all investors by of the other 11 firms could achieve the would not impose a disparate burden on deepening the Exchange’s liquidity competition among market participants tier and qualify for the same credits and pool, supporting the quality of price on the Exchange. fees if those firms directed more of their discovery, promoting market Retail Orders to the Exchange. Intermarket Competition. The transparency and improving investor Exchange operates in a highly Further, the Exchange notes that, with protection. This aspect of the proposed competitive market in which market this proposed rule change, the rule change also is consistent with the participants can readily choose to send difference between the highest credit Act because all similarly situated ETP their orders to other exchange and off- provided for Retail Orders, $0.0035 per Holders would pay the same rate, as is exchange venues if they deem fee levels currently the case, and because all ETP 25 See Nasdaq Price List, Rebate to Add Displayed at those other venues to be more Holders, would be eligible to qualify for Designated Retail Liquidity, at http:// favorable. The Exchange notes that for the rates by satisfying the related nasdaqtrader.com/ the months of January 2019, February Trader.aspx?id=PriceListTrading2. threshold, where applicable. 2019 and March 2019, the Exchange’s 26 See BZX Fee Schedule, Fee Codes and Furthermore, the submission of Retail Associated Fees, at https://markets.cboe.com/us/ Orders is optional for ETP Holders in equities/membership/fee_schedule/bzx/. 28 15 U.S.C. 78f(b)(8). 27 See Securities Exchange Act Release No. 85852 that they could choose whether to 29 Securities Exchange Act Release No. 51808, 70 (May 14, 2019), 84 FR 22919 (May 20, 2019) (SR– submit Retail Orders and, if they do, the FR 37495, 37498–99 (June 29, 2005) (S7–10–04) CboeEDGX–2019–030). extent of its activity in this regard. (Final Rule).

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market share of intraday trading Electronic Comments SECURITIES AND EXCHANGE (excluding auctions) was 9.01%, 8.33% • COMMISSION and 9.02%, respectively.30 In such an Use the Commission’s internet environment, the Exchange must comment form (http://www.sec.gov/ rules/sro.shtml); or [Release No. 34–86122; File No. SR– continually adjust its fees and rebates to NYSEArca–2019–43] remain competitive with other • Send an email to rule-comments@ exchanges and with off-exchange sec.gov. Please include File Number SR– Self-Regulatory Organizations; NYSE venues. Because competitors are free to NYSEArca–2019–42 on the subject line. Arca, Inc.; Notice of Filing and modify their own fees and credits in Immediate Effectiveness of Proposed Paper Comments response, and because market Rule Change To Amend the NYSE Arca participants may readily adjust their • Equities Fees and Charges order routing practices, the Exchange Send paper comments in triplicate to Secretary, Securities and Exchange does not believe its proposed fee change June 17, 2019. can impose any burden on competition. Commission, 100 F Street NE, The Exchange believes that the Washington, DC 20549–1090. Pursuant to Section 19(b)(1) 1 of the proposed change could promote Securities Exchange Act of 1934 (the All submissions should refer to File ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 competition between the Exchange and Number SR–NYSEArca–2019–42. This other execution venues, including those notice is hereby given that, on June 3, file number should be included on the that currently offer similar order types 2019, NYSE Arca, Inc. (‘‘NYSE Arca’’ or subject line if email is used. To help the and comparable transaction pricing, by the ‘‘Exchange’’) filed with the encouraging additional orders to be sent Commission process and review your Securities and Exchange Commission to the Exchange for execution. comments more efficiently, please use (the ‘‘Commission’’) the proposed rule only one method. The Commission will change as described in Items I, II, and C. Self-Regulatory Organization’s post all comments on the Commission’s Statement on Comments on the III below, which Items have been internet website (http://www.sec.gov/ prepared by the self-regulatory Proposed Rule Change Received From rules/sro.shtml). Copies of the Members, Participants, or Others organization. The Commission is submission, all subsequent publishing this notice to solicit No written comments were solicited amendments, all written statements comments on the proposed rule change or received with respect to the proposed with respect to the proposed rule from interested persons. rule change. change that are filed with the III. Date of Effectiveness of the Commission, and all written I. Self-Regulatory Organization’s Proposed Rule Change and Timing for communications relating to the Statement of the Terms of Substance of Commission Action proposed rule change between the the Proposed Rule Change The foregoing rule change is effective Commission and any person, other than those that may be withheld from the The Exchange proposes to amend the upon filing pursuant to Section NYSE Arca Equities Fees and Charges 31 public in accordance with the 19(b)(3)(A) of the Act and (‘‘Fee Schedule’’) to modify the per 32 provisions of 5 U.S.C. 552, will be subparagraph (f)(2) of Rule 19b–4 share credits associated with the Step thereunder, because it establishes a due, available for website viewing and printing in the Commission’s Public Up Tier 4. The Exchange proposes to fee, or other charge imposed by the implement the fee changes effective Exchange. Reference Room, 100 F Street NE, At any time within 60 days of the Washington, DC 20549 on official June 3, 2019. The proposed rule change filing of such proposed rule change, the business days between the hours of is available on the Exchange’s website at Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the www.nyse.com, at the principal office of temporarily suspend such rule change if filing also will be available for the Exchange, and at the Commission’s it appears to the Commission that such inspection and copying at the principal Public Reference Room. action is necessary or appropriate in the office of the Exchange. All comments II. Self-Regulatory Organization’s public interest, for the protection of received will be posted without change. Statement of the Purpose of, and investors, or otherwise in furtherance of Persons submitting comments are Statutory Basis for, the Proposed Rule the purposes of the Act. If the cautioned that we do not redact or edit Change Commission takes such action, the personal identifying information from Commission shall institute proceedings In its filing with the Commission, the 33 comment submissions. You should under Section 19(b)(2)(B) of the Act to self-regulatory organization included determine whether the proposed rule submit only information that you wish to make available publicly. All statements concerning the purpose of, change should be approved or and basis for, the proposed rule change disapproved. submissions should refer to File Number SR–NYSEArca–2019–42 and and discussed any comments it received IV. Solicitation of Comments should be submitted on or before July on the proposed rule change. The text Interested persons are invited to 12, 2019. of those statements may be examined at submit written data, views, and the places specified in Item IV below. For the Commission, by the Division of The Exchange has prepared summaries, arguments concerning the foregoing, Trading and Markets, pursuant to delegated set forth in sections A, B, and C below, including whether the proposed rule authority.34 change is consistent with the Act. of the most significant parts of such Comments may be submitted by any of Vanessa A. Countryman, statements. the following methods: Acting Secretary. [FR Doc. 2019–13118 Filed 6–20–19; 8:45 am] 30 See note 12, supra. BILLING CODE 8011–01–P 31 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). 32 17 CFR 240.19b–4(f)(2). 2 15 U.S.C. 78a. 33 15 U.S.C. 78s(b)(2)(B). 34 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4.

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A. Self-Regulatory Organization’s publicly-available information, no ETP Holder is eligible to earn a credit Statement of the Purpose of, and the single exchange has more than 18% of: Statutory Basis for, the Proposed Rule market share (whether including or • $0.0031 per share for orders that Change excluding auction volume).9 Therefore, provide displayed liquidity to the Book no exchange possesses significant in Tape A Securities, and 1. Purpose pricing power in the execution of equity • $0.0032 per share for orders that The Exchange proposes to amend the order flow. More specifically, in the first provide displayed liquidity to the Book Fee Schedule to modify the per share quarter of 2019, the Exchange averaged in Tape B and Tape C Securities.11 credits available for ETP Holders less than 9% market share of executed Proposed Rule Change (including Market Makers) that provide volume of equity trades.10 displayed liquidity under the Step Up The Exchange believes that the ever- With this proposed rule change, the Tier 4. The Exchange currently provides shifting market share among the Exchange proposes to increase the 4 credits to ETP Holders who submit exchanges from month to month credits available for ETP Holders that orders that provide displayed liquidity demonstrates that market participants qualify for the Step Up Tier 4 as follows: • $0.0033 per share for orders that on the Exchange. The Exchange can move order flow, or discontinue or provide displayed liquidity to the Book currently has multiple levels of credits reduce use of certain categories of in Tape A Securities; for orders that provide displayed products, in response to fee changes. • $0.0034 per share for orders that liquidity that are based on the amount With respect to non-marketable order provide displayed liquidity to the Book of volume of such orders that ETP flow that would provide displayed Holders send to the Exchange. The in Tape B Securities; and liquidity on an Exchange, ETP Holders • purpose of this proposed rule change is $0.0033 per share for orders that can choose from any one of the 13 provide displayed liquidity to the Book to increase the credit for providing currently operating registered exchanges displayed liquidity that would be paid in Tape C Securities. to route such order flow. Accordingly, The Exchange is not proposing to to ETP Holders that qualify for the Step competitive forces constrain exchange Up Tier 4. The Exchange proposes to change any of the requirements to transaction fees that relate to orders that qualify for the Step Up Tier 4. implement the fee changes effective would provide displayed liquidity on an June 3, 2019. With this proposed rule change, the exchange. following credits would be available to Background In response to this competitive ETP Holders that provide increased The Commission has repeatedly environment, the Exchange has already levels of displayed liquidity on the expressed its preference for competition established Step Up Tiers 1–4, which Exchange: over regulatory intervention in are designed to encourage ETP Holders determining prices, products, and that provide displayed liquidity on the Credit for providing Exchange to increase that order flow, Tier displayed services in the securities markets. In liquidity Regulation NMS, the Commission which would benefit all ETP Holders by highlighted the importance of market providing greater execution Step Up Tier ...... $0.0030 (Tape A). forces in determining prices and SRO opportunities on the Exchange. In order $0.0023 (Tape B). revenues and, also, recognized that to provide an incentive for ETP Holders $0.0031 (Tape C). current regulation of the market system to direct providing displayed order flow Step Up Tier 2 ..... $0.0028 (Tape A and C). ‘‘has been remarkably successful in to the Exchange, the credits increase in $0.0022 (Tape B). the various tiers based on increased Step Up Tier 3 ..... $0.0025 (Tape A and C). promoting market competition in its $0.0022 (Tape B). broader forms that are most important to levels of volume directed to the Exchange. Step Up Tier 4 ..... $0.0033 (Tape A and C). investors and listed companies.’’ 5 $0.0034 (Tape B). As the Commission itself recognized, Under the Step Up Tier 4, if an ETP the market for trading services in NMS Holder increases its providing liquidity The goal of the proposed change to stocks has become ‘‘more fragmented on the Exchange by a specified the Step Up Tier 4 pricing tier is to and competitive.’’ 6 Indeed, equity percentage over the level that such ETP incentivize ETP Holders to increase the trading is currently dispersed across 13 Holder provided liquidity in January orders sent to the Exchange that would exchanges,7 32 alternative trading 2019, it is eligible to earn higher credits provide displayed liquidity, which systems,8 and numerous broker-dealer for providing displayed liquidity. would support the quality of price internalizers and wholesalers, all Specifically, to qualify for the credits discovery on the Exchange and promote competing for order flow. Based on under the Step Up Tier 4, an ETP market transparency. This tier is Holder must directly execute providing available to all ETP Holders. However, 4 All references to ETP Holders in connection average daily volume (ADV) per month to date, not one ETP Holder has with the Step Up Tier 4 include Market Makers. that is an increase of no less than 0.70% qualified for the Step Up Tier 4. 5 See Securities Exchange Act Release No. 51808 of US CADV for that month over the The Exchange proposes to increase (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) ETP Holder’s providing ADV in January 6 See Securities Exchange Act Release No. 51808, the credits available under the 84 FR 5202, 5253 (February 20, 2019) (File No. S7– 2019, taken as a percentage of US established Step Up Tier 4 to provide an 05–18) (Final rule). CADV. incentive for ETP Holders to send order 7 See Cboe U.S Equities Market Volume Summary Currently, if an ETP Holder meets flow to qualify for this tier. As noted at https://markets.cboe.com/us/equities/market_ these Step Up Tier 4 qualifications, such share. above, the Exchange operates in a 8 See FINRA ATS Transparency Data (May 6, competitive environment, particularly 2019), available at https:// 9 See Cboe Global Markets U.S. Equities Market as it relates to attracting displayed otctransparency.finra.org/otctransparency/ Volume Summary (May 31, 2019), available at providing liquidity. Because the Step AtsIssueData. Although 54 alternative trading http://markets.cboe.com/us/equities/market_share/. systems were registered with the Commission as of 10 Based on Cboe U.S. Equities Market Volume Up Tier 4 pricing tier has a singular April 30, 2019, only 32 are currently trading. A list Summary, the Exchange’s market share of intraday of alternative trading systems registered with the trading (excluding auctions) for the months of 11 See Securities Exchange Act Release No. 85311 Commission is available at https://www.sec.gov/ January 2019, February 2019 and March 2019 was (March 14, 2019), 84 FR 10348 (March 20, 2019) foia/docs/atslist.htm. 9.01%, 8.33% and 9.02%, respectively. (SR–NYSEArca–2019–10).

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requirement for ETP Holders, i.e., internalizers and wholesalers, all 4 pricing tier. Without having a view of providing an increased liquidity over competing for order flow. Based on ETP Holders’ activity on other markets that ETP Holder’s baseline providing publicly-available information, no and off-exchange venues, the Exchange volume, the Exchange believes that the single exchange has more than 18% has no way of knowing whether this proposed increased credits would market share (whether including or proposed rule change would result in provide an incentive for ETP Holders to excluding auction volume).18 Therefore, any ETP Holders qualifying for this tier. route additional displayed providing no exchange possesses significant However, the Exchange believes the liquidity to the Exchange to qualify for pricing power in the execution of equity proposed higher credits would provide the higher credit. order flow. More specifically, in the first an incentive for ETP Holders to submit The proposed changes are not quarter of 2019, the Exchange averaged additional adding liquidity to qualify for otherwise intended to address any other less than 9% market share of executed the higher credits. issues, and the Exchange is not aware of volume of equity trades (excluding The Exchange believes that the any significant problems that market auction volume).19 The Exchange proposed increased credit is equitable participants would have in complying believes that the ever-shifting market and not unfairly discriminatory because with the proposed changes. share among the exchanges from month the magnitude of the additional credit is 2. Statutory Basis to month demonstrates that market not unreasonably high in comparison to participants can shift order flow, or the credit paid with respect to other The Exchange believes that the discontinue to reduce use of certain proposed rule change is consistent with pricing tiers noted in the table above, categories of products, in response to fee and in comparison to the credits paid by Section 6(b) of the Act,12 in general, and changes. Accordingly, competitive furthers the objectives of Sections other exchanges for orders that add forces constrain exchange transaction liquidity. For example, ETP Holders that 6(b)(4) and (5) of the Act,13 in particular, fees. Stated otherwise, changes to because it provides for the equitable meet the requirement under Tier 1 exchange transaction fees can have a currently receive credits of $0.0031 per allocation of reasonable dues, fees, and direct effect on the ability of an other charges among its members, share in Tape A securities, $0.0023 per exchange to compete for order flow. share in Tape B securities, and $0.0032 issuers and other persons using its The Exchange believes the proposed facilities and does not unfairly per share in Tape C Securities. ETP change is reasonable because the higher Holders that do not qualify for any of discriminate between customers, credits under the Step Up Tier 4 would issuers, brokers or dealers. the Exchange’s tiers currently receive a continue to allow ETP Holders that meet credit of $0.0020 per share in all tapes, The Exchange believes that the the requirement of the pricing tier to proposed rule change provides for the and would continue to receive such receive increased per share credits. As credit for adding liquidity. equitable allocation of reasonable dues noted above, the Exchange operates in a With respect to credits paid by other and fees and is not unfairly highly competitive environment, exchanges, the Cboe BZX Exchange, Inc. discriminatory for the following particularly for attracting order flow that (‘‘BZX’’) provides its members that have reasons. provides displayed liquidity on an As noted above, the Exchange an adding ADV of 1.25% or more of US exchange. The Exchange believes it is operates in highly competitive market. CADV a credit of $0.0032 per share for reasonable to continue to provide a The Commission has repeatedly adding liquidity.20 higher credit for orders that provide Additionally, the expressed its preference for competition displayed liquidity if an ETP Holder Nasdaq Stock Market LLC (‘‘Nasdaq’’) over regulatory intervention in meets the qualification for the Step Up provides a credit of $0.00305 per share determining prices, products, and Tier 4. Because no ETP Holder to date for orders that add liquidity on that services in the securities markets. has qualified for the Step Up Tier 4, the market for members that have greater Specifically, in Regulation NMS, the Exchange believes the proposed than 1.25% add of US CADV. However, Commission highlighted the importance increased credits are reasonable as they Nasdaq members can receive additional of market forces in determining prices would provide an additional incentive credits, as follows: and SRO revenues and, also, recognized • An additional credit of $0.0002 per that current regulation of the market for ETP Holders to qualify for this established tier and direct their order share by meeting the requirements of system ‘‘has been remarkably successful Nasdaq’s Qualified Market Maker in promoting market competition in its flow to the Exchange and provide meaningful added levels of displayed Program; broader forms that are most important to • 14 liquidity, thereby contributing to the An additional credit of $0.0001 per investors and listed companies.’’ share in Tape B securities by having As the Commission itself recognized, depth and market quality on the greater than 0.10% added in Tape B the market for trading services in NMS Exchange. The proposed increased credits would also enable the Exchange securities of Tape B CADV; and stocks has become ‘‘more fragmented • and competitive.’’ 15 Indeed, equity to compete for order flow. An additional credit of $0.00005 trading is currently dispersed across 13 As noted above, no ETP Holder per share in Tape B securities by having exchanges,16 32 alternative trading currently qualifies for the Step Up Tier greater than 1.75% added of US CADV systems,17 and numerous broker-dealer of which 0.60% or greater is in Tape B finra.org/otctransparency/AtsIssueData. Although securities. 54 alternative trading systems were registered with 12 15 U.S.C. 78f(b). the Commission as of April 30, 2019, only 32 are Nasdaq members meeting all of the 13 15 U.S.C. 78f(b)(4) and (5). currently trading. A list of alternative trading above requirements would receive a 14 See Securities Exchange Act Release No. 51808 systems registered with the Commission is available combined credit of $0.00325 per share (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). at https://www.sec.gov/foia/docs/atslist.htm. in Tape A and Tape C securities, and 15 See Securities Exchange Act Release No. 51808, 18 See Cboe Global Markets U.S. Equities Market $0.0034 per share in Tape B securities.21 84 FR 5202, 5253 (February 20, 2019) (File No. S7– Volume Summary (May 31, 2019), available at 05–18) (Final rule). http://markets.cboe.com/us/equities/market_share/. 16 See Cboe U.S. Equities Market Volume 19 Based on Cboe U.S. Equities Market Volume 20 See BZX Fee Schedule, Footnote 1, Add Summary at https://markets.cboe.com/us/equities/ Summary, the Exchange’s market share of intraday Volume Tiers, Tier 6, at https://markets.cboe.com/ market_share. trading (excluding auctions) for the months of us/equities/membership/fee_schedule/bzx/. 17 See FINRA ATS Transparency Data (May 6, January 2019, February 2019 and March 2019 was 21 See https://www.nasdaqtrader.com/ 2019), available at https://otctransparency. 9.01%, 8.33% and 9.02%, respectively. Trader.aspx?id=PriceListTrading2.

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The Exchange believes it is not additional order flow to the Exchange. III. Date of Effectiveness of the unfairly discriminatory to provide The Exchange believes that the Proposed Rule Change and Timing for increased per share credits as the proposed increased credits would Commission Action proposed increased credits would be continue to incentivize market The foregoing rule change is effective provided on an equal basis to all ETP participants to direct providing upon filing pursuant to Section Holders that add liquidity by meeting displayed order flow to the Exchange. 19(b)(3)(A) 25 of the Act and the Step Up Tier 4 requirement. Further, Greater liquidity benefits all market subparagraph (f)(2) of Rule 19b–4 26 the Exchange believes the proposed participants on the Exchange by thereunder, because it establishes a due, increased per share credits would providing more trading opportunities fee, or other charge imposed by the incentivize ETP Holders that meet the and encourages ETP Holders, to send Exchange. current Tier 1 requirement and send orders, thereby contributing to robust At any time within 60 days of the more of their orders to the Exchange to levels of liquidity, which benefits all filing of such proposed rule change, the qualify for increased credits. The market participants. The proposed Commission summarily may proposed increased per share credits credits would be available to all temporarily suspend such rule change if would apply equally to all ETP Holders similarly-situated market participants, it appears to the Commission that such as each would be required to execute and, as such, the proposed change action is necessary or appropriate in the providing ADV per month that is an would not impose a disparate burden on public interest, for the protection of increase of no less than 0.70% of US competition among market participants investors, or otherwise in furtherance of CADV over their January baseline taken on the Exchange. the purposes of the Act. If the as a percentage of US CADV, regardless Intermarket Competition. The Commission takes such action, the of whether an ETP Holder currently Exchange operates in a highly Commission shall institute proceedings meets the requirement of another competitive market in which market under Section 19(b)(2)(B) 27 of the Act to pricing tier. participants can readily choose to send determine whether the proposed rule The Exchange believes that their orders to other exchange and off- change should be approved or recalibrating the credits for providing exchange venues if they deem fee levels disapproved. liquidity will continue to attract order at those other venues to be more IV. Solicitation of Comments flow and liquidity to the Exchange, favorable. The Exchange notes that for thereby contributing to price discovery the months of January 2019, February Interested persons are invited to on the Exchange and benefiting 2019 and March 2019, the Exchange’s submit written data, views, and investors generally. market share of intraday trading arguments concerning the foregoing, Finally, the Exchange believes that it (excluding auctions) was 9.01%, 8.33% including whether the proposed rule is subject to significant competitive and 9.02%, respectively.24 In such an change is consistent with the Act. forces, as described below in the environment, the Exchange must Comments may be submitted by any of Exchange’s statement regarding the the following methods: burden on competition. continually adjust its fees and rebates to For the foregoing reasons, the remain competitive with other Electronic Comments exchanges and with off-exchange Exchange believes that the proposal is • Use the Commission’s internet venues. Because competitors are free to consistent with the Act. comment form (http://www.sec.gov/ modify their own fees and credits in rules/sro.shtml); or B. Self-Regulatory Organization’s response, and because market • Send an email to rule-comments@ Statement on Burden on Competition participants may readily adjust their sec.gov. Please include File Number SR– order routing practices, the Exchange In accordance with Section 6(b)(8) of NYSEArca-2019–43 on the subject line. the Act,22 the Exchange believes that the does not believe its proposed fee change proposed rule change would not impose can impose any burden on competition. Paper Comments any burden on competition that is not The Exchange believes that the • Send paper comments in triplicate necessary or appropriate in furtherance proposed change could promote to Secretary, Securities and Exchange of the purposes of the Act. Instead, as competition between the Exchange and Commission, 100 F Street NE, discussed above, the Exchange believes other execution venues, including those Washington, DC 20549–1090. that the proposed changes would that currently offer similar order types All submissions should refer to File encourage the submission of additional and comparable transaction pricing, by Number SR–NYSEArca–2019–43. This liquidity to a public exchange, thereby encouraging additional orders to be sent file number should be included on the promoting market depth, price to the Exchange for execution. The subject line if email is used. To help the discovery and transparency and Exchange also believes that the Commission process and review your enhancing order execution proposed change is designed to provide comments more efficiently, please use opportunities for ETP Holders. As a the public and investors with a only one method. The Commission will result, the Exchange believes that the Schedule of Fees and Rebates that is post all comments on the Commission’s proposed change furthers the clear and consistent, thereby reducing internet website (http://www.sec.gov/ Commission’s goal in adopting burdens on the marketplace and rules/sro.shtml). Copies of the Regulation NMS of fostering integrated facilitating investor protection. submission, all subsequent competition among orders, which C. Self-Regulatory Organization’s amendments, all written statements promotes ‘‘more efficient pricing of with respect to the proposed rule individual stocks for all types of orders, Statement on Comments on the 23 Proposed Rule Change Received From change that are filed with the large and small.’’ Commission, and all written Intramarket Competition. The Members, Participants, or Others communications relating to the proposed change is designed to attract No written comments were solicited proposed rule change between the or received with respect to the proposed 22 15 U.S.C. 78f(b)(8). rule change. 25 23 Securities Exchange Act Release No. 51808, 70 15 U.S.C. 78s(b)(3)(A). FR 37495, 37498–99 (June 29, 2005) (S7–10–04) 26 17 CFR 240.19b–4(f)(2). (Final Rule). 24 See note 10, supra. 27 15 U.S.C. 78s(b)(2)(B).

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Commission and any person, other than the quoting requirements in order for broader forms that are most important to those that may be withheld from the ETP Holders to qualify for Adding Tier investors and listed companies.’’ 3 public in accordance with the 1, Adding Tier 2 and Adding Tier 3 fees. As the Commission itself recognized, provisions of 5 U.S.C. 552, will be The Exchange also proposes non- the market for trading services in NMS available for website viewing and substantive changes to the presentation stocks has become ‘‘more fragmented printing in the Commission’s Public of the Adding Tiers. The proposed rule and competitive.’’ 4 Indeed, equity Reference Room, 100 F Street NE, change is available on the Exchange’s trading is currently dispersed across 13 Washington, DC 20549 on official website at www.nyse.com, at the exchanges,5 32 alternative trading business days between the hours of principal office of the Exchange, and at systems,6 and numerous broker-dealer 10:00 a.m. and 3:00 p.m. Copies of the the Commission’s Public Reference internalizers and wholesalers. Based on filing also will be available for Room. publicly-available information, no inspection and copying at the principal single exchange has more than 18% of office of the Exchange. All comments II. Self-Regulatory Organization’s the market share of executed volume of received will be posted without change. Statement of the Purpose of, and equity trades (whether excluding or Persons submitting comments are Statutory Basis for, the Proposed Rule including auction volume).7 Therefore, cautioned that we do not redact or edit Change no exchange possesses significant personal identifying information from pricing power in the execution of equity comment submissions. You should In its filing with the Commission, the self-regulatory organization included order flow. More specifically, in May submit only information that you wish 2019, the Exchange had 1.3% market to make available publicly. All statements concerning the purpose of, and basis for, the proposed rule change share of executed volume of equity submissions should refer to File trades (excluding auction volume).8 The Number SR–NYSEArca–2019–43 and and discussed any comments it received on the proposed rule change. The text Exchange believes that the ever-shifting should be submitted on or before July market share among the exchanges from 12, 2019. of those statements may be examined at the places specified in Item IV below. month to month demonstrates that For the Commission, by the Division of The Exchange has prepared summaries, market participants can shift order flow, Trading and Markets, pursuant to delegated or discontinue to reduce use of certain 28 set forth in sections A, B, and C below, authority. categories of products, in response to fee Vanessa A. Countryman, of the most significant parts of such statements. changes. Accordingly, competitive Acting Secretary. forces constrain the Exchange’s [FR Doc. 2019–13123 Filed 6–20–19; 8:45 am] A. Self-Regulatory Organization’s transaction fees, and market participants BILLING CODE 8011–01–P Statement of the Purpose of, and can readily trade on competing venues Statutory Basis for, the Proposed Rule if they deem pricing levels at those Change other venues to be more favorable. SECURITIES AND EXCHANGE The Exchange utilizes a ‘‘taker- 1. Purpose COMMISSION maker’’ or inverted fee model to attract [Release No. 34–86126; File No. SR– The Exchange proposes to amend its orders that provide liquidity at the most NYSENAT–2019–14] Schedule of Fees and Rebates (‘‘Fee competitive prices. Under the taker- Schedule’’) to reduce the number of maker model, offering rebates for taking Self-Regulatory Organizations; NYSE securities in which an ETP Holder must liquidity increases the likelihood that National, Inc.; Notice of Filing and quote to qualify for Adding Tier 1, market participants will send orders to Immediate Effectiveness of Proposed Adding Tier 2 and Adding Tier 3 fees. the Exchange to trade with liquidity Rule Change To Amend Its Schedule of Specifically, the Exchange proposes to providers’ orders. This increased taker Fees and Rebates lower the number of securities in which order flow provides an incentive for market participants to send orders that June 17, 2019. an ETP Holder must quote to qualify for provide liquidity. The Exchange charges Pursuant to Section 19(b)(1) of the Adding Tiers 1–3 by 50 securities across fees for order flow that provides Securities Exchange Act of 1934 the board. The Exchange also proposes liquidity. These fees are reasonable due (‘‘Act’’),1 and Rule 19b–4 thereunder,2 non-substantive changes to the notice is hereby given that on June 3, presentation of the Adding Tiers on the 2019, NYSE National, Inc. (‘‘NYSE Fee Schedule. The Exchange proposes 3 See Securities Exchange Act Release No. 51808 to implement the rule change on June 3, (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). National’’ or ‘‘Exchange’’) filed with the 4 See Securities Exchange Act Release No. 51808, Securities and Exchange Commission 2019. 84 FR 5202, 5253 (February 20, 2019) (File No. S7– (‘‘SEC’’ or ‘‘Commission’’) the proposed 05–18) (Transaction Fee Pilot for NMS Stocks Final Background rule change as described in Items I, II, Rule) (‘‘Transaction Fee Pilot’’). and III below, which Items have been 5 See Cboe Global Markets, U.S. Equities Market The Exchange operates in a highly Volume Summary (May 31, 2019), available at prepared by the Exchange. The competitive market. The Commission http://markets.cboe.com/us/equities/market_share/. Commission is publishing this notice to has repeatedly expressed its preference See generally https://www.sec.gov/fast-answers/ solicit comments on the proposed rule for competition over regulatory divisionsmarketregmrexchangesshtml.html. change from interested persons. 6 See FINRA ATS Transparency Data (May 6, intervention in determining prices, 2019), available at https://otctransparency. I. Self-Regulatory Organization’s products, and services in the securities finra.org/otctransparency/AtsIssueData. Although Statement of the Terms of Substance of markets. Specifically, in Regulation 54 alternative trading systems were registered with NMS, the Commission highlighted the the Commission as of April 30, 2019, only 32 are the Proposed Rule Change currently trading. A list of alternative trading importance of market forces in The Exchange proposes to amend its systems registered with the Commission is available determining prices and SRO revenues at https://www.sec.gov/files/data/alternative- Schedule of Fees and Rebates to revise and, also, recognized that current trading-system-ats-list/atslist043019.pdf. regulation of the market system ‘‘has 7 See Cboe Global Markets U.S. Equities Market 28 17 CFR 200.30–3(a)(12). Volume Summary (May 31, 2019), available at 1 15 U.S.C. 78s(b)(1). been remarkably successful in http://markets.cboe.com/us/equities/market_share/. 2 17 CFR 240.19b–4. promoting market competition in its 8 See id.

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to the additional marketable interest (in that this reduction in the number of daily basis, calculated monthly, and part attracted by the exchange’s rebate securities would be significant enough have an ADV of adding liquidity as a to remove liquidity) with which those to incentivize market participants to percentage of US CADV of 0.10% or order flow providers can trade. increase their quoting on the Exchange more, are charged the following fees: The Exchange sets forth the fees it to meet the new lower requirement, and • $0.0012 per share for adding charges for adding liquidity in four thus be eligible for lower fees, and displayed orders in Tape B and C Adding Tiers that establish minimum submit additional adding liquidity to securities and $0.0015 per share in Tape quoting or volume requirements that an the Exchange. A securities; ETP Holder must satisfy in order to be • $0.0012 per share for orders that set Adding Tier 1 eligible for specific corresponding fees. a new Exchange BBO in Tape B and C These quoting and volume requirements Under current Adding Tier 1, ETP securities and $0.0015 per share in Tape are based on the type of liquidity (i.e., Holders that add liquidity to the A securities; displayed, non-displayed, BBO setting, Exchange in securities with a per share • $0.0014 per share for adding non- or MPL) and the type of security (i.e., price of $1.00 or more and that: displayed orders in Tape B and C whether it is a Tape A, B or C security). (i) Quote at the NBBO 11 at least 5% securities and $0.0017 per share in Tape In addition, the Exchange offers two of the time in 1,000 or more securities A securities; and ‘‘step up’’ Adding Tiers that do not have on an average daily basis, calculated • $0.0005 per share for MPL orders, quoting or minimum volume monthly, and have an average daily which would remain unchanged. requirements but require ETP Holders to volume (‘‘ADV’’) of adding liquidity as The Exchange proposes to reduce the provide additional incremental a percentage of US consolidated ADV number of securities in which the ETP liquidity, thus ‘‘stepping up’’ their (‘‘CADV’’) of 0.20% or more, or Holder must quote to qualify for the tier, liquidity provision, in order to qualify (ii) quote at the NBBO at least 5% of and would require ETP Holders to quote for better pricing based on smaller the time in 2,500 or more securities on at least 5% of the time at the NBBO in amounts of liquidity than are required an average daily basis, calculated 1,950 (instead of 2,000) or more to qualify for Adding Tiers 1–3. The monthly, and have an ADV of adding securities on an average daily basis, different tiers are designed to provide an liquidity as a percentage of US CADV of calculated monthly. The fees charged incentive for order flow providers to 0.10% or more, under the Adding Tier 2 would not add liquidity on the Exchange because would be charged the following fees: change. the fees are lower for the tiers that have • $0.0008 per share for adding Adding Tier 3 higher quoting or volume requirements. displayed orders in Tape B and C ETP Holders that do not send order flow securities and $0.0011 per share in Tape Under current Adding Tier 3, ETP to the Exchange to qualify for the A securities; Holders that add liquidity to the Adding Tier rates would receive the • $0.0008 per share for orders that set Exchange in stocks with a per share rates set forth under item A (General a new Exchange BBO in Tape B and C price of $1.00 or more and that quote at Rates) of the Fee Schedule. securities and $0.0011 per share in Tape least 5% of the NBBO in 600 or more To respond to this competitive A securities; securities on an average daily basis, environment, the Exchange proposes to • $0.0010 per share for adding non- calculated monthly, are charged the adjust its pricing to reduce the number displayed orders in Tape B and C following fees: of securities in which an ETP Holder securities and $0.0013 per share in Tape • $0.0015 per share for adding must quote in order to qualify for the A securities; and displayed orders in Tape B and C Adding Tier 1–3 fees. The Exchange’s • $0.0005 per share for MPL orders. securities and $0.0017 per share in Tape market share of intraday trading (i.e., The Exchange proposes to amend the A securities; excluding auctions) declined from 1.5% quoting requirements for both • $0.0015 per share for orders that set for the month of March 2019 to 1.3% for alternative methods described in (i) and a new Exchange BBO in Tape B and C the month of May 2019.9 The proposed (ii) above to qualify for the tier by securities and $0.0017 per share in Tape fee change is designed to attract reducing the number of securities in A securities; additional order flow to the Exchange which the ETP Holder must quote. As • $0.0017 per share for adding non- by making it easier to qualify for the proposed, the first alternative would displayed orders in Tape B and C respective tiered rates. require ETP Holders to quote at least 5% securities and $0.0019 per share in Tape Proposed Rule Change of the time at the NBBO in 950 (instead A securities; and of 1,000) or more securities on an • $0.0005 per share for MPL orders, As described in more detail below, in average daily basis, calculated monthly, which would remain unchanged. order to qualify for the Adding Tiers 1– while the second would require ETP The Exchange proposes to reduce the 3 fees, an ETP Holder must be quoting Holders to quote at least 5% of the time number of securities in which the ETP at a price that is equal to the NBBO a at the NBBO in 2,450 (instead of 2,500) Holder must quote to qualify for the tier specified percentage of the time, in a or more securities on an average daily by 50, and would require ETP Holders 10 specific number of securities. The basis, calculated monthly. The fees to quote at least 5% of the NBBO in 550 Exchange proposes to lower the number charged under the Adding Tier 1 would (instead of 600) or more securities on an of securities in which an ETP Holder not change. average daily basis, calculated monthly. must quote to qualify for Adding Tiers The fees charged under the Adding Tier 1–3 by 50 securities across the board. Adding Tier 2 3 would not change. Without having a view of ETP Holder’s Under current Adding Tier 2, ETP activity on other markets and off- Holders that add liquidity to the Application of Proposed Fee Change exchange venues, the Exchange believes Exchange in securities with a per share The proposed rule change is designed price of $1.00 or more and that quote at to provide order flow providers with an 9 See id. least 5% of the time at the NBBO in incentive to route liquidity-providing 10 The Adding Tier 4 volume requirements are order flow to the Exchange. As currently waived. See footnote * in the current Fee 2000 or more securities on an average Schedule. The Exchange proposes no changes to described above, ETP Holders with Adding Tier 4. 11 See footnote ** in the current Fee Schedule. liquidity-providing order flow have a

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choice of where to send that order flow. quotes at least 5% of the NBBO in 975 Proposed Non-Substantive Changes The Exchange believes that if it reduces securities on an average daily basis, the requirements to qualify for tiers that calculated monthly, that ETP Holder The Exchange also proposes a non- have lower charges, more ETP Holders would meet the proposed requirement substantive change to the presentation will choose to route their liquidity- of at least 950 securities to qualify for of the Adding Tiers under item B providing order flow to the Exchange to Adding Tier 1. Prior to the proposed (Tiered Rates) of the Fee Schedule. The Exchange proposes a horizontal qualify for those tiers. The Exchange change, that ETP Holder would fall presentation similar to the presentation cannot predict with certainty how many short of the requirement for Tier 1, and of the Taking Tiers rather than the ETP Holders would avail themselves of would have instead qualified for Adding this opportunity, but believes that more current vertical presentation. The Tier 3. With this proposed change, this than 12 ETP Holders could qualify for Exchange also proposes to simplify the ETP Holder would now be eligible for these tiers if they so choose.12 presentation by using sub-titles to Additional liquidity-providing order Adding Tier 1 fees, which, except for identify the type of liquidity (i.e., flow benefits all market participants MPL Adding fees, are lower than the displayed, non-displayed, BBO setting, because it provides greater execution Adding Tier 3 fees. The Exchange and MPL) and then listing the opportunities on the Exchange. believes that charging lower fees would corresponding fees under each category. For example, assume an ETP Holder create an incentive for liquidity The proposed substantive changes averages an ADV of 17.5 million shares providers to direct order flow to the described above would be included in of adding liquidity in a month where a Exchange, which in turn would create the new presentation of the Tiered billing month of US CADV is 7 billion, additional execution opportunities for Rates. The proposed changes would or 0.25% of CADV. If that ETP Holder all market participants. appear as follows in the Fee Schedule:

Adding fees Tier requirement (per share)

Adding Tier 1

Either: Displayed liquidity: (i) at least 5% of the NBBO ** in 950 or more symbols on an average daily basis, calculated monthly —Tapes B and C: $0.0008. and 0.20% or more Adding ADV as a % of US CADV, or —Tape A: $0.0011. (ii) at least 5% of the NBBO ** in 2,450 or more symbols on an average daily basis, calculated month- Non-displayed liquidity: ly and 0.10% or more Adding ADV as a % of US CADV. —Tapes B and C: $0.0010. —Tape A: $0.0013. BBO setting: —Tapes B and C: $0.0008. —Tape A: $0.0011. MPL: —All Tapes: $0.0005.

Adding Tier 2

At least 5% of the NBBO ** in 1,950 or more symbols on an average daily basis, calculated monthly and Displayed liquidity: 0.10% or more Adding ADV as a % of US CADV. —Tapes B and C: $0.0012. —Tape A: $0.0015. Non-displayed liquidity: —Tapes B and C: $0.0014. —Tape A: $0.0017. BBO Setting: —Tapes B and C: $0.0012. —Tape A: $0.0015. MPL: —All Tapes: $0.0005.

Adding Tier 3

At least 5% of the NBBO ** in 550 or more symbols on an average daily basis, calculated monthly ...... Displayed liquidity: —Tapes B and C: $0.0015. —Tape A: $0.0017. Non-displayed liquidity: —Tapes B and C: $0.0017. —Tape A: $0.0019. BBO Setting: —Tapes B and C: $0.0015. —Tape A: $0.0017. MPL: —All Tapes: $0.0005.

12 In the month of May 2019, 12 ETP Holders quoted at least 5% of the time at the NBBO in at least 10 securities.

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Adding fees Tier requirement (per share)

Adding Tier 4 *

0.015% or more Adding ADV as a % of US CADV ...... Displayed liquidity: —Tapes B and C: $0.0023. —Tape A: $0.0025. Non-displayed liquidity: —Tapes B and C: $0.0025. —Tape A: $0.0027. BBO Setting: —Tapes B and C: $0.0021. —Tape A: $0.0023. MPL: —All Tapes: $0.0005.

Step Up Adding Tier 1

0.07% or more Adding ADV as a % of US CADV over the ETP Holder’s Adding ADV as a % of US CADV Displayed liquidity: in November 2018. —Tapes B and C: $0.0012. —Tape A: $0.0015. Non-displayed liquidity: —Tapes B and C: $0.0014. —Tape A: $0.0017. BBO Setting: —Tape B and C: $0.0012. —Tape A: $0.0015. MPL: —All Tapes: $0.0005.

Step Up Adding Tier 2

0.04% or more Adding ADV as a % of US CADV over the ETP Holder’s Adding ADV as a % of US CADV Displayed liquidity: in November 2018. —Tape B and C: $0.0015. —Tape A: $0.0018. Non-displayed liquidity: —Tapes B and C: $0.0017. —Tape A: $0.0020. BBO Setting: —Tapes B and C: $0.0015. —Tape A: $0.0018. MPL: —All Tapes: $0.0005.

The Exchange believes the proposed members, issuers and other persons system ‘‘has been remarkably successful change will add clarity to the using its facilities and does not unfairly in promoting market competition in its Exchange’s rules by making the Fee discriminate between customers, broader forms that are most important to Schedule easier to read. Other than the issuers, brokers or dealers. investors and listed companies.’’ 15 changes to the Adding Tier quoting The Exchange believes that lowering As the Commission itself recognized, qualifications described above, the the number of securities in which ETP the market for trading services in NMS Exchange proposes no other substantive Holders are required to quote at least stocks has become ‘‘more fragmented changes to the Adding Tiers. 5% of the time at the NBBO on an and competitive.’’ 16 Indeed, equity The proposed changes are not average daily basis, calculated monthly, otherwise intended to address any other trading is currently dispersed across 13 for Adding Tiers 1–3 provides for the 17 issues, and the Exchange is not aware of exchanges, 32 alternative trading equitable allocation of reasonable dues systems,18 and numerous broker-dealer any problems that ETP Holders would and fees and is not unfairly have in complying with the proposed discriminatory for the following 15 change. See Securities Exchange Act Release No. 51808 reasons. (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 16 2. Statutory Basis As noted above, the Exchange See Transaction Fee Pilot, 84 FR at 5253. 17 See Cboe Global Markets, U.S. Equities Market The Exchange believes that the operates in a highly competitive market. Volume Summary (May 31, 2019), available at proposed rule change is consistent with The Commission has repeatedly http://markets.cboe.com/us/equities/market_share/. Section 6(b) of the Act,13 in general, and expressed its preference for competition See generally https://www.sec.gov/fast-answers/ furthers the objectives of Sections over regulatory intervention in divisionsmarketregmrexchangesshtml.html. 18 See FINRA ATS Transparency Data (May 6, 14 6(b)(4) and 6(b)(5) of the Act, in determining prices, products, and 2019), available at https:// particular, because it provides for the services in the securities markets. otctransparency.finra.org/otctransparency/ equitable allocation of reasonable dues, Specifically, in Regulation NMS, the AtsIssueData. Although 54 alternative trading fees, and other charges among its Commission highlighted the importance systems were registered with the Commission as of April 30, 2019, only 32 are currently trading. A list of market forces in determining prices of alternative trading systems registered with the 13 15 U.S.C. 78f(b). and SRO revenues and, also, recognized Commission is available at https://www.sec.gov/ 14 15 U.S.C. 78f(b)(4) & (5). that current regulation of the market Continued

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internalizers and wholesalers. Based on profile of liquidity-providing firms market depth, price discovery and publicly-available information, no generally, the Exchange believes that transparency and enhancing order single exchange has more than 18% of more than twelve (12) firms could execution opportunities for ETP the market share of executed volume of qualify for these tiers if they choose to Holders. As a result, the Exchange equity trades (whether including or direct order flow to, and increase believes that the proposed change excluding auction volume).19 Therefore, quoting on, the Exchange. furthers the Commission’s goal in no exchange possesses significant Moreover, the proposed change is adopting Regulation NMS of fostering pricing power in the execution of equity equitable and not unfairly competition among orders, which order flow. More specifically, in May discriminatory because all qualifying promotes ‘‘more efficient pricing of 2019, the Exchange had 1.3% market ETP Holders that add liquidity to the individual stocks for all types of orders, Exchange and quote at the NBBO in share of executed volume of equity large and small.’’ 22 trades (excluding auction volume).20 each tier would be eligible for the fee by The Exchange believes that the ever- satisfying the lowered quoting Intramarket Competition. The shifting market share among the thresholds, and because the lower proposed change is designed to attract exchanges from month to month thresholds would apply equally to all additional order flow to the Exchange demonstrates that market participants similarly situated ETP Holders. The by reducing the number of securities can shift order flow, or discontinue or Exchange further believes that the that an ETP Permit holder is required to reduce use of certain categories of proposed changes would not permit quote for Adding Tiers 1–3. Greater products, in response to fee changes. unfair discrimination among ETP liquidity benefits all market participants Accordingly, competitive forces Holders because the different tiered on the Exchange by providing more constrain exchange transaction fees. rates are available equally to all ETP trading opportunities and encourages The Exchange believes the proposed Holders. As described above, in today’s ETP Holders to send orders, thereby change is equitable and not unfairly competitive marketplace, order flow contributing to robust levels of liquidity, discriminatory because it would providers have a choice of where to which benefits all market participants. continue to encourage ETP Holders to direct liquidity-providing order flow, The proposed reduced quoting send orders to the Exchange, thereby and while only four ETP Holders have requirement would be available to all contributing to robust levels of liquidity, qualified to date for these rates, the similarly-situated market participants, which benefits all market participants. Exchange believes there are additional and, as such, the proposed change Further, the Exchange believes that, for ETP Holders that could qualify if they would not impose a disparate burden on the reasons discussed above, lowering chose to direct their order flow to the competition among market participants the quoting requirement would make it Exchange. on the Exchange. easier for liquidity providers to qualify The Exchange also believes that the for the fees, thereby encouraging proposed non-substantive changes to Intermarket Competition. The submission of additional liquidity to the the Adding Tier presentation would not Exchange operates in a highly Exchange. The proposed change will be inconsistent with the public interest competitive market in which market thereby encourage the submission of and the protection of investors because participants can readily choose to send additional liquidity to a national investors will not be harmed and in fact their orders to other exchange and off- securities exchange, thus promoting would benefit from increased clarity exchange venues if they deem fee levels price discovery and transparency and and transparency, thereby reducing at those other venues to be more enhancing order execution potential confusion. favorable. The Exchange notes that opportunities for ETP Holders from the Finally, the Exchange believes that it Exchange’s market share of intraday substantial amounts of liquidity present is subject to significant competitive trading (excluding auctions) declined on the Exchange. All ETP Holders forces, as described below in the from 1.5% for the month of March 2019 would benefit from the greater amounts Exchange’s statement regarding the to 1.3% for the month of May 2019.23 of liquidity that will be present on the burden on competition. In such an environment, the Exchange Exchange, which would provide greater For the foregoing reasons, the must continually adjust its fees and Exchange believes that the proposal is execution opportunities. rebates to remain competitive with other The Exchange notes that there are consistent with the Act. exchanges and with off-exchange currently four (4) firms qualifying for the combined Adding Tiers 1–4 and B. Self-Regulatory Organization’s venues. Because competitors are free to that, based on current participation on Statement on Burden on Competition modify their own fees and credits in the Exchange, no additional firms In accordance with Section 6(b)(8) of response, and because market would initially qualify with the lower the Act,21 the Exchange believes that the participants may readily adjust their requirements. Without having a view of proposed rule change would not impose order routing practices, the Exchange an ETP Holder’s activity on other any burden on competition that is not does not believe its proposed fee change markets and off-exchange venues, the necessary or appropriate in furtherance can impose any burden on competition. Exchange believes the proposed lower of the purposes of the Act. Instead, as The Exchange believes that the quoting requirement would provide an discussed above, the Exchange believes proposed change could promote incentive for market participants to that the proposed changes would competition between the Exchange and increase their quoting to meet the new encourage the submission of additional other execution venues, including those lower requirement and submit liquidity to a public exchange by that currently offer similar order types additional adding liquidity to the making it easier for liquidity providers and comparable transaction pricing, by Exchange. In addition, based on the to qualify for the Adding Tier 1–3 fees, encouraging additional orders to be sent thereby increasing the likelihood that to the Exchange for execution. files/data/alternative-trading-system-ats-list/ market participants will send orders to atslist043019.pdf. the Exchange to trade with the liquidity 19 See Cboe Global Markets U.S. Equities Market 22 Securities Exchange Act Release No. 51808, 70 Volume Summary (May 31, 2019), available at providers’ orders and thus promoting FR 37495, 37498–99 (June 29, 2005) (S7–10–04) http://markets.cboe.com/us/equities/market_share/. (Final Rule). 20 See id. 21 15 U.S.C. 78f(b)(8). 23 See note 9, supra.

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C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the Act’’) 1 and Rule 19b–4 2 thereunder to Statement on Comments on the submission, all subsequent propose changes to OCC’s margin Proposed Rule Change Received From amendments, all written statements methodology to introduce a new model Members, Participants, or Others with respect to the proposed rule to estimate the liquidation cost for all No written comments were solicited change that are filed with the options and futures, as well as the 3 or received with respect to the proposed Commission, and all written securities in margin collateral. rule change. communications relating to the The Proposed Rule Change was proposed rule change between the published for public comment in the III. Date of Effectiveness of the Commission and any person, other than Federal Register on May 6, 2019,4 and Proposed Rule Change and Timing for those that may be withheld from the the Commission received no comments Commission Action public in accordance with the regarding the Proposed Rule Change. The foregoing rule change is effective provisions of 5 U.S.C. 552, will be This order approves the Proposed Rule upon filing pursuant to Section available for website viewing and Change. 19(b)(3)(A) 24 of the Act and printing in the Commission’s Public II. Background subparagraph (f)(2) of Rule 19b–4 25 Reference Room, 100 F Street NE, The System for Theoretical Analysis thereunder, because it establishes a due, Washington, DC 20549 on official and Numerical Simulations (‘‘STANS’’) fee, or other charge imposed by the business days between the hours of is OCC’s methodology for calculating Exchange. 10:00 a.m. and 3:00 p.m. Copies of the At any time within 60 days of the filing also will be available for margin requirements. OCC uses the filing of such proposed rule change, the inspection and copying at the principal STANS methodology to measure the Commission summarily may offices of the Exchange. All comments exposure of portfolios of options and futures cleared by OCC and of cash temporarily suspend such rule change if received will be posted without change. instruments that are part of margin it appears to the Commission that such Persons submitting comments are collateral. STANS margin requirements action is necessary or appropriate in the cautioned that we do not redact or edit are intended to cover potential losses public interest, for the protection of personal identifying information from due to price movements over a two-day investors, or otherwise in furtherance of comment submissions. You should risk horizon; however, the current the purposes of the Act. If the submit only information that you wish STANS margin requirements do not Commission takes such action, the to make available publicly. All cover the potential additional Commission shall institute proceedings submissions should refer to File liquidation costs OCC may incur in under Section 19(b)(2)(B) 26 Number SR–NYSENAT–2019–14, and of the Act to closing out a defaulted Clearing should be submitted on or before July determine whether the proposed rule Member’s portfolio.5 Closing out change should be approved or 12, 2019. positions in a defaulted Clearing disapproved. For the Commission, by the Division of Member’s portfolio could entail selling IV. Solicitation of Comments Trading and Markets, pursuant to delegated longs at the bid price and covering authority.27 shorts at the ask price. Additionally, Interested persons are invited to Vanessa A. Countryman, submit written data, views, and even well-hedged portfolios consisting Acting Secretary. arguments concerning the foregoing, of offsetting longs and shorts would including whether the proposed rule [FR Doc. 2019–13115 Filed 6–20–19; 8:45 am] require some cost to liquidate in the change is consistent with the Act. BILLING CODE 8011–01–P event of a default. The process of Comments may be submitted by any of modeling liquidation costs is, therefore, relevant to ensuring that OCC holds the following methods: SECURITIES AND EXCHANGE Electronic Comments COMMISSION 1 15 U.S.C. 78s(b)(1). 2 • Use the Commission’s internet 17 CFR 240.19b–4. 3 See Notice of Filing infra note 4, at 84 FR 19815. [Release No. 34–86119; File No. SR–OCC– comment form (http://www.sec.gov/ 4 Securities Exchange Act Release No. 85755 rules/sro.shtml); or 2019–004] (Apr. 30, 2019), 84 FR 19815 (May 6, 2019) (SR– • Send an email to rule-comments@ OCC–2019–004) (‘‘Notice of Filing’’). OCC also filed sec.gov. Please include File Number SR– Self-Regulatory Organizations; the a related advance notice (SR–OCC–2019–802) NYSENAT–2019–14 on the subject line. Options Clearing Corporation; Order (‘‘Advance Notice’’) with the Commission pursuant Approving Proposed Rule Change to Section 806(e)(1) of Title VIII of the Dodd-Frank Paper Comments Wall Street Reform and Consumer Protection Act, Related to the Introduction of a New entitled the Payment, Clearing, and Settlement • Send paper comments in triplicate Liquidation Cost Model in the Options Supervision Act of 2010 and Rule 19b–4(n)(1)(i) to Secretary, Securities and Exchange Clearing Corporation’s Margin under the Exchange Act. 12 U.S.C. 5465(e)(1). 15 Methodology U.S.C. 78s(b)(1) and 17 CFR 240.19b–4, Commission, 100 F Street NE, respectively. The Advance Notice was published in Washington, DC 20549–1090. the Federal Register on May 21, 2019. Securities June 17, 2019. All submissions should refer to File Exchange Act Release No. 85863 (May 15, 2019), 84 Number SR–NYSENAT–2019–14. This I. Introduction FR 23090 (May 21, 2019) (SR–OCC–2019–802). 5 OCC previously introduced a liquidation cost file number should be included on the model into STANS for risk managing only long- subject line if email is used. To help the On April 18, 2019, the Options dated options on the Standard & Poor’s (‘‘S&P’’) 500 Commission process and review your Clearing Corporation (‘‘OCC’’) filed with index (‘‘SPX’’) that have a tenor of three-years or comments more efficiently, please use the Securities and Exchange more. See Securities Exchange Act Release No. Commission (‘‘Commission’’) the 70719 (October 18, 2013), 78 FR 63548 (October 24, only one method. The Commission will 2013) (SR–OCC–2013–16). Under the proposal post all comments on the Commission’s proposed rule change SR–OCC–2019– described in the Proposed Rule Change, OCC would internet website (http://www.sec.gov/ 004 (‘‘Proposed Rule Change’’) pursuant replace the existing liquidation model for long- to Section 19(b) of the Securities dated SPX options with the proposed model. Long- dated SPX options, however, constituted less than 24 Exchange Act of 1934 (‘‘Exchange 15 U.S.C. 78s(b)(3)(A). 0.5 percent of open interest in SPX options open 25 17 CFR 240.19b–4(f)(2). interest at the time of filing. See Notice of Filing, 26 15 U.S.C. 78s(b)(2)(B). 27 17 CFR 200.30–3(a)(12). 84 FR at 19816, note 7.

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sufficient financial resources to close- The process of calculating the Vega proposes including a minimum Vega LC out the portfolio of a defaulted Clearing LC and the Delta LC for each portfolio based on the number of contracts in Member. would require a series of steps, each sub-portfolio. The minimum Vega OCC is proposing to introduce a new beginning with the decomposition of LC of a sub-portfolio would be the total model to its margin methodology to each portfolio into a set of sub-portfolios number of option contracts in the sub- estimate the liquidation cost for all based on the asset underlying each portfolio multiplied by a fixed dollar options and futures, as well as cash instrument in the portfolio. Each sub- amount.15 portfolio would represent a class of instruments that are part of margin b. Delta Liquidation Cost collateral. According to OCC, the instruments. As proposed, the model purpose of this proposal is to collect would include 14 potential classes of Similar to the Vega LC process, the additional financial resources to guard underlying assets based on the liquidity model would calculate Delta LC for each against potential shortfalls in margin of the assets within each class.11 sub-portfolio, which would then be aggregated at the portfolio level. OCC requirements that may arise due to the a. Vega Liquidation Cost costs of liquidating the portfolio of a would first identify and net down the To calculate the Vega LC of a sub- defaulted Clearing Member.6 The Delta of the positions within each sub- portfolio, OCC would group contracts liquidation cost charge would be an portfolio. For each sub-portfolio, OCC within a sub-portfolio into ‘‘buckets’’ add-on to all accounts incurring a would estimate a bid-ask price spread based on each contract’s combination of STANS margin charge. At a high level, (as a percentage). Such a percentage tenor and Delta.12 OCC would then net the proposed model would estimate the would represent the cost of liquidating the long and the short positions down cost to liquidate a portfolio based on the one dollar unit of the underlying to a single net Vega within each bucket. mid-points of the bid-ask spreads for the security during a period of market Next, OCC would estimate the average financial instruments within the stress. The sub-portfolio Delta LC would volatility spread (i.e., the estimated bid- portfolio, and would scale up such be the net dollar Delta of the sub- ask spread on implied volatility) of the liquidation costs for large or portfolio multiplied by the bid-ask price contracts in each bucket.13 The Vega LC spread percentage.16 The portfolio-level concentrated positions that would likely of each bucket would be the net Vega be more expensive to close out. Delta LC would be the simple sum of multiplied by the average volatility the sub-portfolio Delta LCs. OCC’s proposed liquidation cost spread of the bucket. The Vega LC of a model would calculate liquidation costs sub-portfolio would be the aggregated B. Concentration Charges based on risk measures, gross contract Vega LCs of the buckets within that sub- The proposed model would also volumes, and market bid-ask spreads. portfolio. Similarly, the Vega LC of the address the potential risks involved in As described in the Proposed Rule full portfolio would be the aggregated closing out large or concentrated Change, the liquidation cost model Vega LCs of the sub-portfolios within positions in a portfolio. The size of an would include the following that portfolio.14 open position is typically measured components: (1) Calculation of Under the proposed model, the Vega against the relevant instrument’s liquidation costs for each sub-portfolio LC calculation process could result in a average daily trading volume (‘‘ADV’’). (as described below), which would then portfolio-level Vega LC of zero because Closing out a position in excess of the be aggregated at the portfolio level; (2) the process permits offsets between ADV would be expected to increase the calculation of concentration charges that contracts. To prevent such a result, OCC cost of liquidation. To account for such would be applied to scale-up the considerations, the proposed model liquidation costs as appropriate; and (3) 11 For example, equity securities would be incorporates a Vega concentration factor establishment of the liquidation cost as divided based on membership in commonly used market indices (e.g., the S&P 100) or other market and a Delta concentration factor. The a floor on a Clearing Member’s margin liquidity measures, into liquidity classes (which concentration factors would be used to 7 requirement. could include, but would not be limited to, High scale the Vega LCs and the Delta LCs of Liquid Equities, Medium Liquid Equities, and Low each sub-portfolio and to take into A. Liquidation Costs Liquid Equities). 12 For example, those options contracts with a account the additional risk posed by The proposed model would calculate tenor of 1 month and a Delta between 0.25 and 0.75 large or concentrated positions. The two risk-based liquidation costs for a could be grouped in one bucket within a sub- concentration factor could increase, but portfolio: (1) The Vega 8 liquidation cost portfolio, while option contracts with a tenor of 3 would not decrease the Vega LCs and (‘‘Vega LC’’), and (2) the Delta 9 month and a Delta between 0.25 and 0.75 would be grouped in another bucket. The proposed model the Delta LCs. liquidation cost (‘‘Delta LC’’). Options would provide for 25 buckets (based on products would incur both a Vega LC combinations of tenor and Delta) for each sub- C. Margin Floor and a Delta LC, while Delta-one portfolio. As noted above, the liquidation cost products,10 such as futures contracts, 13 Rather than recalibrate the volatility spread of charge (i.e., sum of the portfolio-level each bucket as current market conditions change, Treasury securities, and equity the estimated volatility spread of each bucket Vega LC and Delta LC) would be applied securities, would incur only a Delta LC. within a sub-portfolio would be calibrated based on as an add-on to the STANS margin data from historical periods of market stress. requirement for each account. Because 14 6 See Notice of Filing, 84 FR at 19816. The process for aggregating Vega LCs, of both STANS margin requirements are sub-portfolios and portfolios, under the proposed 7 OCC also proposes a conforming change to its model, is based on the correlations of either the Margin Policy, which would reference OCC’s model 15 bucket or the sub-portfolio being aggregated. To Specifically, the minimum cost rate would documentation. simplify the portfolio-level aggregation, the initially be set as two dollars per contract, unless 8 The Vega of an option represents the sensitivity proposed model would use a single correlation the position is long and the net asset value per of the option price to the volatility of the value across all sub-portfolios in a given portfolio contract is less than $2.00. (For a typical option underlying security. rather than a correlation matrix. To account for with a contract size of 100, this would occur if the 9 The Delta of an option represents the sensitivity potential errors that could arise out of such a option was priced below $0.02.) of the option price to the price of the underlying simplification, the proposed model would require 16 As described in the Notice of Filing, the security. the calculation of three portfolio-level Vega LCs process for determining the Delta LC of a sub- 10 A ‘‘Delta-one product’’ refers to a product for based on the three different correlation values (i.e., portfolio of U.S. dollar Treasury bonds would be which a change in the value of the underlying asset minimum, maximum, and average). The portfolio different. Specifically, it would be based on the sum results in a change of the same, or nearly the same, Vega LC would be the highest of the three Vega LCs of Delta LCs across six tenor buckets. See Notice of proportion in the value of the product. calculated in this manner. Filing, 84 FR at 19818.

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intended to cover potential losses due to estimate the margin necessary to cover resources designed to cover such costs price movements over a two-day risk liquidation costs that OCC could incur in the form of margin. Collecting horizon, the STANS requirement for when closing out a defaulted Clearing additional margin to support OCC’s well-hedged portfolios may be positive, Member’s portfolio. The Commission ability to close out a default Clearing which could result in a margin credit believes that adopting a model designed Member’s portfolio during a period of instead of a charge. to identify and measure a risk not market stress could reduce the To account for the risk of potentially addressed elsewhere in OCC’s margin potentiality that OCC would mutualize liquidating a portfolio at current methodology—namely, the cost to a loss arising out of the close-out (instead of two-day ahead) prices, OCC liquidate a defaulted Clearing Member’s process. While unavoidable under proposes to design the model such that portfolio during periods of market certain circumstances, reducing the it would not permit a margin credit to stress—would improve OCC’s margin potentiality of loss mutualization during offset a portfolio’s liquidation cost. methodology by generating margin periods of market stress could reduce Under the proposal, therefore, the final requirements designed to more fully the potential knock-on effects to non- margin requirement for a portfolio could cover OCC’s credit exposure to each of defaulting Clearing Members, their not be lower than its liquidation cost its Clearing Members. customers and the broader options charge. Moreover, the Commission believes market arising out of a Clearing Member that the inclusion of concentration default. The Commission believes, III. Discussion and Commission charges in the proposed liquidation cost Findings therefore, that adoption of a liquidation model would enhance the measurement cost model calibrated based on periods Section 19(b)(2)(C) of the Exchange of risk described above. The cost of of market stress would be consistent Act directs the Commission to approve liquidating a defaulted Clearing with assuring the safeguarding of a proposed rule change of a self- Member’s portfolio is, in part, a function securities and funds which are in OCC’s regulatory organization if it finds that of market prices and market depth custody or control or for which it is such proposed rule change is consistent present at the time of the Clearing responsible consistent with the with the requirements of the Exchange Member’s default. The process of requirements of Section 17A(b)(3)(F) of Act and the rules and regulations liquidating on a compressed timeframe the Exchange Act.21 thereunder applicable to such a large or concentrated position during organization.17 After carefully such a period could negatively affect B. Consistency With Rule 17Ad– considering the Proposed Rule Change, such market prices for OCC. In 22(e)(6)(i) Under the Exchange Act the Commission finds the proposal is recognition of such costs, OCC proposes Rule 17Ad–22(e)(6)(i) under the consistent with the requirements of the to use concentration factors to scale up Exchange Act requires, in part, that a Exchange Act and the rules and both the Vega LCs and Delta LCs based covered clearing agency establish, regulations thereunder applicable to on the size of a defaulted Clearing implement, maintain, and enforce OCC. More specifically, the Commission Member’s positions relative to the written policies and procedures finds that the proposal is consistent average daily volume of the financial reasonably designed to cover, if the with Section 17A(b)(3)(F) of the instruments in the defaulted Clearing covered clearing agency provides Exchange Act 18 and Rule 17Ad– Member’s portfolio. Including central counterparty services, its credit 22(e)(6)(i) thereunder.19 concentration charges in OCC’s exposures to its participants by proposed liquidation cost model would establishing a risk-based margin system A. Consistency With Section further facilitate the generation of 17A(b)(3)(F) of the Exchange Act that, at a minimum, considers, and requirements designed to more fully produces margin levels commensurate Section 17A(b)(3)(F) of the Exchange cover OCC’s credit exposure to each of with, the risks and particular attributes Act requires that the rules of a clearing its Clearing Members. of each relevant product, portfolio, and The Commission also believes that the agency be designed to, among other market.22 use of the proposed liquidation cost things, assure the safeguarding of As described above, the liquidation model to create a margin floor would securities and funds which are in the cost that OCC could incur in the process improve the management of OCC’s custody or control of the clearing agency of closing out a Clearing Member’s 20 credit exposures through the collection or for which it is responsible. Based portfolio is, in part, a function of the of margin. OCC’s margin methodology on its review of the record, the spread between the bid and the ask may produce a credit for well-hedged Commission believes that the proposed prices of financial instruments within changes are designed to assure the portfolios because it is focused on the potential losses resulting from price the portfolio. The STANS methodology safeguarding of securities and funds attempts to address potential losses which are in OCC’s custody or control movements over a two-day risk horizon. OCC could, however, incur costs in the resulting from changes in price over a for the reasons set forth below. two-day period. As described above, OCC manages its credit exposure to process of closing out a defaulted Clearing Member’s portfolio at current however, STANS is not designed to Clearing Members, in part, through the account for liquidation costs. OCC’s collection of collateral based on OCC’s prices, rather than prices two days into the future. OCC’s proposal proposed model would be designed to margin methodology. As noted above, account for particular attributes of the OCC’s current margin methodology is acknowledges this potential gap by requiring that a Clearing Member post, products in a defaulted Clearing not designed to account for liquidation Member’s portfolio, including the bid- costs that OCC could incur in the at a minimum, margin to cover the liquidation cost of its portfolio. ask spreads and average daily volume of process of closing out a defaulted such products.23 Further, the proposal Clearing Member’s portfolio. OCC As discussed above, OCC proposes to proposes to adopt a model designed to identify and manage the potential cost of liquidating a defaulted Clearing 21 15 U.S.C. 78q–1(b)(3)(F). 22 17 CFR 240.17Ad–22(e)(6)(i). 17 Member’s portfolio. OCC’s estimation of 15 U.S.C. 78s(b)(2)(C). 23 As noted above, OCC proposes to incorporate 18 15 U.S.C. 78q–1(b)(3)(F). such potential costs would be calibrated the proposed model into its margin methodology 19 17 CFR 240.17Ad–22(e)(6)(i). based on historical periods of market documentation and to reference the margin add-on 20 15 U.S.C. 78q–1(b)(3)(F). stress. OCC proposes to collect in its Margin Policy.

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would acknowledge the purpose of the (44 U.S.C. 3501 et seq.), the Securities SECURITIES AND EXCHANGE proposed liquidation cost model as and Exchange Commission COMMISSION distinct from the STANS methodology (‘‘Commission’’) has submitted to the [Release No. 34–86120; File No. SR–BX– by using the proposed liquidation cost Office of Management and Budget this 2019–019] model as a floor on a Clearing Member’s request for extension of the previously margin requirements. approved collection of information Self-Regulatory Organizations; Nasdaq OCC’s proposal would be tailored to discussed below. BX, Inc.; Notice of Filing and the particular attributes of products in a Schedule 14D–9F (17 CFR 240.14d– Immediate Effectiveness of Proposed Clearing Member’s portfolio. As Rule Change To Amend the 103) under the Securities Exchange Act described above, OCC would use the Exchange’s Credits at Equity 7, of 1934 (15 U.S.C. 78 et seq.) is used by proposed model to calculate two risk- Section 118(a) based liquidation costs for each any foreign private issuer incorporated portfolio: (1) The Vega LC and (2) the or organized under the laws of Canada June 17, 2019. Delta LC. The Commission believes, or by any director or officer of such Pursuant to Section 19(b)(1) of the therefore, that the adoption of the issuer, where the issuer is the subject of Securities Exchange Act of 1934 proposed liquidation cost model a cash tender or exchange offer for a (‘‘Act’’),1 and Rule 19b–4 thereunder,2 designed to produce margin levels class of securities filed on Schedule notice is hereby given that on June 4, commensurate with the risks of 14D–1F. The information required to be 2019, Nasdaq BX, Inc. (‘‘BX’’ or liquidating a Clearing Member’s filed with the Commission is intended ‘‘Exchange’’) filed with the Securities portfolio is consistent with Exchange to permit verification of compliance and Exchange Commission (‘‘SEC’’ or Act Rule 17Ad–22(e)(6)(i).24 with the securities law requirements ‘‘Commission’’) the proposed rule and assures the public availability of change as described in Items I, II, and IV. Conclusion III, below, which Items have been such information. The information prepared by the Exchange. The On the basis of the foregoing, the provided is mandatory and all Commission finds that the Proposed Commission is publishing this notice to information is made available to the Rule Change is consistent with the solicit comments on the proposed rule public upon request. We estimate that requirements of the Exchange Act, and change from interested persons. Schedule 14D–9F takes approximately 2 in particular, the requirements of I. Self-Regulatory Organization’s Section 17A of the Exchange Act 25 and hours per response to prepare and is filed by approximately 6 respondents Statement of the Terms of Substance of the rules and regulations thereunder. the Proposed Rule Change It is therefore ordered, pursuant to annually for a total reporting burden of Section 19(b)(2) of the Exchange Act,26 12 hours (2 hours per response × 6 The Exchange proposes to amend the that the Proposed Rule Change (SR– responses). Exchange’s credits at Equity 7, Section OCC–2019–004) be, and hereby is, An agency may not conduct or 118(a), as described further below. approved. The text of the proposed rule change sponsor, and a person is not required to is available on the Exchange’s website at For the Commission, by the Division of respond to, a collection of information http://nasdaqbx.cchwallstreet.com/, at Trading and Markets, pursuant to delegated unless it displays a currently valid the principal office of the Exchange, and authority.27 control number. at the Commission’s Public Reference Vanessa A. Countryman, The public may view the background Room. Acting Secretary. documentation for this information II. Self-Regulatory Organization’s [FR Doc. 2019–13113 Filed 6–20–19; 8:45 am] collection at the following website, BILLING CODE 8011–01–P Statement of the Purpose of, and www.reginfo.gov. Comments should be Statutory Basis for, the Proposed Rule directed to: (i) Desk Officer for the Change Securities and Exchange Commission, SECURITIES AND EXCHANGE In its filing with the Commission, the Office of Information and Regulatory COMMISSION Exchange included statements Affairs, Office of Management and concerning the purpose of and basis for [SEC File No. 270–339, OMB Control No. Budget, Room 10102, New Executive 3235–0382] the proposed rule change and discussed Office Building, Washington, DC 20503, any comments it received on the Submission for OMB Review; or by sending an email to: proposed rule change. The text of these Comment Request [email protected]; and (ii) statements may be examined at the Charles Riddle, Acting Director/Chief places specified in Item IV below. The Upon Written Request Copies Available Information Officer, Securities and Exchange has prepared summaries, set From: Securities and Exchange Exchange Commission, c/o Candace forth in sections A, B, and C below, of Commission, Office of FOIA Services, Kenner, 100 F Street NE, Washington, the most significant aspects of such 100 F Street NE, Washington, DC DC 20549 or send an email to: PRA_ statements. 20549–2736 [email protected]. Comments must be A. Self-Regulatory Organization’s Extension: submitted to OMB within 30 days of Statement of the Purpose of, and Schedule 14D–9F this notice. Statutory Basis for, the Proposed Rule Notice is hereby given that, pursuant Dated: June 18, 2019. Change to the Paperwork Reduction Act of 1995 Eduardo A. Aleman, 1. Purpose Deputy Secretary. 24 17 CFR 240.17Ad–22(e)(6)(i). The Exchange operates on the ‘‘taker- 25 In approving this Proposed Rule Change, the [FR Doc. 2019–13279 Filed 6–20–19; 8:45 am] maker’’ model, whereby it pays credits Commission has considered the proposed rules’ BILLING CODE 8011–01–P impact on efficiency, competition, and capital to members that take liquidity and formation. See 15 U.S.C. 78c(f). 26 15 U.S.C. 78s(b)(2). 1 15 U.S.C. 78s(b)(1). 27 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.

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charges fees to members that provide applicability to a specific segment(s) of transaction services that constrain its liquidity. Under Equity 7, Section market participants nor will it apply pricing determinations in that market. 118(a), the Exchange describes the differently to different types of market The fact that this market is competitive charges and credits applied for the use participants. Non-members cannot has long been recognized by the courts. of the order execution and routing qualify for the credit.5 The proposed In NetCoalition v. Securities and services of the Exchange System by change will lower the threshold Exchange Commission, the D.C. Circuit members for all securities priced at $1 required to achieve a better remove rate stated as follows: ‘‘[n]o one disputes or more per share that it trades. As and therefore will make it more that competition for order flow is described below, the Exchange is achievable for more members.6 ‘fierce.’ . . . As the SEC explained, ‘[i]n amending the qualification criteria of a Consequently, the proposed change will the U.S. national market system, buyers credit provided to members for entering not negatively impact members that do and sellers of securities, and the broker- Orders that access liquidity in the BX not qualify because their credit dealers that act as their order-routing System. opportunities will remain unchanged. agents, have a wide range of choices of Moreover, the proposed fee is a where to route orders for execution’; Description of the Change reduction in costs for members that [and] ‘no exchange can afford to take its The purpose of the proposed rule access quotes on the Exchange, because market share percentages for granted’ change is to reduce the qualification in the absence of the proposed change because ‘no exchange possesses a criteria required to receive a credit for members would receive a lower rebate, monopoly, regulatory or otherwise, in entering an Order in a Tape A or C resulting in a higher cost for transacting the execution of order flow from broker security that accesses liquidity in the on the Exchange. Based on April 2019 dealers’ . . . .’’ 10 BX System. Specifically, the Exchange volumes, the existing tier represents a Numerous indicia demonstrate the currently provides a credit of $0.0015 minimum of 4.387 million shares competitive nature of this market. For per share executed for Tape A and C removed. Based on past experience example, clear substitutes to the securities for an Order that accesses administering similar pricing proposals, Exchange exist in the market for equity liquidity (excluding orders with the Exchange estimates that multiple security transaction services. The Midpoint pegging and excluding orders members of various types would be Exchange is only one of several equity that receive price improvement and reasonably positioned to meet the venues to which market participants execute against an order with a Non- amended tier. may direct their order flow, and it displayed price) entered by a member represents a small percentage of the 2. Statutory Basis that accesses liquidity equal to or overall market. It is also only one of exceeding 0.070% of total Consolidated The Exchange believes that its several taker-maker exchanges. Volume during month. The Exchange is proposal is consistent with Section 6(b) Competing equity exchanges offer proposing to decrease the Consolidated of the Act,7 in general, and furthers the similar tiered pricing structures to that Volume requirement from 0.070% to objectives of Sections 6(b)(4) and 6(b)(5) of the Exchange, including schedules of 0.065%.3 of the Act,8 in particular, in that it rebates and fees that apply based upon provides for the equitable allocation of Applicability to and Impact on members achieving certain volume reasonable dues, fees and other charges Participants 4 thresholds. These competing pricing among members and issuers and other schedules, moreover, are presently The proposed reduction in the persons using any facility, and is not comparable to if not more generous than qualification criteria is not targeted at or designed to permit unfair those that the Exchange provides.11 expected to be limited in its discrimination between customers, Within this environment, market issuers, brokers, or dealers. The participants can freely and often do shift 3 The Exchange calculates Consolidated Volume proposal is also consistent with Section on a monthly basis to determine qualification for their order flow among the Exchange the credit. Because the Exchange is filing this on the 11A of the Act relating to the and competing venues in response to second trading day of the month of June 2019, it establishment of the national market changes in their respective pricing will apply qualification for the tier based on system for securities. Moreover, the schedules.12 Separately, the Exchange 0.070% of total Consolidated Volume for the single Exchange believes that its proposal trading day during which this proposed change was has provided the SEC staff multiple not in effect. The Exchange will apply the proposed complies with Commission guidance on examples of instances where pricing 0.065% criteria for the remaining trading days SRO fee filings that the Commission during the month. As a consequence, qualification 9 Staff issued on May 21, 2019. 10 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. for the credit will be determined by a weighted Cir. 2010) (quoting Securities Exchange Act Release combination of the two levels of Consolidated The Proposal Is Reasonable No. 59039 (December 2, 2008), 73 FR 74770, 74782– Volume based on the number of trading days the particular requirement is in effect. The Exchange’s proposed reduction to 83 (December 9, 2008) (SR–NYSEArca–2006–21)). 11 4 On May 21, 2019, the SEC Division of Trading the qualification requirement is The Exchange notes that NYSE National and and Markets (the ‘‘Division’’) issued fee filing CBOE EDGA offer higher rebates for their members reasonable in several respects. As a accessing liquidity on their exchanges. CBOE EDGA guidance titled ‘‘Staff Guidance on SRO Rule threshold matter, the Exchange is Filings Relating to Fees’’ (‘‘Guidance’’). Within the provides a standard rebate for liquidity removers of Guidance, the Division noted, among other things, subject to significant competitive forces $0.0024 per share executed (or higher if a member that the purpose discussion should address ‘‘how in the market for equity securities qualifies for a volume tier), and NYSE National has the fee may apply differently (e.g., additional cost a range from a fee of $0.0005 per share executed to a rebate of $0.0020 per share executed. In addition, vs. additional discount) to different types of market 5 Id. participants (e.g., market makers, institutional CBOE BYX offers a similar pricing schedule to 6 As substantiated by data provided to the brokers, retail brokers, vendors, etc.) and different Nasdaq BX. Commission. sizes of market participants.’’ See Guidance 12 The Exchange perceives no regulatory, 7 (available at https://www.sec.gov/tm/staff-guidance- 15 U.S.C. 78f(b). structural, or cost impediments to market sro-rule-filings-fees). The Guidance also suggests 8 15 U.S.C. 78f(b)(4) and (5). participants shifting order flow away from it. See that the purpose discussion should include 9 See Guidance, supra note 4. Although the Guidance, supra note 4. In particular, the Exchange numerical examples. Where possible, the Exchange Exchange believes that this filing complies with the notes that these examples of shifts in liquidity and is including numerical examples. In addition, the Guidance, the Exchange does not concede that the market share, along with many others, have Exchange is providing data to the Commission in standards set forth in the Guidance are consistent occurred within the context of market participants’ support of its arguments herein. The Guidance with the Exchange Act and reserves its right to existing duties of Best Execution and obligations covers all aspects of a fee filing, which the challenge those standards through administrative under the Order Protection Rule under Regulation Exchange has addressed throughout this filing. and judicial review, as appropriate. NMS.

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changes by BX and other exchanges existing credit. The Exchange calibrated multiple members with a reasonable have resulted in shifts in exchange the proposal to impact a broad swath of opportunity to meet the adjusted tier. As market share. members whose orders comprise to those members that do not presently Within the foregoing context, the substantial remove volume so that it qualify for the credit tier, and will not proposal represents a reasonable would have a significant effect. The qualify for the adjusted tier (although attempt by the Exchange to increase its Exchange expects that the proposal will they might in the future as their liquidity and market share relative to its enable the multitude of members that business grows), the proposal will not competitors. The Exchange also believes currently qualify for the credit tier to adversely impact their existing pricing that the particular adjustment that it continue to do so. Additionally, based or their ability to qualify for other credit proposes to its volume qualification on May 2019 volume, the Exchange tiers. criteria for the $0.0015 per share estimates that the proposal will provide B. Self-Regulatory Organization’s executed credit is a reasonable attempt multiple members with a reasonable Statement on Burden on Competition to achieve this end because this credit opportunity to meet the adjusted tier. As tier is particularly important to the to those members that do not presently The Exchange does not believe that Exchange’s customers. That is, this qualify for the credit tier, and will not the proposed rule change will impose credit is one for which several Exchange qualify for the adjusted tier, the any burden on competition not members presently qualify and whose proposal will not adversely impact their necessary or appropriate in furtherance orders comprise substantial remove existing pricing or their ability to of the purposes of the Act. volume on the Exchange. It is also a qualify for other credit tiers. Intramarket Competition credit tier that has been endangered by the recent decline in the Exchange’s The Proposed Fee Is Not Unfairly Addressing whether the proposed market share insofar as this decline has Discriminatory change could place certain market made it more difficult for members to The Exchange believes that the participants at a relative disadvantage achieve and maintain its total proposal is not unfairly discriminatory. compared to other market participants, Consolidated Volume requirement. As an initial matter, the Exchange the Exchange does not believe that Finally, the Exchange believes that believes that nothing about its volume- members that do not have the capacity adjusting the qualification criteria for based tiered pricing model is inherently to provide the level of Consolidated this particular credit will not only help unfair; instead, it is a rational pricing Volume required by the proposal are ensure that qualifying members will model that is well-established and disadvantaged. As noted above, all continue to qualify for the credit, but it ubiquitous in today’s economy among members benefit from the removal of also will render the credit readily firms in various industries—from co- liquidity by those that choose to meet achievable for a broader group of branded credit cards to grocery stores to the tier qualification criteria. Members members. The Exchange estimates that cellular telephone data plans—that use may grow their businesses so that they the proposal will provide multiple it to reward the loyalty of their best have the capacity to receive the credit. members with a reasonable opportunity customers that provide high levels of Moreover, members are free to trade on to meet the adjusted tier. business activity and incent other other venues to the extent they believe customers to increase the extent of their that the fees assessed and credits The Proposal Is an Equitable Allocation business activity. It is also a pricing provided are not attractive. As one can of Credits model that the Exchange and its observe by looking at any market share The Exchange believes its proposal competitors have long employed with chart, price competition between allocates its rebates fairly among its the assent of the Commission. It is fair exchanges is fierce, with liquidity and market participants. The Exchange is because it incentivizes customer activity market share moving freely between not proposing to adjust the amount of that increases liquidity, enhances price exchanges in reaction to fee and credit the credit, which will remain at the discovery, and improves the overall changes. The Exchange notes that the $0.0015 per share executed level that quality of the equity markets. tier structure is consistent with broker- the Commission has already approved. Furthermore, the Exchange’s proposal dealer fee practices as well as the other By proposing to lower the criteria to to adjust the qualification criteria for the industries, as described above. qualify for the credit, the Exchange $0.0015 per share executed credit tier is intends to help ensure that those not unfairly discriminatory. The Intermarket Competition members that currently qualify for it Exchange intends for the proposal to Addressing whether the proposed fee will continue to do so even as the improve market quality for all members could impose a burden on competition Exchange’s market share has declined. It on the Exchange and by extension on other SROs that is not necessary or also intends to broaden the base of attract more liquidity to the market, appropriate, the Exchange believes that members who can qualify for it. Finally, improving market wide quality and the proposed change to the qualification the Exchange intends that its proposal price discovery. The proposal neither criteria for the credit for accessing will help to stem or reverse the loss in targets nor will it have a disparate liquidity of Tape A and C does not market share that the Exchange is impact on any particular category of impose a burden on competition experiencing. market participant. Instead, the because the Exchange’s execution The Exchange intends for the Exchange calibrated the proposal to services are completely voluntary and proposal to improve market quality for impact a broad swath of members whose subject to extensive competition both all members on the Exchange and by orders comprise substantial remove from the other 12 live exchanges and extension attract more liquidity to the volume so that it would have a from off-exchange venues, which market, improving market wide quality significant effect. The Exchange expects include 32 alternative trading systems. and price discovery. The proposal that the proposal will enable the The Exchange notes that it operates in neither targets nor will it have a multitude of existing members that a highly competitive market in which disparate impact on any particular currently qualify for the credit tier to market participants can readily favor category of market participant, and in continue to do so. Additionally, based competing venues if they deem fee fact, will allow more market on May 2019 volume, the Exchange levels at a particular venue to be participants to take advantage of the estimates that the proposal will provide excessive, or rebate opportunities

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available at other venues to be more of investors; or (iii) otherwise in For the Commission, by the Division of favorable. In such an environment, the furtherance of the purposes of the Act. Trading and Markets, pursuant to delegated Exchange must continually adjust its If the Commission takes such action, the authority.14 fees to remain competitive with other Commission shall institute proceedings Vanessa A. Countryman, exchanges and with alternative trading to determine whether the proposed rule Acting Secretary. systems that have been exempted from should be approved or disapproved. [FR Doc. 2019–13116 Filed 6–20–19; 8:45 am] compliance with the statutory standards IV. Solicitation of Comments BILLING CODE 8011–01–P applicable to exchanges. Because competitors are free to modify their own Interested persons are invited to fees in response, and because market submit written data, views, and SECURITIES AND EXCHANGE participants may readily adjust their arguments concerning the foregoing, COMMISSION order routing practices, the Exchange including whether the proposed rule change is consistent with the Act. [SEC File No. 270–127, OMB Control No. believes that the degree to which fee 3235–0108] changes in this market may impose any Comments may be submitted by any of burden on competition is extremely the following methods: Submission for OMB Review; limited. Electronic Comments Comment Request The proposed reduced criteria is • reflective of this competition because, as Use the Commission’s internet Upon Written Request Copies Available a threshold issue, the Exchange is a comment form (http://www.sec.gov/ From: Securities and Exchange rules/sro.shtml); or Commission, Office of FOIA Services, relatively small market so its ability to • burden intermarket competition is Send an email to rule-comments@ 100 F Street NE, Washington, DC limited. In this regard, even the largest sec.gov. Please include File Number SR– 20549–2736 BX–2019–019 on the subject line. U.S. equities exchange by volume only Extension: has 17–18% market share, which in Paper Comments Rule 14f–1 most markets could hardly be • Send paper comments in triplicate Notice is hereby given that, pursuant categorized as having enough market to Secretary, Securities and Exchange to the Paperwork Reduction Act of 1995 power to burden competition. Moreover, Commission, 100 F Street NE, (44 U.S.C. 3501 et seq.), the Securities as noted above, price competition Washington, DC 20549–1090. and Exchange Commission between exchanges is fierce, with All submissions should refer to File (‘‘Commission’’) has submitted to the liquidity and market share moving Number SR–BX–2019–019. This file Office of Management and Budget this freely between exchanges in reaction to number should be included on the request for extension of the previously fee and credit changes. This is in subject line if email is used. To help the approved collection of information. addition to free flow of order flow to Commission process and review your Under Exchange Act Rule 14f–1 (17 and among off-exchange venues which comments more efficiently, please use CFR 240.14f–1), if a person or persons comprised more than 38% of industry only one method. The Commission will have acquired securities of an issuer in volume for the month of April 2019. post all comments on the Commission’s a transaction subject to Sections 13(d) or In sum, if the changes proposed internet website (http://www.sec.gov/ 14(d) of the Exchange Act, and changes herein are unattractive to market rules/sro.shtml). Copies of the a majority of the directors of the issuer participants, it is likely that the submission, all subsequent otherwise than at a meeting of security Exchange will lose market share as a amendments, all written statements holders, then the issuer must file with result. Accordingly, the Exchange does with respect to the proposed rule the Commission and transmit to security not believe that the proposed changes change that are filed with the holders information related to the will impair the ability of members or Commission, and all written change in directors within 10 days prior competing order execution venues to communications relating to the to the date the new majority takes office maintain their competitive standing in proposed rule change between the as directors. We estimate that it takes the financial markets. Commission and any person, other than approximately 18 burden hours to C. Self-Regulatory Organization’s those that may be withheld from the provide the information required under Statement on Comments on the public in accordance with the Rule 14f–1 and that the information is Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be filed by approximately 64 respondents Members, Participants, or Others available for website viewing and for a total annual burden of 1,152 hours × No written comments were either printing in the Commission’s Public (18 hours per response 64 responses). solicited or received. Reference Room, 100 F Street NE, An agency may not conduct or Washington, DC 20549, on official sponsor, and a person is not required to III. Date of Effectiveness of the business days between the hours of respond to, a collection of information Proposed Rule Change and Timing for 10:00 a.m. and 3:00 p.m. Copies of the unless it displays a currently valid Commission Action filing also will be available for control number. The foregoing rule change has become inspection and copying at the principal The public may view the background effective pursuant to Section office of the Exchange. All comments documentation for this information 19(b)(3)(A)(ii) of the Act.13 received will be posted without change. collection at the following website, At any time within 60 days of the Persons submitting comments are www.reginfo.gov. Comments should be filing of the proposed rule change, the cautioned that we do not redact or edit directed to: (i) Desk Officer for the Commission summarily may personal identifying information from Securities and Exchange Commission, temporarily suspend such rule change if comment submissions. You should Office of Information and Regulatory it appears to the Commission that such submit only information that you wish Affairs, Office of Management and action is: (i) Necessary or appropriate in to make available publicly. All Budget, Room 10102, New Executive the public interest; (ii) for the protection submissions should refer to File Office Building, Washington, DC 20503, Number SR–BX–2019–019 and should 13 15 U.S.C. 78s(b)(3)(A)(ii). be submitted on or before July 12, 2019. 14 17 CFR 200.30–3(a)(12).

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or by sending an email to: 2450—are part of the application respondents. Burden hours are 2.25 [email protected]; and (ii) process for a 504 loan. SBA is proposing hours for ASM and 2.45 hours for non- Charles Riddle, Acting Director/Chief to make changes to Form 2450 to ASM submissions (this number is Information Officer, Securities and remove duplicative questions as well as slightly higher due to the fact that these Exchange Commission, c/o Candace questions that are no longer applicable respondents are required to submit more Kenner, 100 F Street NE, Washington, to the 504 Loan Program. documentation than the ASM DC 20549 or send an email to: PRA_ respondents). These estimates include Solicitation of Public Comments [email protected]. Comments must be the content from SBA Form 2450, which submitted to OMB within 30 days of SBA is requesting comments on (a) takes an estimated 15 minute for this notice. Whether the collection of information is completion. Dated: June 18, 2019. necessary for the agency to properly perform its functions; (b) whether the Form 1244 Eduardo A. Aleman, burden estimates are accurate; (c) Total burden hours = 16,799. Deputy Secretary. whether there are ways to minimize the Submission through the ASM—4,937 [FR Doc. 2019–13282 Filed 6–20–19; 8:45 am] burden, including through the use of × 2.25 = 11,108 burden hours. BILLING CODE 8011–01–P automated techniques or other forms of Submission through non-ASM information technology; and (d) whether (standard method)—2,323 × 2.45 = 5,691 there are ways to enhance the quality, burden hours. SMALL BUSINESS ADMINISTRATION utility, and clarity of the information. Form 2450 Data Collection Available for Public Summary of Information Collections Total burden hours = 1,815. Comments Title: Application for Section 504 Submission through the ASM and Loan. non-ASM—7,260 × .25 = 1,815 burden ACTION: 60-Day notice and request for Description of Respondents: Small hours. comments. Business Concerns applying for a Total Burden Hours = 18,614. section 504 loan and Certified SUMMARY: The Small Business Curtis Rich, Development Companies. Administration (SBA) intends to request Management Analyst. approval, from the Office of (i) Form Number: SBA Form 1244, [FR Doc. 2019–13284 Filed 6–20–19; 8:45 am] Management and Budget (OMB) for the Application for Section 504 Loan. The collection of information described information collected by this form is BILLING CODE 8025–01–P below. The Paperwork Reduction Act used to review the eligibility of the small business concern (SBC) for SBA (PRA) requires federal agencies to SMALL BUSINESS ADMINISTRATION publish a notice in the Federal Register financial assistance; the concerning each proposed collection of creditworthiness and repayment ability Data Collection Available for Public information before submission to OMB, of the SBC; and the terms and Comments and to allow 60 days for public conditions of the 504 loan for which the comment in response to the notice. This SBC is applying. ACTION: 60-Day notice and request for notice complies with that requirement. (ii) Form 2450 is the Eligibility comments. Checklist used to document the 504 DATES: Submit comments on or before SUMMARY: The Small Business August 20, 2019. loan’s eligibility based on program requirements. These forms are used by Administration (SBA) intends to request ADDRESSES: Send all comments to Mary CDCs to request SBA’s guarantee on approval, from the Office of Frias, Loan Specialist, Office of each debenture. Management and Budget (OMB) for the Financial Assistance, Small Business SBA has established a streamlined collection of information described Administration, 409 3rd Street, 8th loan application processing procedure below. The Paperwork Reduction Act Floor, Washington, DC 20416. known as the Abridged Submission (PRA) requires federal agencies to FOR FURTHER INFORMATION CONTACT: Method (ASM). Under this process, the publish a notice in the Federal Register Mary Frias, Loan Specialist, Office of CDCs are required to collect and retain concerning each proposed collection of Financial Assistance, 202–401–8234, all exhibits to SBA Form 1244, but are information before submission to OMB, [email protected], or Curtis B. Rich, only required to submit selective and to allow 60 days for public Management Analyst, 202–205–7030, documents. CDCs using the non-ASM comment in response to the notice. This [email protected]; method are required to submit all notice complies with that requirement. SUPPLEMENTARY INFORMATION: The Small documents and exhibits required for DATES: Submit comments on or before Business Investment Act authorizes Form 1244. All CDCs must submit the August 20, 2019. SBA to guarantee a debenture issued by Form 2450. ADDRESSES: Send all comments to Mary a Certified Development Company The burden estimates (based on the Frias, Loan Specialist, Office of (CDC). The proceeds from each experience of the CDCs and SBA field Financial Assistance, Small Business debenture are used to fund loans to offices) of the burden hours imposed by Administration, 409 3rd Street SW, eligible small business concerns (‘‘504 use of these forms, including exhibits, Washington, DC 20416. loans’’). 15 U.S.C. 697(a). The Small are as follows: Business Act and the Small Business There are 260 CDCs affected by the FOR FURTHER INFORMATION CONTACT: Investment Act mandate that all information collection. The total Mary Frias, Loan Specialist, Office of guaranteed loans provided by the SBA number of small business concerns that Financial Assistance, mary.frias@ to small business concerns (SBCs) must will annually respond to Form 1244 is sba.gov 202–401–8234, or Curtis B. have a reasonable assurance of ability to approximately 7,000 based on the Rich, Management Analyst, 202–205– repay. See 15 U.S.C. 636(a)(6) and average submission of applications 7030, [email protected]; 687(f); see also 13 CFR 120.150. The submitted from CDCs over the past FY SUPPLEMENTARY INFORMATION: Small information collections described using both the ASM and non-ASM Business Administration (SBA) below—SBA Form 1244 and SBA Form methods. This is a total of 7,260 regulations require that we determine

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that a participating Certified Analyst, 202–619–0511 louis.cupp@ Pursuant to section 10(d) of the Federal Development Company’s Non-Bank sba.gov Curtis B. Rich, Management Advisory Committee Act, 5 U.S.C. 10(d), Lender Institution’s or Microlender’s Analyst, 202–205–7030 curtis.rich@ and 5 U.S.C. 552b(c)(l), it has been management, ownership, etc. is of sba.gov. determined that this meeting will be ‘‘good character’’. To do so requires the SUPPLEMENTARY INFORMATION: SBA closed to the public as the Board will be information requested on the Form Forms 1405 and 1405A are used by reviewing and discussing matters 1081. This form also provides data used Small Business Administration (SBA) properly classified in accordance with to determine the qualifications and examiners as part of their examination Executive Order 13526. capabilities of the lenders key This announcement might appear in of licensed small business investment personnel. the Federal Register less than 15 days companies (SBICs). This information is prior to the meeting. The Department of Solicitation of Public Comments collected from SBIC’S Stockholders and State finds that there is an exceptional partners and provides independent SBA is requesting comments on (a) circumstance in that this advisory third party confirmation of an SBIC’s Whether the collection of information is committee meeting must be held on July representations concerning its owners. necessary for the agency to properly 8th to accommodate the schedule of the The information helps SBA to evaluate perform its functions; (b) whether the Secretary of State. the SBIC’S with applicable laws and burden estimates are accurate; (c) For more information, contact Emily regulations concerning capital whether there are ways to minimize the Sissell at (202) 647–4293. burden, including through the use of requirements. Dated: June 17, 2019. automated techniques or other forms of Solicitation of Public Comments information technology; and (d) whether Kiron K. Skinner, there are ways to enhance the quality, SBA is requesting comments on (a) Director, Office of Policy Planning, utility, and clarity of the information. Whether the collection of information is Department of State. necessary for the agency to properly [FR Doc. 2019–13159 Filed 6–20–19; 8:45 am] Summary of Information Collection perform its functions; (b) whether the BILLING CODE 4710–10–P Title: Statement of Personal History. burden estimates are accurate; (c) Description of Respondents: Small whether there are ways to minimize the Business Lending Companies. burden, including through the use of SURFACE TRANSPORTATION BOARD Form Number: SBA Form 1081. automated techniques or other forms of Total Estimated Annual Responses: information technology; and (d) whether [Docket No. FD 36291] 215. there are ways to enhance the quality, Dakota Southern Railway Company— Total Estimated Annual Hour Burden: utility, and clarity of the information. Modified Rail Certificate 107.50. Title: ‘‘Stockholders’ Confirmation Curtis Rich, (Corporation); Ownership Confirmation On April 17, 2019, Dakota Southern Management Analyst. (Partnership)’’. Railway Company (DSRC), a Class III Description of Respondents: Licensed rail carrier, filed a notice for a modified [FR Doc. 2019–13286 Filed 6–20–19; 8:45 am] small business investment companies certificate of public convenience and BILLING CODE 8026–03–P (SBICs). necessity under 49 CFR 1150 subpart Form Number’s: 1405, 1405A. C—Modified Certificate of Public SMALL BUSINESS ADMINISTRATION Annual Responses: 600. Convenience and Necessity, to provide Annual Burden: 600. freight rail operations over approximately 187.98 miles of rail line Data Collection Available for Public Curtis Rich, Comments owned by the State of South Dakota Management Analyst. (State) and located between milepost ACTION: 60 Day Notice and request for [FR Doc. 2019–13285 Filed 6–20–19; 8:45 am] 374.44 in Mitchell, S.D., and extending comments. BILLING CODE 8025–01–P in a westerly direction to milepost 562.53 in Kadoka, S.D. (the Segment). SUMMARY: In accordance with the According to DSRC, the Segment is part Paperwork Reduction Act of 1995, this DEPARTMENT OF STATE of a longer line from Mitchell to Rapid notice announces the Small Business City, S.D. (the MRC Line). DSRC states Administration’s intentions to request [Public Notice: 10803] that the MRC Line, which was formerly approval on a new and/or currently owned by the Milwaukee, St. Paul & approved information collection. Foreign Affairs Policy Board Meeting Notice; Closed Meeting Pacific Railroad Company, is now DATES: Submit comments on or before owned by the State. August 20, 2019. In accordance with the Federal DSRC states that, in 1980, the U.S. ADDRESSES: Send all comments Advisory Committee Act, 5 U.S.C. App., District Court for the Northern District regarding whether this information the Department of State announces a of Illinois authorized the abandonment collection is necessary for the proper meeting of the Foreign Affairs Policy of the MRC Line, following the issuance performance of the function of the Board to take place on July 8, 2019, at of a report by the Interstate Commerce agency, whether the burden estimates the Department of State, Washington, Commission recommending are accurate, and if there are ways to DC. abandonment. See Ogilvie—Aban.—in minimize the estimated burden and The Foreign Affairs Policy Board S.D., Iowa & Neb., AB 7 (Sub-No. 88) enhance the quality of the collections, to reviews and assesses: (1) Global threats (ICC served May 14, 1980).1 According Louis Cupp, New Markets Policy and opportunities; (2) trends that Analyst, Office of Investment, Small implicate core national security 1 The Milwaukee Railroad Restructuring Act Business Administration, 409 3rd Street, interests; (3) technology tools needed to transferred jurisdiction over Chicago, Milwaukee, 6th Floor, Washington, DC 20416. St. Paul & Pacific Railroad Company abandonments advance the State Department’s mission; from the Interstate Commerce Commission to the FOR FURTHER INFORMATION CONTACT: and (4) priorities and strategic U.S. District Court for the Northern District of Louis Cupp, New Markets Policy frameworks for U.S. foreign policy. Illinois. Ogilvie, AB 7 (Sub-No. 88), slip op. at 1.

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to DSRC, abandonment of the MRC Line insurance coverage. See 49 CFR proposed transaction, BRX Acquisition was not consummated and instead the 1150.23(b)(4)–(5). will merge with and into Pioneer, with MRC Line was acquired by the State in This notice will be served on the Pioneer the surviving corporation. 1980. (DSRC Notice 3.) DSRC states that Association of American Railroads (Car Pioneer will become a wholly owned the portion of the MRC Line west of Service Division), as agent for all subsidiary of BRX Transportation, and, Kadoka is now railbanked. See Mitchell- railroads subscribing to the car-service indirectly, Brookhaven and Related Rapid City Reg’l R.R. Auth.—Modified and car-hire agreement, at 425 Third Infrastructure will thereby acquire Rail Certificate—Between Caputa & Street SW, Suite 1000, Washington, DC control of the Pioneer Railroads.2 Rapid City, S.D., FD 35149 (STB served 20024; and on the American Short Line The verified notice states that the Apr. 28, 2009) (issuing notice of interim and Regional Railroad Association at 50 parties contemplate that the transaction trail use between milepost 659.6 to F Street NW, Suite 7020, Washington, will be consummated during the third milepost 646.0); Sammamish Transp. DC 20001. quarter of 2019. The earliest the Co.—Notice of Interim Trail Use & Board decisions and notices are transaction may be consummated is July Termination of Modified Certificate, FD available at www.stb.gov. 7, 2019, the effective date of the 33398 (Sub-No. 1) (STB served Feb. 26, Decided: June 14, 2019. exemption (30 days after the verified 1998) (issuing notice of interim trail use By the Board, Allison C. Davis, Director, notice was filed). between milepost 646.0 to milepost Office of Proceedings. The verified notice states that: (i) Applicants do not own or control any 562.53). In addition, DSRC states that, to Jeffrey Herzig, the best of its knowledge, two carriers rail line that connect with any of the Clearance Clerk. Pioneer Railroads; (ii) the proposed have obtained modified certificate rights [FR Doc. 2019–13152 Filed 6–20–19; 8:45 am] to operate over portions of the MRC transaction is not part of a series of BILLING CODE 4915–01–P Line east of Kadoka but no longer anticipated transactions that would exercise those rights.2 connect any railroad owned or controlled by Applicants with the The verified notice indicates that the SURFACE TRANSPORTATION BOARD State leases the Segment to the MRC Pioneer Railroads or connect any of the Regional Rail Authority (MRCA), a [Docket No. FD 36306] Pioneer Railroads with one another; and political subdivision of the State. In (iii) the proposed transaction does not Brookhaven Rail Partners, LLC, involve a Class I carrier. Therefore, the 2012, MRCA entered into a sublease Related Infrastructure, LLC, BRX with DSRC, which provides that DSRC transaction is exempt from the prior Transportation Holdings, LLC, and approval requirements of 49 U.S.C. will be the operator of the Segment and BRX Acquisition Sub, Inc.—Control will assume all common carrier 11323. See 49 CFR 1180.2(d)(2). Exemption—Pioneer Railcorp, et al. Under 49 U.S.C. 10502(g), the Board obligations to provide service on the may not use its exemption authority to Segment. (DSRC Notice Ex. C, 2 ¶ 6.) Brookhaven Rail Partners, LLC relieve a rail carrier of its statutory Under the terms of the sublease, DSRC (Brookhaven), Related Infrastructure, obligation to protect the interests of its will provide rail service on the Segment LLC (Related Infrastructure), BRX employees. However, 49 U.S.C. 11326(c) for 20 years from and after the effective Transportation Holdings, LLC (BRX does not provide for labor protection for date of January 1, 2012.3 (Id. at 4 ¶ 17.) Transportation), and BRX Acquisition transactions under 49 U.S.C. 11324 and According to DSRC, it interchanges Sub, Inc. (BRX Acquisition) 11325 that involve only Class III rail with BNSF Railway Company (BNSF) at (collectively, Applicants), filed a carriers. Because this transaction or near Mitchell, pursuant to verified notice of exemption under 49 involves Class III rail carriers only, the interchange, trackage, haulage, and lease CFR 1180.2(d)(2) to acquire control of Board, under the statute, may not agreements with BNSF. Pioneer Railcorp (Pioneer), a noncarrier impose labor protective conditions for The Segment qualifies for a modified holding company that controls 15 Class this transaction. certificate of public convenience and III railroad subsidiaries: Alabama & If the verified notice contains false or necessity. See Common Carrier Status of Florida Railway Co., Inc.; Alabama misleading information, the exemption States, State Agencies & Railroad Co., Inc.; Decatur Junction is void ab initio. Petitions to revoke the Instrumentalities & Political Railway Co.; Elkhart & Western Railroad exemption under 49 U.S.C. 10502(d) Subdivisions, FD 28990F (ICC served Co.; Fort Smith Railroad Co.; The may be filed at any time. The filing of July 16, 1981); 49 CFR 1150.22. Garden City Western Railway, Inc.; a petition to revoke will not DSRC indicates that no subsidy is Georgia Southern Railway Co.; automatically stay the effectiveness of involved and that there are no Gettysburg & Northern Railroad Co.; the exemption. Petitions to stay must be preconditions that shippers must meet Indiana Southwestern Railway Co.; filed no later than June 28, 2019 (at least to receive rail service; DSRC also Kendallville Terminal Railway Co.; seven days before the exemption provides information regarding the Keokuk Junction Railway Co.; Michigan becomes effective). nature and extent of its liability Southern Railroad Company; All pleadings, referring to Docket No. Mississippi Central Railroad Co.; FD 36306, must be filed with the 2 See Nobles Rock R.R.—Modified Rail Certificate, Pioneer Industrial Railway Co.; and Surface Transportation Board via e- FD 33792 (STB served Sept. 16, 1999); Burlington Vandalia Railroad Company N. R.R.—Operations—in States of Iowa & S.D., FD filing or in writing addressed to 395 E 29672 (ICC served Aug. 17, 1981). DSRC states that, (collectively, Pioneer Railroads). Street SW, Washington, DC 20423–0001. to the best of its knowledge, Burlington Northern’s According to the verified notice, In addition, a copy of each pleading rights were terminated by notice, (see Burlington N. Applicants intend to acquire 100% of must be served on Applicants’ R.R. Letter, Oct. 14, 1986, Burlington N. R.R., FD the equity interests of Pioneer pursuant 29672), and Nobles Rock became insolvent and no longer exists. (DSRC Notice 4 n.2.) to an Agreement and Plan of Merger 49 CFR 1104.14(b). The motion for protective order 1 3 DSRC states that it has been operating pursuant dated May 16, 2019. As a result of the will be addressed in a separate decision. to the terms of the sublease since January 1, 2012. 2 The verified notice states that Brookhaven and According to DSRC, SDR Holding Company, which 1 A redacted version of the agreement was filed Related Infrastructure are separate unaffiliated controls DSRC, had been under the impression that with the notice of exemption. An unredacted entities, except for their joint ownership of BRX a modified certificate previously had been issued. version was filed concurrently under seal, along Transportation, which is the parent of BRX (DSRC Notice 2, 4–5.) with Applicants’ motion for protective order under Acquisition.

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representative, David F. Rifkind, SUPPLEMENTARY INFORMATION: Harbor firm does work for multiple Stinson LLP, 1775 Pennsylvania Avenue State DOTs, the Safe Harbor indirect Summary Discussion of Comments NW, Suite 800, Washington, DC 20006. cost rate for the respective State DOT Board decisions and notices are The FHWA published a Federal would take precedence. available at www.stb.gov. Register Notice on July 17, 2018, at 83 The FHWA agrees with the suggestion FR 33288, seeking public comment on Decided: June 18, 2019. that each State DOT implement its own its proposed guidance for Safe Harbor indirect cost rate and that By the Board, Allison C. Davis, Director, implementation of a Safe Harbor Office of Proceedings. the rate apply to agreements within the indirect cost rate and, its intention to respective State DOT only. The Safe Jeffrey Herzig, notify all contracting agencies receiving Harbor indirect cost rate is applicable to Clearance Clerk. FAHP funds that an agency-developed individual specific contracts, and if a [FR Doc. 2019–13204 Filed 6–20–19; 8:45 am] Safe Harbor indirect cost rate for eligible Safe Harbor firm does work on multiple BILLING CODE 4915–01–P consulting firms may be used as a contracts in multiple States, the Safe component of a risk-based oversight Harbor indirect cost rate for the process to provide reasonable assurance respective State DOT should take DEPARTMENT OF TRANSPORTATION to FHWA that consultant costs on precedent. FAHP-funded contracts are allowable in • Multiple commenters made Federal Highway Administration accordance with the Federal regulations. recommendations regarding the indirect [FHWA Docket No. FHWA–2017–0023] In preparing this guidance to assist in cost rate to be used in the Safe Harbor the implementation of a Safe Harbor Program. One suggested a nationwide RIN 2125–ZA11 program, FHWA considered all public rate of 110 percent as was tested in the comments submitted to the Federal pilot program. Another suggested that Guidance on Safe Harbor Rate Register Notice. States determine their own rate with a Streamlining for Engineering and Based on the comments received, floor of 110 percent. Design Services Consultant Contracts FHWA is finalizing the guidance. Since The FHWA disagrees with the AGENCY: Federal Highway compliance with this guidance is recommendation that one nationwide Administration (FHWA), U.S. voluntary for both the contracting Safe Harbor indirect cost rate be Department of Transportation (DOT). agency and the consulting firm, it is not established. The FHWA believes that anticipated to impose any costs. Entities State DOTs should be able to determine ACTION: Notice. that choose to use this guidance would their policy for accepting eligible firms SUMMARY: This Notice announces and do so only if they anticipate a net into their program, applying the Safe outlines the final guidance for the positive impact. In particular, Harbor indirect cost rate, and graduating implementation of a Safe Harbor consulting firms that voluntarily comply firms into a cognizant agency approved indirect cost rate for certain engineering could experience expanded business indirect cost rate. This would be design service firms that find opportunities because they become consistent with current indirect cost rate establishing such rates to be costly and eligible to work on contracts funded by procedures where contracting agencies a barrier to participating in engineering a Federal grant, which they previously develop their own policy pertaining to and design service contracts reimbursed were not. This guidance may also result application of cognizant agency with Federal-aid Highway Program in cost savings due to a reduction in approved indirect cost rates. A rate that (FAHP) funds. resources needed to conduct oversight is set too low will not achieve the DATES: This guidance is effective June and audits of small consulting firms. desired result of incentivizing new, 21, 2019. Commenters included several State small, or disadvantaged business departments of transportation (State enterprises into the professional ADDRESSES: This document, the request DOT), the American Council of services market. A rate that is set too for comments, and the comments Engineering Companies, and one high is at risk for overpaying consultant received may be viewed online through individual. The respondents were in actual costs. the Federal eRulemaking portal at: favor of the implementation of a Safe • Multiple commenters suggested that http://www.regulations.gov. An Harbor indirect cost rate program. once a firm has established a cognizant electronic copy of this document may Several commenters provided agency indirect cost, that firm should be also be downloaded from the Office of suggestions on how to make the allowed to immediately start using the the Federal Register’s website at: https:// program operate most efficiently. The new rate on existing contracts. www.federalregister.gov and the following summarizes the comments The FHWA agrees that the State DOT Government Publishing Office’s website and FHWA’s response. should be allowed to develop criteria for at: http://www.gpo.gov/fdsys. transitioning firms out of the program FOR FURTHER INFORMATION CONTACT: Mr. General Comments based on its own risk assessment. John McAvoy, Consultant Services • Multiple commenters expressed • Multiple commenters suggested that Program Manager, Office of support for expansion of the Safe Harbor the guidance should clearly indicate the Infrastructure, Federal Highway indirect cost rate program beyond the 10 Safe Harbor indirect cost rate program is Administration, 1200 New Jersey States that are currently piloting the voluntary for both the contracting Avenue SE, Washington, DC 20590– program. Multiple commenters noted agency and consultant and temporary in 9898, (202) 853–5593. For legal that they were a pilot State for the Safe nature, intended to provide the questions: Mr. Steven Rochlis, Office of Harbor Indirect Cost Rate Experiment consultant a window to work on the Chief Counsel, Federal Highway and Test and that the program is Government contracts while developing Administration, 1200 New Jersey effectively meeting its stated goals. its cost accounting procedures. Avenue SE, Washington, DC 20590– • One commenter suggested that each The FHWA agrees that use of the Safe 9898, (202) 366–1395. Office hours are State DOT implement its own Safe Harbor indirect cost rate is voluntary for from 8:00 a.m. to 4:30 p.m. E.T., Harbor indirect cost rate, and that the both the contracting agency and Monday through Friday, except for rate apply to agreements within the consultant. Existing regulations found at Federal holidays. respective State DOT only. If a Safe 23 CFR 172.11(b)(1)(iii) allow for the

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use of other methods to contract with indirect cost rate, which is prohibited reflect the needs of operating in firms that do not have a cognizant by statute. Existing regulations found at different markets. We also note that agency approved indirect cost rate and 23 CFR 172.11(b)(1)(iii) allow for the FHWA is not creating any new rules or do not volunteer to use the Safe Harbor use of other methods to contract with regulations nor are we amending current indirect cost rate. firms that do not have a cognizant policy through this Federal Register • Multiple commenters suggested a agency approved indirect cost rate. notice. We acknowledge that existing consultant firm should be able to • One commenter wrote to strongly rules in 23 CFR 172 allow contracting transition from the Safe Harbor indirect support the existing statutory and agencies to develop their own risk-based cost rate to a cognizant agency approved regulatory framework governing the oversight process, approved by FHWA, indirect cost rate within 3 years of procurement, contracting, and to provide reasonable assurance of entering the program. administration of engineering and consultant compliance with Federal cost The FHWA agrees that provided a design-related services on Federal-aid principles and that a contracting relatively consistent contract workload, highway projects, stating that the laws agency-developed Safe Harbor indirect a consulting firm should be able to and regulations have brought a measure cost rate program can be a component transition from the Safe Harbor indirect of uniformity and consistency to State of that process. The FHWA believes that cost rate to a cognizant agency approved transportation programs and help to a continuing dialogue between the State indirect cost rate within 3 years of ensure that Federal funds are DOTs and engineering firms are entering the program. administered efficiently and effectively. instrumental to development of policies • Some commenters recommended The commenter further stated that and procedures that are compliant with that a consulting firm have the option to education and training of engineering 23 CFR 172. utilize the Safe Harbor indirect cost rate firms and State DOT officials on • One commenter recommended indefinitely. compliance, interpretation, and strengthening the language in the notice The FHWA disagrees with the implementation of Federal rules in a fair to require adherence to the parameters recommendation to authorize an and consistent manner protects the of the work plan utilized in the pilot indefinite Safe Harbor indirect cost rate. business interests of the firms and, more program. The commenter further Provided a relatively consistent contract importantly, promotes transparency and recommended that the guidance be workload, a consulting firm should be accountability for taxpayer funds and updated to require compliance with the able to transition from the Safe Harbor protects against waste, fraud, and abuse. policies and procedures outlined in the indirect cost rate to a Federal The FHWA agrees that the existing pilot program. Acquisition Regulation (FAR) indirect statutory and regulatory framework A Safe Harbor program developed by cost rate within 3 years of entering the governing the procurement, contracting, a contracting agency would be part of program. However, FHWA agrees that and administration of engineering and that agency’s written policies and the State DOT should be allowed to design-related services on Federal-aid procedures compliant with 23 CFR develop criteria for determining eligible highway projects promotes quality 172.5(c) and subject to approval by firms and for transitioning firms out of engineering services, provides FHWA. Participation in the Safe Harbor the program based on its own risk transparency and accountability for indirect cost rate program is voluntary assessment. taxpayer funds, and protects against for the contracting agency and the • Multiple commenters suggested the waste, fraud, and abuse. Note that consultant. If both entities do not agree guidance should include the option for FHWA is not creating any new rules or on the parameters of the Safe Harbor a field or project office indirect cost rate. regulations through this Federal indirect cost rate implementation, The FHWA sees the potential for Register notice. The FHWA is existing regulations provide guidance benefit when applied to a field-based acknowledging that existing rules in 23 on how to proceed when the indirect indirect cost rate as part of a State CFR 172 allow contracting agencies to cost rate has not been established by a DOT’s risk-based oversight process to develop their own risk-based oversight cognizant agency. Actions that provide reasonable assurance of process, approved by FHWA, to provide administratively limit or cause de facto consultant compliance with Federal cost reasonable assurance of consultant ceilings on indirect cost rates are principles. Ultimately, it is up to the compliance with Federal cost principles prohibited. State DOT to include a field or project and that a contracting agency-developed • One commenter suggested FHWA office indirect cost rate option when Safe Harbor indirect cost rate program should include instructions to be sure developing their Safe Harbor indirect can be a component of that process. that any State that implements a Safe cost rate program. • One commenter expressed concern Harbor indirect cost rate has a detailed • One commenter recommended that that the proposed Safe Harbor indirect plan in place for educating the firms of if a consulting firm has not developed cost rate program could be a step their true cost structure and moving the an accepted indirect cost rate within the backwards if not implemented carefully. participating firms out of the program past 3 years, it should be eligible for the The notice gives broad latitude to State and into a cognizant agency approved Safe Harbor indirect cost rate program. DOTs to set the parameters and indirect cost rate. The commenter The FHWA agrees that a contracting procedures for such a program resulting theorized that, without the proper agency could, as part of their risk-based in a wide array of approaches that treat knowledge, setting a Safe Harbor oversight process, decide to make their firms differently from State to State. indirect cost rate that is too low will Safe Harbor indirect cost rate available Such an outcome could undermine the have the effect of locking a firm into a to a firm that has had their cognizant coordinated efforts of FHWA, American money losing venture that will hamper agency approved indirect cost rate Association of State Highway and the ability of the firm to mature to a lapse. However, contracting agencies Transportation Officials, and American formally recognized, properly should understand that participation in Council of Engineering Companies over formulated indirect cost rate. the program is voluntary and requiring the last 10+ years. The FHWA believes that a contracting a firm to use a Safe Harbor indirect cost The FHWA recognizes that regional agency should be able to determine their rate because of a lapsed approved variances do exist and contracting policy for educating and accepting indirect cost rate may have the effect of agencies will have the opportunity to eligible firms into their program, imposing a de facto ceiling on an develop policies and procedures that applying the Safe Harbor indirect cost

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rate, and graduating firms into a Background and Pilot Program Beyond the Pilot—Guidance on Use of cognizant agency approved indirect cost the Safe Harbor Indirect Cost Rate To remove these barriers and to rate. This would be consistent with This guidance replaces the Safe current indirect cost rate procedures enhance contracting agency oversight of compliance with Federal cost Harbor Indirect Cost Rate Test and where contracting agencies develop Evaluation pilot by expanding the scope principles, FHWA developed the Safe their own policy pertaining to of the program beyond the ten Harbor Indirect Cost Rate Test and application of cognizant agency contracting agencies that participated in Evaluation pilot. Ten contracting approved indirect cost rates. A rate that the pilot. is set too low will not achieve the agencies participated in a test where Contracting agencies are given desired result of incentivizing new, new or small consulting firms were discretion to determine the eligibility of given the option of applying a Safe small, or disadvantaged business consulting firms for a Safe Harbor Harbor indirect cost rate to specific enterprises into the professional indirect cost rate for use on a case-by- contracts. The selected Safe Harbor services market. A rate that is set too case basis and are required to document indirect cost rate was conservatively high is at risk for overpaying consultant their decision. lower than the industry average rate, actual costs. While the original test of the Safe allowing the firms to participate in the Harbor indirect cost rate only applied to Guidance on Safe Harbor Rate engineering services market without an an office-based indirect cost rate, FHWA Streamlining for Engineering and audit of their costs while providing an sees the potential for benefit if a Design Services Consultant Contracts incentive for the firms to develop an contracting agency elects to apply a actual rate when allowed by their cost field-based indirect cost rate as part of Applicability and Purpose history. the agency’s risk-based oversight This guidance applies to consulting Test results showed a reduction in the process to provide reasonable assurance firms providing engineering and design financial management barriers that of consultant compliance with Federal related services under a contract prevented new, small, or disadvantaged cost principles. reimbursed with Federal-aid highway but qualified consulting firms from If agreed to by both the contracting program (FAHP) funds and contracting entering the federally funded agency and the consulting firm, the Safe Harbor indirect cost rate is applied to agencies receiving FAHP funds. engineering services market, and new contracts executed with a Consulting firms providing services creation of a framework for these contracting agency, or subrecipient. under a contract reimbursed with FAHP consulting firms to establish a cognizant Once applied to a contract, the Safe funds are required to account for, and agency approved indirect cost rate. Harbor indirect cost rate should be used bill, costs in accordance with the Following a risk-based approach for the duration of the contract. A Safe Federal cost principles of the FAR of 48 allowed contracting agency oversight Harbor indirect cost rate may be used in CFR part 31. To do so, consulting firms and audit resources to prioritize their the determination of the fixed fee develop indirect cost rates in efforts on more complex, higher risk portion of the contract, which would accordance with the Federal cost contracts. not be subject to adjustment unless principles. At the same time, The use of a Safe Harbor indirect cost warranted by changes to the scope of contracting agencies shall provide rate is voluntary for both the contracting work or duration of the contract. reasonable assurance to FHWA that agency and the consulting firm. During Firms that use the Safe Harbor consulting firm costs claimed under the test and evaluation, a consulting indirect cost rate, and do not have FAHP-funded contracts, including firm was considered eligible to use a established salaries or wage rates for indirect costs, are allowable in Safe Harbor indirect cost rate if it had employees or classes of employees, use accordance with the Federal cost not had an indirect cost rate previously negotiated, fixed hourly labor rates for principles. 23 CFR 172.11(c)(1). accepted by a cognizant agency. the direct labor portion of the contracted Adhering to these accounting Consulting firms with an audited, or services. The negotiated direct labor rate requirements can place a significant otherwise accepted, actual indirect cost should meet the reasonableness burden on some consulting firms and rate, developed in accordance with the provisions as set forth in 2 CFR 200.404, may create a barrier for otherwise Federal cost principles, were not considering the nature of the services to be provided. Where appropriate for the qualified firms to compete for FAHP- considered eligible to participate in the scope of services under contract, a funded contracts. Many small firms, Safe Harbor Indirect Cost Rate Program. ‘‘fully loaded’’ or ‘‘specific rate of including Disadvantaged Business The FHWA’s test and evaluation pilot compensation’’ hourly rate could be Enterprise firms, lack the financial used a nationwide Safe Harbor indirect established utilizing a reasonable hourly expertise or financial resources to either cost rate of 110 percent of a firm’s direct direct labor rate, a Safe Harbor indirect develop an indirect cost rate themselves salary rate. This rate provided a cost rate as the overhead rate or hire a Certified Public Accountant minimal risk to contracting agencies for component, and an appropriate amount firm to do it for them. New or start-up overpayment to those consulting firms of fixed fee that considers the firms generally do not have a contract- participating in the program. Based on complexity and risk involved. related cost history to use as a base for FHWA’s experience with this pilot, The Safe Harbor indirect cost rate is development of an indirect cost rate. FHWA will expand the use of the Safe intended to be a component of a These firms are typically prohibited Harbor indirect cost rate, beyond the 10 contracting agency’s risk-based from participating in FAHP-funded pilot States, to allow other interested oversight of the procurement, contracts without the development and contracting agencies receiving FAHP management, and administration of application of a provisional indirect cost funds to develop and implement a self- engineering and design-related services rate for each specific contract, which is administered Safe Harbor Indirect Cost contract. Contracting agencies using the adjusted based upon a labor intensive, Rate Program, under a risk-based Safe Harbor indirect cost rate must first contracting agency-conducted final approach compliant with 23 CFR prepare and maintain written policies audit at the completion of the contract. 172.11(c). and procedures establishing the

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program in accordance with 23 CFR obligations under existing statutes and • Electronically: Submit comments 172.5(c)(10), then develop written risk- regulations. electronically by logging onto the based oversight procedures designed to Issued on: June 13, 2019. Federal Docket Management System (FDMS) website at https:// provide reasonable assurance of Nicole R. Nason, consultant compliance with the Federal www.regulations.gov/. Follow the online Administrator, Federal Highway instructions for submitting comments. cost principles in accordance with 23 Administration. CFR 172.11(c)(2). The use of the Safe • Comments may also be faxed to Harbor indirect cost rate is voluntary for [FR Doc. 2019–13241 Filed 6–20–19; 8:45 am] (202) 493–2251. both the contracting agency and for BILLING CODE 4910–22–P Comments must be written in the eligible firms. In reviewing the English language, and be no greater than 15 pages in length, although there is no eligibility of a consulting firm opting to DEPARTMENT OF TRANSPORTATION use the Safe Harbor indirect cost rate, it limit to the length of necessary attachments to the comments. If may be necessary to contact the State National Highway Traffic Safety comments are submitted in hard copy DOT in the home State of the consulting Administration firm to verify the audit history of the form, please ensure that two copies are provided. If you wish to receive firm and ensure the firm does not have [Docket No. NHTSA–2018–0082; Notice 1] an audited or otherwise accepted confirmation that comments you have indirect cost rate developed in Yokohama Tire Corporation, Receipt of submitted by mail were received, please accordance with the Federal cost Petition for Decision of enclose a stamped, self-addressed principles. Some evaluation of the Inconsequential Noncompliance postcard with the comments. Note that accounting system of the consulting all comments received will be posted firms choosing to use the Safe Harbor AGENCY: National Highway Traffic without change to https:// indirect cost rate may be necessary to Safety Administration (NHTSA), www.regulations.gov, including any verify the capability of accumulating Department of Transportation (DOT). personal information provided. All comments and supporting and tracking direct labor for applying ACTION: Receipt of petition. materials received before the close of the Safe Harbor indirect cost rate, as business on the closing date indicated well as for billing other direct costs by SUMMARY: Yokohama Tire Corporation above will be filed in the docket and contract, segregating indirect costs, etc. (YTC) has determined that certain will be considered. All comments and The Internal Control Questionnaire Yokohama RY023 brand replacement supporting materials received after the provided in Appendix B of the commercial tires do not fully comply closing date will also be filed and will AASHTO Uniform Audit and with Federal Motor Vehicle Safety be considered to the fullest extent Accounting Guide (2016 Edition) may be Standard (FMVSS) No. 119, New possible. used by contracting agencies as a tool Pneumatic Tires for Motor Vehicles with a GVWR of more than 4,536 kilograms When the petition is granted or for assessing the accounting system denied, notice of the decision will also capabilities of firms opting to use the (10,000 lbs) and Motorcycles. YTC filed a noncompliance report dated July 12, be published in the Federal Register Safe Harbor indirect cost rate. A pursuant to the authority indicated at contracting agency may wish to conduct 2018. YTC subsequently petitioned NHTSA on July 31, 2018, and submitted the end of this notice. post contract audits or other evaluations All comments, background to verify accurate accumulation and a supplemental petition on February 6, 2019, for a decision that the subject documentation, and supporting billing of direct contract costs. However, materials submitted to the docket may an audit of indirect costs is not noncompliance is inconsequential as it relates to motor vehicle safety. This be viewed by anyone at the address and necessary for Safe Harbor indirect cost times given above. The documents may rate contracts, as the rate should be document announces receipt of YTC’s petition. also be viewed on the internet at https:// applied for the duration of the contract, www.regulations.gov by following the and retroactive adjustments to indirect DATES: The closing date for comments online instructions for accessing the costs incurred on these contracts is not on the petition is July 22, 2019. dockets. The docket ID number for this necessary. ADDRESSES: Interested persons are petition is shown in the heading of this The FHWA Division Office will serve invited to submit written data, views, notice. as the primary point of contact and and arguments on this petition. DOT’s complete Privacy Act liaison for the contracting agency. The Comments must refer to the docket and Statement is available for review in a FHWA Division Offices also will notice number cited in the title of this Federal Register notice published on monitor the respective contracting notice and submitted by any of the April 11, 2000, (65 FR 19477–78). agency’s use of the Safe Harbor indirect following methods: SUPPLEMENTARY INFORMATION: cost rate in accordance with the • Mail: Send comments by mail approved, written risk-based oversight addressed to the U.S. Department of I. Overview procedures. Transportation, Docket Operations, M– YTC has determined that certain Contracting agencies using FAHP 30, West Building Ground Floor, Room Yokohama brand RY023 replacement funds must comply with all Federal, W12–140, 1200 New Jersey Avenue SE, commercial tires do not fully comply State, and local laws and regulations to Washington, DC 20590. with paragraph S6.5(d) and (j) of Federal remain eligible for reimbursement. • Hand Delivery: Deliver comments Motor Vehicle Safety Standard (FMVSS) This guidance is not legally binding by hand to the U.S. Department of No. 119, New Pneumatic Tires for Motor in its own right and will not be relied Transportation, Docket Operations, M– Vehicles with a GVWR of more than upon by the Department as a separate 30, West Building Ground Floor, Room 4,536 kilograms (10,000 lbs) and basis for affirmative enforcement action W12–140, 1200 New Jersey Avenue SE, Motorcycles (49 CFR 571.119). YTC filed or other administrative penalty. Washington, DC 20590. The Docket a noncompliance report dated July 12, Conformity with this guidance Section is open on weekdays from 10 2018, pursuant to 49 CFR part 573, document is voluntary only, and a.m. to 5 p.m. except for Federal Defects and Noncompliance nonconformity will not affect rights and Holidays. Responsibility and Reports. YTC

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subsequently petitioned NHTSA on July In support of its petition, YTC exempted from providing notification of 31, 2018, and submitted a supplemental submitted the following arguments: the noncompliance, as required by 49 petition on February 6, 2019, for an 1. This Petition concerns Yokohama U.S.C. 30118, and a remedy for the exemption from the notification and 11R22.5 16PR RY023 commercial truck noncompliance, as required by 49 remedy requirements of 49 U.S.C. and bus replacement tires whose U.S.C. 30120, should be granted. Chapter 301 on the basis that this branding information incorrectly states YTC’s complete petition and all noncompliance is inconsequential as it the ply rating, load range and load supporting documents are available by relates to motor vehicle safety, pursuant capacity on one side (serial side) only, logging onto the Federal Docket to 49 U.S.C. 30118(d) and 30120(h) and while the branding information on the Management System (FDMS) website at: 49 CFR part 556, Exemption for other side (opposite serial side) is https://www.regulations.gov and by Inconsequential Defect or correct for the subject tires. Because of following the online search instructions Noncompliance. this mold branding error, these tires are to locate the docket number as listed in not in compliance with the tire labeling the title of this notice. II. Tires Involved requirement found in 49 CFR 571.119 NHTSA notes that the statutory Approximately 4,704 Yokohama S6.5(d) and (j), even though all of these provisions (49 U.S.C. 30118(d) and RY023 size 11R22.5 16(LR H) 146/143L tires were manufactured with the 30120(h)) that permit manufacturers to commercial tires manufactured between correct ply rating and load range. file petitions for a determination of February 2, 2018, and May 17, 2018, are 2. YTC implemented verification inconsequentiality allow NHTSA to potentially involved. countermeasures to prevent any exempt manufacturers only from the recurrence of any incorrect tire III. Noncompliance duties found in sections 30118 and markings. Further investigation 30120, respectively, to notify owners, YTC explains that the noncompliance determined that the suspect period purchasers, and dealers of a defect or was due to a mold error in which one ended when the incorrect mold had noncompliance and to remedy the sidewall, the serial sidewall, of subject been removed from production on May defect or noncompliance. Therefore, any tires incorrectly state the ply rating, load 17, 2018, in the 19th production week decision on this petition only applies to range and load capacity as required by of 2018. The 764 tires in containment the subject tires that YTC no longer paragraph S6.5(d) and (j) of FMVSS No. will be repaired before they are sold. controlled at the time it determined that 3. Significantly, these tires were 119. the noncompliance existed. However, manufactured as designed and meet or Specifically, the tires were marked: any decision on this petition does not exceed all applicable Federal motor 14 PR LOAD RANGE G relieve tire distributors and dealers of vehicle safety performance standards. MAX. LOAD SINGLE 2800 kg (6175 lbs) the prohibitions on the sale, offer for While the sidewall markings are correct at 720 kPa (105 psi) COLD sale, or introduction or delivery for on the opposite serial side, the sidewall MAX. LOAD DUAL 2650 kg (5840 lbs) introduction into interstate commerce of markings on the serial side understate at 720 kPa (105 psi) COLD the noncompliant tires under their When they should have been marked: the construction and capacity of the subject tires. The misbranding of these control after YTC notified them that the 16 PR LOAD RANGE H subject noncompliance existed. MAX. LOAD SINGLE 3000 kg (6610 lbs) tires is not a safety concern and also has Authority: 49 U.S.C. 30118, 30120: at 830 kPa (120 psi) COLD no impact on the retreading, repairing and recycling industries. The affected delegations of authority at 49 CFR 1.95 and MAX. LOAD DUAL 2725 kg (6005 lbs) 501.8. at 830 kPa (120 psi) COLD tire mold has already been corrected and all future production will have the Otto G. Matheke III, IV. Rule Requirements correct material shown on the sidewall. Director, Office of Vehicle Safety Compliance. Paragraph S6.5(d) and (j) of FMVSS 4. NHTSA has studied the impact of tire labeling information on safety in the [FR Doc. 2019–13196 Filed 6–20–19; 8:45 am] No. 119, includes the requirements BILLING CODE 4910–59–P relevant to this petition: context of its rulemaking efforts under • Except as specified in paragraph the Transportation Recall Enhancement, S6.5, each tire shall be marked on each Accountability and Documentation DEPARTMENT OF THE TREASURY sidewall with the information specified (TREAD) Act. YTC stated that NHTSA’s analysis concluded that tire in paragraphs (a) through (j) of Office of Foreign Assets Control paragraph S6.5. construction information on a tire’s • The maximum load rating and sidewall is not relied upon by dealers Notice of OFAC Sanctions Actions corresponding inflation pressure of the and consumers in the selling or tire, shown as follows: purchasing of tires and has an AGENCY: Office of Foreign Assets (Mark on tires rated for single and inconsequential impact on motor Control, Treasury. dual load): Max load single ll kg vehicle safety. In addition, YTC cited ACTION: Notice. (ll lb) at ll kPa (ll psi) cold. Max the following petitions that the agency load dual ll kg (ll lb) at ll kPa has previously granted for similar SUMMARY: The Department of the (ll psi) cold. noncompliances: See Sumitomo Rubber Treasury’s Office of Foreign Assets (Mark on tires rated for only for single Industries, Grant of Petition for Decision Control (OFAC) is publishing the names load): Max load single ll kg (ll lb) of Inconsequential Noncompliance, 83 of one or more persons that have been at ll kPa (ll psi) cold. FR 13002 (March 26, 2018) and placed on OFAC’s Specially Designated • Markings must contain the letter Goodyear Tire & Rubber Co., Grant of Nationals and Blocked Persons List designating the tire load range. Petition for Decision for Inconsequential based on OFAC’s determination that one Noncompliance, 82 FR 18210 (April 17, or more applicable legal criteria were V. Summary of Petition 2017). satisfied. All property and interests in YTC described the subject YTC concluded by expressing the property subject to U.S. jurisdiction of noncompliance and stated its belief that belief that the subject noncompliance is these persons are blocked, and U.S. the noncompliance is inconsequential inconsequential as it relates to motor persons are generally prohibited from as it relates to motor vehicle safety. vehicle safety, and that its petition to be engaging in transactions with them.

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DATES: See SUPPLEMENTARY INFORMATION property are blocked pursuant to E.O. interests in property are blocked pursuant to SECTION. 13582. E.O. 13573. Also designated pursuant to section 1(b)(ii) FOR FURTHER INFORMATION CONTACT: 2. FOZ, Amer (a.k.a. FOZ, Amer of E.O. 13582 for being owned or controlled OFAC: Associate Director for Global Zuhair); DOB 11 Mar 1976; POB Homs, by, directly or indirectly, AMAN HOLDING Targeting, tel.: 202–622–2420; Assistant Syria; Gender Male; Passport COMPANY, an entity whose property and Director for Sanctions Compliance & O6O1O274747 (Syria) (individual) interests in property are blocked pursuant to Evaluation, tel.: 202–622–2490; [SYRIA] (Linked To: ASM E.O. 13582. Assistant Director for Licensing, tel.: INTERNATIONAL TRADING LLC). 2. AMAN DAMASCUS JOINT STOCK 202–622–2480; Assistant Director for Designated pursuant to section COMPANY (a.k.a. AMAN DAMASCUS JSC), Regulatory Affairs, tel. 202–622–4855; 1(b)(iv) of E.O. 13573 for having acted Damascus, Syria [SYRIA] (Linked To: AMAN or the Department of the Treasury’s or purported to act for or on behalf of, HOLDING COMPANY). Office of the General Counsel: Office of Designated pursuant to section 1(b)(iv) of directly or indirectly, ASM E.O. 13573 for being owned or controlled by, the Chief Counsel (Foreign Assets INTERNATIONAL TRADING, LLC, an directly or indirectly, AMAN HOLDING Control), tel.: 202–622–2410. entity whose property and interests in COMPANY, an entity whose property and SUPPLEMENTARY INFORMATION: property are blocked pursuant to E.O. interests in property are blocked pursuant to 13573. E.O. 13573. Electronic Availability Also designated pursuant to section Also designated pursuant to section 1(b)(ii) The Specially Designated Nationals 1(b)(ii) of E.O. 13582 for having acted or of E.O. 13582 for being owned or controlled and Blocked Persons List and additional purported to act for or on behalf of, by, directly or indirectly, AMAN HOLDING COMPANY, an entity whose property and information concerning OFAC sanctions directly or indirectly, ASM programs are available on OFAC’s interests in property are blocked pursuant to INTERNATIONAL TRADING, LLC, an E.O. 13582. website (https://www.treasury.gov/ofac). entity whose property and interests in 3. AMAN HOLDING COMPANY (a.k.a. Notice of OFAC Action(s) property are blocked pursuant to E.O. AMAN GROUP; a.k.a. AMAN HOLDING 13582. GROUP; a.k.a. AMAN HOLDING PRIVATE On June 11, 2019, OFAC determined 3. FOZ, Husen (a.k.a. FOZ, Hasan; JSC), Al Shurafa Building Aman Group, Al that the property and interests in a.k.a. FOZ, Hosn Zuhair; a.k.a. FOZ, Moutanabi Street, Lattika, Syria [SYRIA] property subject to U.S. jurisdiction of Hoson; a.k.a. FOZ, Housen; a.k.a. FOZ, (Linked To: FOZ, Samer). the following persons are blocked under Designated pursuant to section 1(b)(iv) of Hussen), Meadows 1, Street 13, Villa 38, the relevant sanctions authorities listed E.O. 13573 for being owned or controlled by, below. Dubai, United Arab Emirates; Adawai directly or indirectly, Samer FOZ, a person Area Rawdet Aleman Bld, 1st Floor, whose property and interests in property are Individuals Damascus City, Syria; DOB 25 May blocked pursuant to E.O. 13573. 1. FOZ, Samer (a.k.a. AL–FOUZ, 1981; POB Lattakia, Syria; nationality Also designated pursuant to section 1(b)(ii) Samer; a.k.a. FAWAZ, Samer; a.k.a. Syria; alt. nationality Saint Kitts and of E.O. 13582 for being owned or controlled FAWZ, Samir; a.k.a. FOUZ, Samer; Nevis; citizen Turkey; alt. citizen Syria; by, directly or indirectly, Samer FOZ, a person whose property and interests in a.k.a. FOZ, Samer Zuhair; a.k.a. FOZ, Gender Female; Passport U08527769 (Turkey); alt. Passport RE0027450 property are blocked pursuant to E.O. 13582. Samir), Meadows 2, Street 3, Villa 5, 4. ASM INTERNATIONAL TRADING, LLC Dubai, United Arab Emirates; DOB 20 (Syria); National ID No. 06010274768 (a.k.a. ASM INTERNATIONAL GENERAL May 1973; POB Latakia, Syria; (Syria) (individual) [SYRIA] (Linked To: TRADING COMPANY; a.k.a. ASM nationality Syria; alt. nationality ASM INTERNATIONAL TRADING INTERNATIONAL GENERAL TRADING Turkey; alt. nationality Saint Kitts and LLC). LLC), Jumeirah Lake Tower, Cluster 1, Nevis; citizen Saint Kitts and Nevis; Designated pursuant to section Platinum Tower, Office 2405, P.O. Box Gender Male; National ID No. 1(b)(iv) of E.O. 13573 for having acted 36102, Dubai, United Arab Emirates [SYRIA] 784197341865828 (Syria) (individual) or purported to act for or on behalf of, (Linked To: FOZ, Samer). [SYRIA]. directly or indirectly, ASM Designated pursuant to section 1(b)(iv) of INTERNATIONAL TRADING, LLC, an E.O. 13573 for being owned or controlled by, Designated pursuant to section directly or indirectly, Samer FOZ, a person 1(b)(iii) of Executive Order 13573 of entity whose property and interests in whose property and interests in property are May 18, 2011, ‘‘Blocking Property of property are blocked pursuant to E.O. blocked pursuant to E.O. 13573. Senior Officials of the Government of 13573. Also, designated pursuant to section Syria’’ (E.O. 13573) for having Also designated pursuant to section 1(b)(ii) of E.O. 13582 for being owned or materially assisted, sponsored, or 1(b)(ii) of E.O. 13582 for having acted or controlled by, directly or indirectly, Samer provided financial, material, or purported to act for or on behalf of, FOZ, a person whose property and interests technological support for, or goods or directly or indirectly, ASM in property are blocked pursuant to E.O. services in support of, Bashar AL– INTERNATIONAL TRADING, LLC, an 13582. 5. BS COMPANY OFFSHORE (a.k.a. B S ASSAD, a person whose property and entity whose property and interests in COMPANY; a.k.a. B.S. COMPANY interests in property are blocked property are blocked pursuant to E.O. OFFSHORE; a.k.a. BS COMPANY SAL pursuant to E.O. 13573. 13582. OFFSHORE), Salame Building, Beit Mery, Also designated pursuant to section Entities Lebanon [SYRIA]. 1(b)(i) of Executive Order 13582 of Designated pursuant to section 1(b)(i) of August 17, 2011, ‘‘Blocking Property of 1. AL–MOHAIMEN FOR TRANSPORTING E.O. 13582 for having materially assisted, the Government of Syria and Prohibiting & CONTRACTING (a.k.a. AL MOHAIMEN sponsored, or provided financial, material, or Certain Transactions With Respect to FOR TRANSPORTATION AND technological support for, or goods or Syria’’ (E.O. 13582) for having CONTRACTING; a.k.a. AL–MOHAIMEN FOR services in support of, BANIAS REFINERY materially assisted, sponsored, or TRANSPORTING AND CONTRACTING), COMPANY, an entity identified as meeting Lattakia, Syria [SYRIA] (Linked To: AMAN the definition of the GOVERNMENT OF provided financial, material, or HOLDING COMPANY). SYRIA as set forth in section 8(d) of E.O. technological support for, or goods or Designated pursuant to section 1(b)(iv) of 13582 and section 542.305 of the Syrian services in support of, the E.O. 13573 for being owned or controlled by, Sanctions Regulations, 31 CFR part 542. GOVERNMENT OF SYRIA, a person directly or indirectly, AMAN HOLDING 6. FOUR SEASONS DAMASCUS (a.k.a. whose property and interests in COMPANY, an entity whose property and DAMASCUS FOUR SEASONS; a.k.a. FOUR

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SEASONS HOTEL DAMASCUS), Shukri Al Designated pursuant to section 1(b)(iv) of DATES: Written comments should be Quatli Street, P.O. Box 6311, Damascus, Syria E.O. 13573 for being owned or controlled by, received on or before August 20, 2019 [SYRIA] (Linked To: FOZ, Samer). directly or indirectly, Samer FOZ, a person to be assured of consideration. Designated pursuant to section 1(b)(iv) of whose property and interests in property are ADDRESSES: E.O. 13573 for being owned or controlled by, blocked pursuant to E.O. 13573. Direct all written comments directly or indirectly, Samer FOZ, a person Also designated pursuant to section 1(b)(ii) to Laurie Brimmer, Internal Revenue whose property and interests in property are of E.O. 13582 for being owned or controlled Service, Room 6529, 1111 Constitution blocked pursuant to E.O. 13573. by, directly or indirectly, Samer FOZ, a Avenue NW, Washington, DC 20224. Also designated pursuant to section 1(b)(ii) person whose property and interests in FOR FURTHER INFORMATION CONTACT: of E.O. 13582 for being owned or controlled property are blocked pursuant to E.O. 13582. Requests for additional information or by, directly or indirectly, Samer FOZ, a 12. SILVER PINE (a.k.a. SILVER PINE copies of the form should be directed to person whose property and interests in DMCC), Jumeirah Lake Tower, Cluster 1, property are blocked pursuant to E.O. 13582. Kerry Dennis, at (202) 317–5751 or Platinum Tower, Office 2405, P.O. Box Internal Revenue Service, Room 6529, 7. FOZ FOR TRADING (a.k.a. FOZ 36102, Dubai, United Arab Emirates [SYRIA] TRADING), Syria [SYRIA] (Linked To: (Linked To: FOZ, Husen). 1111 Constitution Avenue NW, AMAN HOLDING COMPANY). Designated pursuant to section 1(b)(iv) of Washington, DC 20224, or through the Designated pursuant to section 1(b)(iv) of E.O. 13573 for being owned or controlled by, internet, at [email protected]. E.O. 13573 for being owned or controlled by, directly or indirectly, Husen FOZ, a person SUPPLEMENTARY INFORMATION: directly or indirectly, AMAN HOLDING whose property and interests in property are Title: Directed Withholding and COMPANY, an entity whose property and blocked pursuant to E.O. 13573. Deposit Verification, Central interests in property are blocked pursuant to Also designated pursuant to section 1(b)(ii) E.O. 13573. Withholding Agreement, and of E.O. 13582 for being owned or controlled Also designated pursuant to section 1(b)(ii) Application for Central Withholding by, directly or indirectly, Husen FOZ, a of E.O. 13582 for being owned or controlled Agreement Less than $10,000. person whose property and interests in by, directly or indirectly, AMAN HOLDING OMB Number: 1545–2102. property are blocked pursuant to E.O. 13582. COMPANY, an entity whose property and Form Number: Form 13920, 13930, 13. SYNERGY SAL OFFSHORE, Azarieh interests in property are blocked pursuant to street—Azarieh building, Beirut, Lebanon and 13930–A. E.O. 13582. [SYRIA]. Abstract: Central Withholding 8. LANA TV, Beirut, Lebanon [SYRIA] Designated pursuant to section 1(b)(i) of Agreement (CWA) is a tool that can help (Linked To: FOZ, Samer). E.O. 13582 for having materially assisted, nonresident entertainers and athletes Designated pursuant to section 1(b)(iv) of sponsored, or provided financial, material, or who plan to work in the United States E.O. 13573 for being owned or controlled by, technological support for, or goods or directly or indirectly, Samer FOZ, a person and provides for withholdings at a whose property and interests in property are services in support of, BANIAS REFINERY graduated rate. Form 13930 will be used blocked pursuant to E.O. 13573. COMPANY, an entity identified as meeting by an individual who wishes to have a Also designated pursuant to section 1(b)(ii) the definition of the GOVERNMENT OF Central Withholding Agreement (CWA). of E.O. 13582 for being owned or controlled SYRIA as set forth in section 8(d) of E.O. Starting October 1, 2018, NRAAEs must by, directly or indirectly, Samer FOZ, a 13582 and section 542.305 of the Syrian have U.S. gross income of at least Sanctions Regulations, 31 CFR part 542. person whose property and interests in $10,000 (including income estimated on property are blocked pursuant to E.O. 13582. Dated: June 14, 2019. the CWA application budget) before the 9. MAINPHARMA (a.k.a. MEENPHARMA), Andrea M. Gacki, NRAAE is eligible to apply for a Syria [SYRIA] (Linked To: AMAN HOLDING Director, Office of Foreign Assets Control. COMPANY). withholding agreement using Form Designated pursuant to section 1(b)(iv) of [FR Doc. 2019–13211 Filed 6–20–19; 8:45 am] 13930. NRAAEs having gross income of E.O. 13573 for being owned or controlled by, BILLING CODE 4810–AL–P less than $10,000 may apply for a CWA directly or indirectly, AMAN HOLDING with no expenses under the simplified COMPANY, an entity whose property and procedures using Form 13930–A. interests in property are blocked pursuant to DEPARTMENT OF THE TREASURY Starting October 1, 2018, NRAAEs must E.O. 13573. have U.S. gross income of at least Also designated pursuant to section 1(b)(ii) Internal Revenue Service $10,000 (including income estimated on of E.O. 13582 for being owned or controlled the CWA application budget) before the by, directly or indirectly, AMAN HOLDING Proposed Collection; Comment NRAAE is eligible to apply for a COMPANY, an entity whose property and Request for Regulation Project interests in property are blocked pursuant to withholding agreement using Form 13930. NRAAEs having gross income of E.O. 13582. AGENCY: Internal Revenue Service (IRS), less than $10,000 may apply for a CWA 10. MENA CRYSTAL SUGAR COMPANY Treasury. LIMITED (a.k.a. M.E.N.A. CRYSTAL SUGAR with no expenses under the simplified COMPANY; a.k.a. M.E.N.A. SUGAR ACTION: Notice and request for procedures using Form 13930–A. Form COMPANY; a.k.a. MENA SUGAR comments. 13920 is used by withholding agents to COMPANY), Homs, Syria [SYRIA] (Linked verify to IRS that required deposits were To: AMAN HOLDING COMPANY). SUMMARY: made and give the amount of such Designated pursuant to section 1(b)(iv) of The Internal Revenue Service, E.O. 13573 for being owned or controlled by, as part of its continuing effort to reduce deposits. directly or indirectly, AMAN HOLDING paperwork and respondent burden, Current Actions: Form 13930–A is COMPANY an entity whose property and invites the general public and other being added to the above OMB approval interests in property are blocked pursuant to Federal agencies to take this number. E.O. 13573. opportunity to comment on continuing Type of Review: Revision of a Also designated pursuant to section 1(b)(ii) information collections, as required by currently approved collection. of E.O. 13582 for being owned or controlled the Paperwork Reduction Act of 1995. Affected Public: Business or other for- by, directly or indirectly, AMAN HOLDING The IRS is soliciting comments profit organizations, individuals or COMPANY, an entity whose property and concerning directed withholding and households, farms and non-profit interests in property are blocked pursuant to institutions. E.O. 13582. deposit verification, central withholding 11. ORIENT CLUB, Al Najmeh Square— agreement, and Application for Central Form 13930 Abou Romaaneh 6737, Damascus, Syria Withholding Agreement Less than Estimated Number of Responses: [SYRIA] (Linked To: FOZ, Samer). $10,000. 2,300.

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Estimated Time per of Response: 12 DEPARTMENT OF VETERANS pursuant to the West Los Angeles hours. AFFAIRS Leasing Act of 2016 (Pub. L. 114–226). Form 13930–A The Purple Line NEPA documents Notice of Intent To Adopt the Final evaluate the construction and operation Estimated Number of Responses: Environmental Impact Statement/Final of the Westside Purple Line Extension 1,000. Environmental Impact Report, on the VA West Los Angeles Campus. Estimated Time per Response: 10.5 Supplemental Environmental Impact After thorough review and hours. Statement, and Section 130(c) consideration, VA has concluded that Technical Memorandum for the the Purple Line NEPA documents Form 13920 Westside Purple Line Extension sufficiently identify and evaluate the Project Estimated Number of Responses: environmental impacts related to its 8,100. AGENCY: Department of Veterans Affairs proposed action. Estimated Time per Response: 20 (VA). This Notice informs the reader of the minutes. ACTION: Notice of Intent. availability of the Final Purple Line NEPA documents and of VA’s intent to Estimated Total Annual Burden SUMMARY: VA announces its intent to Hours (3 forms): 22,400 hours. adopt the following National adopt the Purple Line NEPA documents for VA’s proposed action. VA will The following paragraph applies to all Environmental Policy Act (NEPA) publish a Record of Decision no sooner of the collections of information covered documents developed by the Federal than 30 days after publication of the by this notice. Transit Administration and the Los Angeles County Metropolitan Environmental Protection Agency’s An agency may not conduct or Transportation Authority (LA Metro) Notice of Intent in the Federal Register. sponsor, and a person is not required to related to Westside Purple Line Availability: Copies of the 2012 EIS/ respond to, a collection of information Extension Project: March 2012 Final EIR, 2017 SEIS, and the Section 130(c) unless the collection of information Environmental Impact Statement/Final Technical Memorandum related to displays a valid OMB control number. Environmental Impact Report (EIS/EIR), Westside Purple Line Extension are Books or records relating to a collection November 2017 Final Supplemental available for public review at: of information must be retained as long Environmental Impact Statement (SEIS), • as their contents may become material and the December 2018 Section 130(c) VA GLAHS WLA Medical Center: in the administration of any internal Technical Memorandum (‘‘Purple Line 11301 Wilshire Boulevard, Los Angeles, revenue law. Generally, tax returns and NEPA Documents’’). Pursuant to NEPA CA 90073, Building 500/Room 6429K; tax return information are confidential, of 1969, as amended, and the Council and as required by 26 U.S.C. 6103. on Environmental Quality’s regulations • On the website at Request for Comments: Comments for implementing the procedural www.losangeles.va.gov/masterplan/. submitted in response to this notice will provisions of NEPA, VA may adopt another Federal agency’s NEPA FOR FURTHER INFORMATION CONTACT: be summarized and/or included in the Glenn Elliott—Environmental Officer, request for OMB approval. All documents if the proposed actions of each agency are substantially the same. Construction Facilities Management comments will become a matter of VA’s Proposed Action is the granting Office, Department of Veterans Affairs, public record. Comments are invited on: of (i) surface level permanent easements 425 I Street NW, Washington, DC 20001; (a) Whether the collection of comprised of approximately 2.19 acres; [email protected]. information is necessary for the proper (ii) surface level temporary construction Signing Authority performance of the functions of the easements comprised of approximately agency, including whether the 6.56 acres; and (iii) additional The Secretary of Veterans Affairs information shall have practical utility; subsurface permanent and construction approved this document and authorized (b) the accuracy of the agency’s estimate easements to LA Metro in conjunction the undersigned to sign and submit the of the burden of the collection of with the Westwood/VA Hospital document to the Office of the Federal information; (c) ways to enhance the subway station which involves the Register for publication electronically as quality, utility, and clarity of the construction, maintenance, repair, an official document of the Department information to be collected; (d) ways to operation of a surface level and of Veterans Affairs. Robert L. Wilkie, subsurface level transit facility, a minimize the burden of the collection of Secretary, Department of Veterans subsurface level transit tunnel, information on respondents, including Affairs, approved this document on June entrances and other appurtenances through the use of automated collection 13, 2019, for publication. techniques or other forms of information including but not limited to tunnels, technology; and (e) estimates of capital supports, rails, air circulation systems, Dated: June 18, 2019. or start-up costs and costs of operation, air pressure relief systems and Jeffrey M. Martin, maintenance, and purchase of services equipment, blast relief shafts, safety and Assistant Director, Office of Regulation Policy to provide information. emergency systems, electric & Management, Office of the Secretary, transmission, and communication lines Department of Veterans Affairs. Approved: June 18, 2019. (the ‘‘Transit Facilities’’). The Transit [FR Doc. 2019–13218 Filed 6–20–19; 8:45 am] Laurie Brimmer, Facilities will be on the VA West Los BILLING CODE 8320–01–P Senior Tax Analyst. Angeles Campus located at 11301 [FR Doc. 2019–13210 Filed 6–20–19; 8:45 am] Wilshire Boulevard, Los Angeles, BILLING CODE 4830–01–P California 90073, adjacent to the Main Hospital (Building 500), as part of Section 3 of the Westside Purple Line Extension. VA has the authority to grant easements for the Transit Facilities

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DEPARTMENT OF VETERANS obtain approval from the Office of USDA Institutional Meat Purchase AFFAIRS Management and Budget (OMB) for each Specification (IMPS) and that the collection of information they conduct contractor furnish evidence to VA that [OMB Control No. 2900–0586] or sponsor. This request for comment is the items meet that requirement. The Agency Information Collection being made pursuant to Section evidence is normally in the form of a tag Activity: Department of Veterans 3506(c)(2)(A) of the PRA. or seal affixed to the item, such as the Affairs Acquisition Regulation (VAAR) With respect to the following UL tag on an electrical cord or a label Clause 852.211–72, Technical Industry collection of information, OM invites on beef product. In most cases, this Standards comments on: (1) Whether the proposed requires no additional effort on the part collection of information is necessary of the contractor, as the items come AGENCY: The Office of Management for the proper performance of OM from the factory with the tags already in (OM), Department of Veterans Affairs. functions, including whether the place, as part of the manufacturer’s ACTION: Notice. information will have practical utility; standard manufacturing operation. (2) the accuracy of OM estimate of the Occasionally, for items not already SUMMARY: The Office of Management burden of the proposed collection of meeting standards or for items not (OM), Department of Veterans Affairs information; (3) ways to enhance the previously tested, a contractor will have (VA), is announcing an opportunity for quality, utility, and clarity of the to furnish a certificate from an public comment on the proposed information to be collected; and (4) acceptable laboratory certifying that the collection of certain information by the ways to minimize the burden of the items furnished have been tested in agency. Under the Paperwork Reduction collection of information on accordance with, and conform to, the Act (PRA) of 1995, Federal agencies are respondents, including through the use specified standards. Only firms whose required to publish notice in the of automated collection techniques or products have not previously been Federal Register concerning each the use of other forms of information tested to ensure the products meet the proposed collection of information, technology. industry standards required under the including each proposed extension of a Authority: Under the PRA of 1995 solicitation and contract will be currently approved collection, and (Pub. L. 104–13; 44 U.S.C. 3501–3521). required to submit a separate certificate. allow 60 days for public comment in Title: Department of Veterans Affairs The information will be used to ensure response to the notice. Acquisition Regulation (VAAR) Clause that the items being purchased meet DATES: Written comments and 852.211–72, Technical Industry minimum safety standards and to recommendations on the proposed Standards. protect VA employees, VA beneficiaries, collection of information should be OMB Control Number: 2900–0586. and the public. received on or before August 20, 2019. Type of Review: Renewal with changes of a currently approved Affected Public: Business or other for- ADDRESSES: Submit written comments collection. profit and not-for-profit institutions. on the collection of information through Abstract: This Paperwork Reduction Estimated Annual Burden: 559 Federal Docket Management System Act (PRA) submission seeks renewal Burden Hours. (FDMS) at www.Regulations.gov or to with changes of Office of Management Estimated Average Burden per Rafael Taylor, Office of Acquisition and and Budget (OMB) approval No. 2900– Respondent: 30 Minutes. Logistics (003A2A), Department of 0586 as follows: Due to the decreased Veterans Affairs, 810 Vermont Avenue Frequency of Response: One per number of respondents, the total annual awarded contract. NW, Washington, DC 20420 or email to burden hours decreased by 666, from [email protected]. Please refer to Estimated Number of Respondents: 1,225 to 559. However, the average 1,118. ‘‘OMB Control No. 2900–0586’’ in any burden time per response has not correspondence. During the comment changed. By direction of the Secretary. period, comments may be viewed online VAAR clause 852.211–72, Technical Danny S. Green, through FDMS. Industry Standards, requires that items Interim VA Clearance Officer, Office of FOR FURTHER INFORMATION CONTACT: offered for sale to VA under the Quality, Performance and Risk, Department Danny S. Green at (202) 421–1354. solicitation conform to certain technical of Veterans Affairs. SUPPLEMENTARY INFORMATION: Under the industry standards, such as [FR Doc. 2019–13256 Filed 6–20–19; 8:45 am] PRA of 1995, Federal agencies must Underwriters Laboratory (UL) or the BILLING CODE 8320–01–P

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Part II

Department of the Treasury

Internal Revenue Service 26 CFR Part 1 Guidance Related to Section 951A (Global Intangible Low-Taxed Income) and Certain Guidance Related to Foreign Tax Credits; Final Rule

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DEPARTMENT OF THE TREASURY Background Summary of Comments and Explanation of Revisions Internal Revenue Service Section 951A was added to the Internal Revenue Code (the ‘‘Code’’) 1 by I. Overview 26 CFR Part 1 the Tax Cuts and Jobs Act, Public Law The final regulations retain the basic 115–97, 131 Stat. 2054, 2208 (2017) (the approach and structure of the proposed [TD 9866] ‘‘Act’’), which was enacted on December regulations and foreign tax credit 22, 2017. On October 10, 2018, the proposed regulations, with certain revisions. This Summary of Comments RIN 1545–BO54; 1545–BO62 Department of the Treasury (‘‘Treasury Department’’) and the IRS published and Explanation of Revisions section Guidance Related to Section 951A proposed regulations (REG–104390–18) discusses those revisions as well as (Global Intangible Low-Taxed Income) under sections 951, 951A, 1502, and comments received in response to the and Certain Guidance Related to 6038 in the Federal Register (83 FR solicitation of comments in the notices Foreign Tax Credits 51072) (the ‘‘proposed regulations’’). A of proposed rulemaking accompanying public hearing on the proposed those regulations. AGENCY: Internal Revenue Service (IRS), regulations was held on February 13, II. Comments and Revisions to Treasury. 2019. The Treasury Department and the Proposed § 1.951–1—Amounts Included ACTION: Final and temporary IRS also received written comments in Gross Income of United States regulations. with respect to the proposed Shareholders regulations. A. Hypothetical Distribution of SUMMARY: This document contains final In addition, on December 7, 2018, the Allocable E&P regulations that provide guidance to Treasury Department and the IRS A United States shareholder (‘‘U.S. determine the amount of global published proposed regulations (REG– intangible low-taxed income included shareholder’’) who owns stock of a 105600–18) relating to foreign tax in the gross income of certain United foreign corporation on the last day of credits in the Federal Register (83 FR States shareholders of foreign the foreign corporation’s taxable year on 63200) (‘‘foreign tax credit proposed corporations, including United States which the foreign corporation is a shareholders that are members of a regulations’’). A public hearing on these controlled foreign corporation (‘‘CFC’’) consolidated group. This document also regulations was scheduled for March 14, includes in gross income its ‘‘pro rata contains final regulations relating to the 2019, but it was not held because there share’’ of the CFC’s subpart F income (as determination of a United States were no requests to speak. However, the defined in section 952) for the taxable shareholder’s pro rata share of a Treasury Department and the IRS year. See section 951(a)(1) and § 1.951– controlled foreign corporation’s subpart received written comments with respect 1(a). In general, a U.S. shareholder’s pro F income included in the shareholder’s to the foreign tax credit proposed rata share of subpart F income is gross income, as well as certain regulations. Certain rules in the foreign determined based on its proportionate reporting requirements relating to tax credit proposed regulations are share of a hypothetical distribution of inclusions of subpart F income and being finalized in this Treasury decision all the current earnings and profits global intangible low-taxed income. to ensure that the applicability dates of (‘‘E&P’’ and ‘‘current E&P’’) of the CFC. Finally, this document contains final these rules coincide with the See section 951(a)(2)(A) and § 1.951– regulations relating to certain foreign tax applicability dates of the statutory 1(b)(1)(i) and (e)(1). A U.S. shareholder’s credit provisions applicable to persons provisions to which they relate. See pro rata share of tested income (as that directly or indirectly own stock in section 7805(b)(2). The rules being defined in section 951A(c)(2)(A) and foreign corporations. finalized relate to §§ 1.78–1, 1.861– § 1.951A–2(b)(1)), tested loss (as defined in section 951A(c)(2)(B)(i) and DATES: 12(c)(2), and 1.965–7(e). See part XI of the Summary of Comments and § 1.951A–2(b)(2)), qualified business Effective date: These regulations are Explanation of Revisions section. asset investment (‘‘QBAI’’) (as defined effective on June 21, 2019. in section 951A(d)(1) and § 1.951A– Applicability dates: For dates of Comments outside the scope of this 3(b)), tested interest expense (as defined applicability, see §§ 1.78–1(c), 1.861– rulemaking are generally not addressed in § 1.951A–4(b)(1)), and tested interest 12(k), 1.951–1(i), 1.951A–7, 1.1502– but may be considered in connection income (as defined in § 1.951A–4(b)(2)) 51(g), 1.6038–2(m), and 1.6038–5(e). with future guidance projects. In this (each a ‘‘tested item’’) generally are also regard, the Treasury Department and the FOR FURTHER INFORMATION CONTACT: determined based on a hypothetical IRS expect that future guidance will distribution of current E&P, with certain Concerning the regulations §§ 1.951–1, address issues concerning the allocation 1.951A–0 through 1.951A–7, 1.6038–2, modifications to account for the and apportionment of expenses in order differences between each tested item and 1.6038–5, Jorge M. Oben at (202) to determine a taxpayer’s foreign tax 317–6934; concerning the regulations and subpart F income. See section credit limitation under section 904. All §§ 1.951A–1(e) and 1.951A–3(g), 951A(e)(1) and § 1.951A–1(d). written comments received in response Jennifer N. Keeney at (202) 317–5045; For purposes of the hypothetical to the proposed regulations and the concerning the regulations §§ 1.1502– distribution, the proposed regulations foreign tax credit proposed regulations 12, 1.1502–32, and 1.1502–51, define ‘‘current E&P’’ for a taxable year Katherine H. Zhang at (202) 317–6848 or are available at www.regulations.gov or as the greater of (i) the E&P of the Kevin M. Jacobs at (202) 317–5332; upon request. Terms used but not corporation for the taxable year concerning the regulations §§ 1.78–1, defined in this preamble have the determined under section 964, or (ii) the 1.861–12, 1.861–12T, and 1.965–7, meaning provided in these final sum of the subpart F income (as Karen J. Cate at (202) 317–6936 (not toll regulations. determined under section 952, as free numbers). increased under section 1 Except as otherwise stated, all section references 951A(c)(2)(B)(ii) and proposed SUPPLEMENTARY INFORMATION: in this preamble are to the Internal Revenue Code. § 1.951A–6(d)) and the tested income of

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the corporation for the taxable year. See The Treasury Department and the IRS that is, to deter the development and proposed § 1.951–1(e)(1)(ii). One agree that the scope of the pro rata share implementation of new transactions or comment asserted that using the term anti-abuse rule should be clarified. arrangements intended to avoid the ‘‘current earnings and profits’’ for this Accordingly, the final regulations clarify operative rule. purpose is confusing because the that the rule applies only to require Another comment recommended an definition differs significantly from the appropriate adjustments to the exception to the pro rata share anti- definition of ‘‘earnings and profits’’ allocation of allocable E&P that would abuse rule for transactions entered into provided in section 964(a), and be distributed in a hypothetical with unrelated parties and for therefore suggested using a different distribution with respect to any share transactions entered into with related term for this purpose. In response to this outstanding as of the hypothetical parties located in the same country of comment, the final regulations replace distribution date. See § 1.951–1(e)(6). tax residence as the relevant CFC. The the term ‘‘current earnings and profits’’ Thus, under the rule, if applicable, comment also recommended a ‘‘small with ‘‘allocable earnings and profits’’ adjustments will be made solely to the business’’ exception for U.S. (‘‘allocable E&P’’). allocation of allocable E&P in the shareholders with worldwide gross hypothetical distribution between receipts under $25 million. The B. Pro Rata Share Anti-Abuse Rule shareholders that own, directly or Treasury Department and the IRS have The proposed regulations provide that indirectly, stock of the CFC as of the determined that the policy concerns any transaction or arrangement that is relevant hypothetical distribution date. underlying the rule can be implicated part of a plan a principal purpose of As clarified, the rule will not apply to by transactions that involve unrelated which is the avoidance of Federal adjust the allocable E&P allocated to a parties, such as accommodation parties income taxation, including, but not shareholder by reason of a transfer of (for instance, a financial institution) that limited to, a transaction or arrangement CFC stock, except by reason of a change hold stock with certain distribution to reduce a U.S. shareholder’s pro rata to the distribution rights with respect to rights in order to reduce an unrelated share of the subpart F income of a CFC, stock in connection with such transfer U.S. shareholder’s pro rata share of which transaction or arrangement (for example, an issuance of a new class subpart F income or tested items. would otherwise avoid Federal income of stock, including by recapitalization). Further, these concerns can arise taxation, is disregarded in determining Other comments suggested that the regardless of whether the parties such U.S. shareholder’s pro rata share of final regulations limit the pro rata share involved are located in the same the subpart F income of the corporation anti-abuse rule to transactions or country of tax residence as the CFC. (the ‘‘pro rata share anti-abuse rule’’). arrangements that lack economic Finally, the Treasury Department and See proposed § 1.951–1(e)(6). The pro substance or are artificial, or only to the IRS have concluded that the level of rata share anti-abuse rule also applies in transactions or arrangements that result gross receipts of the shareholders is not determining the pro rata share of each in non-economic allocations that shift relevant to, and therefore does not subpart F income or tested items away justify, an exception to the rule. Any tested item of a CFC for purposes of from a U.S. shareholder. One comment administrative burden on small determining a U.S. shareholder’s global suggested that the rule should apply businesses would not stem from the rule intangible low-taxed income (‘‘GILTI’’) only to enumerated transactions itself but rather from engaging in a inclusion amount under section 951A(a) identified by the Treasury Department transaction a principal purpose of and § 1.951A–1(b). See id. and the IRS as being abusive, and which is to avoid Federal income Several comments suggested that the another comment suggested that the taxation. Accordingly, these pro rata share anti-abuse rule is regulations should include examples recommendations are not adopted. overbroad and could be interpreted to illustrating transactions to which the C. Facts and Circumstances Approach apply to nearly all transactions, pro rata share anti-abuse rule would or arrangements, or tax elections that would not apply. Section 1.951–1(e)(3)(ii) of the reduce the pro rata share amounts of a The Treasury Department and the IRS existing regulations provides special U.S. shareholder. In particular, do not adopt these recommendations. rules applicable to CFCs with two or comments noted that, under one Transactions that lack economic more classes of stock with discretionary interpretation of the rule, a U.S. substance or are artificial would distribution rights. Under these rules, shareholder that disposes of CFC stock typically be disregarded under general the allocation of current E&P is could be required indefinitely to tax principles, and non-economic primarily based on the relative fair include its ‘‘pro rata share’’ of the CFC’s allocations would generally be market value of the stock with subpart F income or tested items with addressed through the facts and discretionary distribution rights. The respect to such stock. These comments circumstances approach of § 1.951– preamble to the proposed regulations recommended that the final regulations 1(e)(3) (as discussed in part II.C of this notes that this fair market value clarify the scope of the rule and, in Summary of Comments and Explanation allocation method had been the basis of particular, provide that the rule applies of Revisions section), such that limiting certain attempted avoidance structures. only to reallocate subpart F income and the pro rata share anti-abuse rule in the Accordingly, the proposed regulations tested items of a CFC as of a manner recommended could render it adopt a facts and circumstances hypothetical distribution date among superfluous. Moreover, the concerns approach in allocating current E&P in a persons that own, directly or indirectly, underlying the rule may arise in non- hypothetical distribution between shares of the CFC on such date. artificial transactions, or transactions multiple classes of stock, including According to these comments, the rule, with substance, that would be respected stock with discretionary distribution as narrowed in this manner, could not under general tax principles. In rights. See proposed § 1.951–1(e)(3). The apply to cause a U.S. person that addition, attempting to specifically proposed regulations provide that, disposes of stock of a CFC before a identify all the transactions covered by where appropriate, the relative fair hypothetical distribution date to be the rule or to specify such transactions market value of the stock may still be treated as having a pro rata share of the by example would be impractical and taken into account, but as one of several CFC’s subpart F income or tested items inconsistent with one of the purposes factors, none of which is dispositive. as of such date by reason of such stock. underlying any anti-avoidance rule— See id.

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A comment asserted that the facts and approach can distort the determination distributions during the taxable year) as circumstances approach set forth in the required under section 951(a)(2) and of the hypothetical distribution date. proposed regulations is a vague and § 1.951–1(b)(1). A more flexible facts E. Application of Section 951(a)(2)(B) to and circumstances approach that subjective standard that would create Subpart F Income and Tested Income in uncertainty, while the fair market value considers fair market value as a factor the Same Taxable Year approach in the existing regulations for can also take into account other factors stock with discretionary distribution related to the expected distributions of Under section 951(a)(2)(B), a U.S. rights is a long-standing and objective allocable E&P with respect to such shareholder’s pro rata share of subpart standard. The comment further noted stock, without taking into account F income with respect to stock for a that the preamble to the 2005 Treasury capital liquidation rights and other taxable year (as determined under decision that adopts the fair market factors that are not relevant to the section 951(a)(2)(A)) is reduced by the value approach specifically rejects the distribution of allocable E&P. amount of distributions received by any facts and circumstances approach, Accordingly, the final regulations do not other person during the year as a stating that ‘‘the interests of sound tax adopt this recommendation. dividend with respect to the stock, policy and administration are served by subject to a limitation based on the D. Modifications to Example 4 requiring the value-based allocation.’’ period of the taxable year in which the TD 9222, 70 FR 49864 (August 25, The proposed regulations provide that shareholder owned the stock within the 2005). The comment recommended that no amount of current E&P is distributed meaning of section 958(a). Section the fair market value approach be in the hypothetical distribution with 951A(e)(1) provides that the pro rata retained in the final regulations, in lieu respect to a particular class of stock to share of tested income, tested loss, and of the proposed facts and circumstances the extent that a distribution of such QBAI is determined under the rules of approach, for purposes of determining amount would constitute a redemption section 951(a)(2) in the same manner as the pro rata share of subpart F income of stock (even if the redemption would such section applies to subpart F income. Accordingly, the proposed and tested items. be treated as a dividend under sections regulations provide that a U.S. 301 and 302(d)), a distribution in The Treasury Department and the IRS shareholder’s pro rata share of tested liquidation, or a return of capital. See have determined, based on experience income is determined under section proposed § 1.951–1(e)(4)(i). The administering the fair market value 951(a)(2) and § 1.951–1(b) and (e), proposed regulations include an approach, that a facts and circumstances generally substituting ‘‘tested income’’ example to illustrate the application of approach, in which the fair market for ‘‘subpart F income’’ each place it this rule. See proposed § 1.951– value of stock is relevant but not appears. See proposed § 1.951A–1(d)(2). determinative, would be a more reliable 1(e)(7)(v) Example 4. A comment Because section 951(a)(2)(B) applies method for determining a U.S. asserted that proposed § 1.951–1(e)(4)(i) for purposes of determining the pro rata shareholder’s pro rata share of subpart and the example illustrating the rule are share of both subpart F income and F income (and tested items) than the fair confusing because, given the definition tested income, the proposed regulations market value approach. While fair of current E&P in the proposed could be interpreted as permitting a market value is easily determinable for regulations, the hypothetical dollar-for-dollar reduction under section publicly traded stock, determining the distribution would typically not give 951(a)(2)(B) in both a U.S. shareholder’s fair market value of privately-held stock rise to a return of capital (other than pro rata share of subpart F income and is more difficult and typically requires through a redemption). its pro rata share of tested income. The a determination of the stock’s rights to This rule is not intended to refer to Treasury Department and the IRS have distributions of current and the consequences of the hypothetical determined that this would be an accumulated E&P and capital, as well as distribution itself (for example, the inappropriate double benefit that is not the voting rights with respect to such extent to which it could give rise to a contemplated under section 951(a)(2)(B) stock. In contrast, under section return of capital), but rather is intended and section 951A(e)(1). Accordingly, the 951(a)(2) and § 1.951–1(b)(1), a to provide that terms of the stock or regulations under section 951(a)(2)(B) shareholder’s pro rata share of subpart related agreements and arrangements are revised to clarify that a dividend F income is determined based solely on that could give rise to redemptions, received during the taxable year by a a hypothetical distribution of subpart F liquidations, or returns of capital if person other than the U.S. shareholder income for the taxable year. actually exercised (or otherwise taken reduces the U.S. shareholder’s pro rata Furthermore, the amount of subpart F into account) are not taken into account share of subpart F income and its pro income treated as distributed in the for purposes of the hypothetical rata share of tested income in the same hypothetical distribution is determined distribution. The final regulations and proportion as its pro rata share of each under § 1.951–1(e) based on a the related example are clarified to amount bears to its aggregate pro rata distribution of allocable E&P. Thus, the reflect this intent. See § 1.951–1(e)(4)(i) share of both amounts. See § 1.951– most relevant attribute of any share of and § 1.951–1(e)(7)(v) Example 4. 1(b)(1)(ii). CFC stock for purposes of the Similarly, the final regulations clarify The examples in § 1.951–1(b)(2) are hypothetical distribution is its economic that the facts and circumstances taken modified solely to illustrate the rights with respect to the allocable E&P into account in determining the application of the revised rule in of the CFC, which is generally distribution rights of a class of stock do § 1.951–1(b)(1) and to conform to the determined by reference to its current not include actual distributions (or any terminology in the final regulations. The E&P. Generally, a share’s voting rights, amount treated as a dividend) made Treasury Department and the IRS are rights to distributions of E&P during the taxable year that includes the studying the application of section accumulated before the current year, hypothetical distribution date. See 951(a)(2)(A) and (B) in certain cases that and rights to capital, all of which are § 1.951–1(e)(3). Such distributions (or may lead to inappropriate results, for also taken into account in determining dividends) are not relevant in example, due to the concurrent fair market value, are not relevant to the determining a class of stock’s economic application of the provisions. In hypothetical distribution of allocable rights and interest in the allocable E&P addition, the Treasury Department and E&P, and therefore a fair market value (which are not reduced by actual the IRS are studying the application of

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section 951(a)(2)(B) with respect to partnership to determine stock inclusion year’’ means any taxable year dividends paid to foreign persons, ownership in a CFC by a U.S. person for of a foreign corporation beginning after dividends that give rise to a deduction purposes of section 958(a) if certain December 31, 2017, at any time during under section 245A(a), and dividends conditions are met. See proposed which the corporation is a CFC. See paid on stock after the disposition of § 1.951–1(h). A comment suggested that proposed § 1.951A–1(e)(1), (2) and (4). such stock by a U.S. shareholder. because the proposed regulations define Several comments noted that, under Comments are requested in this regard. a ‘‘controlled domestic partnership’’ by certain circumstances, the requirement reference to a specific U.S. shareholder, that a U.S. shareholder take into account F. Revisions to Cumulative Preferred its pro rata share of a CFC’s tested items Stock Rule the rule could be read to apply only with respect to that shareholder but not for a U.S. shareholder inclusion year The proposed regulations provide a with respect to other partners of the that includes a CFC inclusion date special rule applicable to preferred controlled domestic partnership, for could have the effect of requiring a U.S. shares with accrued but unpaid which the partnership would therefore shareholder to take into account its pro dividends that do not compound still be treated as domestic. The rata share of the CFC’s tested items for annually at or above the applicable comment requested that the final a U.S. shareholder inclusion year that Federal rate (‘‘AFR’’) under section regulations clarify that the treatment as does not include the last day of the CFC 1274(d)(1) (‘‘cumulative preferred stock a foreign partnership is with respect to inclusion year. This could happen, for rule’’). See proposed § 1.951–1(e)(4)(ii). all partners of the partnership. The rule, instance, if a U.S. person with a taxable If the cumulative preferred stock rule if applicable, is intended to treat a year ending December 31, 2019, sells a applies with respect to stock, the domestic partnership as a foreign wholly-owned foreign corporation with current E&P allocable to the stock may partnership with respect to all its a taxable year ending November 30, not exceed the amount of dividends partners. The final regulations revise the 2020, to a foreign person on December actually paid during the taxable year definition of controlled domestic 1, 2019 and, as a result of the sale, the with respect to the stock plus the partnership to clarify the scope of the foreign corporation ceases to be a CFC; present value of the unpaid current rule. See § 1.951–1(h)(2); see also in that case, under the proposed dividends with respect to the stock § 1.965–1(e)(2). A change is also made to regulations, the CFC inclusion date with determined by using the AFR that § 1.951–1(h) to conform to the change in respect to the foreign corporation would applies on the date the stock is issued the final regulations to the treatment of be December 1, 2019, whereas the CFC for the term from such issue date to the domestic partnerships for purposes of inclusion year of the foreign corporation mandatory redemption date and section 951A. See part VII.C of this would not end until November 30, 2020. assuming the dividends will be paid at Summary of Comments and Explanation The comments raised several concerns, the mandatory redemption date. See id. in particular, that the U.S. person in this A comment stated that it is unclear of Revisions section. Finally, certain regulations have been example would be unable to determine whether the applicability of the revised to reflect the repeal of section its pro rata share of any tested item of cumulative preferred stock rule is 954(f) (regarding foreign base company the foreign corporation as of December determined based on the AFR as of the shipping income) and section 955 31, 2019, since the foreign corporation’s issuance date or, alternatively, the AFR (regarding foreign investments in less tested items could not be determined for the current year. The comment developed countries). See Public Law until November 30, 2020. The suggested that, because the amount of 108–357, 415(a)(2) (2004) and Public comments also noted that the proposed the preferred dividend determined Law 115–97, 14212(a) (2017). The regulations’ definition of CFC inclusion under the cumulative preferred stock date was inconsistent with section rule is based on the AFR as of the issue Treasury Department and the IRS intend to revise other regulations to reflect the 951A(e)(1), which provides that the pro date, for consistency, the applicability rata share of certain amounts is taken of the rule should be determined by repeal of these provisions in future guidance projects. into account in the taxable year of the reference to the AFR as of the issue date U.S. shareholder in which or with as well. The Treasury Department and III. Comments and Revisions to which the taxable year of the CFC ends. the IRS agree with this comment, and Proposed § 1.951A–1—General The comments recommended that the the final regulations are revised Provisions relevant definitions be revised to accord accordingly. See § 1.951–1(e)(4)(ii). A. CFC Inclusion Date with section 951A(e)(1). The proposed regulations provide that The Treasury Department and the IRS the amount of any arrearage on The proposed regulations provide agree with these comments. cumulative preferred stock is that, for purposes of determining the Accordingly, the final regulations determined taking into account the time GILTI inclusion amount of a U.S. provide that a U.S. shareholder takes value of money principles in the shareholder for a U.S. shareholder into account its pro rata share of a tested cumulative preferred stock rule. See inclusion year, the U.S. shareholder item of a CFC in the U.S. shareholder proposed § 1.951–1(e)(4)(iii). A takes into account its pro rata share of inclusion year that includes the last day comment recommended that the rule be a tested item with respect to a CFC for of the CFC inclusion year. See § 1.951A– clarified to reference the calculation of the U.S. shareholder inclusion year that 1(d)(1). However, consistent with the present value of the unpaid current includes a CFC inclusion date with sections 951(a)(2) and 951A(e)(1), a U.S. dividends described in the cumulative respect to the CFC. See proposed shareholder’s pro rata share of each preferred stock rule. The Treasury § 1.951A–1(d)(1). Under the proposed tested item of a CFC is still determined Department and the IRS agree with this regulations, the term ‘‘U.S. shareholder based on the section 958(a) stock owned comment, and the final regulations are inclusion year’’ means a taxable year of by the shareholder on the last day of the revised accordingly. See § 1.951– a U.S. shareholder that includes a CFC CFC’s taxable year on which it is a CFC 1(e)(4)(iii). inclusion date of a CFC of the U.S. (the ‘‘hypothetical distribution date’’). The proposed regulations contain a shareholder, the term ‘‘CFC inclusion See §§ 1.951–1(e)(1)(i) and 1.951A– special rule for purposes of sections 951 date’’ means the last day of a CFC 1(f)(3). The term ‘‘hypothetical through 964 to treat a controlled inclusion year on which a foreign distribution date’’ in the final domestic partnership as a foreign corporation is a CFC, and the term ‘‘CFC regulations has the same meaning as the

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term ‘‘CFC inclusion date’’ in the reversed in future years when the CFC (to the extent of the dividend and proposed regulations. generates more tested income. liquidation preference) and common The Treasury Department and the IRS stock (to the extent that the B. Pro Rata Share of Certain Tested agree with the comment that the participation right is ‘‘in the money’’), Items approach in the proposed regulations and then allocating QBAI to each 1. Pro Rata Share of QBAI achieves the correct result over a multi- component separately. This issue has year period. Accordingly, the final been mooted because the determination The proposed regulations provide regulations generally adopt the QBAI of a U.S. shareholder’s pro rata share of that, in general, a U.S. shareholder’s pro allocation rule of the proposed QBAI no longer depends on whether the rata share of the QBAI of a tested regulations, with certain modifications stock owned by the shareholder is income CFC is proportionate to the U.S. to the excess QBAI rule to better common or preferred. Accordingly, the shareholder’s pro rata share of the tested effectuate the purposes of the rule. final regulations do not adopt this income of the tested income CFC for the Specifically, the final regulations recommendation. CFC inclusion year. See proposed provide that, in the case of a tested Finally, for the avoidance of doubt, § 1.951A–1(d)(3)(i). However, the income CFC with tested income that is the final regulations clarify that the proposed regulations provide that, to less than ten percent of its QBAI (the aggregate amount of any tested item the extent the amount of a tested income tested income CFC’s ‘‘hypothetical (including QBAI) of a CFC for a CFC CFC’s QBAI is greater than ten times its tangible return’’), a shareholder’s pro inclusion year allocated to the CFC’s tested income for the year (that is, the rata share of QBAI is determined based stock cannot exceed the amount of such point at which the shareholder’s on the shareholder’s pro rata share of tested item of the CFC for the CFC deemed tangible income return this hypothetical tangible return. See inclusion year. See § 1.951A–1(d)(1). § 1.951A–1(d)(3)(ii)(A) and (C). A U.S. (‘‘DTIR’’) attributable to the QBAI would 2. Pro Rata Share of Tested Loss fully offset its pro rata share of the shareholder’s pro rata share of the tested income CFC’s tested income), the hypothetical tangible return is The proposed regulations provide that excess QBAI is allocated solely to determined under the rules for a CFC’s tested loss is allocated based on common shares (and not to preferred determining the shareholder’s pro rata a hypothetical distribution of an amount shares) (the ‘‘excess QBAI rule’’). See share of tested income, for this purpose of current E&P equal to the amount of proposed § 1.951A–1(d)(3)(ii). The treating the hypothetical tangible return tested loss, except that, in general, excess QBAI rule is intended to ensure as tested income. See § 1.951A– tested loss is allocated only to common that a shareholder cannot obtain an 1(d)(3)(ii)(B). In most cases, the excess stock. See proposed § 1.951A– increase in its DTIR by reason of QBAI rule in the final regulations will 1(d)(4)(i)(C). The general rule that tested preferred stock that exceeds the increase produce the same results as the excess loss is allocated only to common stock in its aggregate pro rata share of tested QBAI rule in the proposed regulations. is subject to two exceptions. First, the income from the ownership of the stock. However, unlike the excess QBAI rule proposed regulations allocate tested loss to preferred shares to the extent the Without the excess QBAI rule, U.S. in the proposed regulations, the tested loss reduces the E&P accumulated persons would be incentivized to application of the excess QBAI rule in since the issuance of those preferred acquire debt-like preferred stock of the final regulations is not limited to 2 shares to an amount below the amount CFCs that have significant amounts of preferred stock. Further, with respect necessary to satisfy any accrued but QBAI and minimal tested income in to common stock, by untethering the unpaid dividends with respect to such order to effectively exempt some or all allocation of excess QBAI from the preferred shares. See proposed of the U.S. person’s pro rata shares of allocation of tested income, and instead § 1.951A–1(d)(4)(ii). Second, when the tested income from other CFCs from applying a hypothetical distribution common stock has no liquidation value, taxation under section 951A. The model to the excess QBAI, the rule ensures that the reduction under section the proposed regulations allocate tested preamble to the proposed regulations loss to classes of preferred stock with requested comments on the approach in 951(a)(2)(B) and § 1.951A–1(b)(1)(ii) to a U.S. shareholder’s pro rata share of liquidation value in reverse order of the proposed regulations, including the priority. See proposed § 1.951A– excess QBAI rule, for determining a U.S. tested income does not result in an excessive reduction to the U.S. 1(d)(4)(iii). These two exceptions result shareholder’s pro rata share of a CFC’s in tested loss allocations corresponding QBAI. shareholder’s pro rata share of QBAI. See § 1.951A–1(d)(3)(iii)(C) Example 3. to changes in the economic value of the The only comment received with One comment recommended that the CFC stock. The preamble to the respect to the QBAI allocation approach final regulations allocate QBAI to proposed regulations requested in the proposed regulations agreed that convertible preferred stock or comments on the proposed approach for it was appropriate to limit the allocation participating preferred stock by determining a U.S. shareholder’s pro of QBAI to a preferred shareholder, bifurcating the stock into preferred stock rata share of a CFC’s tested loss, because the debt-like claim that a including how (or whether) to allocate preferred shareholder has on a CFC 2 When the excess QBAI rule in the final tested loss of a CFC when no class of should not entitle it to an amount of regulations applies to a CFC with preferred stock, CFC stock has positive liquidation QBAI that could be used to effectively the increase to the preferred shareholder’s DTIR by reason of the preferred stock generally will be value. exempt tested income of the limited to an amount equal to its pro rata share of Comments were supportive of the shareholder’s other CFCs. The comment tested income, consistent with the purpose of the approach taken in the proposed noted that, in cases where a CFC has rule in the proposed regulations. This is the case regulations to determine pro rata shares because the formula for determining the preferred minimal tested income and substantial shareholder’s pro rata share of QBAI (that is, of tested loss because the approach QBAI, the approach in the proposed multiplying the CFC’s QBAI by the ratio that such avoids complexity, minimizes the regulations could result in a common shareholder’s pro rata share of the hypothetical potential for abusive allocations of shareholder receiving a pro rata share of tangible return bears to the CFC’s total hypothetical tested loss, and is consistent with the tangible return) will yield a product that equals 10 QBAI that is disproportionate to its pro times that shareholder’s pro rata share of tested economic reality that common stock rata share of tested income, but income. For an illustration, see § 1.951A– generally bears the risk of loss before acknowledged that this effect would be 1(d)(3)(iii)(B) Example 2. preferred stock. One comment that was

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supportive of the approach in the income and taxable income of a foreign which, if it were a domestic corporation proposed regulations suggested a corporation. For this purpose, and engaged in such business, would be possible alternative approach of subject to certain exceptions, these rules taxable as a life insurance company to allocating tested loss to preferred shares generally treat foreign corporations as which subchapter L applies, is generally to the extent the preferred shares were domestic corporations. See § 1.952– determined by treating such corporation allocated subpart F income. However, 2(a)(1) and (b)(1). as a domestic corporation taxable under the comment noted that the approach of The preamble to the proposed subchapter L and by applying the the proposed regulations is simpler and regulations requested comments on the principles of §§ 1.953–4 and 1.953–5 for that the suggested approach would application of § 1.952–2 for purposes of determining taxable income. These require additional rules to ensure that determining subpart F income, tested regulations, which were promulgated in corresponding allocations of tested income, and tested loss, including 1964, have not been updated to reflect income were made in future periods to whether other approaches for current sections 953(a), 953(b)(3), and the preferred shares to reflect an actual determining tested income and tested 954(i). A comment requested that the payment of a dividend to the preferred loss, or whether additional final regulations confirm that the rules shares. The Treasury Department and modifications to § 1.952–2 for purposes of current sections 953 and 954(i) apply the IRS agree with the comment that the of calculating tested income and tested in determining the tested income or approach for allocating tested loss in the loss, would be appropriate. Several tested loss of a CFC described in proposed regulations is simpler and that comments were received in response to § 1.952–2(b)(2). The Treasury the suggested approach would require this request. The comments generally Department and the IRS agree that the adjustments to the pro rata share rules supported applying § 1.952–2 for tested income or tested loss of a CFC for tested income as well, resulting in purposes of determining tested income. described in § 1.952–2(b)(2) is more complex tracking of previous year However, a number of comments calculated in the same manner as its pro rata allocations for CFCs and their requested modifications to, or insurance income under sections 953 shareholders to determine current year clarifications regarding, the application and 954(i), and the rule is revised allocations. Accordingly, the suggestion of § 1.952–2. Some comments suggested accordingly. See § 1.951A–2(c)(2)(i). is not adopted. that § 1.952–2 be revised for purposes of However, no inference is intended that One comment recommended that if determining tested income and tested a CFC may determine reserve amounts no class of stock has liquidation value, loss to allow the use of net operating based on foreign statement reserves in the tested loss should be allocated first loss carryforwards under section 172 the absence of a ruling request. See to any shareholders that hold and net capital losses subject to limits section 954(i)(4)(B)(ii). In this regard, guaranteed debt of the CFC, and then to under section 1212. Another comment the Treasury Department and the IRS the most senior class of common stock, requested that the Treasury Department intend to address, in separate guidance, unless another class of stock will in fact and the IRS provide a list of specific the use of foreign statement reserves for bear the economic loss. The Treasury deductions allowed to a CFC that would purposes of measuring qualified Department and the IRS have be disallowed to a domestic corporation, insurance income under section 954(i). determined, based on experience with such as under section 162(m) or 280G. The same comment requested B. Gross Income Excluded by Reason of pro rata share rules in the subpart F Section 954(b)(4) context, that the facts and circumstances clarification that carryforwards of a Section 951A(c)(2)(A)(i)(III) provides approach provides a flexible and CFC’s disallowed interest deduction that gross tested income does not appropriate allocation of tested loss, under section 163(j)(2) are not subject to include any item of gross income including in cases where no class of any limitation or restrictions. Several excluded from foreign base company stock has liquidation value. Therefore, comments suggested that section 245A income (as defined in section 954) this comment is not adopted. should apply to determine a CFC’s subpart F income and tested income and (‘‘FBCI’’) or insurance income (as IV. Comments and Revisions to tested loss under § 1.952–2. There is defined in section 953) ‘‘by reason of Proposed § 1.951A–2—Tested Income also a concern that § 1.952–2 could be section 954(b)(4)’’ (the ‘‘GILTI high tax and Tested Loss interpreted so expansively as to entitle exclusion’’). The proposed regulations clarify that the GILTI high tax exclusion A. Determination of Gross Income and a CFC to a deduction expressly limited applies only to items of gross income Allowable Deductions to domestic corporations, such as a deduction under section 250. that are excluded from FBCI or For purposes of determining tested The Treasury Department and the IRS insurance income solely by reason of an income or tested loss, gross tested intend to address issues related to the election under section 954(b)(4) and income is reduced by deductions application of § 1.952–2, taking into § 1.954–1(d)(5). See proposed § 1.951A– (including taxes) properly allocable to account these comments, in connection 2(c)(1)(iii). Thus, this exclusion does not the gross tested income (or which would with a future guidance project. This apply to any item of gross income be properly allocable to gross tested guidance is expected to clarify that, in excluded from FBCI or insurance income if there were such gross income) general, any provision that is expressly income by reason of an exception other under rules similar to the rules of limited in its application to domestic than section 954(b)(4), regardless of the section 954(b)(5). See section corporations, such as section 250, does effective rate of foreign tax to which 951A(c)(2)(A)(ii). The proposed not apply to CFCs by reason of § 1.952– such item is subject. regulations provide that, for purposes of 2. The Treasury Department and the IRS One comment noted that this determining tested income and tested continue to study whether, and to what clarification is consistent with the loss, the gross income and allowable extent, section 245A should apply to language of the GILTI high tax deductions of a CFC for a CFC inclusion dividends received by a CFC and exclusion, which is limited by its terms year are determined under the rules of welcome comments on this subject. to income subject to the high tax § 1.952–2 for determining the subpart F Section 1.952–2(b)(2) provides that exception of section 954(b)(4). Several income of a CFC. See proposed the taxable income of a CFC engaged in comments, however, requested that the § 1.951A–2(c)(2). Section 1.952–2 the business of reinsuring or issuing final regulations expand the GILTI high provides rules for determining gross insurance or annuity contracts and tax exclusion to exclude additional

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categories of high-taxed income. These loan to its U.S. shareholder, resulting in taxpayers should be permitted to make comments asserted, based on the an inclusion under section 956, or could an election under section 954(b)(4), with legislative history of the Act, that intentionally structure its operations in respect to income that would not be Congress intended that income of a CFC a manner that causes income to be FBCI or insurance income, to exclude would be subject to tax under the GILTI characterized as FBCI. The comment such income from gross tested income regime only if it is subject to a low rate also asserted that a rule that effectively under the GILTI high tax exclusion of foreign tax. Some of these comments permits a taxpayer to elect into subpart using authority other than section suggested that the exclusion be F income is consistent with the 951A(f)(1)(B). In that regard, existing expanded to apply to high-taxed income regulations under section 954, which § 1.954–1(d)(1) does not provide the that would be FBCI or insurance income permit an election to be made with necessary framework for applying the but for the application of one or more respect to high-taxed income under exception under section 954(b)(4) to exceptions in section 954(c), (h), or (i). section 954(b)(4) notwithstanding that income that would be gross tested Others recommended that the final that provision, similar to section 954(a) income, such as rules to determine the regulations apply the GILTI high tax itself, is expressed as a mandatory rule. scope of an item of gross tested income exclusion to any item of gross income See § 1.954–1(d). to which the election applies and rules subject to a sufficiently high effective The final regulations do not adopt to determine the rate of foreign tax on foreign tax rate, regardless of whether these comments. The Treasury such items. Therefore, the Treasury such income would be FBCI or Department and the IRS have declined Department and the IRS are issuing a insurance income but for an exception. to exercise regulatory authority under notice of proposed rulemaking Comments suggested that the Treasury section 951A(f)(1)(B) because that published in the same issue of the Department and the IRS could exercise authority relates to the treatment of a Federal Register as these final their authority under section GILTI inclusion amount, rather than an regulations that will propose a 951A(f)(1)(B) to treat a GILTI inclusion item of gross tested income. A GILTI framework under which taxpayers as a subpart F inclusion that could inclusion amount is determined based would be permitted to make an election potentially be excludible, on an elective on a U.S. shareholder’s pro rata share of under section 954(b)(4) with respect to basis, from FBCI (or insurance income) all the tested items of one or more CFCs income that would otherwise be gross under section 954(b)(4). and, as a result, the determination of the tested income in order to exclude that Comments recommending an extent to which foreign tax is imposed income from gross tested income by expansion of the GILTI high tax on any single item of net income for reason of the GILTI high tax exclusion. exclusion to any item of high-taxed purposes of section 954(b)(4) cannot be However, until the regulations income suggested various methods to made by reference to a GILTI inclusion described in the separate notice of determine the appropriate foreign tax amount. The final regulations also do proposed rulemaking are effective, a rate for this purpose. One comment not permit taxpayers to elect to treat taxpayer may not exclude any item of recommended the same threshold as income that would otherwise be gross income from gross tested income under used for the high tax exception for tested income as subpart F income in section 951A(c)(2)(A)(i)(III) unless the subpart F income under section order to qualify for the exception under income would be FBCI or insurance 954(b)(4)—that is, a rate that is 90 section 954(b)(4). Unlike section income but for the application of section percent of the maximum rate specified 954(b)(4), nothing in section 954(a) or 954(b)(4) and § 1.954–1(d). in section 11 (21 percent), or 18.9 the legislative history suggests that percent. Another comment taxpayers should be permitted to treat C. Gross Income Taken Into Account in recommended a 13.125 percent rate, income that is not described in section Determining Subpart F Income citing the conference report 954(a), such as gross tested income, as 1. In General accompanying the Act that indicated FBCI through a rebuttable presumption that, in general, no residual U.S. tax or otherwise. In addition, this type of Section 951A(c)(2)(A)(i)(II) provides would be owed on GILTI subject to a rebuttable presumption could give rise that gross tested income is determined foreign tax rate greater than or equal to to significant administrability concerns. without regard to any gross income that rate. H.R. Rep. No. 115–466, at 627 These concerns are discussed further in taken into account in determining the (2017) (Conf. Rep.) (‘‘Conference a notice of proposed rulemaking subpart F income of the corporation (the Report’’). published in the same issue of the ‘‘subpart F exclusion’’). Section 952(a) Other comments suggested that even Federal Register addressing an election defines ‘‘subpart F income’’ as the sum if the GILTI high tax exclusion is not under section 954(b)(4) with respect to of certain categories of income, expanded to take into account all high- income that would otherwise qualify as including FBCI and insurance income. taxed income, taxpayers should be tested income. Other than with respect to the permitted to elect to treat income that The Treasury Department and the IRS coordination between the subpart F would otherwise be gross tested income continue to believe that the GILTI high exclusion and section 952(c) (discussed as subpart F income in order to qualify tax exclusion, as articulated in the in part IV.C.2 of this Summary of for the exception under section proposed regulations, reflects a Comments and Explanation of Revisions 954(b)(4), for example, through a reasonable interpretation of section section), the proposed regulations do rebuttable presumption that all income 951A(c)(2)(A)(i)(III) and section not provide guidance on income that is (or alternatively, all high-taxed income) 954(b)(4), for the reasons stated in the ‘‘taken into account in determining the of a CFC is subpart F income. One notice of proposed rulemaking subpart F income’’ of a CFC within the comment asserted that such a rule accompanying the proposed regulations. meaning of the subpart F exclusion. In would be consistent with taxpayers’ Accordingly, the final regulations retain this regard, the final regulations provide historical ability to elect through the the GILTI high tax exclusion without rules for determining gross income choice of transactional or operational modification. See § 1.951A–2(c)(1)(iii). included in FBCI and insurance structure to subject their CFC income to However, the Treasury Department and company for purposes of the subpart F current taxation under subpart F. For the IRS are studying, in light of the exclusion, including by reason of the example, the comment stated that a addition of section 951A by the Act, the application of the de minimis and full taxpayer could cause a CFC to make a appropriate circumstances under which inclusion rules in section 954(b). See

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§ 1.951A–2(c)(4)(ii)(A), (B), and account’’ in determining subpart F E&P recapture rule of section 952(c)(2). § 1.951A–2(c)(4)(iii)(C); see also part income to the extent, and only to the Under that approach, both the subpart F IV.C.3 of this Summary of Comments extent, that the item would be included income subject to E&P limitation in a and Explanation of Revisions section. in subpart F income absent the prior year and gross income in a The final regulations also clarify the application of section 952(c). subsequent year that generates E&P circumstances in which the subpart F The proposed regulations include an giving rise to recapture of subpart F exclusion applies to less common items example that illustrates this rule. See income would be excluded from gross included in subpart F income under proposed § 1.951A–2(c)(4)(ii)(A). In the tested income. section 952(a)(3) through (5) (subpart F example, in Year 1, FS, a CFC wholly The Treasury Department and the IRS income resulting from participation in owned by a U.S. shareholder, has $100x have determined that the section 952(c) or cooperation with certain of foreign base company sales income, coordination rule is consistent with the international boycotts, payments of a $100x loss in foreign oil and gas relevant statutory provisions and results illegal bribes, kickbacks, or other extraction income, and no E&P. In Year in the appropriate amount of income payments, or income derived from any 2, FS has gross income of $100x that is that is subject to tax under sections 951 country during which section 901(j) not otherwise excluded from the and 951A. Gross income that would be applies to that country). See § 1.951A– definition of gross tested income in subpart F income during the current 2(c)(4)(ii)(C) through (E). proposed § 1.951A–2(c)(1)(i) through year but for the application section (v), and no allowable deductions, and 2. Coordination With Section 952(c) 952(c)(1)(A) is literally ‘‘taken into $100x of E&P. The example concludes account’’ in determining subpart F that in Year 1 FS has no subpart F a. In General income in that it potentially gives rise income because of the E&P limitation in The amount of subpart F income for to future subpart F income by reason of section 952(c)(1)(A) and no gross tested a taxable year is subject to the E&P section 952(c)(2). Furthermore, gross income because gross tested income is tested income is not subject to an E&P limitation and recapture provisions in determined without regard to section limitation analogous to the E&P section 952(c). Section 952(c)(1)(A) 952(c). In Year 2, the example concludes limitation on subpart F income under provides that a CFC’s subpart F income that, because FS’s E&P ($100x) exceed section 952(c)(1)(A). In this regard, the for any taxable year cannot exceed its its Year 2 subpart F income ($0), the determination of tested income under E&P for that year. See also § 1.952– subpart F income of Year 1 is recaptured the GILTI regime is based on a taxable 1(c)(1). However, section 952(c)(2) in Year 2 under section 952(c)(2), and provides that, to the extent subpart F FS also has $100x of gross tested income income concept, similar to the income is reduced by reason of the E&P in Year 2 because gross tested income is determination of income earned directly limitation in any taxable year, any determined without regard to section by a U.S. taxpayer, whereas the subpart excess of the E&P of the corporation for 952(c). F regime is rooted in a distributable any subsequent taxable year over the One comment agreed that the section dividend model, and thus predicated on subpart F income for that year is 952(c) coordination rule was an the existence of E&P. Therefore, for recharacterized as subpart F income. appropriate interpretation of the statute, example, a CFC may have $100x of gross See also § 1.952–1(f)(1). An amount noting that the rule preserves the ability tested income but no E&P in a taxable recaptured under section 952(c)(2) is for section 952(c)(2) to recapture subpart year (due, for instance, to a loss in treated as subpart F income in the same F income generated in prior years, while foreign oil and gas extraction income), separate category (as defined in § 1.904– preventing recapture under section and the U.S. shareholder of the CFC 5(a)) as the subpart F income that was 952(c)(2) from permanently exempting (assuming no QBAI or other CFCs) will subject to the E&P limitation in a prior gross tested income generated in nonetheless have a $100x GILTI taxable year. See § 1.952–1(f)(2)(ii). subsequent years. However, several inclusion amount for the taxable year. The Code does not provide a rule that comments suggested that the section This is the result under section 951A explicitly coordinates the subpart F 952(c) coordination rule be withdrawn. notwithstanding that the CFC in this exclusion with section 952(c), which These comments asserted that the case has no net economic income and commenters identified as a source of section 952(c) coordination rule can no E&P for the year. If the same CFC for confusion and potential inconsistency. lead to double taxation because the rule the same taxable year also has $100x of In order to resolve this ambiguity, the can result in the taxation of an aggregate foreign base company sales income and proposed regulations set forth such a amount of CFC income in excess of the $100x of E&P related to such income, in coordination rule by providing that the net economic CFC income over a multi- addition to the $100x GILTI inclusion gross tested income and allowable year period. Some comments further amount, the CFC’s U.S. shareholder deductions properly allocable to gross suggested that the section 952(c) would have a $100x subpart F tested income are determined without coordination rule is contrary to the inclusion. Under these facts, the U.S. regard to the application of section language of the subpart F exclusion, on shareholder is taxed on an aggregate 952(c) (the ‘‘section 952(c) coordination the grounds that any income of a CFC amount of taxable income of the CFC rule’’). See proposed § 1.951A–2(c)(4)(i). that generates E&P that are ($200x) that exceeds the CFC’s net Thus, income that would be subpart F recharacterized as subpart F income by economic income and E&P ($100x). In income but for the application of the reason of the E&P recapture rule is this example, the U.S. shareholder is not E&P limitation in section 952(c)(1)(A) is ‘‘taken into account in determining the subject to tax twice with respect to a excluded from gross tested income by subpart F income’’ of the CFC and single item of income, but rather is reason of the subpart F exclusion. In should therefore be excluded from gross subject to tax once with respect to each addition, income that gives rise to E&P tested income under the subpart F of two items—the CFC’s subpart F that results in subpart F recapture under exclusion. Other comments income of $100x and the CFC’s gross section 952(c)(2) is not excluded from recommended that the section 952(c) tested income of $100x. The section gross tested income by reason of the coordination rule be retained as it 952(c) coordination rule merely ensures subpart F exclusion. In effect, the pertains to the E&P limitation rule that the same result obtains whether all section 952(c) coordination rule treats under section 952(c)(1)(A), but be items of income and loss arise in a an item of gross income as ‘‘taken into modified to exclude from its scope the single year (as in this example) or arise

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in different taxable years (as in the A comment recommended, as an generally pertained to the application of example in proposed § 1.951A– alternative to taking into account the E&P limitation in section 2(c)(4)(ii)(A)). section 952(c)(2) recapture in 952(c)(1)(A), the same issues as The Treasury Department and the IRS determining gross tested income, that discussed in respect to section have also determined that it is not the recapture rules of section 952(c)(2) 952(c)(1)(A) arise with respect to appropriate to exclude the E&P be modified so that E&P derived from application of the qualified deficit rule recapture rule from the scope of the gross tested income does not trigger in section 952(c)(1)(B) and the chain section 952(c) coordination rule. recapture under section 952(c)(2). deficit rule in section 952(c)(1)(C). Because section 951A contains no Although such amount would not be Accordingly, the final regulations revise analog to the E&P limitation in section recaptured as subpart F income, the the section 952(c) coordination rule to 952(c)(1)(A), it also contains no analog comment recommended that, in order to apply also to disregard the effect of a to the E&P recapture rule in section avoid double taxation of the same qualified deficit or a chain deficit in 952(c)(2). Without a GILTI recapture earnings, any recapture account should determining gross tested income. See rule, the approach recommended by nonetheless be reduced by the amount § 1.951A–2(c)(4)(ii). comments would effectively allow prior treated as gross tested income. The One comment requested clarification year losses in categories of income Treasury Department and the IRS have that income subject to the high tax excluded from gross tested income (for determined that this recommendation is exception of section 954(b)(4) is not example, subpart F income or foreign oil inconsistent with the language and included in gross tested income even if and gas extraction income) to purpose of section 952(c)(2). Section such income would also be excluded permanently exempt gross tested 952(c)(2) requires recapture in any from subpart F income by reason of income in subsequent years. For taxable year in which E&P exceed section 952(c)(1)(A). The comment instance, if, in a taxable year, a CFC has subpart F income, and the provided an example in which a CFC $100x of foreign base company sales recommendation would not result in has $100x of foreign base company income, a $100x loss in foreign base recapture in these circumstances. services income, a $100x loss in another company services income, and thus no Further, the purpose of section 952(c)(2) category of subpart F income, no E&P, subpart F income by reason of the E&P is to postpone the inclusion of subpart and thus no subpart F income by reason F income to a subsequent taxable year limitation of section 952(c)(1)(A), any of the E&P limitation of section in which the CFC has sufficient E&P. gross tested income earned by the CFC 952(c)(1)(A). According to the comment, The recommendation, by reducing a in a subsequent year would recapture if the election under section 954(b)(4) is recapture account without recapture of the foreign base company sales income made with respect to the foreign base subpart F income, would result in the from the previous year, and thus such company services income, one permanent exemption of subpart F gross income would never be subject to interpretation of the proposed income. Finally, as illustrated in this section 951A. regulations is that the $100x of foreign part IV.C of the Summary of Comments In excluding certain categories of base company services income is not and Explanation of Revisions section, excluded from gross tested income by income from gross tested income the simultaneous recapture of subpart F (namely, subpart F income, foreign oil income and the inclusion of gross tested either the subpart F exclusion under and gas extraction income, and income does not amount to double section 951A(c)(2)(A)(i)(II) (because effectively connected income), Congress taxation of a single item of income, but such income is not included in subpart not only ensured that such income rather the single taxation of each of two F by reason of the high tax exception of would not be subject to the GILTI items of income. Accordingly, this section 954(b)(4)) or the GILTI high tax regime, but also that losses with respect recommendation is not adopted. exclusion under section to such income would not be permitted A comment recommended as another 951A(c)(2)(A)(i)(III) (because such to reduce income subject to the GILTI alternative that the section 952(c)(2) income is not excluded from subpart F regime. Likewise, section coordination rule not be applied with income ‘‘solely’’ by reason of the high 951A(c)(2)(B)(ii) provides that a loss in respect to recapture accounts that tax exception of section 954(b)(4)). The a category of income subject to the existed before the Act. The comment Treasury Department and the IRS have GILTI regime (that is, tested loss) cannot asserted that it would be inappropriate determined that such clarification is reduce the income subject to the subpart for income that triggers recapture under unnecessary because an election under F regime by reason of the E&P limitation section 952(c)(2) based on pre-Act section 954(b)(4) cannot be made with rule of section 952(c)(1)(A). See also recapture account balances to also be respect to a net item eliminated by § 1.951A–6(b) and part VIII.A of this treated as gross tested income because reason of section 952(c)(1)(A). Section Summary of Comments and Explanation section 951A did not exist before 2018 1.954–1(d)(4)(ii) provides that the net of Revisions section. It is apparent, and therefore no tested losses could item of income to which the high tax based on the purpose and structure of have reduced subpart F income. The exception of section 954(b)(4) applies is section 951A, that Congress intended for final regulations do not adopt this the subpart F income of a CFC the GILTI and subpart F regimes to act recommendation. Nothing in the statute determined after taking into account the as parallel, independent systems of or legislative history suggests that pre- earnings and profits limitation of taxation with respect to prescribed Act recapture account balances should section 952(c)(1)(A). Therefore, the net categories of CFC income, and losses be treated differently than post-Act item of income that can be excluded with respect to one regime (or subject to account balances. Further, there appears under the high tax exception is neither regime) should not be permitted to be no stronger policy rationale for determined after the application of to permanently exempt the income permitting losses that arose before the section 952(c)(1)(A). Indeed, in the subject to another regime. Therefore, an Act to permanently exempt gross tested example presented by the comment, interpretation of section 952(c) that income from taxation than for because the subpart F income of the permits losses related to GILTI-exempt permitting GILTI-exempt losses that CFC after application of the E&P categories of income to reduce gross arise after the Act to do the same. limitation is zero, there is no net item tested income would be contrary to the While the comments with respect to of income for which an election under purpose and structure of section 951A. the section 952(c) coordination rule section 954(b)(4) and § 1.954–1(d)(5) can

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be made. Accordingly, the $100x of section 952(c)(1)(B)(vii)(I). Accordingly, excluded from FBCI or insurance foreign base company services income is the final regulations modify the section income under the de minimis rule or the excluded from gross tested income 952(c) coordination rule to apply only high tax exception of section 954(b)(4), solely by reason of the subpart F with respect to the E&P limitation rules but generally does include any item of exclusion under section of section 952(c)(1) (including the gross income included in FBCI or 951A(c)(2)(A)(i)(II). qualified deficit and chain deficit rules) insurance income under the full and the E&P recapture rule of section inclusion rule. In addition, for purposes b. Coordination With Qualified Deficit 952(c)(2). of the subpart F exclusion, gross income Rule in Section 952(c)(1)(B) taken into account in determining 3. Coordination With De Minimis Rule, The qualified deficit rule in section subpart F income does not include gross Full Inclusion Rule, and High Tax 952(c)(1)(B) reduces a U.S. shareholder’s income that qualifies for an exception to Exception subpart F inclusion attributable to a a category of FBCI described in section qualified activity (defined in section Section 954(a) provides that FBCI for 954(a), including amounts excepted 952(c)(1)(B)(iii)) to the extent of that a taxable year is equal to the sum of from the definition of FPHCI, such as shareholder’s pro rata share of any foreign personal holding company rents and royalties derived from an qualified deficit (defined in section income (as determined under section active business under section 952(c)(1)(B)(ii)). A comment suggested 954(c)) (‘‘FPHCI’’), foreign base 954(c)(2)(A) and § 1.954–2(b)(5) and (6) that a tested loss could, in some cases, company sales income (as determined or active financing income under also give rise to a qualified deficit that under section 954(d)) and foreign base section 954(h). could reduce subpart F income in a company services income (as Section 1.954–1(d)(6) provides that an subsequent taxable year. The comment determined under section 954(e)). item of gross income that is included in asserted that this could occur, for However, section 954(b)(3)(A) provides FBCI or insurance income under the full example, if certain deductions and that if the sum of FBCI (determined inclusion rule (‘‘full inclusion FBCI’’) is losses that make up a qualified deficit without regard to allocable deductions) excluded from subpart F income if more are also properly allocable to gross (‘‘gross FBCI’’) and gross insurance than 90 percent of the gross FBCI and tested income. Accordingly, the income for the taxable year is less than gross insurance income for the taxable comment recommended that the final the lesser of five percent of gross income year (determined without regard to the regulations deny a U.S. shareholder the or $1,000,000, then no part of the gross full inclusion rule) is attributable to net ability to both reduce its net CFC tested income for the taxable year is treated as amounts excluded from subpart F income and increase a qualified deficit FBCI or insurance income (the ‘‘de income under the high tax exception of by reason of the same economic loss. minimis rule’’). Conversely, section section 954(b)(4). The Treasury The Treasury Department and the IRS 954(b)(3)(B) provides that if the sum of Department and the IRS have agree that the same deduction or loss gross FBCI and gross insurance income determined that it would be should not result in a double benefit for the taxable year exceeds 70 percent inappropriate for an item of gross under section 951A and the qualified of gross income, the entire gross income income that would be included in gross deficit rule, but have not identified a for the taxable year is treated as gross tested income but for the full inclusion situation in which a single deduction or FBCI or gross insurance income, as rule to be excluded from both gross loss can both reduce tested income (or appropriate (the ‘‘full inclusion rule’’). tested income (by reason of the subpart increase tested loss) and also give rise One comment requested that the de F exclusion) and subpart F income (by to or increase a qualified deficit. A minimis and full inclusion rules be reason of § 1.954–1(d)(6)). Accordingly, deduction or loss that is properly taken into account for purposes of the final regulations provide that full allocable to gross tested income cannot determining ‘‘gross income taken into inclusion FBCI excluded from subpart F also be attributable to a qualified account’’ in determining subpart F income by reason of § 1.954–1(d)(6) is activity that gives rise to subpart F income within the meaning of the not excluded from gross tested income income, and the same deduction cannot subpart F exclusion. The comment by reason of the subpart F exclusion. be taken into account more than once asserted that such a rule would prevent See § 1.951A–2(c)(4)(iii)(C). The final under sections 954(b)(5) and double taxation because full inclusion regulations further clarify that income 951A(c)(2)(A)(ii). Nevertheless, for the subpart F income would be taxed solely excluded from subpart F income under avoidance of doubt, the final regulations under section 951 (and not section § 1.954–1(d)(6) is also not excluded provide that deductions that are 951A), whereas de minimis subpart F from gross tested income by reason of allocated and apportioned to gross income would be taxed solely under the GILTI high tax exclusion (discussed tested income are not attributable to a section 951A (and not section 951). in part IV.B of this Summary of qualified activity and thus do not also The Treasury Department and the IRS Comments and Explanation of Revisions increase or give rise to a qualified agree with this comment. Accordingly, section). See id. Accordingly, income deficit. See § 1.951A–2(c)(3). subject to the application of the section excluded from subpart F income by 952(c) coordination rule, discussed in reason of § 1.954–1(d)(6) is included in c. Coordination With Section part IV.C.2 of this Summary of gross tested income. 952(c)(1)(B)(vii) Comments and Explanation of Revisions Section 952(c)(1)(B)(vii)(I) contains an section, the final regulations provide D. Effect of Basis Adjustments Under election to apply section 953(a) without that the subpart F exclusion applies to Section 961(c) regard to the same country exception in gross income included in FBCI (adjusted Section 961(c) provides that, under section 953(a)(1)(A). Comments net FBCI as defined in § 1.954–1(a)(5)) regulations prescribed by the Secretary, requested that the section 952(c) or insurance income (adjusted net if a U.S. shareholder is treated under coordination rule be modified to clarify insurance income as defined in § 1.954– section 958(a)(2) as owning stock of a that gross tested income is determined 1(a)(6)). See § 1.951A–2(c)(4)(i). Thus, CFC which is owned by another CFC, after giving effect to the election in for purposes of the subpart F exclusion, then adjustments similar to those section 952(c)(1)(B)(vii)(I). The rule in gross income taken into account in provided under section 961(a) and (b) proposed § 1.951A–2(c)(4) was not determining subpart F income does not are made to the basis in such stock, and intended to address the election in include any item of gross income the basis in stock of any other CFC by

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reason of which the U.S. shareholder is taxable portion of any unrealized last taxable year that is not a CFC considered under section 958(a)(2) as appreciation in the upper-tier CFC inclusion year. See proposed § 1.951A– owning the stock. The provision further stock, to the extent attributable to 3(h)(2)(ii)(D). Income generated by provides, however, that these unrealized appreciation in assets of the fiscal-year CFCs during the disqualified adjustments are made only for the upper-tier CFC, would effectively be period is subject to neither the purposes of determining the amount reduced in an amount equal to the transition tax under section 965 nor the included under section 951 in the gross dividend, either because of a dividend tax on GILTI under section 951A. income of such U.S. shareholder (or any distribution that reduces the value in In response to comments, the successor U.S. shareholder). There are the upper-tier CFC stock without a Treasury Department and the IRS have no regulations in effect under section corresponding basis reduction (section revised these rules in a manner 961(c). 961(d) applies only to the extent loss consistent with the purpose of the rule Comments have questioned whether would otherwise be recognized) or by in the proposed regulations, as basis adjustments under section 961(c) reason of a disposition to the extent the discussed in this part IV.E of the should be taken into account for gain is recharacterized under section Summary of Comments and Explanation purposes of determining gross tested 1248(j) as a dividend for purposes of of Revisions section. Certain comments income of a CFC upon the CFC’s applying section 245A. Comments are and revisions related to the disposition of stock of another CFC. One requested on this issue, including the determination of disqualified basis for comment noted that, while section extent to which adjustments should be purposes of both proposed §§ 1.951A– 951A(f)(1)(A) treats a GILTI inclusion in made to minimize the potential for the 2(c)(5) and 1.951A–3(h)(2) are discussed the same manner as a subpart F same item of income being subject to tax in part IV.E.3 and 4 of this Summary of inclusion for purposes of basis more than once and to minimize the Comments and Explanation of Revisions adjustments under section 961, the inappropriate reduction of gain in CFC section. For a discussion of additional resulting basis under section 961(c) only stock held by corporate U.S. comments and revisions related to the applies for purposes of determining shareholders. determination of disqualified basis for amounts included in gross income purposes of both proposed §§ 1.951A– under section 951. The comment E. Deduction or Loss Attributable to 2(c)(5) and 1.951A–3(h)(2), see part V.G recommended nonetheless that Disqualified Basis of this Summary of Comments and regulations provide that section 961(c) 1. In General Explanation of Revisions section. basis adjustments apply both for 2. Authority purposes of determining subpart F The proposed regulations include a income and gross tested income to rule that generally disallows, for Several comments recommended that prevent certain items of income from purposes of calculating tested income or the rule in proposed § 1.951A–2(c)(5) be being inappropriately taxed twice; the tested loss, any deduction or loss withdrawn or substantially narrowed comment further noted, however, that attributable to disqualified basis in and re-proposed. Some of these unintentional non-taxation should also depreciable or amortizable property comments recommended that the rule be avoided. (including, for example, intangible be revised to apply only to ‘‘non- The interaction of basis adjustments property) resulting from a disqualified economic’’ transactions or transactions under section 961(c) and section 951A transfer of the property. See proposed engaged in with a tax-avoidance will be further considered in connection § 1.951A–2(c)(5). The relevant terms for purpose, or that avoidance-type with a guidance project addressing purposes of applying the rule in transactions be addressed through previously taxed E&P (‘‘PTEP’’) under proposed § 1.951A–2(c)(5) are defined existing statutory or judicial doctrines. sections 959 and 961. See Notice 2019– by reference to certain provisions and One comment recommended that the 1, 2019–2 I.R.B. 275, section 3 terms in proposed § 1.951A–3(h)(2) rule continue to be limited to transfers (announcing an intention to address (disregarding disqualified basis for between related persons because third- PTEP in forthcoming proposed purposes of determining QBAI), with party sales are fundamentally different regulations). The Treasury Department certain modifications. See proposed from the ‘‘non-economic transactions’’ and the IRS are sensitive to the concern § 1.951A–2(c)(5)(iii). In general, the term described in the legislative history. expressed in the comment but are also ‘‘disqualified basis’’ is defined as the However, one comment opposed any aware that taking into account section excess of a property’s adjusted basis additional limitations or weakening of 961(c) basis adjustments for purposes of immediately after a disqualified the anti-abuse rules in the proposed determining gross tested income could transfer, over the sum of the property’s regulations. inappropriately reduce the amount of adjusted basis immediately before the Several comments questioned the stock gain subject to tax. This may occur disqualified transfer and the amount of Treasury Department and the IRS’s because, as was the case before the Act, gain recognized by the transferor in the authority for issuing the rule. Many of section 961(c) adjustments are not taken disqualified transfer that is subject to these comments asserted that section into account for purposes of tax as subpart F income or effectively 951A(d)(4), which provides authority to determining E&P, and thus a disposition connected income. See proposed issue regulations that are ‘‘appropriate of lower-tier CFC stock may generate § 1.951A–3(h)(2)(ii)(A) and (B). The to prevent the avoidance of the purposes E&P for the upper-tier CFC to the extent term ‘‘disqualified transfer’’ is defined of this subsection,’’ does not authorize of the amount of the gain in the stock as a transfer of property by a transferor the Treasury Department and the IRS to determined without regard to section CFC during the transferor CFC’s promulgate rules that apply for any 961(c). If the resulting E&P give rise to disqualified period to a related person purpose other than for purposes of a dividend (including by reason of a in which gain was recognized, in whole determining QBAI under section disposition under section 1248) to a or in part. See proposed § 1.951A– 951A(d). Also, two comments stated corporate U.S. shareholder, the 3(h)(2)(ii)(C). Finally, the term that the disallowance of deductions dividend may result in an offsetting ‘‘disqualified period’’ is defined with under proposed § 1.951A–2(c)(5) is dividends received deduction. See respect to a transferor CFC as the period contrary to, and therefore not authorized sections 245A(a) and 1248(j). If section that begins on January 1, 2018, and ends by, section 951A(c)(2)(A)(ii), which 245A(a) applies to the dividend, the as of the close of the transferor CFC’s requires that the deductions of the CFC

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be allocated to gross tested income income corporation that begins before allocable’’ to gross tested income, under rules similar to the rules of January 1, 2018, which is that foreign subpart F income, or effectively section 954(b)(5) for purposes of corporation’s last taxable year before the connected income of the CFC (‘‘residual calculating tested income or tested loss. transition to the new corporate tax CFC gross income’’). See § 1.951A– In response to these comments, the regime elsewhere in the bill goes into 2(c)(5)(i). Treasury Department and the IRS have effect.’’). Because the final date for While the rules that allocate and revised the proposed rule in a manner measuring the E&P of a CFC for apportion expenses generally depend on that better reflects the source of its purposes of section 965 is December 31, the factual relationship between the authority. Section 7805(a) provides that 2017 (the ‘‘final E&P measurement item of expense and the associated gross ‘‘the Secretary shall prescribe all date’’), and the effective date of section income, the relevant statutory language needful rules and regulations for the 951A is the first taxable year of a CFC in sections 882(c)(1)(A), enforcement of this title, including all beginning after December 31, 2017, all 951A(c)(2)(A)(ii), and 954(b)(5) does not rules and regulations as may be the earnings of a calendar year CFC are constrain the Secretary from taking into necessary by reason of any alteration of potentially subject to taxation under account other considerations in law in relation to internal revenue.’’ either section 965 or section 951A. determining whether it is ‘‘proper’’ for Section 951A(c)(2)(A) defines ‘‘tested However, a fiscal year CFC (for example, a certain item of expense to be allocated income’’ by reference to certain items of a CFC with a taxable year ending to, and therefore reduce, a particular gross income, reduced by ‘‘the November 30) may have a gap between item of gross income. Indeed, the deductions (including taxes) properly its final E&P measurement date under Treasury Department and the IRS are allocable to such gross income under section 965 (December 31, 2017) and the not required to issue rules that rules similar to the rules of section date on which section 951A first applies mechanically allocate an item of 954(b)(5) (or to which such deductions with respect to its income (December 1, expense to gross income to which such would be allocable if there were such 2018, for a CFC with a taxable year expense factually relates if taxable gross income).’’ Section 954(b)(5) ending November 30). Congress was income would be distorted by reason of provides that FPHCI, foreign base aware that taxpayers could take such allocation. In this regard, the company sales income, and foreign base advantage of this period to create ‘‘cost- Treasury Department and the IRS have company services income are reduced, free’’ basis in assets that could be used determined that the rule in § 1.951A– ‘‘under regulations prescribed by the to reduce their U.S. tax liability in 2(c)(5) is necessary to ensure that Secretary,’’ by deductions ‘‘properly subsequent years, and expected the transactions during the disqualified allocable’’ to such income. Similarly, Treasury Department and the IRS to period, the income or earnings from section 882(c)(1)(A) provides that, for issue regulations to prevent this result. which are not subject to tax, are not purposes of determining a foreign See Conference Report, at 645 (‘‘The permitted to improperly reduce or corporation’s income which is conferees intend that non-economic eliminate a taxpayer’s income that effectively connected with the conduct transactions intended to affect tax would be subject to tax after the of a trade or business within the United attributes of CFCs and their U.S. disqualified period. This rule creates States (‘‘effectively connected income’’), shareholders (including amounts of symmetry between the category of ‘‘proper apportionment and allocation’’ tested income and tested loss, tested income generated by reason of a transfer of deductions of the foreign corporation foreign income taxes, net deemed during the disqualified period and the category of income to which any ‘‘shall be determined as provided in tangible income return, and QBAI) to regulations prescribed by the deduction or loss attributable to the minimize tax under this provision be Secretary.’’ The rule, as revised in the resulting basis is allocated. That is, a disregarded. For example, the conferees final regulations, provides guidance for disqualified transfer, by definition, expect the Secretary to prescribe determining whether certain deductions generates residual CFC gross income regulations to address transactions that or losses are ‘‘properly allocable’’ to (income that is not subpart F income, occur after the measurement date of gross tested income, subpart F income, tested income, or effectively connected post-1986 earnings and profits under or effectively connected income within income), and the rule in § 1.951A– amended section 965, but before the the meaning of section 951A(c)(2)(A), 2(c)(5) allocates the deduction or loss first taxable year for which new section section 954(b)(5), or section attributable to the disqualified basis to 951A applies, if such transactions are 882(c)(1)(A), respectively. See, for the same category of income. In the case example, Redlark v. Commissioner, 141 undertaken to increase a CFC’s QBAI.’’). of a depreciable or amortizable asset F.3d 936, 940–41 (9th Cir. 1998) and Consistent with the statute and the with disqualified basis that is held until Miller v. United States, 65 F.3d 687, 690 legislative history, the Treasury the end of its useful life, the aggregate (8th Cir. 1995) (determining that the Department and the IRS have amount of deduction or loss attributable term ‘‘properly allocable’’ in section determined that a deduction or loss to the disqualified basis allocated to 163(e) is ambiguous and therefore there attributable to basis (disqualified basis) residual CFC gross income under the is an implicit legislative delegation of created by reason of a transfer from a rule will equal the amount of residual authority to the Commissioner to define CFC to a related CFC (a disqualified CFC gross income generated in the the term). transfer) during the period between the disqualified transfer. The legislative history to the Act final E&P measurement date and the The rule in proposed § 1.951A–2(c)(5) indicates that section 965 was intended effective date of section 951A (the provides that any deduction or loss as a transition measure to the new disqualified period), to the extent no attributable to disqualified basis is territorial tax system in which section taxpayer included an amount in gross disregarded for purposes of determining 951A applies, and that Congress income by reason of such disqualified tested income or tested loss. In contrast, intended that all earnings of a CFC transfer, should not be permitted to the rule in the final regulations allocates would be potentially subject to tax reduce a taxpayer’s U.S. income tax and apportions any such deduction or under either section 965 or section liability in subsequent years. loss to gross income other than gross 951A. Conference Report, at 613 (‘‘The Accordingly, the final regulations treat tested income, subpart F income, or [transition tax applies in] the last any deduction or loss attributable to effectively connected income. With taxable year of a deferred foreign disqualified basis as not ‘‘properly respect to the determination of tested

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income or tested loss, whether an item inventory would rarely be relevant. CFC1 sells the property to an unrelated of deduction or loss is disregarded Accordingly, the rule in the final party in exchange for $100x of cash and, (under the proposed regulations) or regulations applies to deductions or without regard to proposed § 1.951A– allocated to income other than gross losses attributable to disqualified basis 2(c)(5), recognizes $20x of gain. The tested income (under the final in any property, other than property comments asked whether, under the regulations) does not provide a different described in section 1221(a)(1), rule, the disqualified basis of $70x in result. In either case, the deduction or regardless of whether the property is of the property is disregarded such that the loss is not permitted to reduce tested a type with respect to which a sale results in $90x (rather than $20x) of income or increase tested loss. However, deduction is allowable under section gross tested income to CFC1. by allocating an item of deduction or 167 or 197. See §§ 1.951A–2(c)(5)(iii)(A) The Treasury Department and the IRS loss to residual CFC gross income, the and 1.951A–3(h)(2)(ii). have determined that the rule in rule in the final regulations ensures that One comment asserted that the use of § 1.951A–2(c)(5) should apply only for any deduction or loss attributable to the phrase ‘‘non-economic transactions’’ purposes of determining whether a disqualified basis is also not taken into in the Conference Report means that the deduction or loss is properly allocable account for purposes of determining the authority to draft anti-abuse rules to gross tested income, subpart F CFC’s subpart F income or effectively pursuant to sections 7805 and income, or effectively connected connected income. The broadening of 951A(d)(4) is limited to non-economic income. Thus, disqualified basis is not the rule to allocate any deduction or transactions, which necessitates a facts disregarded for purposes of determining loss attributable to disqualified basis and circumstances test. The rule in income or gain recognized on the away from subpart F income and § 1.951A–2(c)(5) is not premised upon disposition of the property. However, effectively connected income is facts and circumstances, such as a because many taxpayers capitalize intended to ensure that taxpayers taxpayer’s intent; rather, the rule is depreciation or amortization expense to cannot simply circumvent the rule by based on an interpretation of the term other property, including inventory, and converting their gross tested income ‘‘properly allocable’’ in the context of a recover those costs through cost of into either subpart F income or deduction or loss attributable to goods sold or depreciation of the other effectively connected income, and thus disqualified basis. Moreover, the rule property, the final regulations also be permitted to use the deduction or applies only to a narrow subset of provide that any depreciation, loss attributable to the disqualified basis transactions—that is, transfers by fiscal amortization, or cost recovery against such income. The preamble to year CFCs to related parties that occur allowances attributable to disqualified the proposed regulations evidenced an between the final E&P measurement basis is not properly allocable to intention that taxpayers not be date under section 965 and the effective property produced or acquired for resale permitted to claim tax benefits with date of section 951A—and only has the under section 263, 263A, or 471. See respect to cost-free disqualified basis, effect of allocating a deduction or loss § 1.951A–2(c)(5)(i). This rule ensures and the rule in the final regulations attributable to the cost-free basis created that depreciation or amortization effectuates this intent by closing an in such transaction to residual CFC expenses attributable to disqualified obvious loophole. Furthermore, the rule gross income. The Treasury Department basis are not permitted to indirectly ensures that the words ‘‘properly and the IRS have concluded that these reduce taxable income through the allocable’’ are interpreted consistently narrowly circumscribed transactions depreciation expense of other property will in almost all cases be motivated by or from the disposition of inventory. across provisions—sections tax avoidance rather than business As discussed in part V.G of this 882(c)(1)(A), 951A(c)(2)(A)(ii), and exigencies, and that the allocation and Summary of Comments and Explanation 954(b)(5)—with respect to any apportionment of deduction or loss to of Revisions section, disqualified basis deduction or loss attributable to residual CFC gross income is an is generally reduced or eliminated to the disqualified basis. appropriately tailored measure to extent that such basis reduces taxable The rule in proposed § 1.951A–2(c)(5) address these transactions. income. Therefore, a sale of property applies only to deductions or losses Based on the foregoing, the Treasury with disqualified basis generally results attributable to disqualified basis in Department and the IRS have concluded in the elimination of the disqualified ‘‘specified property,’’ which is defined that the rule in § 1.951A–2(c)(5), with basis, because the basis is taken into as property that is of a type with respect the modifications discussed in this part account in determining the CFC’s to which a deduction is allowable under IV.E of the Summary of Comments and taxable income. As a result, absent a section 167 or 197. See proposed Explanation of Revisions section, special provision, a CFC could § 1.951A–2(c)(5)(ii). The Treasury represents an appropriate exercise of its ‘‘cleanse’’ the disqualified basis in Department and the IRS have authority under sections 951A and property by selling the property to a concluded, however, that the rule 7805. related person after the disqualified should not be limited to specified period; the related person would have property because deductions or losses 3. Effect of Disqualified Basis for no disqualified basis in the property, attributable to disqualified basis in other Purposes of Determining Income or Gain and the selling CFC would recognize property may also be used to Some comments noted that the rule in income only to the extent the amount inappropriately reduce a taxpayer’s U.S. proposed § 1.951A–2(c)(5) addresses realized exceeded its adjusted basis in income tax liability. On the other hand, only deductions or losses attributable to the property (for this purpose, including the Treasury Department and the IRS disqualified basis and does not address its disqualified basis). To address this have concluded that it would be unduly the effect of disqualified basis in obvious loophole, the final regulations burdensome to require CFCs to determining a CFC’s income or gain provide that, except to the extent that determine the disqualified basis in each upon the disposition of property. For any loss recognized on the transfer of item of inventory and that it is example, assume USP, a domestic such property is treated as attributable reasonable to expect that most inventory corporation, wholly owns CFC1, which to disqualified basis under § 1.951A– acquired during the disqualified period holds property with a fair market value 2(c)(5), or the basis is reduced or will be sold at a gain such that the of $100x and an adjusted basis of $80x, eliminated in a nonrecognition disqualified basis in an item of $70x of which is disqualified basis. transaction within the meaning of

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section 7701(a)(45), a transfer of are taxed under sections 882 and 951. reduced by the amount of the property with disqualified basis in the Accordingly, this recommendation is disqualified basis and the disqualified hands of a CFC to a related person does not adopted. basis is eliminated. See § 1.951A– not reduce the disqualified basis in the Section 901(m) disallows certain 3(h)(2)(ii)(B)(3). This reduction in hands of the transferee. See § 1.951A– foreign tax credits on foreign income not adjusted basis is for all purposes of the 3(h)(2)(ii)(B)(1)(ii). Thus, for example, if taken into account for U.S. tax purposes Code, including section 901(m). Thus, if a CFC sells property with an adjusted as a result of a ‘‘covered asset an election is made, a disqualified basis of $80x and disqualified basis of acquisition,’’ which includes an transfer of property that is also a $70x to a related person for $100x in a acquisition of assets for U.S. tax covered asset acquisition of a relevant fully taxable exchange, the selling CFC purposes that is treated as the foreign asset will result in neither would recognize $20x of gross income acquisition of stock of a corporation (or disqualified basis in the property within on the sale, which income may be is disregarded) for foreign tax purposes the meaning of § 1.951A–3(h)(2)(ii) nor included in gross tested income, and the and an acquisition of an interest in a a basis difference with respect to the disqualified basis in the property partnership which has an election in relevant foreign asset within the immediately after the transfer would effect under section 754. See section meaning of section 901(m)(3)(C). As a remain $70x in the hands of the related 901(m)(2)(B) and (C). One comment result, in the case of an election, the rule person. noted that a disqualified transfer subject in § 1.951A–2(c)(5) and section 901(m) to the rule in proposed § 1.951A–2(c)(5) will not apply concurrently with respect 4. Concurrent Application of the Rule could also constitute a covered asset With Other Provisions to a disqualified transfer that is also a acquisition under section 901(m), such covered asset acquisition. One comment asserted that if the as the sale of an interest in a disregarded Treasury Department and the IRS retain entity during the disqualified period. In F. Other Comments and Revisions the rule in proposed § 1.951A–2(c)(5), such a case, according to the comment, 1. Tested Loss Carryforward then the disqualified transfer should be a deduction or loss that is not taken into disregarded for all U.S. tax purposes, account for purposes of determining In determining a U.S. shareholder’s including for purposes of determining tested income or tested loss under the net CFC tested income for a taxable the gain or loss recognized by the rule may nevertheless be taken into year, the U.S. shareholder’s aggregate transferor CFC by reason of the transfer account for purposes of section 901(m) pro rata share of tested losses for the and the tax attributes of the transferor such that foreign tax credits under taxable year reduces the shareholder’s CFC created by reason of the transfer. section 960 might be disallowed. The aggregate pro rata share of tested income The comment expressed concern with comment asserted that the concurrent for the taxable year. See section potentially adverse consequences to the application of the rule and section 951A(c)(1). Comments recommended transferor CFC from the concurrent 901(m) could be unduly punitive to that the final regulations include a application of the rule and certain other taxpayers that engaged in disqualified provision allowing a U.S. shareholder’s provisions, such as incremental subpart transfers that were also covered asset aggregate pro rata share of tested losses F income generated by reason of the acquisitions and therefore in excess of the shareholder’s aggregate transfer, additional E&P that could recommended that a deduction or loss pro rata share of tested income for the dilute foreign tax credits with respect to attributable to disqualified basis also be taxable year to be carried forward to a subpart F inclusion, and immediate disregarded for purposes of section offset the shareholder’s net CFC tested U.S. taxation on any effectively 901(m). income in subsequent years. connected income under section 882 Disqualified basis could give rise to A GILTI inclusion amount is an from the transfer. policy concerns under section 901(m) annual calculation, and nothing in the As discussed in part IV.E.2 of this even when a deduction attributable to statute or legislative history suggests Summary of Comments and Explanation the disqualified basis is not taken into that unused items, such as a U.S. of Revisions section, the rule in account in determining tested income or shareholder’s aggregate pro rata share of § 1.951A–2(c)(5) is intended to provide tested loss (or subpart F income or tested losses in excess of the guidance on determining whether effectively connected income). For shareholder’s aggregate pro rata share of deductions of a CFC attributable to example, a deduction or loss tested income for the taxable year, can disqualified basis are properly allocable attributable to the disqualified basis can or should be carried to another taxable to gross tested income, subpart F reduce E&P for a taxable year, with the year. Accordingly, this recommendation income, and effectively connected result that subpart F income for the is not adopted. income. The rule is not intended to taxable year may be limited under 2. Deemed Payments Under Section disregard the transfer that created the section 952(c)(1)(A). Indeed, proposed 367(d) disqualified basis in its entirety. § 1.901(m)–5(b)(1) provides that basis Moreover, the Treasury Department and differences must be taken into account In general, section 367(d) provides the IRS have determined that under section 901(m) regardless of that if a U.S. person transfers intangible disregarding the transfer for all U.S. tax whether the deduction is deferred or property to a foreign corporation in an purposes is not appropriate because the disallowed for U.S. income tax exchange described in section 351 or property has in fact been transferred. In purposes. 361, the person is treated as having sold addition, disqualified basis in property Based on the foregoing, the Treasury the property in exchange for payments does not include basis resulting from Department and the IRS have contingent upon the productivity, use, ‘‘qualified gain,’’ which is gain from the determined that it is not appropriate to or disposition of such property. The transfer included by the transferor CFC disregard disqualified basis for purposes regulations under section 367(d) as effectively connected income or by a of section 901(m). However, in response provide that the deemed payment may U.S. shareholder as its pro rata share of to this comment, the final regulations be treated as an expense (whether or not subpart F income. See § 1.951A– permit taxpayers to make an election that amount is actually paid) of the 3(h)(2)(ii)(C)(3). Thus, the rule in pursuant to which the adjusted basis in transferee foreign corporation that is § 1.951A–2(c)(5) does not apply to basis each property with disqualified basis properly allocated and apportioned to created in connection with amounts that held by a CFC or a partnership is gross income subject to subpart F under

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the provisions of §§ 1.954–1(c) and the taxable year. See section 951A(b)(1) Thus, the statute, taking into account 1.861–8. See § 1.367(d)–1T(c)(2)(ii) and and § 1.951A–1(c)(1). A U.S. the footnote in the Conference Report, (e)(2)(ii). shareholder’s net DTIR is equal to 10 unambiguously provides that tested loss In response to comments, the final percent of its aggregate pro rata share of CFCs cannot have QBAI. Accordingly, regulations clarify that a deemed the QBAI of its CFCs. See section the final regulations retain the tested payment under section 367(d) is treated 951A(b)(2) and § 1.951A–1(c)(3). A loss QBAI exclusion. But cf. part VI.D of as an allowable deduction for purposes CFC’s QBAI is equal to its aggregate this Summary of Comments and of determining tested income and tested average adjusted basis in specified Explanation of Revisions section loss. See § 1.951A–2(c)(2)(ii). tangible property. See section 951A(1) regarding a reduction to tested interest Accordingly, consistent with the and proposed § 1.951A–3(b). Specified expense of a CFC for a ‘‘tested loss QBAI regulations under section 367(d), such tangible property is defined as tangible amount,’’ a new component in deemed payments may be allocated and property used in the production of computing specified interest expense. apportioned to gross tested income to tested income. See section One comment requested that, if the the extent provided under § 1.951A– 951A(d)(2)(A) and proposed § 1.951A– tested loss QBAI exclusion is retained, 2(c)(3). 3(c)(1). Consistent with the statute and proposed § 1.951A–3(b) and (c) should the Conference Report, the proposed be revised to clarify that the exclusion 3. Compute Tested Income in the Same regulations clarify that tangible property applies only for a CFC inclusion year Manner as E&P of a tested loss CFC is not used in the with respect to which a CFC is a tested A comment requested that the final production of tested income within the loss CFC. The final regulations do not regulations provide that tested income meaning of section 951A(d)(2)(A). See revise these provisions because it is and tested loss be determined under the Conference Report, at 642, fn. 1536. In sufficiently clear that the tested loss principles of section 964, which this regard, the proposed regulations QBAI exclusion rule applies only with provides rules for the calculation of E&P provide that tangible property of a respect to a CFC inclusion year of a CFC of foreign corporations. Another tested loss CFC is not specified tangible for which it is a tested loss CFC and that comment requested that the final property and thus a tested loss CFC’s a CFC is a tested loss CFC only for a regulations permit small CFCs to make QBAI is zero (the ‘‘tested loss QBAI CFC inclusion year in which the CFC an annual election to treat their tested exclusion’’). See proposed § 1.951A– does not have tested income. See income or tested loss for a CFC 3(b), (c)(1), and (g)(1). § 1.951A–2(b)(2). Comments recommended that the inclusion year to be equal to their E&P B. Determination of Depreciable final regulations eliminate the tested for such CFC inclusion year. Section Property 951A(c)(2) is clear that tested income or loss QBAI exclusion, such that a tested Section 951A(d)(1)(B) provides that tested loss for a CFC inclusion year is loss CFC could have specified tangible specified tangible property is taken into computed by subtracting properly property and therefore QBAI. One of the account in determining QBAI only if the allocable deductions from gross tested comments noted that the version of property is of a type with respect to income, and there is nothing in the section 951A in the House bill defined which a depreciation deduction is statute or legislative history that specified tangible property as any allowable under section 167. Similarly, indicates that tested income or tested tangible property to the extent such the proposed regulations define loss should be limited by, or otherwise property is used in the production of ‘‘specified tangible property’’ as tangible determined by reference to, E&P for tested income or tested loss. See H.R. 1, property used in the production of such year. Accordingly, these 115th Cong. § 4301(a) (2017). The tested income, and define ‘‘tangible recommendations are not adopted. comment posited that the text of the statute is ambiguous, the tested loss property’’ as property for which the 4. Effect of Losses in Other Categories of QBAI exclusion is otherwise depreciation deduction provided by Income inconsistent with section 951A, and the section 167(a) is eligible to be The proposed regulations provide that exclusion is not compelled by the determined under section 168 (even if allowable deductions are allocated and statute. The comment also asserted that the CFC has elected not to apply section apportioned to gross tested income this rule may be easily avoided by 168). See proposed § 1.951A–3(c)(1) and under the principles of section 954(b)(5) combining a tested loss CFC with a (2). A comment recommended that, for and § 1.954–1(c), by treating gross tested tested income CFC (including through purposes of determining QBAI, the final income within a single category (as an election under § 301.7701–3 to regulations take into account the entire defined in § 1.904–5(a)) as a single item change the classification of either entity adjusted basis in precious metals and of gross income, in addition to the items for U.S. tax purposes) because there is other similar tangible property that are in § 1.954–1(c)(1)(iii). See proposed no corollary to the tested loss QBAI used in the production of tested income, § 1.951A–2(c)(3). The final regulations exclusion for partnerships or even if only a portion of the adjusted clarify that losses in other categories of disregarded entities. The Treasury Department and the IRS basis in such property is depreciable in income (such as FBCI) cannot reduce reject this recommendation. The Senate calculating regular taxable income. The gross tested income, and that tested amendment to the House bill struck the comment suggested that if property is losses cannot reduce other categories of reference to ‘‘tested loss’’ in the depreciable in part, then the entire asset income. See § 1.951A–2(c)(3). definition of specified tangible property, is ‘‘of a type’’ with respect to which a V. Comments and Revisions to and the Conference Report explains that deduction is allowable under section Proposed § 1.951A–3—Qualified the term ‘‘used in the production of 167 within the meaning of section Business Asset Investment tested income’’ means that ‘‘[s]pecified 951A(d)(1)(B). tangible property does not include In defining QBAI, section 951A(d) A. Inability of Tested Loss CFCs To property used in the production of a distinguishes between depreciable Have QBAI tested loss, so that a CFC that has a tangible property and non-depreciable A U.S. shareholder’s GILTI inclusion tested loss in a taxable year does not tangible property, such as land. Section amount is equal to the excess of its net have QBAI for the taxable year.’’ See 951A(d) defines QBAI as specified CFC tested income over its net DTIR for Conference Report, at 642, fn.1536. tangible property ‘‘of a type’’ for which

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a deduction is allowable under section basis of the depreciable portion of the determined using cost depletion, rather 167. The proposed and final regulations metal generally should reflect the net than percentage depletion. interpret the phrase ‘‘of a type’’ present value of the expected returns Section 951A(d)(1)(B) limits property consistent with the interpretation of the generated by the metal. QBAI is a proxy taken into account in determining QBAI phrase ‘‘of a character’’ with respect to for the base upon which non- to tangible property of a type with section 168. See Rev. Rul. 2015–11, extraordinary, tangible returns should respect to which a deduction is 2015–21 I.R.B. 975. See § 1.951A–3(c)(2) be calculated. See S. Comm. on the allowable under section 167. Congress (defining tangible property as property Budget, Reconciliation did not extend the definition of QBAI to for which the depreciation deduction Recommendations Pursuant to H. Con. property of a type with respect to which provided by section 167(a) is eligible to Res. 71, S. Print No. 115–20, at 371 a deduction is allowed under section be determined under section 168 (with (2017) (‘‘Senate Explanation’’) (The 611 (the allowance of deduction for certain exclusions)). The Treasury provision approximates . . . tangible depletion). Although the comment Department and the IRS determined that income . . . as a 10-percent return on focused on the similarities between cost for consistency, the same standard for . . . the adjusted basis in tangible depletion and depreciation, there are determining whether property is depreciable property.’’). Therefore, only also similarities between cost depletion depreciable should apply for the depreciable portion of the precious of mineral properties and the determining whether property qualifies metal, which is associated with the acquisition cost of inventory. The as QBAI. tangible returns, should be taken into inventory cost of a severed mineral In Newark Morning Ledger Co. v. account in this measurement. Given that includes the cost depletion attributable United States, 507 U.S. 546 (1993), the liquid commodity markets exist for to the severed mineral. See section 263A Supreme Court provided that these precious metals, taxpayers could and § 1.263A–1(e)(3)(ii)(J). In essence, ‘‘[w]hether or not . . . a tangible asset, sell the future rights to the recoverable the acquisition cost of the mineral is depreciable for Federal income tax portion of the asset (thereby reducing property recovered through cost purposes depends upon the their economic outlay and exposure depletion is the inventory cost of the determination that the asset is actually with respect to the property). Cf. severed mineral, and QBAI does not exhausting, and that such exhaustion is Guardian Industries v. Commissioner, include inventory. Accordingly, the susceptible of measurement.’’ Newark 97 T.C. 308 (1991) (taxpayer regularly recommendation is not adopted. Morning Ledger Co. v. United States at sold silver waste from photographic 566. Although unrecoverable The proposed regulations define development process to refiners). Thus, ‘‘tangible property’’ as property for commodities used in a business are the depreciable portion of the asset depreciable, recoverable commodities which the depreciation deduction represents the taxpayer’s economic provided by section 167(a) is eligible to used in a business are not depreciable investment in generating tangible because they do not suffer from be determined under section 168 returns. Accordingly, the comment is without regard to section 168(f)(1), (2), exhaustion, wear and tear, or not adopted. obsolescence over a determinable useful or (5) and the date placed in service. See The comment also requested that in life. O’Shaughnessy v. Commissioner, proposed § 1.951A–3(c)(2). Section calculating the adjusted basis in 332 F.3d 1125 (8th Cir. 2003); Arkla, 168(k) increases the depreciation precious metals for QBAI purposes, the Inc. v. United States, 765 F.2d 487 (5th deduction allowed under section 167(a) final regulations provide that class lives Cir. 1985). The recoverable quantity of with respect to qualified property, a commodity used in the business applied to precious metals for purposes which includes tangible and certain suffers no change in its physical of the alternative depreciation system intangible property. The final characteristics or value as a result of its (‘‘ADS’’) are the same class lives regulations revise the definition of use in the business. The comment determined under the principles of Rev. tangible property in § 1.951A–3(c)(2) to seemed to imply that precious metals Rul. 2015–11, rather than the ADS class exclude certain intangible property to were a single unit of property that was lives of the equipment to which the which section 168(k) applies, namely, partially depreciable and partially non- precious metals attach. This computer software, qualified film or depreciable, rather than quantities of recommendation is not adopted because television productions, and qualified metal in separate categories of property, Rev. Rul. 2015–11 does not establish live theatrical productions described in one of which is depreciable. principles for determining class lives of section 168(k)(2)(A). The Treasury Department and the IRS the precious metals discussed therein, but rather addresses whether certain C. Determination of Basis Under have determined that it would not be Alternative Depreciation System appropriate for purposes of determining precious metals are depreciable under a CFC’s QBAI to take into account the the facts and circumstances described in For purposes of determining QBAI, CFC’s entire adjusted basis in an asset the ruling. the adjusted basis in specified tangible that is only partially depreciable. Taking One comment requested that all property is determined by using ADS into account basis that is not subject to expenditures paid or incurred with under section 168(g), and by allocating a depreciation allowance would respect to the acquisition, exploration, the depreciation deduction with respect overstate a CFC’s QBAI. For example, in and development of a mine or other to such property for the CFC inclusion the case of precious metals that are natural deposit should be taken into year ratably to each day during the partially depreciable, such as platinum account in determining QBAI. The period in the taxable year to which such used in a catalyst, a portion of the metal comment stated that such exploration depreciation relates. See section may be subject to exhaustion, wear and and development costs for mining 951A(d)(3) 3 and § 1.951A–3(e)(1). ADS tear, or obsolescence during its useful operations are ‘‘of a type’’ for which life. The remainder of the metal is depreciation is allowed, even though 3 As enacted, section 951A(d) contains two recoverable for reuse or sale. When the costs are recovered through paragraphs designated as paragraph (3). The section initially purchased, the value and tax depletion rather than depreciation. The 951A(d)(3) discussed in this part V.C of the Summary of Comments and Explanation of basis of the recoverable portion comment also recommended that the Revisions section relates to the determination of the generally should reflect the forward adjusted basis in a mine or other natural adjusted basis in property for purposes of price of such metal. The value and tax deposit included as QBAI should be calculating QBAI.

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applies to determine the adjusted basis warranted for CFCs that are not required of accounting used by the CFC for in property for purposes of determining to use ADS for purposes of computing purposes of determining its tested QBAI regardless of whether the property income and E&P. Accordingly, the final income and tested loss. See § 1.951A– was placed in service before the regulations provide that a CFC that is 3(e)(1). enactment of section 951A, or whether not required to use ADS for purposes of A change to ADS from another the basis in the property is determined computing income and E&P may elect, depreciation method for purposes of under another depreciation method for for purposes of calculating QBAI, to use computing tested income or tested loss other purposes of the Code. See section its non-ADS depreciation method to is a change in method of accounting 951A(d)(3) and § 1.951A–3(e)(2). In determine the adjusted basis in subject to section 446(e). The Treasury addition, for purposes of determining specified tangible property placed in Department and the IRS expect that income and E&P, a CFC is generally service before the first taxable year many CFCs that are not already using required to use ADS for depreciable beginning after December 22, 2017, ADS for purposes of computing income property used predominantly outside subject to a special rule related to and E&P will change their method of the United States. See section 168(g) salvage value. See § 1.951A–3(e)(3)(ii). accounting for depreciation to the and §§ 1.952–2(c)(2)(ii) and (iv) and The election also applies to the straight-line method, the applicable 1.964–1(a)(2). However, a CFC may determination of a CFC’s partner recovery period, or the applicable instead use for this purpose a adjusted basis under § 1.951A–3(g)(3) in convention under ADS to comply with depreciation method used for its books partnership specified tangible property § 1.952–2(c)(2)(iv) and § 1.964– of account regularly maintained for placed in service before the CFC’s first 1(c)(1)(iii)(c) and that most of such accounting to shareholders or a method taxable year beginning after December changes are already eligible for conforming to United States generally 22, 2017. See id. This transition rule automatic consent under Rev. Proc. accepted accounting principles (a ‘‘non- does not apply for purposes of 2015–13, 2015–5 I.R.B. 419. The ADS depreciation method’’) if the determining the foreign-derived Treasury Department and the IRS intend differences between ADS and the non- intangible income (‘‘FDII’’) of a to publish another revenue procedure ADS depreciation method are domestic corporation. Cf. section further expanding the availability of immaterial. See §§ 1.952–2(c)(2)(ii) and 250(b)(2)(B) (in calculating deemed automatic consent for depreciation (iv) and 1.964–1(a)(2). tangible income return for purposes of changes and updating the terms and A comment recommended that ADS FDII, QBAI is generally determined conditions in sections 7.07 and 7.09 of not be required under section 951A(d) under section 951A(d)). Rev. Proc. 2015–13 (related to the for specified tangible property placed in A comment requested that the final source, separate limitation service before the enactment of section regulations confirm that the use of ADS classification, and character of section 951A. This comment asserted that in determining the basis in specified 481(a) adjustments) to take into account section 951A(d)(3) does not compel the tangible property, whether placed in section 951A. After the change in conclusion that ADS must be used for service before or after the enactment of accounting method, the basis in assets placed in service before the section 951A, for purposes of specified tangible property will be the enactment of section 951A, and cited determining QBAI is not a change in correct basis for purposes of compliance concerns as a justification method of accounting or, if it is a determining income, E&P, and QBAI. for not requiring the use of ADS with change in method, that global approval The final regulations clarify the respect to such assets. Another under section 446(e) be given for such interaction between the daily proration comment recommended that the final a change. Another comment of depreciation rule in section regulations permit taxpayers to elect to recommended that a CFC switching to 951A(d)(3) and the applicable compute the adjusted basis in all ADS for property placed in service convention under ADS. Under section specified tangible property of a CFC— before the enactment of section 951A 951A(d)(3), the adjusted basis in not just specified tangible property should not be required to file Form 3115 property is determined by allocating the placed in service before the enactment to request an accounting method change depreciation deduction with respect to of section 951A—under the method that for depreciation, and that the property to each day during the period the CFC uses to compute its tested cumulative adjustment should be taken in the taxable year to which the income and tested loss, even if such into account for the adjusted basis in the depreciation relates. The half-year method is not ADS. specified tangible property as of the convention, mid-month convention, and Section 951A(d)(3) is clear that the CFC’s first day of the first year to which mid-quarter convention in section adjusted basis in specified tangible section 951A applies. 168(d) treat property as placed in property is determined using ADS The determination of the adjusted service (or disposed of) for purposes of under section 168(g), and therefore the basis in property under section 951A(d) section 168 at the midpoint of the final regulations do not adopt the is not a method of accounting subject to taxable year, month, or quarter, as recommendation to permit taxpayers an the consent requirement of section applicable, irrespective of when the election to compute the adjusted basis 446(e). As a result, a CFC does not need property was placed in service (or in all specified tangible property under the Commissioner’s consent to use ADS disposed of) during the taxable year. the CFC’s non-ADS depreciation for purposes of determining its adjusted The final regulations clarify that the method. However, recognizing the basis in specified tangible property in period in the CFC inclusion year to potential burden of re-determining the determining its QBAI. A CFC that uses which such depreciation relates is basis under ADS of all specified tangible ADS for purposes of determining QBAI determined without regard to the property held by a CFC placed in should determine the correct basis in applicable convention under section service before the enactment of section the property under ADS as of the CFC’s 168(d). See § 1.951A–3(e)(1). 951A, and given that a non-ADS first day of the first taxable year to Accordingly, in the year property is depreciation method is permissible only which section 951A applies and apply placed in service, the depreciation when there are immaterial differences section 951A(d)(3) accordingly. The deduction allowed for the taxable year between ADS and such other method, final regulations also clarify that the is prorated from the day the property is the Treasury Department and the IRS adjusted basis in property is determined actually placed in service, and, in the have determined that a transition rule is based on the cost capitalization methods year property is disposed of, the

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depreciation deduction allowed for the substantial uncertainty and controversy. the property for the entire taxable year. taxable year is prorated to the date of In addition, the Treasury Department In this regard, there is no ambiguity in disposition. Allocating depreciation to and the IRS have determined that the the language in the regulations, and each day during the period in which the rules under section 861 for allocating a therefore no need for additional property is used irrespective of the depreciation or amortization deduction clarification. applicable convention ensures that the attributable to property owned by a CFC The rules in § 1.951A–3 do not apply average of the aggregate adjusted basis to categories of income of the CFC in determining QBAI for purposes of as of the close of each quarter is represent a reliable and well-understood computing the deduction of a domestic properly adjusted to reflect the proxy for determining the type of corporation under section 250 for its depreciation allowed for the taxable income produced by the property, even FDII. See proposed § 1.250(b)–2 (REG– year. in circumstances where there is no 104464–18, 84 FR 8188 (March 6, 2019)) The Treasury Department and the IRS income that is ‘‘directly identifiable’’ for the QBAI rules related to the FDII continue to study issues related to the with the property. Accordingly, the final deduction. However, it is anticipated determination of QBAI for purposes of regulations provide that the dual use that, except as indicated in part V.D of section 951A. In particular, the Treasury ratio, with respect to tangible property this Summary of Comments and Department and the IRS are aware that for a CFC inclusion year, is the ratio Explanation of Revisions section with a CFC that is a partner in a foreign calculated as the sum of the amount of respect to the election to use a non-ADS partnership may have difficulty the depreciation deduction with respect depreciation method for assets placed in determining the basis in partnership to the property for the CFC inclusion service before the enactment of section property under ADS, particularly when year that is allocated and apportioned to 951A, revisions similar to the revisions the partnership is not controlled by U.S. gross tested income for the CFC to proposed § 1.951A–3 discussed in persons. Comments are requested on inclusion year under § 1.951A–2(c)(3) parts V.B through E of this Summary of methodologies for determining the basis and the depreciation with respect to the Comments and Explanation of Revisions in partnership property owned by a property capitalized to inventory or section will be made to proposed foreign partnership that is not other property held for sale, the gross § 1.250(b)–2. controlled directly or indirectly by U.S. income or loss from the sale of which E. Partnership QBAI persons. is taken into account in determining Section 951A(d)(3) 4 provides that, for tested income for the CFC inclusion D. Dual Use Property purposes of calculating QBAI, if a CFC year, divided by the sum of the total Section 951A(d)(2)(B) provides that if holds an interest in a partnership at the amount of the depreciation deduction property is used both in the production close of the CFC’s taxable year, the CFC with respect to the property for the CFC of tested income and income that is not takes into account its distributive share inclusion year and the total amount of tested income, the property is specified of the aggregate of the partnership’s depreciation with respect to the tangible property in the same proportion adjusted basis in depreciable tangible property capitalized to inventory or that the gross income described in property used in its trade or business other property held for sale, the gross section 951A(c)(1)(A) produced with that is used in the production of tested income or loss from the sale of which respect to such property bears to the income (determined with respect to the is taken into account for the CFC total gross income produced with CFC’s distributive share of income with inclusion year. See § 1.951A–3(d)(3). respect to such property. The proposed respect to such property). For this The dual use ratio also applies with regulations provide that if tangible purpose, a CFC’s distributive share of respect to partnership specified tangible property is used in both the production the adjusted basis in any property is the property, except, for this purpose, of gross tested income and other CFC’s distributive share of income with determined by reference to a tested income, the portion of the adjusted basis respect to such property. See section income CFC’s distributive share of the in the property treated as adjusted basis 951A(d)(3) (flush language). amounts described in the preceding in specified tangible property is The proposed regulations implement sentence. See § 1.951A–3(g)(3)(iii) and determined by multiplying the average the rule in section 951A(d)(3) by part V.E of this Summary of Comments of the adjusted basis in the property by providing that, if a tested income CFC and Explanation of Revisions section. the dual use ratio. See proposed holds an interest in one or more § 1.951A–3(d)(1). If the property A comment recommended that the partnerships as of the close of a CFC produces directly identifiable income final regulations clarify, through inclusion year, the QBAI of the tested for a CFC inclusion year, the dual use additional examples, that the method income CFC for the CFC inclusion year ratio is the ratio of the gross tested for determining the dual use ratio with is increased by the sum of the tested income produced by the property to the respect to specified tangible property income CFC’s partnership QBAI with total amount of gross income produced does not change if (i) the dual use respect to each partnership for the CFC by the property. See proposed § 1.951A– property becomes or ceases to be inclusion year. See proposed § 1.951A– 3(d)(2)(i). In all other cases, the dual use specified tangible property during the 3(g)(1). A tested income CFC’s ratio is the ratio of the gross tested year, or (ii) the dual use property gives partnership QBAI with respect to a income of the tested income CFC to the rise to increasing or decreasing gross partnership is the sum of the tested total amount of gross income of the tested income across quarters in a income CFC’s share of the partnership’s tested income CFC. See proposed taxable year. The Treasury Department adjusted basis in partnership specified § 1.951A–3(d)(2)(ii). and the IRS have determined that tangible property as of the close of a Under the proposed regulations, the additional examples are unnecessary. partnership taxable year that ends with dual use ratio requires a determination As the comment suggests, the dual use of whether and how much gross income ratio is not determined on the basis of 4 As enacted, section 951A(d) contains two is ‘‘directly identifiable’’ with particular the type and amount of gross income paragraphs designated as paragraph (3). The section specified tangible property. The produced by the property as of any 951A(d)(3) discussed in this part V.E of the Summary of Comments and Explanation of Treasury Department and the IRS particular quarter close, but rather is Revisions section relates to tangible property held recognize that application of the directly determined based on the type and the by a partnership taken into account in calculating identifiable standard could result in amount of gross income produced by the QBAI of a CFC partner.

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or within a CFC inclusion year. See QBAI—is generally, in the case of determine the proportionate share ratio proposed § 1.951A–3(g)(2)(i). A tested partnership specified tangible property with respect to partnership specified income CFC’s share of the partnership’s used in the production of only gross tangible property also by reference to adjusted basis in partnership specified tested income (‘‘sole use partnership the depreciation with respect to the tangible property is determined by property’’), the tested income CFC’s property, rather than the directly multiplying the partnership’s adjusted proportionate share of the partnership’s identifiable income attributable to the basis in the property by the tested adjusted basis in the property for the property or the gross income of the income CFC’s partnership QBAI ratio partnership taxable year. See § 1.951A– partner. See § 1.951A–3(g)(4)(ii). with respect to the property. See id. 3(g)(3)(ii). A tested income CFC’s A comment requested clarification Similar to the rule for dual use property, partner adjusted basis with respect to that the partnership QBAI ratio in the under the proposed regulations, the partnership specified tangible property proposed regulations, which references tested income CFC’s partnership QBAI used in the production of gross tested the amount of ‘‘gross income’’ produced ratio with respect to partnership income and gross income that is not by the property, is determined by specified tangible property depends on gross tested income (‘‘dual use reference to ‘‘gross taxable income,’’ whether the property produces directly partnership property’’) is generally the rather than gross section 704(b) income. identifiable income. In the case of tested income CFC’s proportionate share The comment also recommended that if partnership specified tangible property of the partnership’s adjusted basis in the the partnership QBAI ratio is that produces directly identifiable property for the partnership taxable determined by reference to a income for a partnership taxable year, a year, multiplied by the tested income partnership’s gross taxable income, that tested income CFC’s partnership QBAI CFC’s dual use ratio with respect to the section 704(c) allocations (including ratio with respect to the property is the property (determined by reference to the items of income under the remedial tested income CFC’s distributive share tested income CFC’s distributive share method) be taken into account in of the gross income produced by the of amounts described in § 1.951A– determining the CFC’s distributive share property for the partnership taxable year 3(d)(3)). See § 1.951A–3(g)(3)(iii). In of the gross income produced by the that is included in the gross tested either case, a tested income CFC’s property for the partnership taxable income of the tested income CFC for the proportionate share of the partnership’s year. The specific comment regarding CFC inclusion year to the total gross adjusted basis in partnership specified the calculation of gross income income produced by the property for the tangible property is the partnership’s produced by property has been mooted partnership taxable year. See proposed adjusted basis in the property for the by the change to determining the dual § 1.951A–3(g)(2)(ii)(A). In the case of partnership taxable year multiplied by use and proportionate share ratios by partnership specified tangible property the tested income CFC’s proportionate reference to the depreciation with that does not produce directly share ratio with respect to the property respect to the property. However, the identifiable income for a partnership for the partnership taxable year. comment remains relevant to the calculation of the depreciation with taxable year, a tested income CFC’s As discussed in part V.D of this partnership QBAI ratio with respect to respect to property for purposes of Summary of Comments and Explanation determining the dual use ratio and the property is the tested income CFC’s of Revisions section, a rule that distributive share of the gross income of proportionate share ratio. determines adjusted basis in specified For purposes of the proportionate the partnership for the partnership tangible property taken into account in share ratio, the final regulations do not taxable year that is included in the gross determining QBAI by reference to the adopt this recommendation. Section tested income of the tested income CFC ‘‘directly identifiable income’’ 704(b) income represents a partner’s for the CFC inclusion year to the total attributable to such property would lead economic interest in the partnership amount of gross income of the to substantial uncertainty and and therefore more closely aligns with partnership for the partnership taxable controversy, whereas the rules under the economic production of income year. See proposed § 1.951A– section 861 for allocating and from partnership property that QBAI is 3(g)(2)(ii)(B). apportioning depreciation attributable intended to measure. Accordingly, the The partnership QBAI ratio in the to property owned by a CFC to final regulations clarify that the proposed regulations is effectively an categories of income represent a proportionate share ratio is determined amalgamation of two ratios—a ratio that longstanding proxy for determining the by reference to the amount of describes the portion of the partnership types of income produced by the depreciation with respect to property specified tangible property that is used property. For this reason, the final (and a tested income CFC’s distributive in the production of gross tested income regulations determine the dual use ratio share of such amount) determined (that is, the dual use ratio) and a ratio by reference to the amount of under section 704(b). See § 1.951A– that describes a tested income CFC’s depreciation deductions allocated to 3(g)(4)(i). Therefore, items determined proportionate interest in all the income gross tested income under § 1.951A– under section 704(c) are not taken into produced by the property. The final 2(c)(3). Similarly, the Treasury account for purposes of determining a regulations disaggregate the partnership Department and the IRS have tested income CFC’s partner adjusted QBAI ratio into these two ratios—the determined that calculating partnership basis in partnership specified tangible dual use ratio (as defined in § 1.951A– QBAI by reference to the ‘‘directly property held by a partnership and thus 3(d)(3)) and a new proportionate share identifiable income’’ produced by the tested income CFC’s partnership ratio (as defined in § 1.951A–3(g)(4)(ii)). partnership specified tangible property QBAI with respect to the partnership. Accordingly, the final regulations would lead to substantial uncertainty However, because the dual use ratio is provide that a tested income CFC’s and controversy, and that a partner’s determined by reference to the ‘‘partner adjusted basis’’ with respect to share of a depreciation deduction with allocation and apportionment of partnership specified tangible respect to partnership specified tangible depreciation deductions to gross tested property—that is, the adjusted basis in property is a reliable proxy for income of a tested income CFC, and partnership specified tangible property determining a CFC’s distributive share thus is based on a taxable income taken into account in determining the of income with respect to such property. concept, items determined under tested income CFC’s partnership Accordingly, the final regulations section 704(c) are taken into account for

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purposes of determining the dual use the proposed regulations have a rule specified tangible property would, but ratio. that would allow a tested income CFC for the temporary ownership rule, The proposed regulations provide that to increase its QBAI for its share of reduce the GILTI inclusion amount of a partnership QBAI is the sum of the partnership QBAI if the tested income U.S. shareholder, then the property is tested income CFC’s share of the CFC owned the partnership interest for ‘‘per se’’ treated as temporarily held and partnership’s adjusted basis in part of the year but not at the close of acquired with a principal purpose of partnership specified tangible property. the CFC taxable year. However, a reducing the GILTI inclusion amount of See proposed § 1.951A–3(g)(2)(i). A partner that disposes of its entire a U.S. shareholder if the tested income comment recommended that the final partnership interest before the close of CFC holds the property for less than a regulations clarify that the adjusted the CFC taxable year could have a 12-month period that includes at least basis in partnership specified tangible distributive share of partnership income the close of one quarter during its property includes any basis adjustment if the partnership taxable year closes taxable year (the ‘‘12-month per se under section 743(b). In response to this before the close of the CFC taxable year, rule’’). See id. Therefore, the specified comment, the final regulations clarify including by reason of the disposition tangible property is disregarded under that an adjustment under section 743(b) itself. See section 706(c)(2)(A) (taxable the proposed regulations for purposes of to the adjusted basis in partnership year of partnership closes with respect determining QBAI. specified tangible property with respect to partner whose entire interest Although some comments supported to a tested income CFC is taken into terminates, including by reason of a the temporary ownership rule and, in account in determining the tested disposition). particular, stated that the principal income CFC’s partner adjusted basis in The Treasury Department and the IRS purpose standard was a reasonable the partnership specified tangible agree that a partner that has a interpretation of section 951A(d)(4), property. See § 1.951A–3(g)(3) and (7). distributive share of income from a many comments asserted that it was In addition, to ensure that the adjusted partnership should also be permitted overbroad. Comments expressed basis in property other than tangible partnership QBAI with respect to the particular concern with the scope of the property is not inappropriately shifted partnership. Therefore, the final 12-month per se rule, noting for to tangible property for purposes of regulations are revised to provide that a example that it could (i) apply to determining QBAI, the final regulations partner need only hold an interest in a transactions not motivated by tax provide that basis adjustments to partnership during the CFC inclusion avoidance such as ordinary course partnership specified tangible property year to have partnership QBAI with transactions, (ii) require burdensome under section 734(b) are taken into respect to the partnership. See asset-level tracking of CFC property, and account only if they are basis § 1.951A–3(g)(1). The final regulations (iii) lead to uncertain return filing adjustments under section 734(b)(1)(B) also provide that section 706(d) applies positions or financial accounting or 734(b)(2)(B) attributable to to determine a tested income CFC’s volatility if property acquired by a CFC distributions of tangible property or partner adjusted basis in partnership has not yet been held for 12 months basis adjustments under section specified tangible property owned by a when a U.S. shareholder files its return 734(b)(1)(A) or 734(b)(2)(A) by reason of partnership if there is a change in the or publishes a financial statement. gain or loss recognized by a distributee tested income CFC’s interest in the Comments suggested various ways to partner under section 731(a). See partnership during the CFC inclusion minimize the scope of the temporary § 1.951A–3(g)(6). year. See § 1.951A–3(g)(3)(i). ownership rule, including (i) A comment also requested that the eliminating the 12-month per se rule; final regulations clarify that a CFC’s F. Disregard of Basis in Specified (ii) converting the 12-month per se rule QBAI is increased not only for Tangible Property Held Temporarily into a rebuttable presumption; (iii) partnership specified tangible property Section 951A(d)(4) authorizes the providing an exception for property owned by partnerships in which the issuance of regulations or other transferred among related CFCs owned CFC is a direct partner, but also for guidance that the Secretary determines by a U.S. shareholder when there is no lower-tier partnerships in which the are appropriate to prevent the avoidance decrease in that shareholder’s GILTI CFC indirectly owns an interest through of the purposes of section 951A(d), inclusion amount (for this purpose, one or more upper-tier partnerships. including regulations or other guidance treating a consolidated group as a single The final regulations make this which provide for the treatment of entity); (iv) providing that, for purposes clarification. See § 1.951A–3(g)(1). property that is transferred, or held, of applying the 12-month per se rule, a Finally, a comment suggested that, temporarily. The proposed regulations CFC’s holding period in property under section 951A(d)(3) and the provide that if a tested income CFC received in a nonrecognition transaction proposed regulations, a disposition of a (‘‘acquiring CFC’’) acquires specified include a tacked holding period under partnership interest by a tested income tangible property with a principal section 1223(2); (v) providing de CFC could result in the CFC including purpose of reducing the GILTI inclusion minimis or ordinary course transaction its distributive share of partnership amount of a U.S. shareholder for any exceptions; (vi) excepting acquisitions income in its gross tested income, but U.S. shareholder inclusion year, and the of property that result in effectively not taking into account any of the tested income CFC holds the property connected income or subpart F income partnership’s basis in partnership temporarily but over at least the close of to the transferor; (vii) tailoring the rule’s specified tangible property for purposes one quarter, the specified tangible application depending on whether of calculating the CFC’s QBAI. Under property is disregarded in determining property is acquired from or transferred section 951A(d)(3) and proposed the acquiring CFC’s average adjusted to unrelated parties; and (viii) § 1.951A–3(g)(1), if a CFC holds an basis in specified tangible property for establishing a period of ownership that interest in a partnership at the close of purposes of determining the acquiring will not be considered temporary. the taxable year of the CFC, the CFC CFC’s QBAI for any CFC inclusion year In response to the comments, the takes into account its share of a during which the tested income CFC Treasury Department and the IRS have partnership’s adjusted basis in certain held the property (the ‘‘temporary determined that it is appropriate to tangible property for QBAI purposes. ownership rule’’). See proposed narrow the scope of the temporary However, neither section 951A(d)(3) nor § 1.951A–3(h)(1). If an acquisition of ownership rule, and that the following

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changes strike the appropriate balance disclosing that it rebuts the The final regulations do not adopt the between mitigating the compliance presumption. See id. In response to a comments requesting a de minimis or burden and identifying transactions that comment, the final regulations include ordinary course transaction exception. have the potential to avoid the purposes a second presumption that generally The Treasury Department and the IRS of section 951A(d). First, the final provides that property is presumed not have determined that these types of regulations make certain technical to be subject to the temporary exceptions are unnecessary due to the changes that are intended to refine and ownership rule if held for more than 36 narrowed and refined scope of the rule clarify the application of the temporary months. See § 1.951A–3(h)(1)(iv)(B). in the final regulations, including as a ownership rule. For example, the rule The final regulations clarify that the result of converting the 12-month per se applies, in part, based on a principal adjusted basis in property may be rule into a rebuttable presumption, purpose of increasing the DTIR of a U.S. disregarded under the rule for multiple adding the safe harbor, and illustrating shareholder (‘‘applicable U.S. quarter closes. See § 1.951A–3(h)(1)(ii). certain transactions that are targeted by shareholder’’) and, for this purpose, However, in the case that the temporary the rule through new examples. certain related U.S. persons are treated holding results in the property being Moreover, because the rule is limited to as a single applicable U.S. shareholder. taken into account for only one the temporary holding of depreciable See § 1.951A–3(h)(1)(i) and (vi). Further, additional quarter close of a tested property used in a CFC’s trade or in response to comments, the final income CFC in determining the DTIR of business (that is, specified tangible regulations clarify that property held a U.S. shareholder inclusion year, the property), the Treasury Department and temporarily over a quarter close is adjusted basis in the property is the IRS do not anticipate that many subject to the temporary ownership rule disregarded under this rule only as of such assets will be acquired and only if the holding of the property over the first tested quarter close that follows disposed of in the ‘‘ordinary course’’ of the quarter close would, without regard the acquisition. See id.; see also a CFC’s business, however that standard to the temporary ownership rule, § 1.951A–3(h)(1)(vii)(C) (Example 2) is defined. increase the DTIR of an applicable U.S. (disregarding the adjusted basis in Finally, the final regulations do not shareholder for its taxable year. See specified tangible property for a single adopt the comment requesting an § 1.951A–3(h)(1)(i). quarter due to differences in CFC exception for acquisitions of property The final regulations also clarify that taxable years). This rule ensures that the that result in effectively connected a CFC’s holding period for purposes of adjusted basis in property is not income or subpart F income to the this rule does not include the holding inappropriately disregarded in excess of transferor. The Treasury Department period for which the property was held the amount necessary to eliminate the and the IRS have concluded that, unlike by any other person under section 1223. increase in the DTIR of the applicable the rule that addresses disqualified basis See § 1.951A–3(h)(1)(v). The final U.S. shareholder by reason of the in § 1.951A–2(c)(5) and § 1.951A– regulations do not adopt the request to temporary holding. 3(h)(2), the treatment of gain recognized permit a tacking of holding periods for The final regulations also include a by the transferor (if any) is not relevant purpose of the temporary ownership safe harbor for certain transfers for purposes of determining whether it rule, because temporary acquisitions of involving CFCs. See § 1.951A– is appropriate to take into account property through nonrecognition 3(h)(1)(iii). Under the safe harbor, the specified tangible property held transactions, particularly between holding of property as of a tested quarter temporarily for purposes of determining related parties, can artificially increase close is not treated as increasing the QBAI. Nothing in section 951A(d)(4) or a U.S. shareholder’s DTIR by, for DTIR if certain conditions are satisfied. the legislative history suggests that instance, causing the property to be In general, the safe harbor applies to transfers of property that result in taken into account for an additional transfers between CFCs that are owned income or gain that is subject to U.S. tax quarter close for purposes of calculating in the same proportion by the U.S. should be exempt from the rule. Indeed, QBAI. shareholder, have the same taxable the policy concern underlying this The final regulations also modify the years, and are all tested income CFCs. rule—the temporary holding of 12-month per se rule to make it a The safe harbor is intended to exempt specified tangible property with a presumption rather than a per se rule. non-tax motivated transfers from the principal purpose of increasing the Therefore, under the final regulations rule when the temporary holding of the DTIR of a U.S. shareholder—is present the temporary ownership rule is property does not have the potential for regardless of whether the basis in the presumed to apply only if property is increasing the DTIR of an applicable specified tangible property reflects gain held for less than 12 months. See U.S. shareholder. The addition of the that is subject to U.S. tax. § 1.951A–3(h)(1)(iv)(A). This safe harbor responds to the comment presumption may be rebutted if the facts requesting that the rule be tailored G. Determination of Disqualified Basis and circumstances clearly establish that depending on whether the transfers The determination of disqualified the subsequent transfer of the property involve related or unrelated parties. basis is relevant for purposes of both the was not contemplated when the In addition, in response to comments, rule in § 1.951A–2(c)(5) (allocating property was acquired by the acquiring the final regulations include four new deductions attributable to disqualified CFC and that a principal purpose of the examples to illustrate the application of basis to residual CFC gross income) and acquisition of the property was not to the rule. See § 1.951A–3(h)(1)(vii). The the rule in § 1.951A–3(h)(2) increase the DTIR of the applicable U.S. examples identify a transaction that is (disregarding disqualified basis for shareholder. See id. As a result of this not subject to the rule due to the purposes of calculating QBAI). This part change, a taxpayer generally will know application of the safe harbor, and three V.G of the Summary of Comments and when it files its return whether the transactions that are subject to the rule, Explanation of Revisions section temporary ownership rule will apply. In including transfers of property between describes comments and revisions order to rebut the presumption, a CFCs that have different taxable years, related to the computation of taxpayer must attach a statement to the and an acquisition of property by a disqualified basis both for purposes of Form 5471 filed with the taxpayer’s tested income CFC from a tested loss § 1.951A–2(c)(5) and § 1.951A–3(h)(2). return for the taxable year of the CFC in CFC, which cannot have QBAI pursuant For other comments and revisions which the subsequent transfer occurs to § 1.951A–3(b) and (c)(1). related to the computation of

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disqualified basis discussed in the basis other than disqualified basis is income. Depreciation or amortization context of the application of § 1.951A– reduced or eliminated, then the that is allocated and apportioned to 2(c)(5), see part IV.E.3 and 4 of this disqualified basis in the property is residual CFC gross income continues to Summary of Comments and Explanation reduced or eliminated in the same reduce the adjusted basis in the of Revisions section. proportion that the disqualified basis property in accordance with section As described in part IV.E.1 of this bears to the total adjusted basis in the 1016(a)(2). Accordingly, clarification Summary of Comments and Explanation property. See proposed § 1.951A– that any depreciation or amortization of Revisions section, the proposed 3(h)(2)(ii)(A). The final regulations attributable to disqualified basis in regulations define ‘‘disqualified basis’’ adopt this rule without substantial property reduces adjusted basis in the in property as the excess of the modification, except that the final property is unnecessary. property’s adjusted basis immediately regulations provide a special rule where Disqualified basis in property is after a disqualified transfer, over the a loss is recognized on a taxable sale or generally an attribute specific to the sum of the property’s adjusted basis exchange. See §§ 1.951A–2(c)(5)(ii) and property itself, rather than an attribute immediately before the disqualified 1.951A–3(h)(2)(ii)(B)(1)(i). In the case of of a CFC or a U.S. shareholder with transfer and the qualified gain amount a loss recognized on a taxable sale or respect to the property. The final with respect to the disqualified transfer. exchange of the property, the loss is regulations, however, provide rules to See proposed § 1.951A–3(h)(2)(ii)(A). In treated as attributable to disqualified treat basis in other property as addition, the proposed regulations basis to the extent thereof. See id. disqualified basis if such basis was define ‘‘disqualified transfer’’ as a Therefore, to the extent of the determined, in whole or in part, by transfer of property by a transferor CFC disqualified basis, the loss on the sale is reference to the basis in property with during a transferor CFC’s disqualified allocated to residual CFC gross income disqualified basis. See § 1.951A– period to a related person in which gain and the disqualified basis in the 3(h)(2)(ii)(B)(2). These rules are was recognized, in whole or in part. See property is reduced. intended to prevent taxpayers from proposed § 1.951A–3(h)(2)(ii)(C). One A comment noted that the proposed eliminating disqualified basis in comment recommended that the regulations do not specify when the nonrecognition transactions that would definition of disqualified transfer not be proportion of the disqualified basis to otherwise have the effect of granting expanded to include transfers of the total adjusted basis in the property taxpayers the benefit of the disqualified property to unrelated persons. The final is determined for purposes of basis. This could occur, for example, if regulations do not modify the definition determining the reduction to property with disqualified basis is of disqualified transfer, and therefore disqualified basis. The comment transferred in a nonrecognition the term continues to be limited to recommended that the Treasury transaction, such as a like-kind transfers of property by a CFC to a Department and the IRS clarify that this exchange under section 1031, in related person. See § 1.951A– proportion is determined immediately exchange for other depreciable property. 3(h)(2)(ii)(C)(2). after the disqualified transfer and does In that case, a portion of the basis in the A comment noted that the proposed not change throughout the useful life of newly acquired property is treated as regulations do not explain whether the the property absent a subsequent disqualified basis. Also, disqualified computation of disqualified basis in disqualified transfer. The final basis may be duplicated through certain property takes into account basis regulations do not adopt this nonrecognition transactions. For adjustments under section 743(b) or recommendation, because the example, if property with disqualified section 734(b) allocated to that property proportion of disqualified basis to total basis is transferred in a section 351 under section 755 during the adjusted basis in property can change by exchange, both the stock received by the disqualified period. The final reason of one or more transactions transferor and the property received by regulations clarify that adjustments subsequent to a disqualified transfer. the transferee will have disqualified under sections 732(d), 734(b), and For instance, a loss recognized on a basis, in each case determined by 743(b) can create, increase, or reduce taxable sale of property with reference to the disqualified basis in the disqualified basis in property. See disqualified basis and adjusted basis property in the hands of the transferor § 1.951A–3(h)(2)(ii)(A) and (B). other than disqualified basis, which immediately before the transaction. See The proposed regulations provide that reduces disqualified basis to the extent § 1.951A–3(h)(2)(ii)(B)(2)(ii). The final disqualified basis may be reduced or of the loss under § 1.951A– regulations also provide that basis eliminated through depreciation, 3(h)(2)(ii)(B)(1)(i), will have the effect of arising from other transactions, such as amortization, sales or exchanges, section decreasing the proportion of distributions of property from a 362(e), and other methods. See disqualified basis to total adjusted basis. partnership to a partner, can create proposed § 1.951A–3(h)(2)(ii)(A). The See, generally, 1.951A–3(h)(2)(ii)(B) and disqualified basis in property to the final regulations clarify the this part V.G of the Summary of extent the transaction has the effect of circumstances under which disqualified Comments and Explanation of Revisions shifting disqualified basis from one basis is reduced. Specifically, the final for additional adjustments to property to another. See § 1.951A– regulations provide that disqualified disqualified basis. 3(h)(2)(ii)(B)(2)(i). This might occur, for basis in property is reduced to the A comment recommended that the example, if low-basis property is extent that a deduction or loss Treasury Department and the IRS clarify distributed in liquidation of a high-basis attributable to the disqualified basis in that depreciation or amortization that is partner under section 732(b) resulting in the property is taken into account in disregarded for purposes of determining a decrease to disqualified basis in other reducing gross income, including any tested income or tested loss under partnership property under section deduction or loss allocated to residual proposed § 1.951A–2(c)(5) nonetheless 734(b)(2)(B). See § 1.951A–3(h)(2)(iii)(D) CFC gross income by reason of the rule reduces the adjusted basis in the Example 4. in § 1.951A–2(c)(5). See § 1.951A– property. The final regulations do not The final regulations also clarify how 3(h)(2)(ii)(B)(1)(i). disregard a deduction or loss disqualified basis is disregarded under The proposed regulations provide attributable to disqualified basis, but § 1.951A–3(h)(2)(i) in the case of dual that, if the adjusted basis in property rather allocate and apportion such use property and partnership specified with disqualified basis and adjusted deduction or loss to residual CFC gross tangible property for purposes of

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determining QBAI and partnership interest expense is potentially more expense’’ is defined in the proposed QBAI, respectively. The portion of the favorable to taxpayers than permitted by regulations as interest expense paid or adjusted basis in dual use property with the statute because it provides that accrued by a CFC that is taken into disqualified basis that is taken into specified interest expense is reduced by account in determining the tested account for determining QBAI is the all interest income included in the income or tested loss of the CFC, average adjusted basis in the property, tested income of the U.S. shareholder reduced by the qualified interest multiplied by the dual use ratio, and (subject to certain exceptions), even if expense of the CFC. See proposed then reduced by the disqualified basis earned from unrelated parties. § 1.951A–4(b)(1)(i). For this purpose, in the property. See § 1.951A– The Treasury Department and the IRS ‘‘interest expense’’ is defined as any 3(h)(2)(i)(B); see also § 1.951A–3(d)(4) have determined that the netting expense or loss treated as interest Example. For purposes of determining approach appropriately balances expense under the Code or regulations, partnership QBAI, a CFC’s partner administrability concerns with the and any other expense or loss incurred adjusted basis with respect to purpose and language of section in a transaction or series of integrated or partnership specified tangible property 951A(b)(2)(B). As discussed in the related transactions in which the use of with disqualified basis is first preamble to the proposed regulations, funds is secured for a period of time if determined under the general rules of the netting approach avoids the such expense or loss is predominantly § 1.951A–3(g)(3)(i) and then reduced by complexity related to a tracing incurred in consideration of the time the partner’s share of the disqualified approach, under which a U.S. value of money. See proposed § 1.951A– basis in the property. See § 1.951A– shareholder’s pro rata share of each item 4(b)(1)(ii). The proposed regulations 3(h)(2)(i)(C). In either case, the of interest expense of a CFC would have include similar definitions for ‘‘tested allocation and apportionment rules of to be matched to the shareholder’s pro interest income’’ and ‘‘interest income.’’ § 1.951A–2(c)(5) are not taken into rata share of the interest income See proposed § 1.951A–4(b)(2)(i) and account for purposes of applying the attributable to such interest expense (ii). dual use ratio and the proportionate received by a CFC. Furthermore, the One comment asserted that the share ratio to determine the amount of amount of specified interest expense concepts of ‘‘predominantly incurred in the adjusted basis in property that is should, in most cases, be the same consideration of the time value of reduced by the disqualified basis. See whether determined under a netting money’’ and ‘‘predominantly derived § 1.951A–3(h)(2)(i)(B) and (C). approach or under a tracing approach. from consideration of the time value of The Treasury Department and the IRS In this regard, while the netting money’’ are new and unclear, and lack request comments on the application of approach does not require a factual link analogies in other authorities. The the rules that reduce or increase between the interest income and interest comment also stated that this new disqualified basis including, for expense, only interest income included standard is further complicated by example, how the rules should apply in in gross tested income, other than references to ‘‘a transaction or series of an exchange under section 1031 where income included by reason of section integrated or related transactions.’’ property with disqualified basis is 954(h) or (i) (that is, ‘‘qualified interest Other comments asserted that creating a exchanged for property with no income’’), is taken into account for this new standard for interest expense and disqualified basis. purpose. Because interest income is interest income specifically for specified generally FPHCI under section interest expense would result in VI. Comments and Revisions to 954(c)(1)(A) and qualified interest additional confusion and complexity. Proposed § 1.951A–4—Tested Interest income is not taken into account under Another comment questioned the Expense and Tested Interest Income the netting approach, interest income inclusion of interest equivalents in the A. Determination of Specified Interest taken into account under the netting definition of interest in the proposed Expense Under Netting Approach approach is generally limited to interest regulations and noted that, because the income that is excluded from subpart F definition covers both interest income Section 951A(b)(2)(B) reduces net income by reason of section 954(c)(3) or and interest expense, there is a DTIR of a U.S. shareholder by interest (6). Furthermore, because the exceptions particular risk of whipsaw to the expense that reduces tested income (or under section 954(c)(3) and (6) apply government unless the authority for the increases tested loss) for the taxable year only to interest income paid or accrued regulations is clear. Some comments of the shareholder to the extent the by related party foreign corporations, recommended that the final regulations interest income attributable to such both the interest income excluded by replace the definitions of interest expense is not taken into account in reason of section 954(c)(3) or (6) and the expense and interest income in the determining such shareholder’s net CFC interest expense attributable to such proposed regulations with references to tested income. The proposed regulations interest income will generally be taken interest expense or interest income adopt a netting approach to determine into account in determining the net CFC under any provision of the Code or the amount of interest expense of a U.S. tested income of either the same U.S. regulations, or as a consequence of shareholder described in section shareholder or a related U.S. issuing or holding an instrument that is 951A(b)(2)(B) (‘‘specified interest shareholder. Accordingly, the final treated as indebtedness for Federal expense’’), defining such amount as the regulations retain the netting approach income tax purposes, such as excess of such shareholder’s pro rata for determining specified interest instruments characterized as share of ‘‘tested interest expense’’ of expense, with certain modifications indebtedness under judicial factors or each CFC over its pro rata share of described in part VI.B through D of this administrative guidance, or payments ‘‘tested interest income’’ of each CFC. Summary of Comments and Explanation ‘‘equivalent to interest.’’ See proposed § 1.951A–1(c)(3)(iii). of Revisions section. See § 1.951A– The Treasury Department and the IRS Several comments agreed with the 1(c)(3)(iii). did not intend to create a new standard adoption of the netting approach, of interest solely for purposes of principally on the grounds of B. Definition of Tested Interest Expense determining specified interest expense. administrability and policy. However, and Tested Interest Income In this regard, the reduction of net DTIR one comment noted that the netting For purposes of determining specified by specified interest expense under approach for determining specified interest expense, ‘‘tested interest section 951A(b)(2)(B) and the limitation

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on business interest under section 163(j) C. Determination of Qualified Interest approach effectively treats all interest are meant to achieve similar policy Expense and Qualified Interest Income expense of a qualified CFC as goals, namely preventing certain interest The proposed regulations provide attributable ratably to the assets of the expense in excess of interest income that, for purposes of determining the qualified CFC that give rise to income from being taken into account in specified interest expense of a U.S. excluded from FPHCI by reason of determining taxable income. Further, shareholder, the tested interest expense section 954(h) and (i), but then traces because the amount of interest expense and tested interest income of a such interest expense, after attribution subject to each of these provisions is ‘‘qualified CFC’’ are reduced by its to such assets, to any interest income determined, in part, by reference to ‘‘qualified interest expense’’ and received from related CFCs to the extent interest income received, each of these ‘‘qualified interest income,’’ thereof. A comment indicated that the two- provisions need clear and consistent respectively. See proposed § 1.951A– step approach in the proposed definitions of both interest expense and 4(b)(1) and (2). The reduction for regulations can understate the amount interest income, including when and to qualified interest expense and qualified of qualified interest expense. what extent transactions that result in a interest income is intended to neutralize Specifically, the comment noted that the financing from an economic perspective the effect of interest expense and proposed regulations include related may be treated as generating interest interest income attributable to the active party receivables in the denominator of expense and interest income. Finally, conduct of a financing or insurance the fraction under the first step, thus the relevant terms used in each business on a U.S. shareholder’s net diluting the fraction and resulting in provision—‘‘interest expense’’ and DTIR. For example, absent the rule for less qualified interest expense, and then ‘‘interest income’’ in section qualified interest expense, the third- interest income from such receivables 951A(b)(2)(B) and ‘‘business interest’’ party interest expense of a captive further reduce qualified interest expense and ‘‘business interest income’’ in finance company—to the extent its dollar-for-dollar under the second step. section 163(j)—do not differ interest expense exceeds its interest The comment recommended that, to meaningfully in their respective income—could inappropriately increase avoid double counting, related party contexts and therefore do not specified interest expense (and thus receivables should be excluded from the necessitate different definitions. As a reduce the net DTIR) of its U.S. fraction in the first step. result of the foregoing, and in order to shareholder. Alternatively, under a The Treasury Department and the IRS reduce administrative complexity, the netting approach to calculating agree with the comment that, under the Treasury Department and the IRS have specified interest expense, the third- two-step approach to the proposed determined that taxpayers and the party interest income of a captive regulations, related party receivables are government would benefit from the finance company—to the extent its effectively double-counted, and application of a single definition of interest income exceeds interest therefore the final regulations eliminate interest for both section 951A(b)(2)(B) expense—could inappropriately reduce the second step reduction for interest and section 163(j) (rather than the the specified interest expense (and thus income included in the gross tested application of two partially overlapping, increase the net DTIR) of its U.S. income of a qualified CFC that is but ultimately different standards). shareholder. excluded from FPHCI by reason of Accordingly, the final regulations define For purposes of these rules, the section 954(c)(3) or (6). See § 1.951A– ‘‘interest expense’’ and ‘‘interest proposed regulations define a ‘‘qualified 4(b)(1)(iii)(A). This revision ensures that income’’ by reference to the definition CFC’’ as an eligible controlled foreign a related party receivable is not double- of interest expense and interest income corporation (within the meaning of counted in the determination of under section 163(j). See § 1.951A– section 954(h)(2)) or a qualifying qualified interest expense, and thus 4(b)(1)(ii) and (2)(ii). insurance company (within the meaning qualified interest expense as calculated of section 953(e)(3)). See proposed The regulations under section 163(j), under the final regulations more § 1.951A–4(b)(1)(iv). Further, ‘‘qualified when finalized, will address comments accurately reflects the interest expense interest income’’ is defined as interest incurred to earn income earned from on the validity of the definition of income included in the gross tested interest expense and interest income unrelated parties in an active financing income of the qualified CFC that is or insurance business. Further, the that are used in those regulations. excluded from FPHCI by reason of Because the final regulations adopt this Treasury Department and the IRS section 954(h) or (i). See proposed preferred the elimination of the second definition for purposes of determining § 1.951A–4(b)(2)(iii). The proposed specified interest expense, the step reduction for resolving the double- regulations define ‘‘qualified interest counting issue, rather than the discussion in the regulations under expense’’ as the portion of the interest recommended alternative of excluding section 163(j) will, by extension, expense of a qualified CFC, which related party receivables from the address the validity of the definitions as portion is determined based on a two- fraction in the first step, because the used in these final regulations. step approach. First, a qualified CFC’s elimination of an additional step Finally, the definition of tested interest expense is multiplied by a substantially simplifies the calculation interest expense is revised in the final fraction, the numerator of which is the of qualified interest expense. regulations to mean interest expense CFC’s average basis in assets which give In addition, with regard to the effect that is ‘‘allocated and apportioned to rise to income excluded from FPHCI by of related party receivables on the gross tested income’’ of a CFC under reason of section 954(h) or (i), and the computation of qualified interest § 1.951A–2(c)(3). See § 1.951A– denominator is the CFC’s average basis expense, the final regulations clarify 4(b)(1)(i). This revision does not reflect in all its assets. See proposed § 1.951A– that a receivable that gives rise to a substantive change to the definition in 4(b)(1)(iii)(A). Second, the product of income that is excludible from FPHCI the proposed regulations—interest the first step is reduced by the interest by reason of section 954(c)(3) or (6) is expense ‘‘taken into account in income of the qualified CFC that is excluded from the numerator of the determining the tested income or tested excluded from FPHCI by reason of fraction (that is, the receivable is not a loss’’—but rather is intended to more section 954(c)(3) or (6). See proposed ‘‘qualified asset’’ within the meaning of clearly articulate that definition. § 1.951A–4(b)(1)(iii)(B). This two-step § 1.951A–4(b)(1)(iii)(B), a new term in

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the final regulations), notwithstanding whether a CFC avails itself of the insurance business, the interest expense that such receivable may also give rise reduction for qualified interest expense, of the holding company may constitute to income excluded from FPHCI by the exclusion for qualified interest qualified interest expense and thus be reason of section 954(h) or (i). See income is mandatory. See § 1.951A– disregarded in determining specified § 1.951A–4(b)(1)(iii)(B)(2). Similarly, the 4(b)(2)(iii)(A). interest expense. In this regard, the final final regulations clarify that interest A comment recommended an regulations retain the rule that the income that is excludible from FPHCI exception from the qualified interest adjusted basis in stock of a subsidiary is by reason of section 954(c)(3) or (6) is rules for a CFC that is a qualified treated as basis in a qualified asset to excluded from qualified interest insurance company under section the extent that the assets of the income, notwithstanding that such 954(i), or in the alternative, an subsidiary are qualified assets. See income may also be excluded from exception from the qualified interest § 1.951A–4(b)(1)(iii)(B)(3). In addition, FPHCI by reason of section 954(h) or (i). rules for any CFC that is part of a the final regulations provide a new rule See § 1.951A–4(b)(2)(iii)(B). These financial services group defined in that treats a CFC that owns 25 percent clarifications ensure that the section 904(d)(2)(C)(ii), with the result or more of the capital or profits interest computation of qualified interest that all interest income and interest in a partnership as owning its income and qualified interest expense is expense of such CFCs would be tested attributable share of any property held determined by reference only to interest interest income and tested interest by the partnership, as determined under expense and interest income attributable expense taken into account in the principles of § 1.956–4(b). See to a CFC’s active conduct of a financing determining a U.S. shareholder’s § 1.951A–4(b)(1)(iii)(B)(4). Therefore, or insurance business with unrelated specified interest expense. The under the final regulations, whether, persons. comment speculated that the qualified and to what extent, the interest expense A comment recommended that, for interest rules may have been crafted to of a CFC is qualified interest expense purposes of determining the amount of address a CFC involved in a financial depends entirely on the nature of the qualified interest expense of a CFC, services business that was not a member assets it holds directly and indirectly, instruments or obligations that give rise of a business group primarily engaged in and not on whether the CFC itself is to interest income derived by active a financial services business. The engaged in an active financing or securities and derivatives dealers that is Treasury Department and the IRS insurance business. excluded from FPHCI under section decline to adopt this recommendation. Finally, the definition of qualified 954(c)(2)(C) should also be included in The qualified interest rules are intended interest expense in the proposed the numerator for calculating qualified to neutralize the effect of an active regulations includes a parenthetical that interest expense. The final regulations finance business or an active business of indicates that the fraction for adopt this recommendation by a CFC on the specified interest expense determining qualified interest expense including such instruments or (and thus net DTIR) of its U.S. cannot exceed one. See proposed obligations in the definition of qualified shareholder, irrespective of whether the § 1.951A–4(b)(1)(iii). The Treasury assets. See § 1.951A–4(b)(1)(iii)(B)(1). CFC is a member of a business group Department and the IRS have Similarly, interest income excluded primarily engaged in such activities. In determined that, because the numerator from FPHCI under section 954(c)(2)(C) contrast, the recommended exception (average basis in qualified assets) is a is included in the definition of qualified would permit interest income from an subset of the denominator (average basis interest income. See § 1.951A– active finance business or active in all assets), this fraction can never 4(b)(2)(iii)(A). insurance business in excess of the exceed one, even without regard to the A comment suggested that the benefit associated interest expense to net parenthetical. Therefore, the final to some U.S. shareholders from the against other interest expense in the regulations eliminate the parenthetical exclusion for qualified interest expense computation of specified interest in the definition of qualified interest may not justify the difficulty and expense. expense as surplusage. See § 1.951A– expense to determine the amount The same comment also explained 4(b)(1)(iii)(A). excluded. Therefore, the comment that some foreign financial service recommended that the final regulations groups borrow externally through a D. Interest Expense Paid or Accrued by provide taxpayers the ability to either holding company to fund their a Tested Loss CFC establish the amount of their qualified qualifying insurance company Under the proposed regulations, interest expense or, alternatively, to subsidiaries that earn qualified interest tested interest expense includes interest assume that none of their interest income. The comment noted that the expense paid or accrued by a tested loss expense constitutes qualified interest proposed regulations create a mismatch CFC, notwithstanding that the proposed expense. The Treasury Department and between the treatment of the interest regulations provide that a tested loss the IRS agree that taxpayers should not income of the subsidiaries, which is CFC has no QBAI. See proposed be required to reduce their CFCs’ tested qualified interest income of a qualified § 1.951A–3(b) and § 1.951A–4(b)(1). As interest expense by their CFCs’ qualified CFC and thus not taken into account in discussed in part V.A of this Summary interest expense if the taxpayer calculating specified interest expense, of Comments and Explanation of determines that the value of such and the interest expense of the holding Revisions section, the final regulations reduction is outweighed by the cost of company, which is not qualified interest continue to provide that a tested loss compliance. Accordingly, the final expense of a qualified CFC and thus is CFC has no QBAI. See § 1.951A–3(b). regulations provide that a CFC’s taken into account in calculating Comments recommended that, if the qualified interest expense is taken into specified interest expense. To address rule excluding the QBAI of a tested loss account only to the extent established this mismatch, the final regulations CFC were retained, the final regulations by the CFC. See § 1.951A–4(b)(1)(iii)(A). eliminate the term ‘‘qualified CFC.’’ should also exclude all interest expense Thus, if a CFC does not establish an Therefore, if a holding company that is of a tested loss CFC from the calculation amount of qualified interest expense, not engaged in an active financing or of tested interest expense. Comments the taxpayer can assume that none of insurance business borrows to fund the asserted that exempting interest expense the CFC’s interest expense is qualified activities of subsidiaries that are of tested loss CFCs from the calculation interest expense. However, regardless of engaged in an active financing or of specified interest expense, in

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conjunction with the exclusion of the used in the production of gross tested Department and the IRS should provide QBAI of tested loss CFCs, would income. such an exception. Further, an produce appropriate results, though one exception for interest paid to U.S. E. Interest Expense Paid or Accrued to comment acknowledged that such a rule persons could permit taxpayers to a U.S. Shareholder might need to be accompanied by an circumvent section 951A(b)(2)(B) by anti-abuse rule. One comment asserted As discussed in part VI.A of this borrowing externally at the U.S. that excluding interest expense of a Summary of Comments and Explanation shareholder level and then on-lending tested loss CFC would be appropriate of Revisions section, the proposed the borrowed funds to CFCs. In this under section 951A(b)(2)(B), because regulations adopt a netting approach case, the borrowing by the U.S. that subparagraph refers only to interest with the result that specified interest shareholder would not reduce net DTIR, expense ‘‘taken into account under expense is the excess of a U.S. notwithstanding that the borrowing is subsection (c)(2)(A)(ii),’’ which, shareholder’s pro rata share of tested factually traceable to the acquisition by according to the comment, describes interest expense of each CFC over its the CFC of specified tangible property only deductions taken into account in pro rata share of tested interest income and net DTIR would have been reduced determining tested income. Another of each CFC. See proposed § 1.951A– if instead the CFC had borrowed comment recommended that, rather 1(c)(3)(ii). Several comments directly from the third party. recommended that the final regulations than excluding all the interest expense VII. Comments and Revisions to of a tested loss CFC, the final exclude interest expense paid by a CFC to a U.S. shareholder or a related U.S. Proposed § 1.951A–5—Domestic regulations should exclude the interest Partnerships and Their Partners expense incurred to fund acquisitions of person from the definition of tested tangible property held by the tested loss interest expense. One comment A. Proposed Hybrid Approach CFC. The comments suggested that recommended that this exclusion be applied to a payment of interest to any The proposed regulations provide including interest expense of a tested that, in general, a domestic partnership loss CFC (or incurred to acquire tangible U.S. person, whereas two comments suggested that this exclusion also apply that is a U.S. shareholder (‘‘U.S. property of the tested loss CFC), which shareholder partnership’’) of a CFC reduces net DTIR of a U.S. shareholder, to interest expense to the extent the related interest income is subject to U.S. (‘‘partnership CFC’’) determines a GILTI while excluding the QBAI of a tested inclusion amount, and partners of the loss CFC, which increases the net DTIR tax as effectively connected income or subpart F income. These comments partnership that are not also U.S. of a U.S. shareholder, results in unfair asserted that interest expense should shareholders of the partnership CFC and asymmetrical treatment of tested not generally increase specified interest take into account their distributive share loss CFCs. expense to the extent that the related of the partnership’s GILTI inclusion The final regulations do not adopt the interest income is subject to U.S. tax at amount. See proposed § 1.951A–5(b). recommendation to exclude all interest the regular statutory rate, at least in the Partners that are U.S. shareholders of a expense of a tested loss CFC, because hands of a U.S. shareholder or related partnership CFC (‘‘U.S. shareholder such exclusion would be inconsistent person. According to these comments, partners’’), however, do not take into with the text of section 951A(d)(2)(A) excluding interest expense under these account their distributive share of the and footnote 1563 of the Conference circumstance would be consistent with partnership’s GILTI inclusion amount to Report and could create an incentive to the policy of section 951A(b)(2)(B), the extent determined by reference to inappropriately shift interest expense to which does not reduce a U.S. the partnership CFC but instead are a tested loss CFC in order to avoid shareholder’s net DTIR for a CFC’s treated as proportionately owning the reducing a U.S. shareholder’s net DTIR. interest expense to the extent that the stock of the partnership CFC within the The reference to section related income increases the U.S. meaning of section 958(a) as if the 951A(c)(2)(A)(ii) in section shareholder’s net CFC tested income. domestic partnership were an aggregate 951A(b)(2)(B) encompasses all The final regulations do not adopt of its partners. To accomplish this deductions properly allocable to gross these recommendations. Section result, the proposed regulations, with tested income, including deductions 951A(b)(2)(B) generally reduces net respect to U.S. shareholder partners, taken into account in determining tested DTIR of a U.S. shareholder by the full treat the domestic partnership in the loss. See section 951A(c)(2)(B)(i) amount of its pro rata share of the same manner as a foreign partnership, (defining tested loss as the excess of interest expense of a CFC, but then which is treated as an aggregate of its deduction described in section provides a limited exception for the partners under section 958(a)(2). As a 951A(c)(2)(A)(ii) over gross tested CFC’s interest expense to the extent the result, a U.S. shareholder partner income described in section related interest income is taken into determines its GILTI inclusion amount 951A(c)(2)(A)(i)). account in determining the net CFC taking into account its pro rata share of However, in response to the tested income of the U.S. shareholder. any tested item of the partnership CFC. comments, the final regulations reduce In effect, the rule generally reduces net If the U.S. shareholder partnership a tested loss CFC’s tested interest DTIR of a U.S. shareholder by its pro holds other partnership CFCs in which expense by its tested loss QBAI amount, rata share of the net external interest the partner is not a U.S. shareholder, an amount equal to 10 percent of the expense incurred by its CFCs. Thus, then a separate GILTI computation is QBAI that the tested loss CFC would borrowing between commonly-owned made at the partnership level with have had if it were instead a tested CFCs generally does not reduce net respect to such partnership CFCs’ tested income CFC. See § 1.951A–4(b)(1)(i) and DTIR, whereas external borrowing items, and the partner includes its (iv) and (c) Example 5. This rule has the generally does. The statute does not distributive share of this separately effect of not taking into account the provide a similar exception for any determined GILTI inclusion amount as tested interest expense of a tested loss payment of interest to the extent the well. See proposed § 1.951A–5(c). This CFC to the extent that such tested related interest income is subject to U.S. hybrid approach (‘‘proposed hybrid interest expense is less than or equal to tax, nor is there any indication in the approach’’) of treating a domestic a notional 10 percent return on the legislative history of the Act that partnership as an entity with respect to tested loss CFC’s tangible assets that are Congress intended that the Treasury partners that are not U.S. shareholders,

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but as an aggregate of its partners with partnership audit regime enacted by Both comments primarily respect to partners that are U.S. section 1101 of the Bipartisan Budget recommended a pure aggregate shareholders, is intended to balance the Act of 2015, Public Law 114–74 (BBA) approach. Under a pure aggregate policies underlying GILTI with the as some determinations are made at the approach, a domestic partnership would relevant statutory provisions. In partnership level and others at the not have a GILTI inclusion amount, and particular, a domestic partnership is a partner level. thus no partner of the partnership U.S. person under sections 957(c) and The comments also raised concerns would have a distributive share of such 7701(a)(30) and thus a U.S. shareholder that the determination of a GILTI amount. Rather, for purposes of under section 951(b), which suggests inclusion amount at the partnership determining the partner’s GILTI that a domestic partnership should level and the disparate treatment of U.S. inclusion amount, a partner would be generally be treated as an entity for shareholder partners and non-U.S. treated as owning directly the stock of purposes of subpart F. On the other shareholder partners under the CFCs owned by a domestic partnership hand, if a domestic partnership were proposed hybrid approach leads to for purposes of determining its own treated strictly as an entity for purposes uncertainty regarding the application of GILTI inclusion amount. Thus, under a of section 951A, a domestic partnership sections 959 and 961 (regarding PTEP pure aggregate approach, unlike under with a GILTI inclusion amount would and corresponding basis adjustments) the proposed hybrid approach or a pure be ineligible for foreign tax credits with respect to domestic partnerships entity approach, a partner that is not a under section 960(d) or a deduction and partnership CFCs, basis adjustments U.S. shareholder of a partnership CFC under section 250 with respect to its with respect to partnership interests and would not have a pro rata share of the GILTI inclusion amount. partnership CFCs, and capital accounts partnership CFC’s tested items or a In the proposed regulations, the determined and maintained in distributive share of a GILTI inclusion Treasury Department and the IRS accordance with § 1.704–1(b)(2). For amount of the partnership. According to rejected an approach that would treat a instance, there are no rules in the comments, a pure aggregate approach domestic partnership as an entity with proposed regulations regarding whether would reduce complexities inherent in respect to all its partners (‘‘pure entity and to what extent a U.S. shareholder the proposed hybrid approach in terms approach’’) for purposes of section partner’s capital account in a of administration and compliance. A 951A, because treating a domestic partnership is adjusted when the U.S. pure aggregate approach would also partnership as the section 958(a) owner shareholder partner computes its GILTI avoid the disparate and arbitrary effects of stock in all cases would frustrate the inclusion amount based on its pro rata of a pure entity approach, under which GILTI framework by creating shares of tested items of partnership a U.S. shareholder’s GILTI inclusion unintended planning opportunities for CFCs. The comments noted that if the amount may vary significantly well-advised taxpayers and traps for the capital account of a U.S. shareholder depending on whether it owns CFCs unwary. However, the Treasury partner is not adjusted for its pro rata through a domestic partnership as Department and the IRS also did not shares of tested items of a partnership opposed to directly or through a foreign adopt an approach that would treat a CFC, then the economic arrangement partnership. The comments domestic partnership as an aggregate between the U.S. shareholder partner acknowledged that while domestic with respect to all its partners (‘‘pure and other partners could be distorted. partnerships have historically been aggregate approach’’) for purposes of treated as entities for purposes of GILTI, because such an approach would Neither comment recommended a pure entity approach as its primary subpart F, the enactment of section be inconsistent with the treatment of 951A and its reliance on shareholder- domestic partnerships as entities for recommendation. One comment level calculations justifies a purposes of subpart F. supported a pure entity approach over the proposed hybrid approach, although reconsideration of this approach. B. Comments on Proposed Hybrid it recommended a pure entity approach One comment recommended that the Approach only if a pure aggregate approach were pure aggregate approach apply also to Two comments were received on the not adopted. Another comment the determination of whether a foreign treatment of domestic partnerships and recommended that the pure entity corporation owned by a domestic their partners under the proposed approach not be adopted in any case. partnership is a CFC. Under this regulations. These comments raised Both comments noted that the pure approach, a domestic partnership would concerns regarding the procedural and entity approach would avoid the also be treated as a foreign partnership computational complexity of the complexities inherent in the proposed for purposes of determining whether a proposed hybrid approach. The hybrid approach and conform the domestic partnership is a U.S. comments highlighted the difficulty that treatment of domestic partnerships for shareholder of a foreign corporation and some partnerships would have in GILTI purposes with the treatment therefore whether the foreign determining whether and to what extent under subpart F before the enactment of corporation is owned in the aggregate its partners are U.S. shareholder section 951A. However, the comments more than 50 percent (by voting power partners of partnership CFCs in order to noted that a pure entity approach is or value) by U.S. shareholders. The determine whether and with respect to inconsistent with the purpose of section same comment suggested that if this which partnership CFCs to calculate a 951A, which is to compute a single approach were not adopted, the final partnership-level GILTI inclusion GILTI inclusion amount for a taxpayer regulations should either adopt the amount for each of its partners. In this by reference to the items of all the proposed hybrid approach or an regard, a partner of a U.S. shareholder taxpayer’s CFCs. The comments agreed aggregate approach that would require partnership may itself be a U.S. that the preamble to the proposed even non-U.S. shareholder partners to shareholder of one or more partnership regulations articulated valid policy take into account their pro rata shares of CFCs, but not a U.S. shareholder of one reasons for rejecting the pure entity tested items of CFCs owned by a or more others. According to the approach, namely, that such approach domestic partnership. This approach, in comments, the proposed hybrid presents both an inappropriate planning contrast to the pure entity approach and approach also raises administrability opportunity as well as a trap for the the proposed hybrid approach, would concerns under the centralized unwary. permit a partner that is not a U.S.

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shareholder with respect to a does not have a GILTI inclusion amount respect to the taxation of CFC earnings partnership CFC to nonetheless and thus no partner of the partnership after the Act, the Treasury Department aggregate its pro rata shares of the tested has a distributive share of a GILTI and the IRS have determined that it is items of such partnership CFC with its inclusion amount. Furthermore, because an appropriate occasion to reexamine pro rata shares of the tested items of any only a U.S. shareholder can have a pro whether a domestic partnership should non-partnership CFCs with respect to rata share of a tested item of a CFC be treated as an entity or an aggregate in which the partner is a U.S. shareholder under section 951A(e)(1) and § 1.951A– determining the owners of section for purposes of determining a single 1(d), a partner that is not a U.S. 958(a) stock for purposes of sections 951 GILTI inclusion amount for the partner. shareholder of a CFC owned by the and 951A. The 1954 legislative history The other comment recommended partnership does not have a pro rata makes clear that this determination that if the pure aggregate approach or share of any tested item of the CFC. For should be based on the policies of the the pure entity approach were not the reasons discussed in this part VII.C provision at issue. See H.R. Rep. No. adopted, the final regulations adopt an of the Summary of Comments and 83–2543, at 59 (1954) (Conf. Rep.). In approach under which a domestic Explanation of Revisions section, the this regard, the Act fundamentally partnership would be treated as an Treasury Department and the IRS have changed the policies relating to the entity for purposes of determining its determined that this approach best taxation of CFC earnings relative to GILTI inclusion amount and each reconciles the relevant statutory those in 1962. Moreover, an aggregate partner’s distributive share of such provisions, the policies underlying approach applies if it is appropriate to amount, but then each partner’s overall GILTI, and the administrative and carry out the purpose of a provision of GILTI inclusion amount would be compliance concerns raised by the the Code, unless an entity approach is adjusted by its separately-computed comments. specifically prescribed and clearly GILTI inclusion amount with respect to Since the enactment of subpart F, contemplated by the relevant statute. Cf. non-partnership CFCs of the partner. domestic partnerships have generally § 1.701–2(e). This adjustment would be positive to been treated as entities, rather than as As discussed in the preamble to the the extent of the partner’s net CFC aggregates of their partners, for purposes proposed regulations, an aggregate tested income with respect to CFCs of determining whether a foreign approach to domestic partnerships owned outside a domestic partnership, corporation is a CFC. See § 1.701–2(f) furthers the purposes of the GILTI but it could be negative if the partner Example 3 (concluding that a domestic regime. It is consistent with the general had a ‘‘net CFC tested loss’’ (that is, partnership that wholly owns a foreign aggregate pro rata shares of tested loss corporation is treated as an entity and intent of the GILTI regime to determine in excess of aggregate pro rata share of the U.S. shareholder of the foreign tax liability at the U.S. shareholder level tested income) with respect to such corporation, and that the foreign on an aggregate basis rather than on a CFCs. corporation is a CFC for section 904 CFC-by-CFC basis. See Senate purposes). In addition, domestic Explanation at 371 (‘‘The committee C. Adoption of Aggregate Treatment for partnerships have generally been treated believes that calculating GILTI on an Purposes of Determining GILTI as entities for purposes of determining aggregate basis, instead of on a CFC-by- Inclusion Amounts the U.S. shareholder that has the CFC basis, reflects the interconnected After consideration of the comments subpart F inclusion with respect to such nature of a U.S. corporation’s global received, the Treasury Department and foreign corporation. But cf. §§ 1.951– operations and is a more accurate way the IRS have decided not to adopt the 1(h) and 1.965–1(e) (treating certain of determining a U.S. corporation’s proposed hybrid approach in the final domestic partnerships owned by CFCs global intangible income.’’); see also regulations. Instead, the final as foreign partnerships for purposes of House Ways and Means Committee, regulations adopt an approach that determining the U.S. shareholder that 115th Cong., Rep. on H.R. 1, H.R. Rep. treats a domestic partnership as an has a subpart F inclusion with respect No. 115–409, at 389 (Comm. Print 2017) aggregate for purposes of determining to CFCs owned by such domestic (‘‘[I]n making this measurement, the the level (that is, partnership or partner) partnerships). Committee recognizes the integrated at which a GILTI inclusion amount is The GILTI rules employ the basic nature of modern supply chains and calculated and taken into gross income. subpart F architecture in several believes it is more appropriate to look Specifically, the final regulations regards, such as for purposes of at a multinational enterprise’s foreign provide that, in general, for purposes of determining a U.S. shareholder’s pro operations on an aggregate basis, rather section 951A and the section 951A rata share of tested items. See section than by entity or by country.’’). A pure regulations, and for purposes of any 951A(e)(1). Nevertheless, there is no entity approach undermines this overall other provision that applies by reference indication that Congress intended to framework in two ways. First, under a to section 951A or the section 951A incorporate the historical treatment of pure entity approach, well-advised regulations (for instance, sections 959, domestic partnerships under subpart F taxpayers might avail themselves of 960, and 961), a domestic partnership is into the GILTI regime, particularly given domestic partnerships to segregate not treated as owning stock of a foreign that respecting a domestic partnership tested items in a manner that is corporation within the meaning of as the owner under section 958(a) of the inconsistent with the overall framework section 958(a). See § 1.951A–1(e)(1). stock of a CFC for purposes of GILTI of section 951A. In this regard, Rather, the partners of a domestic would frustrate the statutory framework. taxpayers generally would lower their partnership are treated as owning In addition, no provision in the Code tax liability by separating through one proportionately the stock of CFCs prescribes the treatment of domestic or more domestic partnerships their owned by the partnership in the same partnerships for purposes of section CFCs with high-taxed tested income and manner as if the partnership were a 958(a) in determining GILTI. tested interest expense from their CFCs foreign partnership under section Given the silence in the statute with with low-taxed tested income, QBAI, 958(a)(2). See id. Because a domestic respect to the treatment of domestic and tested losses. Second, a pure entity partnership is not treated as owning partnerships for purposes of GILTI, the approach would represent a trap for an section 958(a) stock for purposes of Act’s legislative history, and the overall unwary taxpayer by, for example, section 951A, a domestic partnership significance of the GILTI regime with preventing the use of the tested losses

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of CFCs directly held by a taxpayer to partner’s GILTI inclusion amount by The final regulations also do not offset the tested income of CFCs held by reference to CFCs owned by the extend aggregate treatment to the the taxpayer through one or more domestic partnership. determination of the controlling domestic partnerships. This result The final regulations treat a domestic domestic shareholders (as defined in would not occur if the domestic partnership as an aggregate of its § 1.964–1(c)(5)) of a CFC for purposes of partnership were treated as an aggregate partners in determining section 958(a) any election made under the section of its partners. In this regard, the stock ownership by providing that, for 951A regulations. See § 1.951A– proposal to ‘‘adjust’’ a partner’s purposes of section 951A and the 3(e)(3)(ii) (election to use a non-ADS distributive shares of its domestic section 951A regulations, a domestic depreciation method for pre-enactment partnerships’ GILTI inclusion amount partnership is treated in the same property) and § 1.951A–3(h)(2)(ii)(B)(3) by the partner’s net CFC tested income manner as a foreign partnership. See (election to eliminate disqualified and the net CFC tested loss calculated § 1.951A–1(e)(1). For purposes of basis). As a result, a domestic with respect to the partner’s CFCs held subpart F, a foreign partnership is partnership that satisfies the ownership outside the partnership would not fully explicitly treated as an aggregate of its requirements of § 1.964–1(c)(5) with address these concerns. That is, the partners, and rules regarding respect to a CFC, and not its partners, partner would be permitted the full aggregation of foreign partnerships are is treated as the controlling domestic benefit of its aggregate pro rata share of relatively well-developed and shareholder of the CFC and the tested losses with respect to CFCs understood. See section 958(a)(2). partnership files the relevant elections outside the partnership, but the Therefore, rather than developing a new with respect to the CFC. The treatment specified interest expense with respect standard for the treatment of domestic of a domestic partnership as the to CFCs outside the partnership would partnerships as an aggregate, the controlling domestic shareholder be effectively segregated from the QBAI Treasury Department and the IRS have reduces the number of persons that need of CFCs inside the partnership (and determined that it would be simpler and to comply with the rules of § 1.964– therefore would not reduce the partner’s more administrable to incorporate the 1(c)(3), and ensures that any election net DTIR), and vice versa. aggregate approach by reference to the with respect to a CFC that could affect the tax consequences of a U.S. person In addition, an aggregate approach rules related to foreign partnerships that is a partner of a domestic with respect to section 958(a) furthers under section 958(a)(2). partnership is made by such the policies of other provisions related The final regulations do not adopt the partnership. Accordingly, the final to section 951A. The legislative history recommendation to extend the regulations provide that the aggregation makes clear that Congress intended for treatment of a domestic partnership as rule for domestic partnerships does not a domestic corporate partner of a an aggregate of its partners to the apply for purposes of determining domestic partnership to obtain the determination of U.S. shareholder and whether a U.S. person is a U.S. benefit of a foreign tax credit under CFC status. The Treasury Department shareholder, whether a U.S. shareholder and the IRS have determined that an section 960(d) and a deduction under is a controlling domestic shareholder (as section 250 with respect to a GILTI approach that treats a domestic defined in § 1.964–1(c)(5)), or whether a inclusion amount. See Conference partnership as an aggregate of its foreign corporation is a CFC. See Report, at 623, fn. 1517. However, only partners for purposes of determining § 1.951A–1(e)(2). domestic corporations (not domestic CFC status would not be consistent with The treatment of domestic partnerships) are eligible for a foreign the relevant statutory provisions. A partnerships as foreign partnerships in tax credit under section 960(d) or a domestic partnership is a U.S. person the final regulations is solely for deduction under section 250. Moreover, under section 957(c) and section purposes of section 951A and the absent treating a domestic partnership 7701(a)(30) and, therefore, can be a U.S. section 951A regulations and for as an aggregate for purposes of section shareholder under section 951(b). purposes of any other provision that 951A, a domestic corporate partner’s Indeed, when subpart F was enacted in applies by reference to a GILTI inclusion percentage under section 1962, the legislative history indicated inclusion amount (such as sections 959 960(d)(2) is determined without regard that domestic partnerships generally and 961). The rule does not affect the to any CFC owned by the partnership should be treated as U.S. shareholders. determination of ownership under because such partner has no pro rata See S. Rep. No. 1881, 87th Cong., 2d section 958(a) for any other provision of share of the tested income of such CFC. Sess. 80 n.1 (1962) (‘‘U.S. shareholders the Code (such as section 1248(a)), nor See section 960(d)(2)(B) (the are defined in the bill as ‘U.S. persons’ does it change whether such partner has denominator of the inclusion percentage with 10-percent stockholding. U.S. a distributive share of a domestic of a domestic corporation is the persons, in general, are U.S. citizens and partnership’s subpart F inclusion under corporation’s aggregate pro rata share of residents and domestic corporations, section 951(a). However, the Treasury tested income amount under section partnerships and estates or trusts.’’). Department and the IRS are proposing 951A(c)(1)(A)). Therefore, a strict entity Furthermore, sections 958(b) and in a notice of proposed rulemaking approach to section 960(d) might 318(a)(3) treat a partnership (including published in the same issue of the suggest that domestic corporate partners a domestic partnership) as owning the Federal Register as these final of a domestic partnership are ineligible stock of its partners for purposes of regulations to apply a similar aggregate for foreign tax credits with respect to a determining whether the foreign treatment to domestic partnerships for GILTI inclusion amount of the corporation is owned more than 50 purposes of section 951. partnership. On the other hand, an percent by U.S. shareholders, which Under section 1373(a), an S aggregate approach to domestic suggests that partnerships are treated as corporation is treated as a partnership partnerships furthers Congressional entities for purposes of determining and its shareholders as partners for policy by treating domestic corporate ownership under section 958(b). See purposes of subpart F, including section partners as owning (within the meaning also sections 958(b) and 318(a)(2) 951A. Therefore, for purposes of of section 958(a)) stock of CFCs owned (treating stock owned by a partnership, determining a GILTI inclusion amount by domestic partnerships and thus domestic or foreign, as owned of a shareholder of an S corporation, determining the domestic corporate proportionately by its partners). under § 1.951A–1(e), the S corporation

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is not treated as owning stock of a 951A(c)(2)(B)(ii) (‘‘Coordination with The Treasury Department and the IRS foreign corporation within the meaning subpart F to deny double benefit of have determined that it would be of section 958(a) but instead is treated losses’’), the provision is limited to inappropriate to treat any portion of a in the same manner as a foreign denying a double benefit from a tested GILTI inclusion amount as personal partnership. The Treasury Department loss (that is, a reduction in both net CFC holding company income. A GILTI and the IRS are studying the application tested income and subpart F income), inclusion amount is determined by of section 1373(a) with respect to and that there can be no such double reference to income that would have section 951A, as well as the broader benefit to the extent that the tested loss been taxed, if at all, as dividends from implications of treating S corporations does not reduce a U.S. shareholder’s net CFCs before the enactment of section as partnerships for purposes of subpart CFC tested income. These comments 951A, which are specifically excluded F. Comments are requested in this recommended that proposed § 1.951A– from the definition of personal holding regard. 6(d) be modified such that it applies company income under section Conforming changes are also made to only to a tested loss to the extent the 543(a)(1)(C). Further, there is no other aspects of the final regulations to tested loss is ‘‘used’’ within the meaning indication in the legislative history that account for the aggregate treatment of of proposed § 1.951A–6(e). Congress intended through the domestic partnerships under § 1.951A– The final regulations do not adopt this enactment of section 951A to 1(e). For instance, the proposed recommendation. Section substantially change the types of income regulations provide that, for purposes of 951A(c)(2)(B)(ii), by its terms, increases that would be taken into account in determining whether a U.S. shareholder E&P for purposes of section 952(c)(1)(A) determining personal holding company has a pro rata share of an accrual for by the amount of any tested loss. There status. Accordingly, the final regulations purposes of sections 163(e)(3)(B)(i) and is no indication in the provision or clarify that in determining whether a 267(a)(3)(B), a domestic partnership’s legislative history that limiting the corporate U.S. shareholder is a personal pro rata share of the accrual is taken application of section 951A(c)(2)(B)(ii) holding company, a GILTI inclusion into account only to the extent that U.S. to a tested loss that reduces net CFC amount is not treated as personal persons include in gross income a tested income would be appropriate, holding company income (as defined in distributive share of the domestic and the heading of the provision has no section 543(a)). See § 1.951A–5(d). partnership’s GILTI inclusion amount. legal effect. See section 7806(b). C. Adjustments to Basis Related to Net See proposed § 1.951A–5(c)(2). This rule Accordingly, the rule is adopted Used Tested Loss is no longer necessary under the final without modification in § 1.951A–6(b). regulations because a domestic To eliminate the potential for the partnership does not have a GILTI B. Treating GILTI Inclusion Amounts as duplicative use of a loss, the proposed inclusion amount, and partners that are Subpart F Inclusions for Purposes of the regulations set forth rules providing for U.S. shareholders have their own pro Personal Holding Company Rules downward adjustments to the adjusted basis in stock of a tested loss CFC to the rata shares of the accrual. Therefore, this A comment requested clarification rule is eliminated in the final extent its tested loss was used to offset regarding the treatment of a GILTI tested income of another CFC. See regulations. See § 1.951A–5(c). In inclusion amount for purposes of the proposed § 1.951A–6(e). These addition, the partnership blocker rule is personal holding company rules in adjustments are generally made at the modified such that it no longer applies sections 541 through 547. Section 541(a) time of a direct or indirect disposition for purposes of section 951A. See imposes a 20-percent tax on the of stock of the tested loss CFC. See § 1.951–1(h)(1). It is no longer necessary undistributed personal holding proposed § 1.951A–6(e)(1). Comments to apply the rule for purposes of section company income of a personal holding raised many significant issues with 951A because, for such purposes, a company. Section 542(a) defines a respect to these rules. domestic partnership is not treated as ‘‘personal holding company’’ as a The Treasury Department and the IRS owning stock of a foreign corporation corporation if at least 60 percent of its remain concerned that, absent basis within the meaning of section 958(a). adjusted ordinary gross income for the adjustments, a tested loss can result in VIII. Comments and Revisions to taxable year is personal holding the creation of uneconomic or Proposed § 1.951A–6—Treatment of company income and certain ownership duplicative loss, but have determined GILTI Inclusion Amount and requirements are satisfied. Section that the rules in the proposed Adjustments to E&P and Basis Related 543(a) defines ‘‘personal holding regulations related to basis adjustments to Tested Loss CFCs company income’’ by reference to should not be adopted in these final certain categories of passive income, regulations. Instead, the rules related to A. Increase of E&P by Tested Losses for including dividends. However, for this basis adjustments, including the Purposes of Section 952(c)(1)(A) purpose, dividends received by a U.S. comments received with respect to such Section 951A(c)(2)(B)(ii) provides that shareholder from a CFC are excluded rules, will be considered in a separate section 952(c)(1)(A) is applied by from the definition of personal holding project. Accordingly, the final increasing the E&P of a tested loss CFC company income. See section regulations reserve on the rules related by the amount of its tested loss. See also 543(a)(1)(C). The comment noted that to adjustments to stock of tested loss proposed § 1.951A–6(d). Comments the existing regulations under section CFCs. See § 1.951A–6(c). Any rules asserted that proposed § 1.951A–6(d) 951 provide that for purposes of issued under § 1.951A–6(c) will apply has the effect of increasing E&P by a determining whether a corporate U.S. only with respect to tested losses tested loss even if, and to the extent, the shareholder is a personal holding incurred in taxable years of CFCs and tested loss does not provide a benefit to company, the character of a subpart F their U.S. shareholders ending after the a U.S. shareholder because its aggregate inclusion of such domestic corporation date of publication of any future pro rata share of tested losses exceeds is determined as if the amount that guidance. its aggregate pro rata share of tested results in the subpart F inclusion were For a discussion of corresponding income. These comments argued that realized directly by the corporation from rules for basis adjustments within a this result is not appropriate because, the source from which it is realized by consolidated group, as provided for in based on the heading of section the CFC. See § 1.951–1(a)(3). proposed §§ 1.1502–13, 1.1502–32, and

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1.1502–51, see part IX.C of this purposes of determining a member’s net required to rationalize the priority Summary of Comments and Explanation CFC tested income, a member’s allocation approach. of Revisions section. aggregate pro rata share of tested income Two of the comments proposed is determined on a separate-entity basis similar methods for determining a IX. Comments and Revisions to by aggregating its pro rata share of the member’s GILTI inclusion amount. One Proposed §§ 1.1502–13, 1.1502–32, and tested income of each of its CFCs. See of these comments suggested calculating 1.1502–51—Consolidated Section 951A proposed § 1.1502–51(e)(1) and (12). the consolidated group’s GILTI A. Calculation of GILTI Inclusion However, a member’s aggregate pro rata inclusion amount as if members holding Amount share of tested loss and its net DTIR for CFC stock were divisions of a single Section 1502 provides that the taxable year is calculated in three corporation, then allocating the resulting consolidated group amount consolidated return regulations will be steps—first, each member’s pro rata among members based on each promulgated to clearly reflect the share of each tested item other than member’s net CFC tested income. For income tax liability of a consolidated tested income is determined on a this purpose, net CFC tested income is group and each member of the separate-entity basis by reference to its calculated in a manner consistent with consolidated group (a ‘‘member’’). pro rata share of each CFC; second, each the priority allocation approach, by However, in the context of section member’s pro rata share of each tested allowing the member’s tested losses to 951A, clear reflection of the GILTI item other than tested income is aggregated into a consolidated sum; and be used first to offset the same member’s inclusion amounts of both individual third, each member is then allocated a tested income. The other comment members and the consolidated group as portion of the consolidated sum of each suggested calculating and allocating the a whole is not feasible. Section 951A such tested item based on its relative consolidated group’s GILTI inclusion requires a U.S. shareholder-level amount of tested income (the amount in the same manner, but would calculation, where, for example, the ‘‘aggregation approach’’). See proposed extend application of this method to shareholder’s pro rata share of the tested § 1.1502–51(e)(2), (3), (4), (5), (7), and foreign tax credits with respect to tested income of one CFC may be offset by its (10). The aggregation approach has the income. This second comment proposed pro rata share of the tested loss or QBAI effect of determining the aggregate using the aggregation approach to of another CFC, to produce a smaller amount of GILTI inclusion amounts of determine the amount of such credits GILTI inclusion amount. Accordingly, members on a single-entity basis, but available to the consolidated group (and calculating a member’s GILTI inclusion then determining each member’s share the identity of the CFCs to whom the amount on a completely separate-entity of the consolidated group’s aggregate credits are attributable), but allocating basis, solely based on its pro rata share GILTI inclusion amount based on its certain basis adjustments in member of the items of its CFCs, would clearly relative pro rata share of tested income stock related to such credits under the reflect the income tax liability of the as determined on a separate-entity basis. priority allocation approach. As an member. However, such an approach The Treasury Department and the IRS alternative, the second comment would would mean that the consolidated received several comments addressing base the allocations on the relative group’s GILTI inclusion amount would the calculation of a member’s GILTI amounts of foreign tax credits paid by vary depending on which members own inclusion amount. These comments each member’s CFCs. each CFC, particularly in cases in which generally supported single-entity The Treasury Department and the IRS the CFCs held by some members treatment, but they expressed concern decline to adopt these comments produce tested income, but the CFCs about the lack of clear reflection of because they do not produce reasonable held by other members produce tested income at the member level. The results that are consistent with single- loss. This variability undermines the concern arises from the movement of entity treatment. In particular, the first clear reflection of the income tax the economic benefit (in the GILTI of these comments does not provide for liability of the consolidated group as a computation) of one member’s pro rata single-entity treatment when foreign tax whole. The Treasury Department and share of a tested loss with respect to credits are taken into account, instead the IRS determined in the proposed stock held by the member to other allowing for wide variation in the regulations that members’ GILTI members, including those not holding availability of foreign tax credits inclusion amounts should be such stock. The comments considered depending on which member of a determined in a manner that clearly whether alternative methods could be consolidated group owns the stock of reflects the income tax liability of the used that both provide for single-entity the CFCs. The variation arises because consolidated group and that creates treatment and minimize uneconomic a corporate U.S. shareholder is deemed consistent results regardless of which results to members. In particular, the to pay a portion of the foreign income member of a consolidated group owns comments raised the possibility that the taxes paid or accrued by its CFCs based the stock of the CFCs (‘‘single-entity tested loss of a CFC should first offset on the shareholder’s GILTI inclusion treatment’’). This approach removes the tested income of a CFC owned by amount. See section 960(d). A priority incentives for inappropriate planning the same member (the ‘‘priority allocation approach, like the separate and also eliminates traps for the allocation approach’’). entity calculations discussed in a unwary. One comment evaluated the merits of preceding paragraph, would change The proposed regulations accomplish the priority allocation approach versus members’ GILTI inclusion amounts these goals by providing that the GILTI the aggregation approach. The comment based on which member owns the stock inclusion amount of a member is identified the tension in the section of the CFCs. By extension, a priority determined pursuant to a multi-step 951A context between clearly reflecting allocation approach would also change process. As in the case of a non- income tax liability at the consolidated the amount of foreign tax credits that are member, the GILTI inclusion amount of group level and doing so at the member available to the consolidated group a member equals the excess (if any) of level, and it considered possible ways to based on which member owns the stock the member’s net CFC tested income alleviate this conflict. The comment of the CFCs. This disparity would allow over the member’s net DTIR for the ultimately endorsed maintaining the for tax planning to maximize the taxable year. See proposed § 1.951A– approach in proposed § 1.1502–51, due availability of foreign tax credits with 1(c)(1) and proposed § 1.1502–51(b). For to the additional rules and complexities respect to tested income.

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The second of these comments D. Portion of Proposed Regulations not language directly provides for the contains proposals that contravene Being Finalized dividends-received deduction, and longstanding foreign tax credit The proposed regulations would treat therefore the rule applying proposed principles, by divorcing a member’s a member as receiving tax-exempt § 1.78–1(c) to taxable years beginning income inclusion from the member’s income immediately before another before January 1, 2018, should be deemed payments of foreign tax. Absent member recognizes income, gain, eliminated. a GILTI inclusion amount and deduction, or loss with respect to a The Treasury Department and the IRS ownership of a CFC that has paid or share of the first member’s stock (the ‘‘F have determined that sections 7805(a), accrued foreign taxes on tested income, adjustment’’). See proposed § 1.1502– 7805(b)(2), and 245A(g) provide ample a U.S. shareholder can claim no foreign 32(b)(3)(ii)(F). The amount of the tax- authority for the rule and therefore tax credits with respect to tested exempt income would be determined finalize the proposed applicability date income. And yet under the proposed based in part on the aggregate tested without change. Section 7805(a) method, a consolidated group’s foreign income and aggregate tested losses of provides that the Treasury Department tax credits may reflect foreign taxes paid the member’s CFCs in prior taxable and the IRS shall prescribe all needful or accrued by CFCs of members that years. rules and regulations for the have no GILTI inclusion amount. For The Treasury Department and the IRS enforcement of title 26, including all these reasons, the Treasury Department have become aware of serious flaws rules and regulations as may be and the IRS do not adopt this method. with the F adjustment. Examples of the necessary by reason of any alteration of Based on the foregoing, the Treasury problems include unintended and law in relation to internal revenue. The Department and the IRS continue to duplicative tax benefits, distortive enactment of the Act and the addition believe that the aggregation approach effects, and possible avoidance of Code of section 245A necessitated regulations balances, to the greatest extent possible, provisions and regulations. Therefore, to ensure that section 78 continues to the clear reflection of the income tax the Treasury Department and the IRS serve its intended purpose. The purpose liability under section 951A of a have decided not to finalize the F of the section 78 dividend is to ensure consolidated group with reasonable adjustment. As a result, taxpayers may that a U.S. shareholder cannot results to its individual members. not rely on the F adjustment. The effectively both deduct and credit the Accordingly, the final regulations Treasury Department and the IRS foreign taxes paid by a foreign generally adopt the aggregation continue to study a number of issues subsidiary that are deemed paid by the approach from the proposed regulations regarding consolidated stock basis in U.S. shareholder. See Elizabeth A. without substantial changes. this area. Owens & Gerald T. Ball, The Indirect B. Applicability Date for Consolidated X. Comments and Revisions to Credit § 2.2B1a n.54 (1975); Stanley Groups Proposed §§ 1.78–1, 1.861–12(c)(2), and Surrey, ‘‘Current Issues in the Taxation For a discussion of the applicability 1.965–7(e) of the Foreign Tax Credit of Corporate Foreign Investment,’’ 56 date for § 1.1502–51, see part XI.A of Proposed Regulations Columbia Law Rev. 815, 828 (June 1956) this Summary of Comments and (describing the ‘‘mathematical quirk’’ Explanation of Revisions section. A. Special Applicability Date Under that necessitated enactment of section Section 78 78). Allowing a dividends-received C. Basis Adjustments to Member Stock The foreign tax credit proposed deduction for a section 78 dividend The proposed regulations contain regulations revise § 1.78–1 to reflect the would undermine the purpose of the special rules, applicable to consolidated amendments to section 78 made by the section 78 dividend because taxpayers groups, that reflect the downward basis Act, as well as make conforming would effectively be allowed both a adjustments set forth in proposed changes to reflect pre-Act statutory credit and deduction for the same § 1.951A–6(e) with respect to the stock amendments. In addition, the foreign foreign tax. For this reason, section 78 of tested loss CFCs. See proposed tax credit proposed regulations provide (as revised by the Act) provides that a §§ 1.1502–32(b)(3)(ii)(E) and that amounts treated as dividends under section 78 dividend is not eligible for a (b)(3)(iii)(C), and 1.1502–51(c) and (d). section 78 (‘‘section 78 dividends’’) that dividends-received deduction under As discussed above in part VIII.C of this relate to taxable years of foreign section 245A. Summary of Comments and Explanation corporations that begin before January 1, As noted in the preamble to the of Revisions section, the Treasury 2018 (as well as section 78 dividends foreign tax credit proposed regulations, Department and the IRS have that relate to later taxable years), are not the special applicability date rule under determined that the rules related to treated as dividends for purposes of § 1.78–1(c) is necessary to ensure that basis adjustments for tested loss CFCs section 245A. this principle is consistently applied should not be adopted in these final Comments questioned whether the with respect to a CFC that uses a fiscal regulations and will instead be Treasury Department and the IRS have year beginning in 2017 as its U.S. considered in a separate project. authority to treat section 78 dividends taxable year (a ‘‘fiscal year CFC’’) in Correspondingly, the special rules for relating to taxable years of foreign order to prevent the arbitrary disparate consolidated groups that reflect such corporations beginning before January 1, treatment of similarly situated rules are likewise reserved. See 2018, as ineligible for the dividends- taxpayers. Otherwise, a U.S. shareholder §§ 1.1502–32(b)(3)(ii)(E) and received deduction under section 245A, of a fiscal year CFC would effectively be (b)(3)(iii)(C), and 1.1502–51(c) and (d). which generally applies to certain able to take both a credit and a These special rules, along with related dividends paid after December 31, 2017. deduction for foreign taxes by claiming comments, will be considered in the Although some comments a section 245A deduction with respect same project as the rules related to basis acknowledged that allowing a to its section 78 dividend. In contrast, adjustments for tested loss CFCs and dividends-received deduction for section 78 (as revised by the Act) would will apply only to taxable years of U.S. section 78 dividends would provide apply correctly to a U.S. shareholder of shareholders that are members of a taxpayers with a double benefit that a CFC using the calendar year as its U.S. consolidated group ending after the date clearly was not intended by Congress, taxable year that was also subject to of publication of the final rules. the comments claimed that the statutory section 245A.

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The special applicability date is also for E&P to account for the increase to negative, and to account for the changes consistent with the grant of authority E&P of an E&P deficit foreign made to § 1.965–2(f)(2). Specifically, under section 245A(g) to provide rules corporation under section 965(b)(4)(B). § 1.861–12(c)(2)(i)(B)(1)(ii) now as may be necessary or appropriate to Alternatively, the comment requested provides that the taxpayer first adjusts carry out the provisions of section 245A. that the adjustment for E&P not include its basis in the 10 percent owned Section 245A was intended to provide PTEP. However, proposed § 1.861– corporation as if it did not make the for tax-exempt treatment of certain E&P 12(c)(2)(i)(B)(1)(ii) already accounts for election in § 1.965–2(f)(2)(i) and then, if earned through foreign subsidiaries as the increase in E&P of an E&P deficit applicable, adjusts the basis in the 10 part of a new participation exemption foreign corporation under section percent owned corporation by the system. See Conference Report, at 470 965(b)(4)(B) by providing for an amount described in § 1.965– (2017) (section 245A ‘‘allows an equivalent reduction in the adjusted 2(f)(2)(ii)(B)(1). These changes are not exemption for certain foreign income’’). basis of the foreign corporation. intended to alter the outcome of the Notably, the amount of a dividend Accordingly, the recommendation is not application of the rule to the taxpayer’s eligible for a dividends-received adopted. adjusted basis in the stock of the 10 deduction under section 245A is Another comment requested that the percent owned corporation as compared determined based on the amount of a rule in proposed § 1.861– to the rule articulated in the foreign tax foreign corporation’s ‘‘undistributed 12(c)(2)(i)(B)(1)(ii) be revised in light of credit proposed regulations; rather, the foreign earnings.’’ It would be the changes to § 1.965–2(f)(2) to changes are intended to make the rule incompatible with the purpose of similarly provide that any reductions in more straightforward for taxpayers to section 245A to exempt income arising basis be limited to the amount of the apply and to clarify any ambiguities by reason of a section 78 dividend, taxpayer’s basis in the 10 percent owned about the application of the rule where which is not paid out of a foreign corporation. This comment noted that in the adjustment exceeded the taxpayer’s corporation’s undistributed foreign the absence of such a rule, the adjusted basis in the stock. See § 1.861– earnings but instead represents earnings application of proposed § 1.861– 12(c)(2)(i)(C)(1) (Example 1) and (2) that could not be distributed since they 12(c)(2)(i)(B)(1)(ii) could reduce the (Example 2). were used to pay foreign tax. adjusted basis of the stock below zero, which would be inappropriate for C. Effect of Section 965(n) Election B. Application of Basis Adjustment for purposes of applying the expense Under section 965(n), a taxpayer may Purposes of Characterizing Certain allocation rules. The Treasury elect to exclude the amount of section Stock Department and the IRS agree that, for 965(a) inclusions (reduced by section Proposed § 1.861–12(c)(2) clarifies purposes of applying the expense 965(c) deductions) and associated certain rules for adjusting the stock allocation rules, a taxpayer should not section 78 dividends in determining the basis in a 10 percent owned corporation, have an adjusted basis below zero in the amount of the net operating loss including that the adjustment to basis stock of a 10 percent owned carryover or carryback that is deductible for E&P includes PTEP. Proposed corporation. However, rather than limit in the taxable year of the inclusions. § 1.861–12(c)(2)(i)(B)(2). Additionally, the reduction in stock basis to the Section 1.965–7(e)(1), as added by TD in order to account for the application amount of the taxpayer’s basis in the 10 9846, 84 FR 1838 (February 5, 2019), of section 965(b)(4)(A) and (B), relating percent owned corporation, the final provides that, if the taxpayer makes a to the treatment of reduced E&P of a regulations provide that § 1.861– section 965(n) election, the taxpayer deferred foreign income corporation and 12(c)(2)(i)(B)(1)(ii) may cause the does not take into account the amount increased E&P of an E&P deficit foreign taxpayer’s adjusted basis in the stock of of the section 965(a) inclusions (reduced corporation, proposed § 1.861– the corporation to be negative, as long by section 965(c) deductions) and 12(c)(2)(i)(B)(1)(ii) provides that, for as the adjustment for E&P provided for associated section 78 dividends in purposes of § 1.861–12(c)(2), a taxpayer in § 1.861–12(c)(2)(i)(A) increases the determining the amount of the net determines the basis in the stock of a taxpayer’s adjusted basis to zero or an operating loss for the taxable year. specified foreign corporation as if it had amount above zero. If the taxpayer’s Proposed § 1.965–7(e)(1)(i), included made the election under § 1.965–2(f)(2), adjusted basis in the 10 percent owned in the foreign tax credit proposed even if the taxpayer did not in fact make corporation is still below zero after regulations, provides that the amount by the election. However, the taxpayer does application of § 1.861–12(c)(2)(i)(A)(1) which the section 965(n) election not include the amount by which basis and (2), then for purposes of § 1.861–12, creates or increases the net operating with respect to a deferred foreign the taxpayer’s adjusted basis in the 10 loss for the taxable year is the ‘‘deferred income corporation is increased under percent owned corporation is zero for amount.’’ Proposed § 1.965– § 1.965–2(f)(2)(ii)(A), because the the taxable year. Section 1.861– 7(e)(1)(iv)(B) provides ordering rules to amount of that increase would be 12(c)(2)(i)(A)(3); see also § 1.861– coordinate the election’s effect on reversed if the increase were by 12(c)(2)(i)(C)(3) (Example 3) and (4) section 172 with the computation of the operation of section 961. After issuance (Example 4). The Treasury Department foreign tax credit limitations under of the foreign tax credit proposed and the IRS have determined that section 904. The foreign tax credit regulations, final regulations issued allowing the adjusted basis in stock to proposed regulations provide that the under section 965 (TD 9864, 84 FR 1838 be negative before the application of the deferred amount comprises a ratable (February 5, 2019)) altered the election adjustment for E&P most accurately portion of the deductions (other than under § 1.965–2(f)(2) to allow taxpayers reflects the value of the stock in the 10 the section 965(c) deduction) allocated to limit the reduction in basis with percent owned corporation. and apportioned to each statutory and respect to an E&P deficit foreign Additionally, these final regulations residual grouping for section 904 corporation under the election to the modify proposed § 1.861– purposes. amount of the taxpayer’s basis in the 12(c)(2)(i)(B)(1)(ii) to make clear that the Before the issuance of the foreign tax respective share of stock of the relevant adjustment in § 1.861– credit proposed regulations, the foreign corporation. 12(c)(2)(i)(B)(1)(ii) may cause a Treasury Department and the IRS were One comment requested a special rule taxpayer’s adjusted basis in stock in the aware that some taxpayers were taking with respect to the adjustment to basis 10 percent owned corporation to be the position that the source and separate

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category of the deferred amount consistent with sections 965(n) and 904. category of the deferred amount. See consisted solely of deductions allocated Section 965(n) does not modify the § 1.965–7(e)(1)(iv)(B)(2). and apportioned to the section 965(a) generally applicable rules concerning Separately, the Treasury Department inclusion. Under this approach, the the allocation and apportionment of and the IRS have determined that deferred amount would likely consist expenses for section 904 purposes, nor nothing in proposed § 1.965– primarily of deductions allocated and does it provide an ordering rule for 7(e)(1)(iv)(B)(2) suggests that the apportioned to foreign source general determining which deductions create or allocation and apportionment of category income because that is the increase the amount of a current year expenses is based on the section 965(a) likely source and separate category of net operating loss by reason of the inclusion net of the section 965(c) the section 965(a) inclusion; as a result, section 965(n) election. Section 965(n) deduction, as opposed to the section the electing taxpayer would generally applies solely to determine the amount 965(a) inclusion not reduced by the have a greater amount of foreign source of the net operating loss for the election section 965(c) deduction. All expenses general category income and thus be year and the amount of net operating are allocated and apportioned according to the regulations under §§ 1.861–8 able to credit more foreign taxes paid or loss carryover or carryback to that year. through 1.861–17. See proposed accrued with respect to general category It does not require or permit the § 1.965–7(e)(1)(iv)(B)(1). The section income (relative to the result under the reallocation of deductions that are foreign tax credit proposed regulations). 965(c) deduction is definitely related to After publication of the foreign tax allocated and apportioned to the the section 965(a) inclusion. See credit proposed regulations, a comment separate category containing the section § 1.861–8(b). Other deductions are recommended not finalizing the 965(a) inclusion and associated section allocated and apportioned according to proposed ordering rules because 78 dividends, regardless of whether any the regulations under §§ 1.861–8 taxpayers did not have a chance to deductions are deferred by reason of the through 1.861–17. For example, a consider those ordering rules before section 965(n) election. For example, if deduction that is not definitely related deciding to make an election under a taxpayer with only U.S. source and to any gross income must be ratably section 965(n). The comment also general category income has U.S. source apportioned between the statutory argued that the foreign tax credit taxable income exceeding the amount of grouping of gross income and the proposed regulations are inconsistent deductions allocated and apportioned to residual grouping. The gross income with the statutory language in section foreign source general category income utilized for such ratable apportionment 965(n), and with existing rules on the that includes a section 965(a) inclusion is not reduced by the section 965(c) allocation and apportionment of and associated section 78 dividends, a deduction. See § 1.861–8(c)(3). expenses under section 904, to the section 965(n) election would not result The final regulations also adopt the extent they defer deductions that would in a deferred amount and would not comment’s alternative suggestion to be taken against income other than the affect the calculation of the taxpayer’s allow taxpayers a limited period to section 965(a) inclusion. In addition, the foreign tax credit limitation. Similarly, a revoke a prior election under section comment stated that the foreign tax taxpayer with U.S. source income in 965(n) in order to account for the fact credit proposed regulations are excess of its net operating loss carryover that the foreign tax credit proposed inconsistent with the operation of would have no basis to prevent general regulations were issued after some section 965 and section 904 to the category income that includes a section taxpayers were required to make the extent they treat the section 965(a) 965(a) inclusion from being reduced by election under section 965(n). See inclusion net of the section 965(c) a general category section 172 § 1.965–7(e)(2)(ii)(B). For deduction, rather than the section 965(a) deduction. A pro rata convention for administrability reasons, in order to inclusion without reduction for the determining the source and separate minimize the number of amended section 965(c) deduction, as the gross category of the deferred amount is more returns that a taxpayer may need to file income in the statutory grouping for neutral and more consistent with the in connection with section 965, the section 904 purposes. The comment also operation of the expense allocation rules deadline for a revocation is based on the extended due dates for the taxpayer’s suggested that the exclusion of the in the absence of a deferred amount returns. In addition, in response to the section 965(c) deductions from the than a rule stacking the deferred amount comment’s request for clarification, deferred amount was inappropriate. The first out of deductions that would comment further stated that, if the proposed § 1.965–7(e)(1)(iv)(B)(1) is reduce the section 965(a) inclusion and regulations are finalized as proposed, revised in the final regulation to clarify associated section 78 dividends. taxpayers should be allowed to revoke that it refers to all deductions (other Therefore, the final regulations include the section 965(n) election. Finally, the than the net operating loss carryover or comment recommended that proposed the proposed rules applying the existing carryback to that year that is not § 1.965–7(e)(1)(iv)(B) be revised to refer rules on the allocation and allowed by reason of the section 965(n) to allocation of all deductions (other apportionment of expenses for purposes election). than the net operating loss carryover or of section 904, and determining the Another comment requested guidance carryback to that year that is not source and separate category of the providing that a taxpayer that had made allowed by reason of the section 965(n) deferred amount on a pro rata basis. a timely election under section 965(n) election), rather than refer solely to However, in response to the comment be treated as having made a timely allocation of deductions that would regarding the exclusion of the section election under section 965(h). Under have been allowed for the year but for 965(c) deductions from the deferred section 965(h), a taxpayer may elect to the section 965(n) election. amount, the Treasury Department and pay its section 965(h) net tax liability in The final regulations include the the IRS agree that section 965(n) does eight installments. Section 965(h)(5) ordering rules from the foreign tax not provide that the deferred amount provides that the election must be made credit proposed regulations, with some includes or excludes specific no later than the due date for the tax modifications to take into account the deductions for purposes of section 904. return for the inclusion year and in the comments. In general, the Treasury Therefore, the final regulations include manner prescribed by the Secretary. Department and the IRS have the section 965(c) deduction in Section 1.965–7(b)(2)(ii) provides that determined that these rules are determining the source and separate relief is not available under § 301.9100–

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2 or § 301.9100–3 to file a late election. Comments recommended that the pro certainty, would be less The comment explained that, as a result rata share anti-abuse rule in proposed administratively burdensome, and of the ordering rules in the foreign tax § 1.951–1(e)(6) not be applied to would not result in improper allocations credit proposed regulations, some transactions or arrangements entered of subpart F income because the method taxpayers will have a section 965(h) net into before the general applicability date is consistent with each shareholder’s tax liability in excess of amounts paid of § 1.951–1(e). Under this economic rights and interests. with respect to the tax year ending recommendation, transactions or The Treasury Department and the IRS December 31, 2017. Those taxpayers did arrangements entered into before the have determined that it would be not make a timely election under general applicability date of § 1.951– inappropriate to permit U.S. section 965(h) because they may have 1(e)(6), regardless of whether they shareholders the ability to choose determined that they did not have a would be subject to the pro rata share whether to rely on the new allocation section 965(h) net tax liability in excess anti-abuse rule, would be given effect rules under § 1.951–1(e)(3) for taxable of amounts paid because they calculated for purposes of determining a U.S. years of foreign corporations that end their section 904 foreign tax credit shareholder’s pro rata share of subpart within the U.S. shareholder’s taxable limitation in the inclusion year without F income and tested items for taxable year ending before October 3, 2018, the allocating or apportioning any expenses years ending after the general general applicability date of § 1.951– to reduce the amount described in applicability date. The Treasury 1(e). See § 1.951–1(i). Rather than § 1.965–7(e)(1)(ii), which is inconsistent Department and the IRS do not adopt simplifying the process of determining with the rules in the foreign tax credit this recommendation because it would their pro rata shares with respect to proposed regulations. have the effect of grandfathering their calendar year foreign subsidiaries, The final regulations do not adopt this existing transactions or arrangements the proposal would incentivize recommendation. The statute requires entered into with a principal purpose of taxpayers to invest additional time and that the election must be made not later avoiding Federal income taxation. resources to determine their U.S. tax liability under both sets of pro rata share than the due date for the tax return for A comment also recommended that rules in order to determine the rules that the inclusion year. See section taxpayers be permitted, but not result in the least amount of U.S. tax 965(h)(5); see also TD 9846, 84 FR 1838, required, to apply the facts and liability. In addition, because most tax 1868 (February 5, 2019) (denying a circumstances method under § 1.951– returns of U.S. shareholders that include similar request to permit late elections 1(e)(3), the substance of which is under section 965). Moreover, income from a foreign subsidiary with a discussed more fully in part II.C of this taxable year ending on December 31, regulations deeming an election to be Summary of Comments and Explanation made by default would not be 2017, by reason of section 965 have of Revisions section, to taxable years already been filed, the proposal would appropriate, because the statute requires ending on or after December 31, 2017, an affirmative election. Cf. 83 FR 39514, increase the number of amended returns and before October 3, 2018. The filed for those taxable years, thus 39533–39534 (August 9, 2018) (denying comment stated that, under section 965, a similar request to provide for default creating additional compliance burdens a U.S. shareholder with a taxable year for taxpayers and administrative costs section 965(h) elections). For these ending on December 31 may be required reasons, these regulations do not treat a for the government. Accordingly, the to determine its pro rata share of the final regulations do not adopt this taxpayer that has made a timely election increase to subpart F income of its under section 965(n) as having made a proposal. foreign subsidiaries in both its 2017 There were no comments related to timely election under section 965(h). taxable year with respect to foreign Finally, the final regulations include the applicability dates of other subsidiaries with a taxable year ending provisions of the proposed regulations. two new examples to illustrate the December 31, and its 2018 taxable year The final regulations adopt the application of § 1.965–7(e)(1). See with respect to foreign subsidiaries with applicability dates of the proposed § 1.965–7(e)(3). a taxable year ending November 30. regulations without substantial changes. Consistent with § 1.965–9, the final Accordingly, given the applicability regulations in § 1.965–7(e) apply to the Therefore, consistent with the date in the proposed regulations, for applicability date of section 951A, last taxable year of a foreign corporation purposes of determining such U.S. §§ 1.951A–1 through 1.951A–6, that begins before January 1, 2018, and shareholder’s inclusion under section including §§ 1.951A–2(c)(5) and with respect to a U.S. person, beginning 965, the U.S. shareholder could be –3(h)(2), apply to taxable years of the taxable year in which or with which required to apply, with respect to its foreign corporations beginning after such taxable year of the foreign calendar year foreign subsidiaries, the December 31, 2017, and to taxable years corporation ends. fair market value method under the of U.S. shareholders in which or with XI. Comments and Revisions Regarding existing regulations for classes of stock which such taxable years of foreign Applicability Dates with discretionary distribution rights, corporations end. The applicability but then apply, with respect to its fiscal dates with respect to the rules in A. Proposed Regulations year foreign subsidiaries, the facts and § 1.951–1 are as follows. Paragraphs (a), The proposed regulations provide that circumstances method for stock with the (b)(1)(ii), (b)(2), (e)(1)(ii)(B), and (g)(1) § 1.951–1(e), other than paragraph same characteristics. The comment apply to taxable years of foreign (e)(1)(ii)(B) (regarding the determination suggested that allowing U.S. corporations beginning after December of allocable E&P), applies to taxable shareholders to rely on the facts and 31, 2017, and to taxable years of U.S. years of U.S. shareholders ending on or circumstances method for taxable years shareholders in which or with which after October 3, 2018. Comments ending on or after December 31, 2017, such taxable years of foreign requested certain changes and guidance and before October 3, 2018, would corporations end. Paragraph (e), except related to the applicability date of enable taxpayers to apply a uniform for paragraph (e)(1)(ii)(B), applies to proposed § 1.951–1(e)(6), the substance method for allocating the section 965(a) taxable years of U.S. shareholders of which is discussed more fully in part earnings amounts of all relevant foreign ending on or after October 3, 2018. II.B of this Summary of Comments and subsidiaries among or between U.S. Paragraph (h) applies to taxable years of Explanation of Revisions section. shareholders, would provide more domestic partnerships ending on or after

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May 14, 2010. Sections 1.6038–2(a) and § 1.78–1(c) in order to apply the second regulations. OMB has designated this § 1.6038–5 apply to taxable years of sentence of § 1.78–1(a) to section 78 final regulation as economically foreign corporations beginning on or dividends received after December 31, significant under section 1(c) of the after October 3, 2018. 2017, with respect to a taxable year of Memorandum of Agreement. These final regulations modify a foreign corporation beginning before Accordingly, the final regulations have applicability dates in the proposed January 1, 2018. See part X.A of this been reviewed by OMB’s Office of regulations related to consolidated Summary of Comments and Explanation Information and Regulatory Affairs. For groups. Proposed § 1.1502–51 applies to of Revisions section regarding purposes of E.O. 13771 this rule is taxable years of foreign corporations comments received about the special regulatory. For more detail on the beginning after December 31, 2017, and applicability date in § 1.78–1(c). economic analysis, please refer to the to taxable years of U.S. shareholders in following analysis. which or with which such taxable years XII. Comment Regarding Special of foreign corporations end. The Analyses A. Need for the Final Regulations Treasury Department and the IRS have One comment asserted that in issuing The final regulations are needed to determined that for U.S. shareholders the proposed regulations, the Treasury address remaining open questions that are members of a consolidated Department and the IRS did not comply regarding the application of section group, the applicability date for with the Regulatory Flexibility Act 951A and comments received on the § 1.1502–51 should be postponed to (‘‘RFA’’) due to the number of small proposed regulations. In addition, taxable years of such members for business entities impacted. The certain rules in the foreign tax credit which the due date (without extensions) comment also stated that the Treasury proposed regulations need to be of the consolidated return is after the Department and the IRS did not comply finalized to ensure that the applicability date on which these final regulations are with the Paperwork Reduction Act dates of these rules coincide with the published in the Federal Register. (‘‘PRA’’) when they authorized the applicability dates of the statutory However, the final regulations provide collection of information. Lastly, the provisions to which they relate. that a consolidated group may apply the comment claimed that the Treasury B. Background rules of § 1.1502–51 in their entirety to Department and the IRS did not comply The Tax Cuts and Jobs Act (the Act) all of its members for all taxable years with Executive Orders 12866 and 13563, established a system under which described in § 1.951A–7. See § 1.1502– as well as the Memorandum of certain earnings of a foreign corporation 51(g). Understanding, Review of Tax can be repatriated to a corporate U.S. Regulations under Executive Order B. Foreign Tax Credit Proposed shareholder without U.S. tax. See Regulations 12866, when they issued the proposed section 14101(a) of the Act and section regulations. No significant changes were made to 245A. However, Congress recognized The Treasury Department and the IRS the applicability dates of the portions of that, without any base protection complied with the applicable the final regulations that relate to rules measures, this system, known as a requirements under the RFA, the PRA, that were in the foreign tax credit participation exemption system, could and Executive Orders 12866 and 13563 proposed regulations. Under § 1.965– incentivize taxpayers to allocate when issuing the proposed regulations. 9(a), the provisions of § 1.965–7 income—in particular, mobile income See 83 FR 51072, 51084 Special contained in this final regulation apply from intangible property—that would Analyses section. The comment’s beginning the last taxable year of a otherwise be subject to the full U.S. assertion regarding the number of small foreign corporation that begins before corporate tax rate to controlled foreign business entities impacted by the January 1, 2018, and with respect to a corporations (CFCs) operating in low- or United States person, beginning the proposed regulations is addressed in zero-tax jurisdictions. See Senate taxable year in which or with which part III of the Special Analyses section. Explanation at 365. Therefore, Congress such taxable year of the foreign Special Analyses enacted section 951A in order to subject corporation ends. In general, § 1.78–1 intangible income earned by a CFC to I. Regulatory Planning and Review— applies to taxable years of foreign U.S. tax on a current basis, similar to the Economic Analysis corporations that begin after December treatment of a CFC’s subpart F income 31, 2017, and to taxable years of U.S. Executive Orders 13563 and 12866 under section 951(a)(1)(A). However, in shareholders in which or with which direct agencies to assess costs and order to not harm the competitive such taxable years of foreign benefits of available regulatory position of U.S. corporations relative to corporations end, and § 1.861–12(c) alternatives and, if regulation is their foreign peers, the global intangible applies to taxable years that both begin necessary, to select regulatory low-taxed income (GILTI) of a corporate after December 31, 2017, and end on or approaches that maximize net benefits U.S. shareholder is taxed at a reduced after December 4, 2018. (including potential economic, rate by reason of the deduction under A special applicability date was environmental, public health and safety section 250 (with the resulting U.S. tax provided in proposed § 1.861–12(k) in effects, distributive impacts, and further reduced by a portion of foreign order to apply § 1.861– equity). Executive Order 13563 tax credits under section 960(d)). Id. 12(c)(2)(i)(B)(1)(ii) to the last taxable emphasizes the importance of Also, due to the administrative year of a foreign corporation beginning quantifying both costs and benefits, of difficulty in identifying income before January 1, 2018, since there may reducing costs, of harmonizing rules, attributable to intangible assets, be an inclusion under section 965 for and of promoting flexibility. intangible income (and thus GILTI) is that taxable year. In the final These final regulations have been determined for purposes of section regulations, this special applicability designated as subject to review under 951A based on a formulaic approach. date is extended to § 1.861–12(c)(2)(i)(A) Executive Order 12866 pursuant to the Intangible income for this purpose is to accommodate the changes that were Memorandum of Agreement (April 11, generally all net income (other than made to that rule to further implement 2018) between the Treasury Department certain excluded items) less a 10- the rule in § 1.861–12(c)(2)(i)(B)(1)(ii). A and the Office of Management and percent return (‘‘normal return’’) on special applicability date is provided in Budget (OMB) regarding review of tax certain tangible assets (‘‘qualified

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business asset investment’’ or ‘‘QBAI’’). similarly situated taxpayers might interpretation under the baseline and Id. at 366. interpret the statutory rules of section the final regulation. Thus it is not The final regulations address open 951A differently, potentially resulting in feasible for the Treasury Department questions regarding the application of inefficient patterns of economic activity and the IRS to quantify with any section 951A and comments received on or litigation in the event that a reasonable precision the difference in the proposed regulations. In addition, taxpayer’s interpretation of the statute economic activity that might be certain rules in the foreign tax credit differs from that of the IRS. For undertaken by those taxpayers based on proposed regulations are being finalized example, different taxpayers might those marginal GILTI inclusions.5 As in this Treasury decision to ensure that pursue income-generating activities data become available, the Treasury the applicability dates of these rules based on different assumptions about Department and the IRS will observe coincide with the applicability dates of whether that income will be counted as and monitor partner GILTI inclusions the statutory provisions to which they GILTI, and some taxpayers may forego resulting from the statute and these relate. The final regulations retain the specific investments that other supporting regulations. basic approach and structure of the taxpayers deem worthwhile based on With these considerations in mind, proposed regulations and foreign tax different interpretations of the tax part I.C.3.a.i of this Special Analyses credit proposed regulations, with consequences alone. If the foregone section explains the rationale behind certain revisions. activities would have been more the final regulations’ approach to the The final regulations relating to GILTI profitable than those that were treatment of partnerships and provides provide general rules and definitions, undertaken, U.S. economic performance a qualitative assessment of the guidance on the computation of a GILTI would be negatively affected. The alternatives considered. inclusion amount, rules regarding the guidance provided in these regulations The final regulations also include interaction of certain aspects of section helps to ensure that taxpayers face more provisions designed to curtail improper 951A with other provisions, guidance uniform incentives when making tax avoidance behavior. In the absence for consolidated groups and their economic decisions, thereby improving of these provisions, taxpayers could members and partnerships and their U.S. economic performance. This potentially reduce their GILTI by partners, information reporting guidance also helps to ensure that holding specified tangible property over requirements, and rules to prevent the taxpayers make tax-related decisions an additional quarter close. See part avoidance of GILTI. The regulations under interpretations that are more I.C.3.d.i of this Special Analyses under sections 78, 861, and 965 finalize consistent with the intent and purpose section. This activity is economically certain discrete provisions included in of the statute. inefficient to the extent that the the foreign tax credit proposed The Treasury Department and the IRS taxpayer acquires the property or holds regulations that relate to section 965. have not undertaken quantitative property longer than the taxpayer would estimates of these effects. Any such have held it in the absence of this tax- C. Economic Analysis quantitative estimates would be highly avoidance opportunity. The cost of this 1. Baseline uncertain because the mix of inefficiency (relative to the final interpretations that taxpayers might regulations, which reduce the incentives The Treasury Department and the IRS have pursued in the absence of this for such behavior) is roughly have assessed the economic effects of guidance and the mix of economic proportional to the amount of specified the final regulations relative to a no- behaviors stemming from those tangible property held longer than action baseline reflecting anticipated interpretations are not readily known. optimal, multiplied by the length of the Federal income tax-related behavior in More importantly, the relationship extra holding period, multiplied by the the absence of these final regulations. between a taxpayer’s interpretation difference between the use value of this 2. Summary of Economic Effects absent this guidance and the taxpayer’s property to the taxpayer and its GILTI inclusion under the final alternative use. The benefit of the final To assess the economic effects of regulations, a difference that is key to regulations is the reduction in this these final regulations, the Treasury understanding the economic effects of inefficiency. Department and the IRS considered the final regulations, is also not readily The Treasury Department and the IRS economic effects arising from three sorts known. have not undertaken a quantitative of provisions of these final regulations. For example, the final regulations estimate of this benefit but expect it to These are (i) effects arising from include provisions to address the be small because the difference between provisions that provide enhanced treatment of domestic partnerships and the use value to the taxpayer of property certainty and clarity; (ii) effects arising partners for purposes of section 951A held for tax avoidance purposes and its from provisions to prevent tax- and the section 951A regulations. Part alternative use is not likely to be large.6 avoidance behavior; and (iii) effects I.C.3.a.i of this Special Analyses section The Treasury Department and the IRS arising from other provisions. lays out some of the possible do not have readily available data on the These final regulations provide interpretations that taxpayers might amount of specified tangible property certainty and clarity to taxpayers have adopted in calculating their GILTI that might otherwise be used for tax regarding terms and calculations they inclusion with respect to CFCs owned avoidance purposes, the taxpayers who are required to apply under the statute. by a domestic partnership in the might hold this property, or the value Because a tax had not been imposed on absence of specific guidance. Because differential of the property that would GILTI before the enactment of section GILTI and the GILTI partnership be held for tax avoidance purposes. 951A and because the statute is silent provisions are new and because While it is not currently feasible for on certain aspects of definitions and taxpayers’ ownership shares of CFCs the Treasury Department and the IRS to calculations, taxpayers can particularly both through and separate from benefit from enhanced specificity domestic partnerships are not readily 5 Part I.C.3.a.ii of this Special Analyses section regarding the relevant terms and available, the Treasury Department and provides further discussion of data limitations in identifying the set of affected taxpayers. necessary calculations they are required the IRS cannot readily predict the 6 This claim refers solely to the economic benefit to apply under the statute. In the difference in taxpayers’ marginal GILTI arising from this provision and does not refer to any absence of this enhanced specificity, inclusion between any given estimate of the tax revenue effects of the provision.

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quantify these effects, part I.C.3.c.i of partially depreciable assets within the IRS re-evaluated this approach for the these Special Analyses explains the United States versus without relative to final regulations. rationale behind the final regulations’ an alternative of treating the entire The Treasury Department and the IRS approach to the temporary holding of adjusted basis of the asset as QBAI. considered a number of alternatives for specified tangible property and provides Because GILTI is new and because tax addressing the treatment of domestic a qualitative assessment of the filings do not report taxpayers’ partnerships in the final regulations. alternatives considered. accounting methods for assets placed in These alternatives were: (i) The hybrid This economic analysis further service before the enactment of section approach set forth in the proposed considered the economic effects of all 951A, the Treasury Department and the regulations; (ii) an approach under other provisions in the final regulations. IRS do not have readily available data which the domestic partnership would For example, the statute dictates that, to project which taxpayers are affected be treated as an entity for all purposes for the purpose of calculating QBAI, by these regulations or to project their of section 951A; and (iii) an approach taxpayers should depreciate assets marginal GILTI inclusion for current under which a domestic partnership placed in service before the enactment income-generating activities. Thus it is would be treated as an entity for of section 951A using the alternative not currently feasible for the Treasury purposes of determining whether any depreciation system (ADS) but grants Department and the IRS to estimate the U.S. person is a U.S. shareholder and authority to the Secretary under economic effects of the final regulations any foreign corporation is a CFC, but as 951A(d)(4) to issue regulations to relative to the baseline. an aggregate for purposes of determining prevent the avoidance of the purposes of whether, and to what extent, any U.S. section 951A(d). By providing taxpayers With these considerations in mind, person has a GILTI inclusion. A fourth an alternative to ADS, the final part I.C.3 of these Special Analyses option, to apply a pure aggregate regulations reduce taxpayers’ explains the rationale behind the final approach under which a domestic compliance burden and, by effecting regulations and provides a qualitative partnership would be treated as an changes in QBAI, change some assessment of the alternatives aggregate of all of its partners for all taxpayers’ marginal GILTI inclusion, an considered. purposes of section 951A, was rejected effect that may result in changes in 3. Economic Effects of Provisions because the Treasury Department and economic activity and the location of Substantially Revised From the the IRS determined that it is such activity. Furthermore, the final Proposed Regulations inconsistent with other sections of the regulations determine partnership QBAI Code. by reference to the depreciation a. Treatment of Domestic Partnerships The first option was to finalize the deductions generated by partnership Under Section 951A hybrid approach set forth in the specified tangible property because a i. Background and Alternatives proposed regulations. While the hybrid CFC partner’s share of these Considered approach is consistent with the depreciation deductions can be used as framework of section 951A, a number of a reliable proxy for determining a CFC’s Section 951A does not contain any comments pointed to administrative and distributive share of tested income specific rules on the treatment of a procedural complexities with the produced with respect to such property. domestic partnership and their partners approach of the proposed regulations, The use of the proxy simplifies, and that directly or indirectly own stock of including coordination with partners’ reduces the uncertainty in the CFCs. The proposed regulations contain capital accounts and basis adjustments computation for taxpayers, thereby a rule that requires a domestic with respect to partnership interests and reducing taxpayer burden relative to the partnership that is a U.S. shareholder of CFCs. In particular, comments noted the baseline. a CFC to determine its GILTI inclusion uncertainty under the hybrid approach The netting approach for specified amount. The proposed regulations then whether, and to what extent, a U.S. interest expense adopted in these final provide that partners of the partnership shareholder partner’s pro rata share of regulations also reduces uncertainty and that are not separately U.S. shareholders tested income or tested loss of a the complexity involved in of the CFC take into account their partnership CFC should increase or characterizing income and matching distributive share of the partnership’s decrease the partner’s capital account expense to income which would be GILTI inclusion amount. In contrast, with respect to the partnership or its required under a tracing approach. partners that are U.S. shareholders of basis in the partnership interest. Therefore, the netting approach the CFC are required to take into Comments also noted that the hybrid simplifies the taxpayers’ computations account their proportionate share of the approach can result in varied GILTI and reduces their compliance costs. partnership’s pro rata share of tested computations for partners depending on With respect to partially depreciable items of the CFC for purposes of whether the partner is a U.S. assets, such as platinum catalysts, the determining the U.S. shareholder’s own shareholder of a CFC owned by a final regulations treat a portion of the GILTI inclusion amount. The proposed domestic partnership. Finally, adjusted basis of the asset as giving rise regulations thus adopt a hybrid comments noted that the hybrid to QBAI, rather than the asset’s entire approach under which the domestic approach would result in disparate adjusted basis. The Treasury partnership is treated as an entity with treatment between partners that own Department and the IRS determined that respect to partners that are not stock in a CFC through a domestic applying the same standard for themselves U.S. shareholders of a CFC partnership and partners that own stock determining whether property qualifies but as an aggregate with respect to in a CFC through a foreign partnership. as QBAI and whether the property is partners that are themselves U.S. These latter outcomes have clearly depreciable is simpler for tax shareholders of the CFC. While the detrimental economic effects because administration and compliance hybrid approach is consistent with the they do not treat similar taxpayers in a purposes than having two standards. framework of section 951A, a number of similar fashion. Moreover, since QBAI generally is comments pointed to administrative and The second option was to adopt a determined for purposes of FDII under procedural complexities with the pure entity approach, meaning that the section 951A(d), it is expected that the approach of the proposed regulations. domestic partnership would determine final rule will incentivize the use of Thus the Treasury Department and the its own GILTI inclusion amount and

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each partner would take into account its that, in general, for purposes of section tested items of CFCs owned by the distributive share of the partnership’s 951A and the section 951A regulations, partnership nor include in their income GILTI inclusion amount. This approach a domestic partnership is treated in the a distributive share of the partnership’s is consistent with the historical same manner as a foreign partnership. GILTI inclusion amount. This latter treatment of domestic partnerships for The final regulations employ the group is likely to be a substantial purposes of subpart F. However, this existing framework for foreign portion of domestic partners given the approach is inconsistent with the partnerships (which are generally high number of partners per partnership policies underlying the GILTI treated as an aggregate of their partners and have lower compliance costs as a provisions and interrelated rules, such for purposes of subpart F), rather than result of the final regulations. Because it as the deduction under section 250 and creating new aggregation rules is not possible to readily identify these certain foreign tax credits for GILTI that specifically for the treatment of types of partners based on available are determined at the partner level domestic partnerships, because such data, this number is an upper bound of (rather than the partnership level). framework is relatively well-developed partners who would have been affected Further, under this approach, many and understood. Using the same by this rule had this rule been in effect taxpayers would be compelled to treatment for domestic and foreign in 2015 or 2016. reorganize their ownership structure— partnerships is more likely to result in b. Rule for Transfers During the for instance, by eliminating their market forces determining organization Disqualified Period ownership of CFCs through domestic form instead of tax law. In addition, by partnerships—to obtain full aggregation eliminating the complexity and traps for i. Background and Alternatives of tested items of their CFCs as the unwary associated with the hybrid Considered envisioned by Congress. Yet other and entity approaches, respectively, the The proposed regulations include a taxpayers would be incentivized to chosen approach reduces compliance rule in § 1.951A–2(c)(5) to address reorganize in an attempt to avoid full costs relative to the alternatives. transactions intended to reduce a GILTI aggregation so as to reduce their inclusion amount as a result of a inclusion below an amount that ii. Affected Taxpayers stepped-up basis in CFC assets accurately reflects their GILTI. For The Treasury Department and the IRS attributable to related party transfers instance, taxpayers could separate estimate that there were approximately that occur during the disqualified tested items that generally decrease a 7,000 U.S. partnerships with CFCs that period. The disqualified period of a CFC U.S. shareholder’s GILTI (for example, e-filed at least one Form 5471 as is the period between December 31, qualified business asset investment) Category 4 or 5 filers in 2015 and 2016.7 2017, which is the last earnings and from certain tested items that reduce the The identified partnerships had profits (E&P) measurement date under benefit of such tested items (for approximately 2 million partners, as section 965, and the beginning of the example, specified interest expense), indicated by the number of Schedules CFC’s first taxable year that begins after thus minimizing the U.S. shareholder’s K–1 filed by the partnerships. This December 31, 2017, which is the first aggregate GILTI inclusion amount. number includes both domestic and taxable year with respect to which Potentially reorganizing to realize a foreign partners, so it substantially section 951A is effective. A taxpayer specific GILTI treatment suggests that overstates the number of partners that that caused a CFC to sell its assets to a tax instead of market signals are would actually be affected by the final related party during the disqualified determining business structures. This regulations by including foreign period would not be subject to taxation can lead to higher compliance costs and partners.8 The final regulations affect on the income or earnings from such inappropriate investment. domestic partners that are U.S. sales under either section 965 (because The third option, which is adopted in shareholders of a CFC owned by the it was after the final E&P measurement the final regulations, is to apply an domestic partnership because such date) or section 951A (because it was approach that treats a domestic partners will determine their GILTI before its effective date). However, partnership as an entity for purposes of inclusion amount by reference to their absent a special rule, in subsequent determining whether any U.S. person is pro rata shares of tested items of CFCs years, the transaction would reduce a a U.S. shareholder and whether any owned by the partnership. Domestic U.S. shareholder’s GILTI, by either foreign corporation is a CFC, but treats partners that are not U.S. shareholders reducing the transferee CFC’s tested a domestic partnership as an aggregate of a CFC owned by the domestic income (or increase its tested loss) for purposes of determining whether, partnership will neither determine their through the depreciation or and to what extent, a partner of a own GILTI inclusion amount by amortization attributable to the ‘‘cost- domestic partnership has a GILTI reference to their pro rata shares of inclusion. Such an approach is free’’ basis (disqualified basis) in assets created by reason of such related party consistent with the framework of 7 Data are from IRS’s Research, Applied section 951A and gives effect to the Analytics, and Statistics division based on data transfer. Accordingly, the rule in the relevant statutory language that treats a available in the Compliance Data Warehouse. proposed regulations prevents the domestic partnership as a U.S. Category 4 filer includes a U.S. person who had benefits of the disqualified basis by control of a foreign corporation during the annual disallowing any deduction or loss shareholder and as owning stock for accounting period of the foreign corporation. purposes of determining U.S. Category 5 includes a U.S. shareholder who owns attributable to the disqualified basis for shareholder and CFC status. Moreover, stock in a foreign corporation that is a CFC and who purposes of determining tested income this approach eliminates the owned that stock on the last day in the tax year of or tested loss. the foreign corporation in that year in which it was Because the rule in proposed administrative complexity identified by a CFC. For full definitions, see https://www.irs.gov/ comments with respect to the hybrid pub/irs-pdf/i5471.pdf. § 1.951A–2(c)(5) only disallows the approach in the proposed regulations by 8 This analysis is based on the tax data readily stepped-up basis created by reason of a calculating a U.S. shareholder partner’s available to the Treasury Department at this time. disqualified transfer for purposes of GILTI inclusion amount solely at the Some variables may be available on tax forms that determining a CFC’s tested income and are not available for statistical purposes. Moreover, partner level. with new tax provisions, such as section 951A, tested loss, under the proposed The final regulations treat a domestic relevant data may not be available for a number of regulations, a taxpayer would have to partnership as an aggregate by providing years for statistical purposes. keep track of both a CFC’s disqualified

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basis in an asset for purposes of section not alone provide appropriate results, transferred during the disqualified 951A and the CFC’s adjusted basis in without taking into account the policies period. the asset for all other purposes of the underlying the specific provisions. Such The Treasury Department and the IRS Code. In addition, if the disqualified particular policy considerations could do not have data identifying CFCs that basis was not allowed for purposes of require additional special and detailed engaged in transactions with related determining tested income and tested rules or modifications to the general CFCs during the period after December loss, a comment noted that it would be disallowance rules. In addition, it 31, 2017 but before the effective date of unfair for the basis to still be taken into would be difficult to assess the effect section 951A. As an upper-bound account for purposes of section 901(m), that the disqualified basis would have estimate, there are approximately 3,000 which disallows foreign tax credits for on other provisions of the Code, or how U.S. shareholders of fiscal year CFCs foreign income not subject to U.S. tax by it could affect different taxpayers with with at least one related CFC that could reason of certain basis differences that different tax postures. potentially engage in a transaction.9 arise by reason of covered asset The third option, which is adopted in This is an overestimate since only those acquisitions. A transfer subject to the the final regulations, is to allow fiscal year CFCs with unrealized gains rule (a disqualified transfer) can also be taxpayers to make an election that could take advantage of this disqualified a covered asset acquisition, and eliminates disqualified basis in property period. The Treasury Department does therefore section 901(m) and proposed by reducing a commensurate amount of not have data readily available to § 1.951A–2(c)(5) could apply adjusted basis in the property for all estimate these unrealized gains. concurrently by reason of the same purposes of the Code. Although this c. Transition Rule To Determine Normal transaction. option was not as targeted as the second Return Using the Alternative The Treasury Department and the IRS option, it was the simplest of the three Depreciation System considered three options to address the options because it results in the treatment of disqualified basis. These i. Background and Alternatives property only having a single tax basis Considered options were: (i) Adopt the proposed for all purposes of the Code such that regulations without change; (ii) revise different bases need not be tracked for A U.S. shareholder’s GILTI inclusion the regulations to provide that different purposes. In addition, it does amount is based on a formulaic disqualified basis is also not taken into not result in additional complex rules, approach under which a 10-percent account for purposes of certain other as would be required in the second return attributed to certain tangible provisions (in addition to section 951A) option, because it simply applies for all assets (QBAI) is computed and then to ensure that the rule only prevents the purposes; once the basis is reduced, the each dollar of certain income above GILTI benefits that taxpayers were Code simply applies to the property as such ‘‘normal return’’ is effectively trying to achieve; or (iii) allow taxpayers if the basis were never stepped up. treated as intangible income. Under the to make an election that would Finally, this approach permits taxpayers statute, QBAI is measured by disregard the disqualified basis for all determining the adjusted basis in purposes of the Code. to decide whether the benefit of the additional adjusted basis associated certain tangible property using the The first option was to finalize alternative depreciation system (ADS). without change the rule contained in with the disqualified basis outweighs the cost of complexity in applying the Section 951A(d)(4) directs the Secretary the proposed regulations. On the one to issue regulations or other guidance hand, this approach could be viewed as rule or, alternatively, whether the value of simplicity outweighs the benefit of that is appropriate to prevent the simple and targeted, because this rule avoidance of the purposes of section would only disregard disqualified basis the additional adjusted basis. By allowing this flexibility and adopting a 951A(d), including with respect to the for purposes of determining GILTI, and treatment of temporarily held or the transactions subject to the rule were single adjusted basis for all purposes of the Code, the adopted approach reduces transferred property. primarily intended to reduce GILTI. On The proposed regulations require the complexity and compliance costs, the other hand, this rule could be adjusted basis of all specified tangible relative to both alternatives considered. considered unfair in certain cases property to be determined using ADS because the concurrent application of ii. Affected Taxpayers under section 168(g) for purposes of both the rule and section 901(m), determining the QBAI of a CFC. In The final regulations apply to any without a means for avoiding such general, the Code requires that tangible deduction or loss attributable to concurrent application, could be viewed property used by a CFC outside the disqualified basis. Disqualified basis is as unduly punitive to taxpayers that United States must be depreciated using created by reason of a disqualified engaged in such transactions. In ADS. Accordingly, in most instances, transfer, which is defined as a transfer addition, this option would require the depreciation method required under of property by a fiscal year CFC during taxpayers to track and maintain separate the proposed regulations will the disqualified period to a related bases in the property for purposes of correspond to the CFC’s depreciation person in which gain was recognized, in GILTI and all other purposes of the method used for computing income. whole or in part. A fiscal year CFC’s Code. However, under existing regulations disqualified period is the period that The second option was to not take under section 952, a CFC may compute begins on January 1, 2018, and ends as into account disqualified basis for its income and E&P using the of the close of the CFC’s last taxable certain other provisions (in addition to depreciation method used in keeping its year that is not a CFC inclusion year. section 951A) to ensure that the rule accounting books and records or a The taxpayer affected is a U.S. only prevented the GILTI benefits that method conforming to United States shareholder of any CFC that holds taxpayers were trying to achieve. Such generally accepted accounting property with disqualified basis. In an approach would result in additional principles (‘‘non-ADS depreciation general these final regulations affect and considerable complexity because method’’) if the differences between numerous other provisions would have U.S. shareholders with at least one fiscal to be considered. In addition, simply year CFC that has at least one other CFC 9 Based on IRS Statistics of Income 2014 study not taking into account the basis for where the fiscal-year CFC has property file of C corporations with Form 5471 category 4 purposes of these other provisions may with unrealized gains that can be filers. Includes full and part year returns.

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ADS and the non-ADS depreciation permitted to compute their income and special rule is required because method are immaterial. In the case of a E&P using their non-ADS depreciation otherwise the salvage value would be CFC that is permitted to use a non-ADS method for specified tangible property included in the CFC’s QBAI until the depreciation method, the proposed used outside the United States when the CFC disposed of the asset. This option regulations would nonetheless require differences between the non-ADS was the least administratively the CFC to determine its adjusted basis depreciation method and ADS are burdensome, and the least likely to in its assets for purposes of calculating immaterial. Therefore, the Treasury result in controversy between taxpayers QBAI based on ADS. In particular, with Department and the IRS determined that and the IRS. It reduces compliance costs respect to assets placed in service before some relief from the administrative relative to the two alternatives by the enactment of section 951A, the burden of re-determining the adjusted eliminating the need to redetermine the proposed regulations would require the basis of each property placed in service adjusted basis, class life and date placed CFC to determine the date the assets before December 22, 2017, should be in service of property for which good were placed in service, the ADS class available to CFCs that are not required records may not exist. As noted above, life, and other information about the to use ADS for computing income and it does not impact taxpayers’ incentives asset to correctly apply ADS as if the E&P. Such relief will alleviate this or cost of capital, because it applies to asset had been depreciated using ADS administrative burden, but will not property already placed in service. since the date the asset was placed in impact taxpayer incentives or cost of Further, because relief is provided in service. Several comments noted that capital, because it pertains only to instances in which the difference this requirement could be onerous for property already placed in service. between ADS and a non-ADS specified tangible property acquired The second option considered seeks depreciation method is immaterial, it is before the enactment of section 951A to relieve burden by requiring ADS for likely to result in only minimal and requested relief from this determining the adjusted basis in differences in depreciation deductions requirement for such property. specified tangible property, but on a and QBAI.10 Small changes in the QBAI Although section 951A(d)(3) ‘‘cut-off basis.’’ Under this option, the have an even more muted impact on the specifically requires use of ADS to CFC would apply ADS to the adjusted determination of GILTI, because net determine the adjusted basis in basis determined using its non-ADS DTIR, a component of the GILTI specified tangible property, section depreciation method as of the beginning calculation, is only 10 percent of QBAI. 951A(d)(4) authorizes the Secretary to of the first taxable year subject to Therefore, the impact of using a non- issue regulations that are appropriate for section 951A. This option eliminates the ADS depreciation method versus ADS purposes of determining QBAI. Thus, need to re-determine the adjusted basis for property placed in service before the the Treasury Department and the IRS in the property as if ADS had been used enactment of section 951A is minimal. considered three options to address the since the property was placed in Accordingly, this is the option adopted use of ADS for specified tangible service. This approach could be in the final regulations. property placed in service prior to the implemented by applying ADS for the enactment of section 951A. These remaining ADS class life of the property ii. Affected Taxpayers options were: (i) Require the use of ADS or by treating the property as newly The population of taxpayers for all property placed in service before placed in service and applying the full potentially affected by this aspect of the enactment of section 951A, ADS class life to the property. Each of these final regulations are the U.S. consistent with the proposed those options would still require the shareholders of CFCs that are not regulations; (ii) require ADS for CFC to determine when the property required to use ADS when computing determining the adjusted basis of was placed in service and its ADS class E&P, subpart F income, and tested specified tangible property, but on a life. In addition, applying ADS for the income or tested loss, because the ‘‘cut-off basis’’; or (iii) allow the CFC to remaining ADS class life of the property differences in the tax liability of such continue using its non-ADS would also require special rules for U.S. shareholders resulting from the use depreciation method for property placed situations in which the property would of the CFCs’ non-ADS depreciation in service prior to the enactment of have been fully depreciated under ADS method are immaterial relative to the section 951A, and to include a special before the first taxable year subject to use of ADS. Only those taxpayers whose rule that requires depreciation of the section 951A, and applying ADS to the CFCs use a non-ADS depreciation ‘‘salvage value.’’ These options apply property based on the full ADS class life method for property placed in service only where the CFC is not required to of the property would extend the period before December 22, 2017 instead of use ADS to compute its income under that the property is taken into account ADS when computing E&P would be § 1.952–2 or E&P under § 1.964–1 with in the computation of QBAI. The affected by these final regulations. respect to such property. Treasury Department and the IRS The Treasury Department and the IRS The first option considered was to concluded that applying ADS on a cut- have previously projected that between require the use of ADS for all property off basis under either approach did not 25,000 and 35,000 direct shareholders of placed in service before the enactment significantly reduce the administrative CFCs would be potentially subject to of section 951A, consistent with the burden of computing QBAI with respect GILTI and thus could be affected by this proposed regulations. However, to property placed in service prior to the rule. This is an upper-bound estimate of Treasury and the IRS recognize that re- enactment of section 951A. taxpayers affected because it is not determining the adjusted basis in assets The third option considered was to limited to those with CFCs that are using a new depreciation method could allow the CFC to elect to use its non- permitted to use a non-ADS be a difficult, uncertain, and time- ADS depreciation method for property depreciation method with respect to consuming process for CFCs that have acquired prior to the enactment of property placed in service before the numerous items of specified tangible section 951A, and to include a special property acquired before the enactment rule that requires depreciation of the 10 Treasury Depreciation Model tabulations of of section 951A, in part, because the ‘‘salvage value’’ (in other words, the depreciation rates by 2 digit industry indicate that, on average, book depreciation and ADS CFCs may not have kept the records portion of the basis of property that depreciation for property in the manufacturing, necessary to make the determinations. would not be fully depreciated under mining, construction, utilities, and wholesale trade Notably as described above, CFCs are the non-ADS depreciation method). The industries, are within 10 percent of one another.

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enactment of section 951A. Precise transactions subject to the rule relative years, and are all tested income CFCs. identification of these taxpayers is not to the first option, and would be Finally, this option would include possible from readily available data administrable for the IRS and taxpayers examples to indicate types of because taxpayers do not report on (because a taxpayer’s motivation for transactions that are, and are not, Form 5471 what depreciation method holding the property would not be subject to the rule. they used in computing E&P. relevant), it could still apply to This fourth option more accurately transactions that were not tax- identifies cases of potential abuse in d. Anti-Abuse Rule for Specified motivated. In addition, it could increase comparison to the proposed regulations Tangible Property Held Temporarily the burden on IRS to enforce and the other options discussed in this i. Background and Alternatives compliance because it would require part I.C.3.d.i of the Special Analyses Considered additional resources to assert the rule section. Because it more accurately identifies cases of potential abuse, it The proposed regulations include an for property held longer than six yields more efficient outcomes because anti-abuse rule to address property that months, even though the property may it does not penalize taxpayers with a is held temporarily over the quarter still be held temporarily for tax- legitimate business purpose for close of a CFC with a principal purpose motivated reasons. The third option was to eliminate the temporarily holding tangible property. of reducing the GILTI inclusion amount per se rule and rely on a principal This option provides flexibility to of a U.S. shareholder of the CFC. In the purpose rule. The rule would disregard taxpayers holding property less than 12 absence of an anti-abuse rule, taxpayers the adjusted basis in property for months to either accept the presumption could reduce their GILTI inclusion by purposes of computing QBAI if the (and thus disregard the basis of the having a CFC temporarily hold property property is held temporarily and is property under the anti-abuse rule) or, over an additional quarter close in order acquired with a principal purpose of if appropriate, to choose to rebut the to artificially increase the U.S. reducing a GILTI inclusion amount. presumption by filing the appropriate shareholder’s ‘‘normal return’’ on While this option would have the statement. Taxpayers will have the tangible assets. The anti-abuse rule for benefit of being flexible and, therefore, flexibility to make the choice that temporarily held property in the in theory could apply only to temporary appropriately balances the compliance proposed regulations included a ‘‘per holdings that were intended to reduce a costs related to rebutting the se’’ rule, which deemed property to be U.S. shareholder’s GILTI inclusion presumption with the tax cost of not held temporarily and acquired with a amount, it could create uncertainty for rebutting the presumption depending on principal purpose of reducing a GILTI both taxpayers and the IRS. This their particular circumstances. This inclusion amount if held by the CFC for uncertainty would result, in part, from option also relieves taxpayers of the less than a 12-month period. Comments the need to determine the taxpayer’s burden of monitoring assets that are asserted that the anti-abuse rule was principal purposes for each relevant held more than 36 months, relative to overbroad. In particular, comments acquisition and not having general the other options. In addition, the safe expressed concerns that the 12-month guidelines for when property is harbor would provide additional per se rule could affect transactions not considered to be held temporarily. It certainty to both taxpayers and the IRS, motivated by tax avoidance, such as would also increase administrative and and eliminate any resulting compliance ordinary course transactions, and create compliance costs for the IRS and and administrative costs, because these burdens resulting from having to track taxpayers because there could be more transactions, which generally do not how long the specified tangible property disputes over the taxpayer’s principal give rise to avoidance concerns, would is held. purpose and when a property is held be entirely excluded from the The Treasury Department and the IRS temporarily. application of the rule. Although the considered four options to address these The fourth option that was considered compliance costs associated with a concerns. These options were: (i) Adopt involved several components. First, this rebuttal based on facts and the proposed regulations without option would convert the per se rule to circumstances will likely be higher than change; (ii) shorten the per se rule; (iii) a rebuttable presumption. Under this under the first and second alternatives, eliminate the per se rule and rely on a rule, property would be presumed to be those alternatives do not provide principal purpose rule; or (iv) convert temporarily held and acquired with a taxpayers with an opportunity to the per se rule into a rebuttable principal purpose of reducing a GILTI demonstrate the economic substance of presumption, add a safe harbor, and inclusion amount if the property is held the transaction, and the electivity of the clarify the scope of the rule. for less than twelve months. However, rebuttal leaves taxpayers no worse off The first option was to finalize the presumption could be rebutted if, in than under the first and second options. without change the rule contained in general, the facts and circumstances It is not clear whether the adopted the proposed regulations. This approach clearly establish that the subsequent approach has higher or lower is a simple and administrable rule for transfer of the property by the CFC was compliance costs than the third the IRS and taxpayers because it would not contemplated when the property approach, but Treasury and IRS not consider the taxpayer’s motivation was acquired and that a principal determined the adopted approach to be for holding property for less than 12 purpose of the acquisition of the superior for the reasons discussed months; however, it would not address property was not to increase the normal above. the concern raised by comments that the return of a U.S. shareholder. This option The Treasury and the IRS determined rule can potentially apply to also would add a second presumption that these changes strike an appropriate transactions that were not tax motivated that generally provides that property is balance between (i) mitigating and could therefore lead to a reduction presumed to not be subject to the rule compliance burdens relative to the in otherwise economically valuable if held for more than 36 months. In proposed regulations and providing transactions. addition, this option would include a certainty and flexibility to taxpayers and The second option was to shorten the ‘‘safe harbor’’ that generally applies to (ii) identifying transactions that have 12-month per se rule to, for example, six transfers between CFCs that are owned the potential for abuse. Thus, this is the months. While this option could in the same proportion by U.S. approach adopted in the final significantly reduce the number of shareholders, have the same taxable regulations.

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ii. Affected Taxpayers 864(e)(4) is increased as a result of the Department and the IRS considered two In principle, this aspect of the final application of section 965(b)(4)(B), even options to address the concern regulations could apply to any tested though there has been no economic expressed by the comment. These income CFC that purchases tangible change to the value of the foreign options were: (i) Adopt the foreign tax property and holds it temporarily. corporation. Under final regulations credit proposed regulations described Therefore, this aspect of the regulations under section 965, in general, a taxpayer above with a statement that the could affect any of the 25,000–35,000 may elect to reduce the basis in the reduction in basis is limited to the persons with a potential GILTI inclusion stock of the foreign corporation, on a taxpayer’s adjusted basis in the stock of and should be treated as an upper- share by share basis, by the amount of the foreign corporation; or (ii) allow a bound estimate. In practice, however, it the increase to the E&P of the foreign taxpayer’s adjusted basis in the stock of would only apply to U.S. shareholders corporation under section 965(b)(4)(B). the foreign corporation to be reduced of CFC that temporarily hold tangible See § 1.965–2(f)(2)(i). However, the below zero as a result of the adjustment property for tax minimization purposes, election does not cause the taxpayer’s for section 965(b)(4)(B) as long as the which would only be a small subset of basis to be reduced below zero, even if adjustment for E&P provided in section sophisticated tax planners. The the amount of the increase to the E&P 864(e)(4) increased the adjusted basis of Treasury Department and the IRS do not of the foreign corporation under section the foreign corporation to or above zero. have readily available data to enable 965(b)(4)(B) exceeds the taxpayer’s basis The first option was to adopt the estimating how many taxpayers could in the stock. proposed regulations with a statement minimize tax in this way, nor which The foreign tax credit proposed that the reduction in basis is limited to taxpayers would likely undertake such regulations provide that, for purposes of the taxpayer’s adjusted basis in the behavior in the absence of these determining the adjusted basis of the stock of the foreign corporation. On one regulations. stock of the foreign corporation under hand, this would address the concerns section 864(e)(4), a taxpayer should that the adjustment could cause a e. Application of Basis Adjustment for determine its adjusted basis in the stock taxpayer’s adjusted basis in the stock of Purposes of Characterizing Certain of the foreign corporation as if the the foreign corporation to be less than Stock taxpayer had made in the election in zero for purposes of the expense i. Background and Alternatives § 1.965–2(f)(2)(i). See proposed § 1.861– allocation rules. On the other hand, this Considered 12(c)(2)(i)(B)(1)(ii). After this would perpetuate some of the distortion adjustment, the taxpayer then follows created by the application of section Under the Code, certain expenses, the existing rule under section 864(e)(4) 965(b)(4)(B). That is, because the including interest, must be allocated to increase or decrease the adjusted increase in the E&P of the foreign based on the adjusted basis of the assets basis in the stock by the E&P of the corporation would exceed the held by the taxpayer. For purposes of foreign corporation and its subsidiaries. allocating expenses to stock of certain A comment requested that the foreign downward adjustment in the basis of foreign corporations held directly by a tax credit proposed regulations be the foreign corporation, the adjusted taxpayer, section 864(e)(4) generally amended to make clear that, for basis in the stock of the foreign requires that a taxpayer adjust the purposes of section 864(e)(4), that the corporation would still be higher for adjusted basis of the stock by the reduction in basis under proposed purposes of section 864(e)(4) than if aggregate amount of E&P of the foreign § 1.861–12(c)(2)(i)(B)(1)(ii) does not section 965(b)(4)(B) had not applied. corporation and its subsidiaries. The cause the taxpayer’s basis in the stock The second option was to provide that combination of the adjusted basis of the in the foreign corporation to be less than the taxpayer’s adjusted basis in the stock of the foreign corporation and the zero. This could happen, for example, stock of the foreign corporation may be increase or decrease (if the foreign where the increase in the foreign reduced below zero as a result of the corporation and its subsidiaries have a corporation’s E&P under section adjustment for section 965(b)(4)(B) as deficit in E&P) in that amount by the 965(b)(4)(B) exceeded the taxpayer’s long as the adjustment for E&P provided E&P of the foreign corporation adjusted basis in the stock of that in section 864(e)(4) increased the approximate the value of the stock of foreign corporation. adjusted basis of the foreign corporation the foreign corporation for purposes of The Treasury Department and the IRS to or above zero. This option fully the expense allocation rules. See Joint agreed that, for purposes of applying the addresses the non-economic increase to Committee on Tax’n, General expense allocation rules, a taxpayer the E&P of the foreign corporation under Explanation of the Tax Reform Act of should not have an adjusted basis below section 965(b)(4)(B) because the 1986 (Pub. L. 99–514) (May 4, 1987), zero in the stock of a foreign adjusted basis of the foreign corporation JCS–10–87, at p. 946 (noting that ‘‘the corporation. When the adjusted basis of is reduced by the full amount of the failure to consider earnings and profits an asset is zero, no expenses are increase. However, it also still ensures caused significant distortion’’ for allocated to that asset and thus allowing that, for expense allocation purposes, purposes of expense allocation rules a negative adjusted basis would serve no the adjusted basis of the stock of the because the value of the earnings and purpose for the expense allocation rules. foreign corporation will not be below profits is reflected in the fair market However, because the adjustment to the zero, after accounting for the E&P value of the stock). stock of the foreign corporation in this adjustment in section 864(e)(4). The Under section 965(b)(4)(B), if a case is two steps—the adjusted basis is Treasury Department and the IRS taxpayer used a deficit in E&P to offset reduced to account for the application selected this option for the final its inclusion under section 965(a), the of section 965(b)(4)(B) and then regulations because it addressed the deficit is eliminated by increasing the increased or decreased by the amount of concerns regarding negative adjusted E&P of the foreign corporation with the E&P of the foreign corporation and its basis while most accurately reflecting deficit. However, because there is no subsidiaries—the adjusted basis could the value of the stock in the foreign offsetting reduction to the basis of the be less than zero after the initial corporation for purposes of the expense stock of the foreign corporation, the adjustment but still be positive after the allocation rules, and did not increase adjusted basis of that foreign second adjustment is taken into compliance costs relative to the corporation for purposes of section account. Accordingly, the Treasury alternatives.

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ii. Affected Taxpayers Form 1120 series, Form 1040 series, basis is held directly by a CFC or The taxpayers potentially affected by Form 1041 series, and Form 1065 series indirectly through a partnership in this aspect of the final regulations are (see chart at the end of this part II of this which the CFC is a partner. With respect those taxpayers that own at least 10 Special Analyses section for the status to property held directly by the CFC, percent of a foreign corporation that had of the PRA submissions for these forms). this election is made by controlling its E&P increased under section The collection of information in domestic shareholders of the CFC by 965(b)(4)(B). The Treasury Department § 1.951A–3(h)(1)(iv)(A) is a statement attaching a statement meeting the and the IRS have not estimated how that a U.S. shareholder must attach to a requirements of § 1.964–1(c)(3)(ii) with many taxpayers are likely to be affected Form 5471 with respect to a CFC in their income tax returns following the by these regulations because this level order to rebut the presumption that a notice requirements of § 1.964– of detail regarding taxpayer filings transfer of specified tangible property 1(c)(3)(iii). See § 1.951A– under section 965 is not readily held by the CFC for less than 12 months 3(h)(2)(ii)(B)(3)(ii). With respect to available. However, 100,000 taxpayers was held temporarily with a principal property held in a partnership in which were estimated to pay the section 965 purpose of increasing the DTIR of the the CFC is a partner, this election is one-time tax. This is an upper-bound U.S. shareholder. The information made by the partnership by filing a estimate of affected taxpayers since only included in the statement is required in statement as described in § 1.754–1(b)(1) those with an E&P adjustment under order for the IRS to be aware if the attached to the partnership return. See section 965(b)(4)(B) would be affected. taxpayer takes the position that the § 1.951A–3(h)(2)(ii)(B)(3)(iii). For Information on those taxpayers is not temporary ownership rule of § 1.951A– purposes of the PRA, the reporting readily available to the Treasury 3(h)(1) does not apply. Without this burden associated with § 1.951A– Department and the IRS. statement, there is a presumption that 3(h)(2)(ii)(B)(3)(ii) will be reflected in such property is held temporarily with the PRA submission associated with the II. Paperwork Reduction Act a principal purpose of increasing DTIR Form 990 series, Form 1120 series, Form In response to comments addressing of a U.S. shareholder and a portion of 1040 series, Form 1041 series, and Form the notices of proposed rulemaking the basis in the property may be 1065 series (see chart at the end of this preceding the final regulations, the disregarded for purposes of calculating part II of the Special Analysis section Treasury Department and the IRS have QBAI of the CFC that holds the property for the status of the PRA submissions for added new collections of information temporarily. The statement indicates these forms). For purposes of the PRA, with respect to section 951A and that the U.S. shareholder should be the reporting burden associated with revised a collection of information with allowed the benefit of basis that would § 1.951A–3(h)(2)(ii)(B)(3)(iii) will be respect to section 965(n). otherwise be disregarded for purposes of reflected in the PRA submission The new collections of information in calculating QBAI. For purposes of the associated with Form 1065 (see chart at these regulations with respect to section PRA, the reporting burden associated the end of this part II of the Special 951A are in § 1.951A–3(e)(3)(ii), with § 1.951A–3(h)(1)(iv)(A) will be Analysis section for the status of the (h)(1)(iv)(A), and (h)(2)(ii)(B)(3). The reflected in the PRA submission PRA submissions for this form). revised collection of information with associated with Form 5471, The collection of information in respect to the election under section ‘‘Information Return of U.S. Persons § 1.965–7(e)(2)(ii)(B) requires a taxpayer 965(n) is in § 1.965–7(e)(2)(ii)(B). With Respect to Certain Foreign revoking a section 965(n) election to The collection of information in Corporations’’ (OMB control number attach a statement to that effect to an § 1.951A–3(e)(3)(ii) is an election that 1545–0123). amended income tax return. The the controlling domestic shareholders of The collection of information in information is required in order for the a CFC may make in order for the CFC § 1.951A–3(h)(2)(ii)(B)(3) is an election IRS to be aware if a taxpayer revokes an to continue to use its book depreciation to disregard disqualified basis, which is election. The Treasury Department and method (rather than converting to ADS) certain basis that was created by reason the IRS have determined that the for purposes of determining the adjusted of a disqualified transfer during the reporting burden associated with basis in specified tangible property disqualified period of a transferor CFC, § 1.965–7(e)(2)(ii)(B) to revoke a section placed in service before its first taxable as those terms are defined in § 1.951A– 965(n) election is reflected in the year beginning after December 22, 2017 3(h)(2)(ii)(C). This election would reporting burden associated with if certain conditions are met. This simplify recordkeeping with respect to making the election. For purposes of the election is made by controlling domestic the property because a separate record PRA, the reporting burden associated shareholders by attaching a statement of the disqualified basis and total with § 1.965–7(e)(2)(ii)(B) will be meeting the requirements of § 1.964– adjusted basis in the property would not reflected in the PRA submission 1(c)(3)(ii) with their income tax returns have to be tracked. For purposes of associated with TD 9846, 84 FR 1838 following the notice requirements of determining disqualified basis, a (February 5, 2019) (OMB control § 1.964–1(c)(3)(iii). This election, if disqualified transfer includes both a number 1545–2280). made by a CFC, simplifies the direct transfer during the disqualified The estimates for the number of calculation of the QBAI for the CFC period by one CFC to a related person, impacted filers with respect to the attributable to property placed in and also an indirect transfer of property collections of information described in service before December 22, 2017, owned by a partnership through, for this part II of the Special Analysis which, and in turn, simplifies the example, a transfer by a CFC to a related section are based on filers of income tax calculation of the DTIR of the CFC’s person of an interest in the partnership, returns with a Form 5471 attached U.S. shareholders attributable to such for which a section 754 election is in because only filers that are U.S. property. For purposes of the Paperwork effect. Therefore, disqualified basis may shareholders of CFCs or that have at Reduction Act of 1995 (44 U.S.C. exist in both property held by a CFC and least a 10 percent ownership in a foreign 3507(d)) (‘‘PRA’’), the reporting burden property held by a partnership. corporation would be subject to the associated with § 1.951A–3(e)(3)(ii) will Accordingly, there are two methods for information collection requirements. be reflected in the PRA submission making this election based upon The IRS estimates the number of associated with the Form 990 series, whether the property with disqualified affected filers to be the following:

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TAX FORMS IMPACTED

Number of Collection of information respondents Forms to which the information may be attached (estimated)

§ 1.951A–3(e)(3)(ii) Election to continue to use income and 25,000–35,000 Form 990 series, Form 1120 series, Form 1040 series, Form E&P depreciation method for property placed in service be- 1041 series, and Form 1065 series. fore the first taxable year beginning after December 22, 2017. § 1.951A–3(h)(1)(iv)(A) Statement for less than 12 month prop- 25,000–35,000 Form 5471. erty. § 1.951A–3(h)(2)(ii)(B)(3) Election to disregard disqualified 25,000–35,000 Form 990 series, Form 1120 series, Form 1040 series, Form basis. 1041 series, and Form 1065 series. § 1.965–7(e)(2)(ii)(B) Statement to revoke section 965(n) elec- 25,000–35,000 Form 990 series, Form 1120 series, Form 1040 series, Form tion. 1041 series, and Form 1065 series. Source: MeF, DCS, and CDW.

The current status of the PRA forms and schedules for tax-exempt not estimated the burden, including that submissions related to the tax forms that organizations, of 50.450 million hours of any new information collections, will be revised as a result of the and total estimated monetized costs of related to the requirements under the information collections in the section $1,297,300,000 ($2017). The overall regulations. The Treasury Department 951A regulations is provided in the burden estimates provided for the OMB and the IRS estimate PRA burdens on a accompanying table. As described control numbers below are aggregate taxpayer-type basis rather than a above, the reporting burdens associated amounts that relate to the entire package provision-specific basis. Those with the information collections in the of forms associated with the applicable estimates would capture both changes regulations are included in the OMB control number and will in the made by the Act and those that arise out aggregated burden estimates for OMB future include, but not isolate, the of discretionary authority exercised in control numbers 1545–0123 (which estimated burden of the tax forms that the final regulations. represents a total estimated burden time will be revised as a result of the The Treasury Department and the IRS for all forms and schedules for information collections in the request comments on all aspects of corporations of 3.157 billion hours and regulations. These numbers are information collection burdens related total estimated monetized costs of therefore unrelated to the future to the final regulations, including $58.148 billion ($2017)), 1545–0074 calculations needed to assess the burden estimates for how much time it would (which represents a total estimated imposed by the regulations. These take to comply with the paperwork burden time, including all other related burdens have been reported for other burdens described above for each forms and schedules for individuals, of regulations related to the taxation of relevant form and ways for the IRS to 1.784 billion hours and total estimated cross-border income and the Treasury minimize the paperwork burden. monetized costs of $31.764 billion Department and the IRS urge readers to Proposed revisions (if any) to these ($2017)), 1545–0092 (which represents a recognize that these numbers are forms that reflect the information total estimated burden time, including duplicates and to guard against collections contained in these final all other related forms and schedules for overcounting the burden that regulations will be made available for trusts and estates, of 307,844,800 hours international tax provisions imposed public comment at https://apps.irs.gov/ and total estimated monetized costs of prior to the Act. No burden estimates app/picklist/list/draftTaxForms.html $9.950 billion ($2016)), and 1545–0047 specific to the forms affected by the and will not be finalized until after (which represents a total estimated regulations are currently available. The these forms have been approved by burden time, including all other related Treasury Department and the IRS have OMB under the PRA.

Form Type of filer OMB No.(s) Status

Forms 990 ...... Tax exempt entities (NEW 1545–0047 ...... Approved by OIRA 12/21/2018 until 12/31/2019. The Form will be Model). updated with OMB number 1545–0047 and the corresponding PRA Notice on the next revision.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201811-1545-003

Form 1040 ...... Individual (NEW Model) .... 1545–0074 ...... Limited Scope submission (1040 only) approved on 12/7/2018 until 12/31/2019. Full ICR submission for all forms in 6/2019. 60 Day FRN not published yet for full collection.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201808-1545-031

Form 1041 ...... Trusts and estates ...... 1545–0092 ...... Submitted to OIRA for review on 9/27/2018.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201806-1545-014

Form 1065 and 1120 Business (NEW Model) .... 1545–0123 ...... Approved by OIRA 12/21/2018 until 12/31/2019.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201805-1545-019

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Form Type of filer OMB No.(s) Status

Form 5471 ...... Business (NEW Model) .... 1545–0123 ...... Published in the FRN on 10/8/18. Public Comment period closes on 12/10/18.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201805-1545-019

Individual (NEW Model) .... 1545–0074 ...... Limited Scope submission (1040 only) on 10/11/18 at OIRA for review. Full ICR submission for all forms in 3–2019. 60 Day FRN not published yet for full collection.

Link: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=201808-1545-031

In 2018, the IRS released and invited taxpayers who are at least 10-percent Examining the gross receipts of the e- comments on drafts of the above forms shareholders of a foreign corporation. filed Forms 5471 that is the basis of the in order to give members of the public The reporting burdens in § 1.951A– 25,000–35,000 respondent estimates, the advance notice and an opportunity to 3(e)(3)(ii), (h)(1)(iv)(A), and Treasury Department and the IRS have submit comments. The IRS received no (h)(2)(ii)(B)(3), and § 1.965–7(e)(2)(ii)(B) determined that the tax revenue from comments on the portions of the forms generally affect U.S. taxpayers that elect section 951A estimated by the Joint that relate to section 951A during the to make or revoke certain elections or Committee on Taxation for businesses of comment period. Consequently, the IRS rebut a presumption. In general, foreign all sizes is less than 0.3 percent of gross made the forms available in late 2018 corporations are not considered small receipts as shown in the table below. and early 2019 for use by the public. entities. Nor are U.S. taxpayers Based on data for 2015 and 2016, total considered small entities to the extent The IRS is contemplating making gross receipts for all businesses with the taxpayers are natural persons or additional changes to forms in order to gross receipts under $25 million is $60 implement these final regulations. entities other than small entities. For purposes of the PRA, the Treasury billion while those over $25 million is III. Regulatory Flexibility Act Department and the IRS estimate that $49.1 trillion. Given that tax on GILTI It is hereby certified that this final there are 25,000–35,000 respondents of inclusion amounts is correlated with regulation will not have a significant all sizes that are likely to file Form gross receipts, this results in businesses economic impact on a substantial 5471. Only a small proportion of these with less than $25 million in gross number of small entities within the filers are likely to be small business receipts accounting for approximately meaning of section 601(6) of the entities. This estimate was used in the 0.01 percent of the tax revenue. Data are Regulatory Flexibility Act (5 U.S.C. proposed regulations (REG–104390–18), not readily available to determine the chapter 6). and comments were requested on the sectoral breakdown of these entities. Sections 951 and 951A generally number of small entities that are likely Based on this analysis, smaller affect U.S. shareholders of CFCs. to be impacted by the section 951A businesses are not significantly Section 965 generally affects U.S. regulations. impacted by these final regulations.

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 billion billion billion billion billion billion billion billion billion billion

JCT tax revenue...... 7.7 12.5 9.6 9.5 9.3 9.0 9.2 9.3 15.1 21.2 Total gross receipts...... 30,727 53,870 566,676 59,644 62,684 65,865 69,201 72,710 76,348 80,094 Percent ...... 0.03 0.02 0.02 0.02 0.01 0.01 0.01 0.01 0.02 0.03 Source: RAAS, CDW (E-filed Form 5471, category 4 or 5, C and S corporations and partnerships); Conference Report, at 689.

Although the Treasury Department readily available. However, businesses is hereby certified that the collection of and the IRS received one comment that are U.S. shareholders of CFCs are information requirements of § 1.951A– asserting that a substantial number of generally not small businesses because 3(e)(3)(ii), (h)(1)(iv)(A), and small entities would be affected by the the ownership of sufficient stock of a (h)(2)(ii)(B)(3) will not have a significant proposed regulations, that comment was CFC in order to be a U.S. shareholder economic impact on a substantial principally concerned with U.S. citizens generally entails significant resources number of small entities. living abroad that owned foreign and investment. Therefore, the Treasury With respect to § 1.965–7(e)(2)(ii)(B) corporations directly or indirectly Department and the IRS have regarding the revocation of the election under section 965(n), the Treasury through other foreign entities. U.S. determined that a substantial number of citizens living abroad are not small Department and the IRS have domestic small business entities will business entities; thus, no small entity determined that § 1.965–7(e)(2)(ii)(B) not be subject to § 1.951A–3(e)(3)(ii), is affected in this scenario. will not have a significant economic Specifically, the small business (h)(1)(iv)(A), and (h)(2)(ii)(B)(3). impact on a substantial number of small entities that are subject to the Moreover, as discussed above, smaller entities for the reasons described in part requirements of § 1.951A–3(e)(3)(ii), businesses are not significantly III of the Special Analyses section in TD (h)(1)(iv)(A), and (h)(2)(ii)(B)(3) of the impacted by the final regulations. 9864, 84 FR 1838 (February 5, 2019). final regulations are domestic small Consequently, the Treasury Department Accordingly, it is hereby certified that entities that are U.S. shareholders of one and the IRS have determined that the collection of information or more CFCs. The data to assess the § 1.951A–3(e)(3)(ii), (h)(1)(iv)(A), and requirements of § 1.965–7(e)(2)(ii)(B) number of small entities potentially (h)(2)(ii)(B)(3) will not have a significant will not have a significant economic affected by § 1.951A–3(e)(3)(ii), economic impact on a substantial impact on a substantial number of small (h)(1)(iv)(A), and (h)(2)(ii)(B)(3) are not number of small entities. Accordingly, it entities.

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Pursuant to section 7805(f), the in the effective date is unnecessary and Drafting Information proposed regulations preceding these contrary to the public interest. The The principal authors of the final regulations (REG–104390–18 and statutory provisions to which these regulations are Jorge M. Oben, Michael REG–105600–18) were submitted to the rules relate were enacted on December A. Kaercher, and Karen Cate of the Chief Counsel for Advocacy of the Small 22, 2017 and apply to taxable years of Office of Associate Chief Counsel Business Administration for comment foreign corporations and to the taxable (International), Jennifer N. Keeney of the on their impact on small business. years of United States persons in which Office of the Associate Chief Counsel or with which such taxable years of IV. Unfunded Mandates Reform Act (Passthroughs and Special Industries), foreign corporations end. In certain Section 202 of the Unfunded and Katherine H. Zhang and Kevin M. cases, these taxable years have already Jacobs of the Office of Associate Chief Mandates Reform Act of 1995 requires ended. This means that the statutory Counsel (Corporate). However, other that agencies assess anticipated costs provisions are currently effective, and personnel from the Treasury and benefits and take certain other taxpayers may be subject to Federal Department and the IRS participated in actions before issuing a final rule that income tax liability for their 2017 or the development of the regulations. includes any Federal mandate that may 2018 taxable years reflecting these result in expenditures in any one year provisions. In certain cases, taxpayers Effect on Other Documents by a state, local, or tribal government, in may be required to file returns reflecting The following publications are the aggregate, or by the private sector, of this Federal income liability during the obsolete as of June 21, 2019: $100 million in 1995 dollars, updated 60-day period that begins after this rule Notice 2009–7 (2009–3 I.R.B. 312). annually for inflation. In 2019, that is published in the Federal Register. Notice 2010–41 (2010–22 I.R.B. 715). threshold is approximately $154 These final regulations provide million. These regulations do not crucial guidance for taxpayers on how Statement of Availability of IRS include any Federal mandate that may to apply the relevant statutory rules, Documents result in expenditures by state, local, or compute their tax liability and IRS Revenue Procedures, Revenue tribal governments, or by the private accurately file their Federal income tax Rulings, notices, and other guidance sector in excess of that threshold. returns. These final regulations resolve cited in this document are published in statutory ambiguity, prevent abuse and V. Executive Order 13132: Federalism the Internal Revenue Bulletin (or grant taxpayer relief that would not be Cumulative Bulletin) and are available Executive Order 13132 (entitled available based solely on the statute. from the Superintendent of Documents, ‘‘Federalism’’) prohibits an agency from Because taxpayers must already comply U.S. Government Publishing Office, publishing any rule that has federalism with the statute, a 60-day delay in the Washington, DC 20402, or by visiting implications if the rule either imposes effective date of the final regulations is the IRS website at http://www.irs.gov. substantial, direct compliance costs on unnecessary and contrary to the public state and local governments, and is not interest. A delay would place certain List of Subjects in 26 CFR Part 1 required by statute, or preempts state taxpayers in the unusual position of Income taxes, Reporting and law, unless the agency meets the having to determine whether to file tax recordkeeping requirements. consultation and funding requirements returns during the pre-effective date of section 6 of the Executive Order. period based on final regulations that Adoption of Amendments to the These regulations do not have are not yet effective. If taxpayers chose Regulations federalism implications and do not not to follow the final regulations and Accordingly, 26 CFR part 1 is impose substantial direct compliance did not amend their returns after the amended as follows: costs on state and local governments or regulations became effective, it would preempt state law within the meaning of place significant strain on the IRS to PART 1—INCOME TAXES the Executive Order. ensure that taxpayers correctly calculated their tax liabilities. For ■ Paragraph 1. The authority citation VI. Congressional Review Act example, in cases where taxpayers and for part 1 is amended by adding entries The Administrator of the Office of their CFCs have engaged in disqualified for §§ 1.78–1, 1.861–12, 1.951–1, Information and Regulatory Affairs of transfers or other abusive transactions, a 1.951A–2, 1.951A–3, 1.951A–5, 1.1502– the OMB has determined that this delayed effective date may hamper the 51, 1.6038–5 in numerical order to read Treasury decision is a major rule for IRS’ ability to detect such transactions. in part as follows: purposes of the Congressional Review Moreover, a delayed effective date could Authority: 26 U.S.C. 7805 * * * Act (5 U.S.C. 801 et seq.) (‘‘CRA’’). create uncertainty and possible Section 1.78–1 also issued under 26 U.S.C. Under section 801(3) of the CRA, a restatements with respect to financial 245A(g). major rule takes effect 60 days after the statement audits. Therefore, the rules in * * * * * rule is published in the Federal this Treasury decision are effective on Section 1.861–12 also issued under 26 Register. Notwithstanding this the date of publication in the Federal U.S.C. 864(e)(7). requirement, section 808(2) of the CRA Register and apply in certain cases to * * * * * allows agencies to dispense with the taxable years of foreign corporations and Section 1.951–1 also issued under 26 requirements of section 801 of the CRA United States persons beginning before U.S.C. 7701(a). when the agency for good cause finds such date. Section 1.951A–2 also issued under 26 that such procedure would be The foregoing good cause statement U.S.C. 882(c)(1)(A) and 954(b)(5). impracticable, unnecessary, or contrary only applies to the 60-day delayed Section 1.951A–3 also issued under 26 to the public interest and that the rule effective date provision of section 801(3) U.S.C. 951A(d)(4). shall take effect at such time as the of the CRA and is permitted under Section 1.951A–5 also issued under 26 agency promulgating the rule section 808(2) of the CRA. The Treasury U.S.C. 951A(f)(1)(B). determines. Department and the IRS hereby comply * * * * * Pursuant to section 808(2) of the CRA, with all aspects of the CRA and the Section 1.1502–51 also issued under 26 the Treasury Department and the IRS Administrative Procedure Act (5 U.S.C. U.S.C. 1502. find, for good cause, that a 60-day delay 551 et seq.). * * * * *

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Section 1.6038–5 also issued under 26 (1) The corporation includes in gross (B) Computational rules—(1) U.S.C. 6038. income under section 951(a)(1)(A) the Adjustments to basis—(i) Application of * * * * * amounts by reason of which there are section 961 or 1293(d). For purposes of deemed paid under section 960(a) the this section, a taxpayer’s adjusted basis ■ Par. 2. Section 1.78–1 is revised to foreign income taxes that give rise to in the stock of a foreign corporation read as follows: that section 78 dividend, does not include any amount included notwithstanding that the foreign income in basis under section 961 or 1293(d) of § 1.78–1 Gross up for deemed paid foreign the Code. tax credit. taxes may be carried back or carried over to another taxable year and deemed (ii) Application of section 965(b). For (a) Taxes deemed paid by certain to be paid or accrued in such other purposes of this section, if a taxpayer domestic corporations treated as a taxable year under section 904(c); or owned the stock of a specified foreign dividend. If a domestic corporation (2) The corporation includes in gross corporation (as defined in § 1.965– chooses to have the benefits of the income under section 951A(a) the 1(f)(45)) as of the close of the last foreign tax credit under section 901 for amounts by reason of which there are taxable year of the specified foreign any taxable year, an amount that is deemed paid under section 960(d) the corporation that began before January 1, equal to the U.S. dollar amount of foreign income taxes that give rise to 2018, the taxpayer’s adjusted basis in foreign income taxes deemed to be paid that section 78 dividend. the stock of the specified foreign by the corporation for the year under (c) Applicability date. This section corporation for that taxable year and any section 960 (in the case of section applies to taxable years of foreign subsequent taxable year is determined 960(d), determined without regard to corporations that begin after December as if the taxpayer did not make the the phrase ‘‘80 percent of’’ in section 31, 2017, and to taxable years of United election described in § 1.965–2(f)(2)(i) 960(d)(1)) is, to the extent provided by States shareholders in which or with (regardless of whether the election was this section, treated as a dividend (a which such taxable years of foreign actually made) and is further adjusted as section 78 dividend) received by the corporations end. The second sentence described in this paragraph domestic corporation from the foreign of paragraph (a) of this section also (c)(2)(i)(B)(1)(ii). If § 1.965–2(f)(2)(ii)(B) corporation. A section 78 dividend is applies to section 78 dividends that are applied (or would have applied if the treated as a dividend for all purposes of received after December 31, 2017, by election had been made) with respect to the Code, except that it is not treated as reason of taxes deemed paid under the stock of a specified foreign a dividend for purposes of section 245 section 960(a) with respect to a taxable corporation, the taxpayer’s adjusted or 245A, and does not increase the year of a foreign corporation beginning basis in the stock of the specified earnings and profits of the domestic before January 1, 2018. foreign corporation is reduced by the corporation or decrease the earnings and ■ Par. 3. Section 1.861–12 is amended amount described in § 1.965– profits of the foreign corporation. Any by revising paragraph (c)(2) and adding 2(f)(2)(ii)(B)(1) (without regard to the reduction under section 907(a) of the paragraph (k) to read as follows. rule for limited basis adjustments in foreign income taxes deemed paid with § 1.965–2(f)(2)(ii)(B)(2) and the respect to combined foreign oil and gas § 1.861–12 Characterization rules and limitation in § 1.965–2(f)(2)(ii)(C), and adjustments for certain assets. income does not affect the amount without regard to the rules regarding the treated as a section 78 dividend. See * * * * * netting of basis adjustments in § 1.965– § 1.907(a)–1(e)(3). Similarly, any (c) * * * 2(h)(2)). The reduction in the taxpayer’s (2) Basis adjustment for stock in 10 reduction under section 901(e) of the adjusted basis in the stock may reduce percent owned corporations—(i) foreign income taxes deemed paid with the taxpayer’s adjusted basis in the Taxpayers using the tax book value respect to foreign mineral income does stock below zero prior to the application method—(A) General rule. For purposes not affect the amount treated as a of paragraphs (c)(2)(i)(A)(1) and (2) of of apportioning expenses on the basis of section 78 dividend. See § 1.901– this section. No adjustment is made in the tax book value of assets, the adjusted 3(a)(2)(i), (b)(2)(i)(b), and (d) Example 8. the taxpayer’s adjusted basis in the basis of any stock in a 10 percent owned Any reduction under section stock of a specified foreign corporation corporation owned by the taxpayer 6038(c)(1)(B) in the foreign taxes paid or for an amount described in § 1.965– either directly or indirectly through a accrued by a foreign corporation is 2(f)(2)(ii)(A). To the extent that, in an partnership or other pass-through entity exchange described in section 351, 354, taken into account in determining (after taking into account the or 356, a taxpayer receives stock of a foreign taxes deemed paid and the adjustments described in paragraph foreign corporation in exchange for amount treated as a section 78 dividend. (c)(2)(i)(B)(1) of this section) shall be— stock of a specified foreign corporation See, for example, § 1.6038–2(k)(5) (1) Increased by the amount of the described in this paragraph Example 1. To the extent provided in earnings and profits of such corporation (c)(2)(i)(B)(1)(ii), this paragraph the Code, section 78 does not apply to (and of lower-tier 10 percent owned (c)(2)(i)(B)(1)(ii) applies to such stock any tax not allowed as a credit. See, for corporations) attributable to such stock received. example, sections 901(j)(3), 901(k)(7), and accumulated during the period the (2) Amount of earnings and profits. 901(l)(4), 901(m)(6), and 908(b). For taxpayer or other members of its For purposes of this paragraph (c)(2), rules on determining the source of a affiliated group held 10 percent or more earnings and profits (or deficits) are section 78 dividend in computing the of such stock; or computed under the rules of section 312 limitation on the foreign tax credit (2) Reduced by any deficit in earnings and, in the case of a foreign corporation, under section 904, see §§ 1.861–3(a)(3), and profits of such corporation (and of sections 964(a) and 986 for taxable years 1.862–1(a)(1)(ii), and 1.904–5(m)(6). For lower-tier 10 percent owned of the 10 percent owned corporation rules on assigning a section 78 dividend corporations) attributable to such stock ending on or before the close of the to a separate category, see § 1.904–4. for such period; or taxable year of the taxpayer. (b) Date on which section 78 dividend (3) Zero, if after application of Accordingly, the earnings and profits of is received. A section 78 dividend is paragraphs (c)(2)(i)(A)(1) and (2) of this a controlled foreign corporation include considered received by a domestic section, the adjusted basis of the stock all earnings and profits described in corporation on the date on which— is less than zero. section 959(c). The amount of the

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earnings and profits with respect to application of paragraph (c)(2)(i)(B) of this under section 961 or 1293(d), USP’s adjusted stock of a foreign corporation held by section). basis in the stock of CFC2 is $0 (before the the taxpayer is determined according to (ii) Analysis. Under paragraph application of paragraph (c)(2)(i)(B) of this the attribution principles of section (c)(2)(i)(B)(1)(ii) of this section, USP’s section). Additionally, the adjusted basis of adjusted basis in the stock of CFC1 is USP in the stock of CFC1 and CFC2 at the 1248 and the regulations under section determined as if USP did not make the end of the 2019 taxable year is the same as 1248. The attribution principles of election described in § 1.965–2(f)(2)(i). USP’s at the beginning of that year, and as of the section 1248 apply without regard to the adjusted basis in the stock of CFC2 is then end of the 2019 taxable year, CFC1 has requirements of section 1248 that are reduced by $75x, the amount described in earnings and profits of $25x and CFC2 has not relevant to the determination of a § 1.965–2(f)(2)(ii)(B)(1), without regard to the earnings and profits of $50x that are shareholder’s pro rata portion of rule for limited basis adjustments in § 1.965– attributable to the stock owned by USP and earnings and profits, such as whether 2(f)(2)(ii)(B)(2) and without regard to the accumulated during the period that USP held earnings and profits (or deficits) were rules regarding the netting of basis the stock of CFC1 and CFC2. adjustments in § 1.965–2(h)(2). No (ii) Analysis. The analysis is the same as in derived (or incurred) during taxable adjustment is made to USP’s adjusted basis paragraph (c)(2)(i)(C)(1)(ii) of this section (the years beginning before or after in the stock in CFC1. Accordingly, for analysis in Example 1) except that for December 31, 1962. purposes of determining the value of stock of purposes of determining the value of stock of (3) Annual noncumulative CFC1 and CFC2 at the beginning of the 2019 CFC1 and CFC2 at the beginning of the 2019 adjustment. The adjustment required by taxable year, USP’s adjusted basis in the taxable year, USP’s adjusted basis in the paragraph (c)(2)(i)(A) of this section is stock of CFC1 is $100x and USP’s adjusted stock of CFC2 is ¥$75x ($0¥$75x). Because made annually and is noncumulative. basis in the stock of CFC2 is $275x USP’s basis in the stock of CFC1 and CFC2 ¥ Thus, the adjusted basis of the stock ($350x $75x). is the same at the end of the 2019 taxable (determined without regard to prior (2) Example 2: Election described in year, prior to the application of the § 1.965–2(f)(2)(i)—(i) Facts. USP, a domestic years’ adjustments under paragraph adjustments in paragraphs (c)(2)(i)(A)(1) and corporation, owns all of the stock of CFC1, (2) of this section, USP’s adjusted basis in the (c)(2)(i)(A) of this section) is adjusted which owns all of the stock of CFC2, both stock of CFC1 is $100x and USP’s adjusted annually by the amount of accumulated controlled foreign corporations. USP, CFC1, basis in the stock of CFC2 is ¥$75x. Under earnings and profits (or deficits) and CFC2 all use the calendar year as their paragraph (c)(2)(i)(A)(1) of this section, for attributable to the stock as of the end of U.S. taxable year. USP owned CFC1, and purposes of apportioning expenses on the each year. CFC1 owned CFC2 as of December 31, 2017, basis of the tax book value of assets, USP’s (4) Translation of non-dollar and CFC1 and CFC2 were specified foreign adjusted basis in the stock of CFC1 is $125x functional currency earnings and corporations with respect to USP. USP’s basis ($100x + $25x). Under paragraph profits. Earnings and profits (or deficits) in each share of stock of CFC1 is identical. (c)(2)(i)(A)(3) of this section, for purposes of of a qualified business unit that has a USP made the election described in § 1.965– apportioning expenses on the basis of the tax 2(f)(2)(i). As a result of the election, USP was functional currency other than the book value of assets, USP’s adjusted basis in required to increase its basis in the stock of the stock of CFC2 is $0 because after dollar must be computed under this CFC1 by $90x under § 1.965–2(f)(2)(ii)(A)(1), applying paragraph (c)(2)(i)(A)(1) of this paragraph (c)(2) in functional currency and to decrease its basis in the stock of CFC1 section, USP’s adjusted basis in the stock of and translated into dollars using the by $90x under § 1.965–2(f)(2)(ii)(B)(1). CFC2 is less than zero (¥$75x + $50x). exchange rate at the end of the Pursuant to § 1.965–2(h)(2), USP netted the (4) Example 4: Election described in taxpayer’s current taxable year (and not increase of $90x against the decrease of $90x § 1.965–2(f)(2)(i) and adjusted basis below the exchange rates for the years in and made no net adjustment to the basis in zero—(i) Facts. The facts are the same as in which the earnings and profits or the stock of CFC1. For purposes of paragraph (c)(2)(i)(C)(3)(i) of this section (the deficits were derived or incurred). determining the value of the stock of CFC1 facts in Example 3), except that USP made (C) Examples. The following at the beginning of the 2019 taxable year, the election described in § 1.965–2(f)(2)(i) without regard to amounts included in basis examples illustrate the application of and, as result, recognized $75x of gain under under section 961 or 1293(d), USP’s adjusted § 1.965–2(h)(3). paragraph (c)(2)(i) of this section. basis in the stock of CFC1 is $600x (before (ii) Analysis. The analysis is the same as in (1) Example 1: No election described in the application of paragraph (c)(2)(i)(B) of paragraph (c)(2)(i)(C)(3)(ii) of this section (the § 1.965–2(f)(2)(i)—(i) Facts. USP, a domestic this section). analysis in Example 3). (ii) Analysis. Under paragraph corporation, owns all of the stock of CFC1 (c)(2)(ii) through (c)(2)(vi) [Reserved]. and CFC2, both controlled foreign (c)(2)(i)(B)(1)(ii) of this section, USP’s corporations. USP, CFC1, and CFC2 all use adjusted basis in the stock of CFC1 is For further guidance, see § 1.861– the calendar year as their U.S. taxable year. determined as if USP did not make the 12T(c)(2)(ii) through (c)(2)(vi). USP owned CFC1 and CFC2 as of December election described in § 1.965–2(f)(2)(i). While * * * * * 31, 2017, and CFC1 and CFC2 were specified USP made the election, no adjustment was (k) Applicability date. This section foreign corporations with respect to USP. made to the stock of CFC1 as a result of the applies to taxable years that both begin USP’s basis in each share of stock of each of election. However, USP’s adjusted basis in after December 31, 2017, and end on or the stock of CFC1 is then reduced by $90x, CFC1 and CFC2 is identical. USP did not after December 4, 2018. Paragraphs make the election described in § 1.965– the amount described in § 1.965– 2(f)(2)(i), but if USP had made the election, 2(f)(2)(ii)(B)(1), without regard to the rules (c)(2)(i)(A) and (c)(2)(i)(B)(1)(ii) of this § 1.965–2(f)(2)(ii)(B) would have applied to regarding the netting of basis described in section also apply to the last taxable the stock of CFC2 and the amount described § 1.965–2(h)(2). No adjustment is made to year of a foreign corporation that begins in § 1.965–2(f)(2)(ii)(B)(1) (without regard to USP’s basis in the stock of CFC1 for the before January 1, 2018, and with respect the rule for limited basis adjustments in amount described in § 1.965–2(f)(2)(ii)(A)(1). to a United States person, the taxable § 1.965–2(f)(2)(ii)(B)(2) and without regard to Accordingly, for purposes of determining the year in which or with which such the rules regarding the netting of basis value of stock of CFC1 at the beginning of the taxable year of the foreign corporation adjustments in § 1.965–2(h)(2)) with respect 2019 taxable year, USP’s adjusted basis in the ends. to the stock of CFC2, in aggregate, is $75x. stock of CFC1 is $510x ($600x¥$90x). ■ For purposes of determining the value of the (3) Example 3: Adjusted basis below zero— Par. 4. Section 1.861–12T is amended stock of CFC1 and CFC2 at the beginning of (i) Facts. The facts are the same as in by revising paragraph (c)(2)(i) to read as the 2019 taxable year, without regard to paragraph (c)(2)(i)(C)(1)(i) of this section (the follows: amounts included in basis under section 961 facts in Example 1), except that for purposes or 1293(d), USP’s adjusted basis in the stock of determining the value of the stock of CFC2 § 1.861–12T Characterization rules and of CFC1 is $100x and its adjusted basis in the at the beginning of the 2019 taxable year, adjustments for certain assets (temporary). stock of CFC2 is $350x (before the without regard to amounts included in basis * * * * *

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(c) * * * § 1.951A–2(b)(1)) of such corporation for share of the subpart F income of M for Year (c)(2)(i)(A) through (C) [Reserved]. For the taxable year, and 1 is $100x. further guidance, see § 1.861– (B) The dividend which would have (iii) Example 2—(A) Facts. The facts are 12(c)(2)(i)(A) through (c)(2)(i)(C). been received by such other person if the same as in paragraph (b)(2)(ii)(A) of this the distributions by such corporation to section (the facts in Example 1), except that * * * * * instead of holding 100% of the stock of M for ■ Par. 5. Section 1.951–1 is amended all its shareholders had been the amount which bears the same ratio to the the entire year, A sells 60% of such stock to by: B on May 26, Year 1. Thus, M is a controlled subpart F income of such corporation ■ 1. Revising paragraph (a) introductory foreign corporation for the period January 1, text. for the taxable year as the part of such Year 1, through May 26, Year 1. ■ 2. Revising paragraphs (b)(1)(ii), (b)(2), year during which such shareholder did (B) Analysis. Under section 951(a)(2)(A) (c), (e), and (g)(1). not own (within the meaning of section and paragraph (b)(1)(i) of this section, A’s pro ■ 3. Adding paragraphs (h) and (i). 958(a)) such stock bears to the entire rata share of the subpart F income of M is The revisions and addition read as taxable year. limited to the subpart F income of M which follows: (2) Examples. The following examples bears the same ratio to its subpart F income illustrate the application of this for such taxable year ($100x) as the part of § 1.951–1 Amounts included in gross paragraph (b). such year during which M is a controlled income of United States shareholders. (i) Facts. The following facts are foreign corporation bears to the entire taxable (a) In general. If a foreign corporation assumed for purposes of the examples. year (146/365). Accordingly, under section is a controlled foreign corporation (A) A is a United States shareholder. 951(a)(2) and paragraph (b)(1) of this section, (within the meaning of section 957) at (B) M is a foreign corporation that has A’s pro rata share of the subpart F income of only one class of stock outstanding. M for Year 1 is $40x ($100x × 146/365). any time during any taxable year of such (iv) Example 3—(A) Facts. The facts are the corporation, every person— (C) B is a nonresident alien individual, and stock owned by B is not same as in paragraph (b)(2)(ii)(A) of this * * * * * considered owned by a domestic entity section (the facts in Example 1), except that (b) * * * under section 958(b). instead of holding 100% of the stock of M for (1) * * * (D) P and R are foreign corporations. the entire year, A holds 60% of such stock on December 31, Year 1, having acquired (ii) The lesser of— (E) All persons use the calendar year such stock on May 26, Year 1, from B, who (A) The amount of distributions as their taxable year. received by any other person during owned such stock from January 1, Year 1. (F) Year 1 ends on or after October 3, Before A’s acquisition of the stock, M had such taxable year as a dividend with 2018, and has 365 days. respect to such stock multiplied by a distributed a dividend of $15x to B in Year 1 with respect to the stock so acquired by A. fraction, the numerator of which is the (ii) Example 1—(A) Facts. A owns 100% of the stock of M throughout Year 1. For Year M has no tested income for Year 1. subpart F income of such corporation 1, M derives $100x of subpart F income, has (B) Analysis. Under section 951(a)(2) and for the taxable year and the denominator $100x of earnings and profits, and makes no paragraph (b)(1) of this section, A’s pro rata of which is the sum of the subpart F distributions. share of the subpart F income of M for Year income and the tested income (as (B) Analysis. Under section 951(a)(2) and 1 is $21x, such amount being determined as defined in section 951A(c)(2)(A) and paragraph (b)(1) of this section, A’s pro rata follows:

Table 1 to paragraph (b)(2)(iv)(B): M’s subpart F income for Year 1 ...... $100x Less: Reduction under section 951(a)(2)(A) for period (1–1 through 5–26) during which M is not a controlled foreign corporation ($100x × 146/365) ...... 40x Subpart F income for Year 1 as limited by section 951(a)(2)(A) ...... 60x A’s pro rata share of subpart F income as determined under section 951(a)(2)(A) (0.6 × $60x) ...... 36x Less: Reduction under section 951(a)(2)(B) for dividends received by B during Year 1 with respect to the stock of M acquired by A: (i) Dividend received by B ($15x), multiplied by a fraction ($100x/$100x), the numerator of which is the subpart F income of such corporation for the taxable year ($100x) and the denominator of which is the sum of the subpart F income and the tested income of such corporation for the taxable year ($100x) ($15x × ($100x/$100x)) ...... 15x (ii) B’s pro rata share (60%) of the amount which bears the same ratio to the subpart F income of such corporation for the taxable year ($100x) as the part of such year during which A did not own (within the meaning of section 958(a)) such stock bears to the entire taxable year (146/365) (0.6 × $100x × (146/365)) ...... 24x (iii) Amount of reduction under section 951(a)(2)(B) (lesser of (i) or (ii)) ...... 15x A’s pro rata share of subpart F income as determined under section 951(a)(2) ...... 21x

(v) Example 4—(A) Facts. A owns 100% of 951(a)(2)(B) and paragraph (b)(1)(ii) of this the entire year, P holds 60% of such stock the only class of stock of P throughout Year section for the dividend of $20x paid to P on December 31, Year 1, having acquired 1, and P owns 100% of the only class of stock because there was no part of Year 1 during such stock on March 14, Year 1, from B. of R throughout Year 1. For Year 1, R derives which A did not own (within the meaning of Before P’s acquisition of the stock, R had $100x of subpart F income, has $100x of section 958(a)) the stock of R. Under section distributed a dividend of $100x to B in Year earnings and profits, and distributes a 959(b), the $20x distribution from R to P is 1 with respect to the stock so acquired by P. dividend of $20x to P. R has no gross tested not again includible in the gross income of The stock interest so acquired by P was income. P has no income for Year 1 other A under section 951(a). The $20x distribution owned by B from January 1, Year 1, until than the dividend received from R. from R to P is not includible in the gross acquired by P. R also has $300x of tested (B) Analysis. Under section 951(a)(2) and tested income of P. income for Year 1. paragraph (b)(1) of this section, A’s pro rata (vi) Example 5—(A) Facts. The facts are the (B) Analysis—(1) Limitation of pro rata share of the subpart F income of R for Year same as in paragraph (b)(2)(v)(A) of this share of subpart F income. Under section 1 is $100x. A’s pro rata share of the subpart section (the facts in Example 4), except that 951(a)(2) and paragraph (b)(1) of this section, F income of R is not reduced under section instead of holding 100% of the stock of R for A’s pro rata share of the subpart F income of

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M for Year 1 is $28x, such amount being determined as follows:

Table 1 to paragraph (b)(2)(vi)(B)(1): R’s subpart F income for Year 1 ...... $100x Less: Reduction under section 951(a)(2)(A) for period (1–1 through 3–14) during which R is not a controlled foreign corporation ($100x × 73/365) ...... 20x Subpart F income for Year 1 as limited by section 951(a)(2)(A) ...... 80x A’s pro rata share of subpart F income as determined under section 951(a)(2)(A) (0.6 × $80x) ...... 48x Less: Reduction under section 951(a)(2)(B) for dividends received by B during Year 1 with respect to the stock of R indirectly acquired by A: (i) Dividend received by B ($100x) multiplied by a fraction ($100x/$400x), the numerator of which is the subpart F income of such corporation for the taxable year ($100x) and the denominator of which is the sum of the subpart F income and the tested income of such corporation for the taxable year ($400x) ($100x × ($100x/$400x)) ...... 25x (ii) B’s pro rata share (60%) of the amount which bears the same ratio to the subpart F income of such corporation for the taxable year ($100x) as the part of such year during which A did not own (within the meaning of section 958(a)) such stock bears to the entire taxable year (73/365) (0.6 × $100x × (73/365)) ...... 12x (iii) Amount of reduction under section 951(a)(2)(B) (lesser of (i) or (ii)) ...... 12x A’s pro rata share of subpart F income as determined under section 951(a)(2) ...... 36x

(2) Limitation of pro rata share of tested tested income of M for Year 1 is $108x, such income. Under section 951A(e)(1) and amount being determined as follows: § 1.951A–1(d)(2), A’s pro rata share of the

Table 1 to paragraph (b)(2)(vi)(B)(2): R’s tested income for Year 1 ...... $300x Less: Reduction under section 951(a)(2)(A) for period (1–1 through 3–14) during which R is not a controlled foreign corporation ($300x × 73/365) ...... 60x Tested income for Year 1 as limited by under section 951(a)(2)(A) ...... 240x A’s pro rata share of tested income as determined under § 1.951A–1(d)(2) (0.6 × $240x) ...... 144x Less: Reduction under section 951(a)(2)(B for dividends received by B during Year 1 with respect to the stock of R indirectly acquired by A: (i) Dividend received by B ($100x) multiplied by a fraction ($300x/$400x), the numerator of which is the tested income of such corporation for the taxable year ($300x) and the denominator of which is the sum of the subpart F income and the tested income of such corporation for the taxable year ($400x) ($100x × ($300x/$400x)) ...... 75x (ii) B’s pro rata share (60%) of the amount which bears the same ratio to the tested income of such corporation for the taxable year ($300x) as the part of such year during which A did not own (within the meaning of section 958(a)) such stock bears to the entire taxable year (73/365) (0.6 × $300x × (73/365)) ...... 36x (iii) Amount of reduction under section 951(a)(2)(B) (lesser of (i) or (ii)) ...... 36x A’s pro rata share of tested income under section 951A(e)(1) ...... 108x

(c) [Reserved] for the taxable year (not reduced by 951A(c)(2)(A) and § 1.951A–2(b)(1)) of * * * * * actual distributions during the year) the corporation for the taxable year. (e) Pro rata share of subpart F income were distributed (hypothetical (2) One class of stock. If a controlled defined—(1) In general—(i) distribution) on the last day of the foreign corporation for a taxable year Hypothetical distribution. For purposes corporation’s taxable year on which has only one class of stock outstanding of paragraph (b) of this section, a United such corporation is a controlled foreign on the hypothetical distribution date, States shareholder’s pro rata share of a corporation (hypothetical distribution the amount of the corporation’s controlled foreign corporation’s subpart date). allocable earnings and profits F income for a taxable year is the (ii) Definition of allocable earnings distributed in the hypothetical amount that bears the same ratio to the and profits. For purposes of this distribution with respect to each share corporation’s subpart F income for the paragraph (e), the term allocable in the class of stock is determined as if taxable year as the amount of the earnings and profits means, with respect the hypothetical distribution were made corporation’s allocable earnings and to a controlled foreign corporation for a pro rata with respect to each share in profits that would be distributed with taxable year, the amount that is the the class of stock. respect to the stock of the corporation greater of— (3) More than one class of stock. If a which the United States shareholder (A) The earnings and profits of the controlled foreign corporation for a owns (within the meaning of section corporation for the taxable year taxable year has more than one class of 958(a)) for the taxable year bears to the determined under section 964; and stock outstanding on the hypothetical total amount of the corporation’s (B) The sum of the subpart F income distribution date, the amount of the allocable earnings and profits that (as determined under section 952 after corporation’s allocable earnings and would be distributed with respect to the the application of section profits distributed in the hypothetical stock owned by all the shareholders of 951A(c)(2)(B)(ii) and § 1.951A–6(b)) of distribution with respect to each class of the corporation if all the allocable the corporation for the taxable year and stock is determined based on the earnings and profits of the corporation the tested income (as defined in section distribution rights of each class of stock

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on the hypothetical distribution date, the class of preferred stock does not (whether determined by a percentage of which amount is then further have a mandatory redemption date, the par value, a reference to a floating distributed pro rata with respect to each mandatory redemption date is the date coupon rate, a stated return expressed in share in the class of stock. Subject to that the class of preferred stock is terms of a certain amount of U.S. dollars paragraphs (e)(4) through (6) of this expected to be redeemed based on all or foreign currency, or otherwise) with section, the distribution rights of a class facts and circumstances. respect to a class of stock the of stock are determined taking into (iii) Dividend arrearages. If there is an distribution of which is a condition account all facts and circumstances arrearage in dividends for prior taxable precedent to a further distribution of related to the economic rights and years with respect to a class of preferred earnings and profits that year with interest in the allocable earnings and stock of a controlled foreign respect to any class of stock (not profits of the corporation of each class, corporation, an amount of the including a distribution in partial or including the terms of the class of stock, corporation’s allocable earnings and complete liquidation) is not a restriction any agreement among the shareholders profits is distributed in the hypothetical or other limitation on the distribution of and, if and to the extent appropriate, the distribution to the class of preferred earnings and profits by a controlled relative fair market value of shares of stock by reason of the arrearage only to foreign corporation. stock. For purposes of this paragraph the extent the arrearage exceeds the (iv) Illustrative list of restrictions and (e)(3), facts and circumstances do not accumulated earnings and profits of the limitations. Except as provided in include actual distributions (including controlled foreign corporation paragraph (e)(5)(iii) of this section, distributions by redemption) or any remaining from prior taxable years restrictions or other limitations on amount treated as a dividend under any beginning after December 31, 1962, as of distributions include, but are not other provision of subtitle A of the the beginning of the taxable year, or the limited to— Internal Revenue Code (for example, date on which such stock was issued, (A) An arrangement that restricts the under section 78, 356(a)(2), 367(b), or whichever is later (the applicable date). ability of a controlled foreign 1248) made during the taxable year that If there is an arrearage in dividends for corporation to pay dividends on a class includes the hypothetical distribution prior taxable years with respect to more of stock of the corporation until a date. than one class of preferred stock, the condition or conditions are satisfied (for (4) Special rules—(i) Redemptions, previous sentence is applied to each example, until another class of stock is liquidations, and returns of capital. No class in order of priority, except that the redeemed); amount of allocable earnings and profits accumulated earnings and profits (B) A loan agreement entered into by is distributed in the hypothetical remaining after the applicable date are a controlled foreign corporation that distribution with respect to a particular reduced by the allocable earnings and restricts or otherwise affects the ability class of stock based on the terms of the profits necessary to satisfy arrearages to make distributions on its stock until class of stock of the controlled foreign with respect to classes of stock with a certain requirements are satisfied; or corporation or any agreement or higher priority. For purposes of this (C) An arrangement that conditions arrangement with respect thereto that paragraph (e)(4)(iii), the amount of any would result in a redemption (even if arrearage with respect to stock described the ability of a controlled foreign such redemption would be treated as a in paragraph (e)(4)(ii) of this section is corporation to pay dividends to its distribution of property to which determined in the same manner as the shareholders on the financial condition section 301 applies pursuant to section present value of unpaid current of the corporation. 302(d)), a distribution in liquidation, or dividends on such stock under (6) Transactions and arrangements a return of capital. paragraph (e)(4)(ii) of this section. with a principal purpose of changing (ii) Certain cumulative preferred (5) Restrictions or other limitations on pro rata shares. Appropriate stock. If a controlled foreign corporation distributions—(i) In general. A adjustments must be made to the has outstanding a class of redeemable restriction or other limitation on allocation of allocable earnings and preferred stock with cumulative distributions of an amount of earnings profits that would be distributed dividend rights and dividend arrearages and profits by a controlled foreign (without regard to this paragraph (e)(6)) on such stock do not compound at least corporation is not taken into account in in a hypothetical distribution with annually at a rate that equals or exceeds determining the amount of the respect to any share of stock outstanding the applicable Federal rate (as defined corporation’s allocable earnings and as of the hypothetical distribution date in section 1274(d)(1)) that applies on the profits distributed in a hypothetical to disregard the effect on the date the stock is issued for the term distribution to a class of stock of the hypothetical distribution of any from such issue date to the mandatory controlled foreign corporation. transaction or arrangement that is redemption date based on a comparable (ii) Definition. For purposes of undertaken as part of a plan a principal compounding assumption (the relevant paragraph (e)(5)(i) of this section, a purpose of which is the avoidance of AFR), the amount of the corporation’s restriction or other limitation on Federal income taxation by changing the allocable earnings and profits distributions includes any limitation amount of allocable earnings and profits distributed in the hypothetical that has the effect of limiting the distributed in any hypothetical distribution with respect to the class of distribution of an amount of earnings distribution with respect to such share. stock may not exceed the amount of and profits by a controlled foreign This paragraph (e)(6) also applies for dividends actually paid during the corporation with respect to a class of purposes of the pro rata share rules taxable year with respect to the class of stock of the corporation, other than described in § 1.951A–1(d) that stock plus the present value at the end currency or other restrictions or reference this paragraph (e), including of the controlled foreign corporation’s limitations imposed under the laws of the rules in § 1.951A–1(d)(3) that taxable year of the unpaid current any foreign country as provided in determine the pro rata share of qualified dividends with respect to the class section 964(b). business asset investment based on the determined using the relevant AFR and (iii) Exception for certain preferred pro rata share of tested income. assuming the dividends will be paid at distributions. For purposes of paragraph (7) Examples. The following examples the mandatory redemption date. For (e)(5)(i) of this section, the right to illustrate the application of this purposes of this paragraph (e)(4)(ii), if receive periodically a fixed amount paragraph (e).

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(i) Facts. Except as otherwise stated, of this section, the amount of FC1’s allocable the preferred shareholders on the the following facts are assumed for earnings and profits distributed in the hypothetical distribution date as a result of purposes of the examples: hypothetical distribution with respect to FC1’s right to redeem the preferred shares. (A) FC1 is a controlled foreign Individual A’s preferred shares is $12x (0.04 This is the case regardless of the restriction × $10x × 30) and with respect to USP1’s on paying dividends to the common corporation. common shares is $88x ($100x¥$12x). shareholders while the preferred stock is (B) USP1 and USP2 are domestic Accordingly, under paragraph (e)(1) of this outstanding, and regardless of the fact that a corporations. section, USP1’s pro rata share of FC1’s redemption of FC2’s preferred shares would (C) Individual A is a foreign subpart F income is $44x ($50x ¥ $88x/ be treated as a distribution to which section individual, and FC2 is a foreign $100x) for Year 1. 301 applies under section 302(d) (due to corporation that is not a controlled (iv) Example 3: Restriction based on FC2’s constructive ownership of the common foreign corporation. cumulative income—(A) Facts. FC1 has shares). Thus, neither the restriction on (D) All persons use the calendar year outstanding 10 shares of common stock and paying dividends to the common 400 shares of 2% nonparticipating, voting shareholders while the preferred stock is as their taxable year. preferred stock with a par value of $1x per outstanding nor FC1’s redemption rights with (E) Any ownership of FC1 by any share. USP1 owns all of the common shares. respect to the preferred shares affects the shareholder is for all of Year 1. FC2 owns all of the preferred shares. USP1 distribution of allocable earnings and profits (F) The common shareholders of FC1 and FC2 cause the governing documents of in the hypothetical distribution to FC1’s are entitled to dividends when declared FC1 to provide that no dividends may be shareholders. However, the distribution by FC1’s board of directors. paid to the common shareholders until FC1 rights of the preferred shares are not a (G) There are no accrued but unpaid cumulatively earns $100,000x of income. For restriction or other limitation within the dividends with respect to preferred Year 1, FC1 has $50x of earnings and profits meaning of paragraph (e)(5) of this section. and $50x of subpart F income within the As a result, the amount of FC1’s allocable shares, the preferred stock is not meaning of section 952. earnings and profits distributed in the described in paragraph (e)(4)(ii) of this (B) Analysis. The agreement restricting hypothetical distribution with respect to section, and common shares have FC1’s ability to pay dividends to common FC2’s preferred shares is $20x (0.04 × $50x positive liquidation value. shareholders until FC1 cumulatively earns × 10) and with respect to USP1’s common (H) There are no other facts and $100,000x of income is a restriction or other shares is $80x ($100x¥$20x). Accordingly, circumstances related to the economic limitation within the meaning of paragraph under paragraph (e)(1) of this section, USP1’s rights and interest of any class of stock (e)(5) of this section. Therefore, the pro rata share of FC1’s subpart F income is in the allocable earnings and profits of restriction is disregarded for purposes of $80x for Year 1. a foreign corporation, and no determining the amount of FC1’s allocable (vi) Example 5: Shareholder owns common earnings and profits distributed in the and preferred stock—(A) Facts. FC1 has transaction or arrangement was entered hypothetical distribution to a class of stock. outstanding 40 shares of common stock and into as part of a plan a principal The distribution rights of the preferred shares 60 shares of 6% nonparticipating, nonvoting purpose of which is the avoidance of are not a restriction or other limitation within preferred stock with a par value of $100x per Federal income taxation. the meaning of paragraph (e)(5) of this share. USP1 owns 30 shares of the common (I) FC1 has neither tested income section. Under paragraph (e)(3) of this stock and 15 shares of the preferred stock within the meaning of section section, the amount of FC1’s allocable during Year 1. The remaining 10 shares of 951A(c)(2)(A) and § 1.951A–2(b)(1) nor earnings and profits distributed in the common stock and 45 shares of preferred hypothetical distribution with respect to stock of FC1 are owned by Individual A. For tested loss within the meaning of × × section 951A(c)(2)(B)(i) and § 1.951A– FC2’s preferred shares is $8x (0.02 $1x Year 1, FC1 has $1,000x of earnings and 400) and with respect to USP1’s common profits and $500x of subpart F income within 2(b)(2). shares is $42x ($50x ¥ $8x). Accordingly, the meaning of section 952. (ii) Example 1: Single class of stock—(A) under paragraph (e)(1) of this section, USP1’s (B) Analysis. The right of the holder of the Facts. FC1 has outstanding 100 shares of one pro rata share of FC1’s subpart F income is preferred stock to receive 6% of par value is class of stock. USP1 owns 60 shares of FC1. $42x for Year 1. not a restriction or other limitation within USP2 owns 40 shares of FC1. For Year 1, FC1 (v) Example 4: Redemption rights—(A) the meaning of paragraph (e)(5) of this has $1,000x of earnings and profits and Facts. FC1 has outstanding 40 shares of section. The amount of FC1’s allocable $100x of subpart F income within the common stock and 10 shares of 4% earnings and profits distributed in the meaning of section 952. nonparticipating, preferred stock with a par hypothetical distribution with respect to (B) Analysis. FC1 has one class of stock. value of $50x per share. Pursuant to the FC1’s preferred shares is $360x (0.06 × $100x Therefore, under paragraph (e)(2) of this terms of the preferred stock, FC1 has the right × 60) and with respect to its common shares section, FC1’s allocable earnings and profits to redeem at any time, in whole or in part, is $640x ($1,000x¥$360x). As a result, the of $1,000x are distributed in the hypothetical the preferred stock. FC2 owns all of the amount of FC1’s allocable earnings and distribution pro rata to each share of stock. preferred shares. USP1, wholly owned by profits distributed in the hypothetical Accordingly, under paragraph (e)(1) of this FC2, owns all of the common shares. distribution to USP1 is $570x, the sum of section, for Year 1, USP1’s pro rata share of Pursuant to the governing documents of FC1, $90x ($360x × 15/60) with respect to its FC1’s subpart F income is $60x ($100x × no dividends may be paid to the common preferred shares and $480x ($640x × 30/40) $600x/$1,000x) and USP2’s pro rata share of shareholders while the preferred stock is with respect to its common shares. FC1’s subpart F income is $40x ($100x × outstanding. For Year 1, FC1 has $100x of Accordingly, under paragraph (e)(1) of this $400x/$1,000x). earnings and profits and $100x of subpart F section, USP1’s pro rata share of the subpart (iii) Example 2: Common and preferred income within the meaning of section 952. F income of FC1 is $285x ($500x × $570x/ stock—(A) Facts. FC1 has outstanding 70 (B) Analysis. The agreement restricting $1,000x). shares of common stock and 30 shares of 4% FC1’s ability to pay dividends to common (vii) Example 6: Subpart F income and nonparticipating, voting preferred stock with shareholders while the preferred stock is tested income—(A) Facts. FC1 has a par value of $10x per share. USP1 owns all outstanding is a restriction or other limitation outstanding 700 shares of common stock and of the common shares. Individual A owns all within the meaning of paragraph (e)(5) of this 300 shares of 4% nonparticipating, voting of the preferred shares. For Year 1, FC1 has section. Therefore, the restriction is preferred stock with a par value of $100x per $100x of earnings and profits and $50x of disregarded for purposes of determining the share. USP1 owns all of the common shares. subpart F income within the meaning of amount of FC1’s allocable earnings and USP2 owns all of the preferred shares. For section 952. profits distributed in the hypothetical Year 1, FC1 has $10,000x of earnings and (B) Analysis. The distribution rights of the distribution to a class of stock. Under profits, $2,000x of subpart F income within preferred shares are not a restriction or other paragraph (e)(4)(i) of this section, no amount the meaning of section 952, and $9,000x of limitation within the meaning of paragraph of allocable earnings and profits is tested income within the meaning of section (e)(5) of this section. Under paragraph (e)(3) distributed in the hypothetical distribution to 951A(c)(2)(A) and § 1.951A–2(b)(1).

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(B) Analysis—(1) Hypothetical distribution. United States shareholder means, with with respect to a United States The allocable earnings and profits of FC1 respect to a foreign corporation, a shareholder, a person that is related to determined under paragraph (e)(1)(ii) of this United States person (as defined in the United States shareholder within the section are $11,000x, the greater of FC1’s meaning of section 267(b) or 707(b)(1). earnings and profits as determined under section 957(c)) who owns within the section 964 ($10,000x) or the sum of FC1’s meaning of section 958(a), or is (3) Example—(i) Facts. USP, a domestic subpart F income and tested income ($2,000x considered as owning by applying the corporation, owns all of the stock of CFC1 + $9,000x). The amount of FC1’s allocable rules of ownership of section 958(b), 10 and CFC2. CFC1 and CFC2 own 60% and earnings and profits distributed in the percent or more of the total combined 40%, respectively, of the interests in the hypothetical distribution with respect to voting power of all classes of stock capital and profits of DPS, a domestic USP2’s preferred shares is $1,200x (0.04 × partnership. DPS owns all of the stock of × entitled to vote of such foreign $100x 300) and with respect to USP1’s corporation, or 10 percent or more of the CFC3. Each of CFC1, CFC2, and CFC3 is a common shares is $9,800x controlled foreign corporation. USP, DPS, ($11,000x¥$1,200x). total value of shares of all classes of CFC1, CFC2, and CFC3 all use the calendar (2) Pro rata share of subpart F income. stock of such foreign corporation. year as their taxable year. For Year 1, CFC3 Accordingly, under paragraph (e)(1) of this * * * * * has $100x of subpart F income and $100x of section, USP1’s pro rata share of FC1’s (h) Special rule for partnership earnings and profits. × subpart F income is $1,782x ($2,000x blocker structures—(1) In general. For (ii) Analysis. DPS is a controlled domestic $9,800x/$11,000x), and USP2’s pro rata share partnership within the meaning of paragraph of FC1’s subpart F income is $218x ($2,000x purposes of sections 951 through 964, other than for purposes of 951A, a (h)(2) of this section because more than 50% × $1,200x/$11,000x). of the interests in its capital or profits are (3) Pro rata share of tested income. controlled domestic partnership is owned by persons related to USP within the Accordingly, under § 1.951A–1(d)(2), USP1’s treated as a foreign partnership in meaning of section 267(b) (that is, CFC1 and pro rata share of FC1’s tested income is determining the stock of a controlled CFC2), and thus DPS is controlled by USP $8,018x ($9,000x × $9,800x/$11,000x), and foreign corporation owned (within the and related persons. The conditions of USP2’s pro rata share of FC1’s tested income paragraph (h)(1) of this section are satisfied × meaning of section 958(a)) by a United is $982x ($9,000x $1,200x/$11,000x) for States person if the following conditions because, without regard to paragraph (h) of Year 1. this section, DPS is a United States (viii) Example 7: Subpart F income and are satisfied— (i) Without regard to paragraph (h) of shareholder that owns (within the meaning of tested loss—(A) Facts. The facts are the same section 958(a)) stock of CFC3, a controlled as in paragraph (e)(7)(vii)(A) of this section this section, the controlled domestic foreign corporation, and if DPS were treated (the facts in Example 6), except that for Year partnership owns (within the meaning as foreign, CFC3 would continue to be a 1, FC1 has $8,000x of earnings and profits, of section 958(a)) stock of a controlled controlled foreign corporation, and USP $10,000x of subpart F income within the foreign corporation; and would be treated as owning (within the meaning of section 952 (but without regard (ii) If the controlled domestic meaning of section 958(a)) stock of CFC3 to the limitation in section 952(c)(1)(A)), and partnership (and all other controlled through CFC1 and CFC2, which are both $2,000x of tested loss within the meaning of partners in DPS. Thus, under paragraph section 951A(c)(2)(B)(i) and § 1.951A–2(b)(2). domestic partnerships in the chain of ownership of the controlled foreign (h)(1) of this section, DPS is treated as a Under section 951A(c)(2)(B)(ii) and foreign partnership for purposes of § 1.951A–6(b), the earnings and profits of corporation) were treated as foreign— determining the stock of CFC3 owned (within FC1 are increased for purposes of section (A) The controlled foreign corporation the meaning of section 958(a)) by USP. 952(c)(1)(A) by the amount of FC1’s tested would continue to be a controlled Accordingly, USP’s pro rata share of CFC3’s loss. Accordingly, after the application of foreign corporation; and subpart F income for Year 1 is $100x, and section 951A(c)(2)(B)(ii) and § 1.951A–6(b), (B) At least one United States USP includes in its gross income $100x the subpart F income of FC1 is $10,000x. shareholder of the controlled foreign under section 951(a)(1)(A). DPS is not a (B) Analysis—(1) Pro rata share of subpart corporation would be treated as owning United States shareholder of CFC3 for F income. The allocable earnings and profits purposes of sections 951 through 964. determined under paragraph (e)(1)(ii) of this (within the meaning of section 958(a)) section are $10,000x, the greater of the stock of the controlled foreign (i) Applicability dates. Paragraphs (a), earnings and profits of FC1 determined under corporation through another foreign (b)(1)(ii), (b)(2), (e)(1)(ii)(B), and (g)(1) of section 964 ($8,000x) or the sum of FC1’s corporation that is a direct or indirect this section apply to taxable years of subpart F income and tested income partner in the controlled domestic foreign corporations beginning after ($10,000x + $0). The amount of FC1’s partnership. December 31, 2017, and to taxable years allocable earnings and profits distributed in (2) Definition of a controlled domestic of United States shareholders in which the hypothetical distribution with respect to USP2’s preferred shares is $1,200x (.04 × partnership. For purposes of paragraph or with which such taxable years of $100x × 300) and with respect to USP1’s (h)(1) of this section, the term controlled foreign corporations end. Except for common shares is $8,800x domestic partnership means a domestic paragraph (e)(1)(ii)(B) of this section, ($10,000x¥$1,200x). Accordingly, under partnership that is controlled by a paragraph (e) of this section applies to paragraph (e)(1) of this section, for Year 1, United States shareholder described in taxable years of United States USP1’s pro rata share of FC1’s subpart F paragraph (h)(1)(ii)(B) of this section shareholders ending on or after October income is $8,800x and USP2’s pro rata share and persons related to the United States 3, 2018. Paragraph (h) of this section of FC1’s subpart F income is $1,200x. shareholder. For purposes of this applies to taxable years of domestic (2) Pro rata share of tested loss. The allocable earnings and profits determined paragraph (h)(2), control is determined partnerships ending on or after May 14, under § 1.951A–1(d)(4)(i)(B) are $2,000x, the based on all the facts and 2010. amount of FC1’s tested loss. Under § 1.951A– circumstances, except that a partnership ■ Par. 6. Sections 1.951A–0 through 1(d)(4)(i)(C), the entire $2,000x of tested loss will be deemed to be controlled by a 1.951A–7 are added to read as follows: is allocated in the hypothetical distribution United States shareholder and related to USP1’s common shares. Accordingly, persons in any case in which those § 1.951A–0 Outline of section 951A USP1’s pro rata share of the tested loss is persons, in the aggregate, own (directly regulations. $2,000x. or indirectly through one or more This section lists the headings for §§ 1.951A–1 through 1.951A–7. * * * * * partnerships) more than 50 percent of (g) * * * the interests in the partnership capital § 1.951A–1 General provisions. (1) In general. For purposes of or profits. For purposes of this (a) Overview. sections 951 through 964, the term paragraph (h)(2), a related person is, (1) In general.

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(2) Scope. (i) Example 1. (B) Residual CFC gross income. (b) Inclusion of global intangible low-taxed (A) Facts. (iv) Examples. income. (B) Analysis. (A) Example 1: Sale of intangible property (c) Determination of GILTI inclusion (1) CFC and United States shareholder during the disqualified period. amount. determinations. (1) Facts. (1) In general. (2) Application of section 951A. (2) Analysis. (2) Definition of net CFC tested income. (ii) Example 2. (B) Example 2: Related party transfer after (3) Definition of net deemed tangible (A) Facts. the disqualified period; gain recognition. income return. (B) Analysis. (1) Facts. (i) In general. (1) CFC and United States shareholder (2) Analysis. (ii) Definition of deemed tangible income determination. (C) Example 3: Related party transfer after return. (2) Application of section 951A. the disqualified period; loss recognition. (iii) Definition of specified interest (f) Definitions. (1) Facts. expense. (1) CFC inclusion year. (2) Analysis. (4) Determination of GILTI inclusion (2) Controlled foreign corporation. § 1.951A–3 Qualified business asset amount for consolidated groups. (3) Hypothetical distribution date. investment. (d) Determination of pro rata share. (4) Section 958(a) stock. (a) Scope. (1) In general. (5) Tested item. (b) Qualified business asset investment. (2) Tested income. (6) United States shareholder. (c) Specified tangible property. (i) In general. (7) U.S. shareholder inclusion year. (1) In general. (ii) Special rule for prior allocation of § 1.951A–2 Tested income and tested loss. (2) Tangible property. tested loss. (a) Scope. (d) Dual use property. (3) Qualified business asset investment. (b) Definitions related to tested income and (1) In general. (i) In general. tested loss. (2) Definition of dual use property. (ii) Special rule for excess hypothetical (1) Tested income and tested income CFC. (3) Dual use ratio. tangible return. (2) Tested loss and tested loss CFC. (4) Example. (A) In general. (c) Rules relating to the determination of (i) Facts. (B) Determination of pro rata share of tested income and tested loss. (ii) Analysis. hypothetical tangible return. (1) Definition of gross tested income. (A) Dual use property. (C) Definition of hypothetical tangible (2) Determination of gross income and (B) Depreciation not capitalized to return. allowable deductions. inventory. (iii) Examples. (i) In general. (C) Depreciation capitalized to inventory. (A) Example 1. (ii) Deemed payment under section 367(d). (e) Determination of adjusted basis in (1) Facts. (3) Allocation of deductions to gross tested specified tangible property. (2) Analysis. income. (1) In general. (i) Determination of pro rata share of tested (4) Gross income taken into account in (2) Effect of change in law. income. determining subpart F income. (3) Specified tangible property placed in (ii) Determination of pro rata share of (i) In general. service before enactment of section 951A. qualified business asset investment. (ii) Items of gross income included in (i) In general. (B) Example 2. subpart F income. (ii) Election to use income and earnings (1) Facts. (A) Insurance income. and profits depreciation method for property (2) Analysis. (B) Foreign base company income. placed in service before the first taxable year (i) Determination of pro rata share of tested (C) International boycott Income. beginning after December 22, 2017. income. (D) Illegal bribes, kickbacks, or other (A) In general. (ii) Determination of pro rata share of payments. (B) Manner of making the election. qualified business asset investment. (E) Income earned in certain foreign (f) Special rules for short taxable years. (C) Example 3. countries. (1) In general. (1) Facts. (iii) Coordination rules. (2) Determination of quarter closes. (2) Analysis. (A) Coordination with E&P limitation. (3) Reduction of qualified business asset (i) Determination of pro rata share of tested (B) Coordination with E&P recapture. investment. income. (C) Coordination with full inclusion rule (4) Example. (ii) Determination of pro rata share of and high tax exception. (i) Facts. qualified business asset investment. (iv) Examples. (ii) Analysis. (4) Tested loss. (A) Example 1. (A) Determination of short taxable years (i) In general. (1) Facts. and quarters. (ii) Special rule in case of accrued but (2) Analysis. (B) Calculation of qualified business asset unpaid dividends. (i) Year 1. investment for the first short taxable year. (iii) Special rule for stock with no (ii) Year 2. (C) Calculation of qualified business asset liquidation value. (B) Example 2. investment for the second short taxable year. (iv) Examples. (1) Facts. (g) Partnership property. (A) Example 1. (2) Analysis. (1) In general. (1) Facts. (i) FC1. (2) Determination of partnership QBAI. (2) Analysis. (ii) FC2. (3) Determination of partner adjusted basis. (B) Example 2. (C) Example 3. (i) In general. (1) Facts. (1) Facts. (ii) Sole use partnership property. (2) Analysis. (2) Analysis. (A) In general. (i) Year 1. (i) Foreign base company income. (B) Definition of sole use partnership (ii) Year 2. (ii) Recapture of subpart F income. property. (5) Tested interest expense. (iii) Gross tested income. (iii) Dual use partnership property. (6) Tested interest income. (5) Allocation of deduction or loss (A) In general. (e) Treatment of domestic partnerships. attributable to disqualified basis. (B) Definition of dual use partnership (1) In general. (i) In general. property. (2) Non-application for determination of (ii) Determination of deduction or loss (4) Determination of proportionate share of status as United States shareholder and attributable to disqualified basis. the partnership’s adjusted basis in controlled foreign corporation. (iii) Definitions. partnership specified tangible property. (3) Examples. (A) Disqualified basis. (i) In general.

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(ii) Proportionate share ratio. (A) Facts. (a) Scope. (5) Definition of partnership specified (B) Example 1: Qualification for safe (b) Definitions related to specified interest tangible property. harbor. expense. (6) Determination of partnership adjusted (1) Facts. (1) Tested interest expense. basis. (2) Analysis. (i) In general. (7) Determination of partner-specific QBAI (C) Example 2: Transfers between CFCs (ii) Interest expense. basis. with different taxable year ends. (iii) Qualified interest expense. (8) Examples. (1) Facts. (A) In general. (i) Facts. (2) Analysis. (B) Qualified asset. (ii) Example 1: Sole use partnership (D) Example 3: Acquisition from unrelated (1) In general. property. person. (2) Exclusion for related party receivables. (A) Facts. (1) Facts. (3) Look-through rule for subsidiary stock. (B) Analysis. (2) Analysis. (4) Look-through rule for certain (1) Sole use partnership property. (E) Example 4: Acquisitions from tested partnership interests. (2) Proportionate share. loss CFCs. (iv) Tested loss QBAI amount. (3) Partner adjusted basis. (1) Facts. (2) Tested interest income. (4) Partnership QBAI. (2) Analysis. (i) In general. (iii) Example 2: Dual use partnership (2) Disregard of adjusted basis in property (ii) Interest income. property. transferred during the disqualified period. (iii) Qualified interest income. (A) Facts. (i) Operative rules. (A) In general. (1) Asset C. (A) In general. (B) Exclusion for related party interest. (2) Asset D. (B) Application to dual use property. (c) Examples. (3) Asset E. (C) Application to partnership specified (1) Example 1: Wholly-owned CFCs. (B) Analysis. tangible property. (i) Facts. (1) Asset C. (ii) Determination of disqualified basis. (ii) Analysis. (i) Proportionate share. (A) In general. (A) CFC-level determination; tested interest (ii) Dual use ratio. (B) Adjustments to disqualified basis. expense and tested interest income. (iii) Partner adjusted basis. (1) Reduction or elimination of disqualified (1) Tested interest expense and tested (3) Asset D. basis. interest income of FS1. (i) Proportionate share. (i) In general. (2) Tested interest expense and tested (ii) Dual use ratio. (ii) Exception for related party transfers. interest income of FS2. (2) Increase to disqualified basis for (B) United States shareholder-level (iii) Partner adjusted basis. nonrecognition transactions. determination; pro rata share and specified (4) Asset E. (i) Increase corresponding to adjustments interest expense. (i) Proportionate share. in other property. (2) Example 2: Less than wholly-owned (ii) Dual use ratio. (ii) Exchanged basis property. CFCs. (iii) Partner adjusted basis. (iii) Increase by reason of section 732(d). (i) Facts. (5) Partnership QBAI. (3) Election to eliminate disqualified basis. (ii) Analysis. (iv) Example 3: Sole use partnership (i) In general. (A) CFC-level determination; tested interest specified tangible property; section 743(b) (ii) Manner of making the election with expense and tested interest income. adjustments. respect to a controlled foreign corporation. (B) United States shareholder-level (A) Facts. (iii) Manner of making the election with determination; pro rata share and specified (B) Analysis. respect to a partnership. interest expense. (v) Example 4: Tested income CFC with (iv) Conditions of making an election. (3) Example 3: Operating company; distributive share of loss from a partnership. (C) Definitions related to disqualified basis. qualified interest expense. (A) Facts. (1) Disqualified period. (i) Facts. (B) Analysis. (2) Disqualified transfer. (ii) Analysis. (vi) Example 5: Tested income CFC sale of (3) Qualified gain amount. (A) CFC-level determination; tested interest partnership interest before CFC inclusion (4) Related person. expense and tested interest income. date. (5) Transfer. (1) Tested interest expense and tested (A) Facts. (6) Transferor CFC. interest income of FS1. (B) Analysis. (iii) Examples. (2) Tested interest expense and tested (1) FC1. (A) Example 1: Sale of asset; disqualified interest income of FS2. (2) FC2. period. (B) United States shareholder-level (vii) Example 6: Partnership adjusted basis; (1) Facts. determination; pro rata share and specified distribution of property in liquidation of (2) Analysis. interest expense. partnership interest. (B) Example 2: Sale of asset; no (4) Example 4: Holding company; qualified (A) Facts. disqualified period. interest expense. (B) Analysis. (1) Facts. (i) Facts. (h) Anti-avoidance rules related to certain (2) Analysis. (ii) Analysis. transfers of property. (C) Example 3: Sale of partnership interest. (A) CFC-level determination; tested interest (1) Disregard of adjusted basis in specified (1) Facts. expense and tested interest income. tangible property held temporarily. (2) Analysis. (1) Tested interest expense and tested (i) In general. (D) Example 4: Distribution of property in interest income of FS1. (ii) Disregard of first quarter close. liquidation of partnership interest. (2) Tested interest expense and tested (iii) Safe harbor for certain transfers (1) Facts. interest income of FS2. involving CFCs. (2) Analysis. (3) Tested interest expense and tested (iv) Determination of principal purpose (E) Example 5: Distribution of property to interest income of FS3. and transitory holding. a partner in basis reduction transaction. (B) United States shareholder-level (A) Presumption for ownership less than (1) Facts. determination; pro rata share and specified 12 months. (2) Analysis. interest expense. (B) Presumption for ownership greater than (F) Example 6: Dual use property with (5) Example 5: Specified interest expense 36 months. disqualified basis. and tested loss QBAI amount. (v) Determination of holding period. (1) Facts. (i) Facts. (vi) Treatment as single applicable U.S. (2) Analysis. (ii) Analysis. shareholder. § 1.951A–4 Tested interest expense and (A) CFC-level determination; tested interest (vii) Examples. tested interest income. expense and tested interest income.

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(1) Tested interest expense and tested corporation related to a tested loss. tested loss CFC (as defined in § 1.951A– interest income of FS1. Section 1.951A–7 provides dates of 2(b)(2)) for a CFC inclusion year that (2) Tested interest expense and tested applicability. ends with or within the U.S. interest income of FS2. (2) Scope. Paragraph (b) of this section shareholder inclusion year. (B) United States shareholder-level determination; pro rata share and specified provides the general rule requiring a (3) Definition of net deemed tangible interest expense. United States shareholder to include in income return—(i) In general. The term § 1.951A–5 Treatment of GILTI inclusion gross income its global intangible low- net deemed tangible income return amounts. taxed income for a U.S. shareholder means, with respect to a United States (a) Scope. inclusion year. Paragraph (c) of this shareholder and a U.S. shareholder (b) Treatment as subpart F income for section provides rules for determining inclusion year, the excess (if any) of— certain purposes. the amount of a United States (A) The shareholder’s deemed (1) In general. shareholder’s global intangible low- tangible income return (as defined in (2) Allocation of GILTI inclusion amount to taxed income for the U.S. shareholder paragraph (c)(3)(ii) of this section) for tested income CFCs. inclusion year, including a rule for the the U.S. shareholder inclusion year, (i) In general. application of section 951A and the over (ii) Example. section 951A regulations to (B) The shareholder’s specified (A) Facts. interest expense (as defined in (B) Analysis. consolidated groups. Paragraph (d) of (3) Translation of portion of GILTI this section provides rules for paragraph (c)(3)(iii) of this section) for inclusion amount allocated to tested income determining a United States the U.S. shareholder inclusion year. CFC. shareholder’s pro rata share of certain (ii) Definition of deemed tangible (c) Treatment as an amount includible in items for purposes of determining the income return. The term deemed the gross income of a United States person. United States shareholder’s global tangible income return means, with (d) Treatment for purposes of personal intangible low-taxed income. Paragraph respect to a United States shareholder holding company rules. (e) of this section provides rules for the and a U.S. shareholder inclusion year, § 1.951A–6 Adjustments related to tested treatment of a domestic partnership and 10 percent of the aggregate of the losses. its partners for purposes of section 951A shareholder’s pro rata share of the (a) Scope. and the section 951A regulations. qualified business asset investment (as (b) Increase of earnings and profits of defined in § 1.951A–3(b)) of each tested tested loss CFC for purposes of section Paragraph (f) of this section provides 952(c)(1)(A). additional definitions for purposes of income CFC for a CFC inclusion year (c) [Reserved] this section and the section 951A that ends with or within the U.S. § 1.951A–7 Applicability dates. regulations. shareholder inclusion year. (iii) Definition of specified interest § 1.951A–1 General provisions. (b) Inclusion of global intangible low- taxed income. Each person who is a expense. The term specified interest (a) Overview—(1) In general. This United States shareholder of any expense means, with respect to a United section and §§ 1.951A–2 through controlled foreign corporation and owns States shareholder and a U.S. 1.951A–7 (collectively, the section 951A section 958(a) stock of any such shareholder inclusion year, the excess regulations) provide rules to determine controlled foreign corporation includes (if any) of— a United States shareholder’s income in gross income in the U.S. shareholder (A) The aggregate of the shareholder’s inclusion under section 951A, describe inclusion year the shareholder’s GILTI pro rata share of the tested interest certain consequences of an income inclusion amount, if any, for the U.S. expense (as defined in § 1.951A–4(b)(1)) inclusion under section 951A with shareholder inclusion year. of each controlled foreign corporation respect to controlled foreign (c) Determination of GILTI inclusion for a CFC inclusion year that ends with corporations and their United States amount—(1) In general. Except as or within the U.S. shareholder inclusion shareholders, and define certain terms provided in paragraph (c)(4) of this year, over for purposes of section 951A and the section, the term GILTI inclusion (B) The aggregate of the shareholder’s section 951A regulations. This section amount means, with respect to a United pro rata share of the tested interest provides general rules for determining a States shareholder and a U.S. income (as defined in § 1.951A–4(b)(2)) United States shareholder’s inclusion of shareholder inclusion year, the excess of each controlled foreign corporation global intangible low-taxed income, (if any) of— for a CFC inclusion year that ends with including a rule relating to the (i) The shareholder’s net CFC tested or within the U.S. shareholder inclusion application of section 951A and the income (as defined in paragraph (c)(2) of year. section 951A regulations to domestic this section) for the year, over (4) Determination of GILTI inclusion partnerships and their partners. Section (ii) The shareholder’s net deemed amount for consolidated groups. For 1.951A–2 provides rules for determining tangible income return (as defined in purposes of section 951A and the a controlled foreign corporation’s tested paragraph (c)(3) of this section) for the section 951A regulations, a member of income or tested loss. Section 1.951A– year. a consolidated group (as defined in 3 provides rules for determining a (2) Definition of net CFC tested § 1.1502–1(h)) determines its GILTI controlled foreign corporation’s income. The term net CFC tested income inclusion amount taking into account qualified business asset investment. means, with respect to a United States the rules provided in § 1.1502–51. Section 1.951A–4 provides rules for shareholder and a U.S. shareholder (d) Determination of pro rata share— determining a controlled foreign inclusion year, the excess (if any) of— (1) In general. For purposes of corporation’s tested interest expense (i) The aggregate of the shareholder’s paragraph (c) of this section, each and tested interest income. Section pro rata share of the tested income of United States shareholder that owns 1.951A–5 provides rules relating to the each tested income CFC (as defined in section 958(a) stock of a controlled treatment of the inclusion of global § 1.951A–2(b)(1)) for a CFC inclusion foreign corporation as of a hypothetical intangible low-taxed income for certain year that ends with or within the U.S. distribution date determines its pro rata purposes. Section 1.951A–6 provides shareholder inclusion year, over share (if any) of each tested item of the certain adjustments to earnings and (ii) The aggregate of the shareholder’s controlled foreign corporation for the profits and basis of a controlled foreign pro rata share of the tested loss of each CFC inclusion year that includes the

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hypothetical distribution date and ends section, over the sum of the tested (C) Definition of hypothetical tangible with or within the U.S. shareholder income allocated to each such class of return. For purposes of this paragraph inclusion year. Except as otherwise stock for each prior CFC inclusion year (d)(3)(ii), the term hypothetical tangible provided in this paragraph (d), a United under this paragraph (d)(2)(ii). return means, with respect to a tested States shareholder’s pro rata share of Paragraph (d)(2)(i) of this section income CFC for a CFC inclusion year, 10 each tested item is determined applies for purposes of determining a percent of the qualified business asset independently of its pro rata share of United States shareholder’s pro rata investment of the tested income CFC for each other tested item. In no case may share of the remainder of the tested the CFC inclusion year. the sum of the pro rata share of any income, except that, for purposes of the (iii) Examples. The following tested item of a controlled foreign hypothetical distribution of section examples illustrate the application of corporation for a CFC inclusion year 951(a)(2)(A) and § 1.951–1(b)(1)(i) and paragraphs (d)(2) and (3) of this section. allocated to stock under this paragraph (e)(1)(i), the amount of allocable See also § 1.951–1(e)(7)(vii) (Example 6) (d) exceed the amount of such tested earnings and profits of the tested (illustrating a United States item of the controlled foreign income CFC is reduced by the amount shareholder’s pro rata share of tested corporation for the CFC inclusion year. of tested income allocated under the income). Except as modified in this paragraph first sentence of this paragraph (d)(2)(ii). (A) Example 1—(1) Facts. FS, a controlled (d), a United States shareholder’s pro For an example of the application of this foreign corporation, has outstanding 70 rata share of any tested item is paragraph (d)(2), see paragraph shares of common stock and 30 shares of 4% determined under the rules of section (d)(4)(iv)(B) of this section (Example 2). nonparticipating, cumulative preferred stock 951(a)(2) and § 1.951–1(b) and (e) in the (3) Qualified business asset with a par value of $10x per share. P Corp, same manner as those provisions apply investment—(i) In general. Except as a domestic corporation and a United States to subpart F income. Under section shareholder of FS, owns all of the common provided in paragraphs (d)(3)(ii) of this shares. Individual A, a United States citizen 951(a)(2) and § 1.951–1(b) and (e), as section, a United States shareholder’s modified by this paragraph (d), a United and a United States shareholder, owns all of pro rata share of the qualified business the preferred shares. Individual A, FS, and P States shareholder’s pro rata share of asset investment of a tested income CFC Corp use the calendar year as their taxable any tested item for a U.S. shareholder for a U.S. shareholder inclusion year year. Individual A and P Corp are inclusion year is determined with bears the same ratio to the total shareholders of FS for all of Year 4. At the respect to the section 958(a) stock of the qualified business asset investment of beginning of Year 4, FS had no dividend controlled foreign corporation owned by the tested income CFC for the CFC arrearages with respect to its preferred stock. For Year 4, FS has $100x of earnings and the United States shareholder on a inclusion year as the United States hypothetical distribution date with profits, $120x of tested income, and no shareholder’s pro rata share of the tested subpart F income within the meaning of respect to a CFC inclusion year that income of the tested income CFC for the ends with or within the U.S. section 952. FS also has $750x of qualified U.S. shareholder inclusion year bears to business asset investment for Year 4. shareholder inclusion year. A United the total tested income of the tested (2) Analysis—(i) Determination of pro rata States shareholder’s pro rata share of income CFC for the CFC inclusion year. share of tested income. For purposes of any tested item is translated into United (ii) Special rule for excess determining P Corp’s pro rata share of FS’s States dollars using the average hypothetical tangible return—(A) In tested income under paragraph (d)(2) of this exchange rate for the CFC inclusion year section, the amount of FS’s allocable earnings general. If the tested income of a tested of the controlled foreign corporation. and profits for purposes of the hypothetical income CFC for a CFC inclusion year is Paragraphs (d)(2) through (5) of this distribution described in § 1.951–1(e)(1)(i) is less than the hypothetical tangible section provide rules for determining a $120x, the greater of its earnings and profits return of the tested income CFC for the United States shareholder’s pro rata as determined under section 964 ($100x) and CFC inclusion year, a United States the sum of its subpart F income and tested share of each tested item of a controlled income ($0 + $120x). Under paragraph (d)(2) foreign corporation. shareholder’s pro rata share of the qualified business asset investment of of this section and § 1.951–1(e)(3), the (2) Tested income—(i) In general. amount of FS’s allocable earnings and profits Except as provided in paragraph the tested income CFC for a United States shareholder inclusion year bears distributed in the hypothetical distribution (d)(2)(ii) of this section, a United States with respect to Individual A’s preferred shareholder’s pro rata share of the tested the same ratio to the qualified business shares is $12x (0.04 × $10x × 30) and the income of each tested income CFC for asset investment of the tested income amount distributed with respect to P Corp’s a U.S. shareholder inclusion year is CFC as the United States shareholder’s common shares is $108x ($120x ¥ $12x). determined under section 951(a)(2) and pro rata share of the hypothetical Accordingly, under paragraph (d)(2) of this § 1.951–1(b) and (e), substituting ‘‘tested tangible return of the CFC for the U.S. section and § 1.951–1(e)(1), Individual A’s income’’ for ‘‘subpart F income’’ each shareholder inclusion year bears to the pro rata share of FS’s tested income is $12x, and P Corp’s pro rata share of FS’s tested place it appears, other than in § 1.951– total hypothetical tangible return of the CFC for the CFC inclusion year. income is $108x for Year 4. 1(e)(1)(ii)(B) and the denominator of the (ii) Determination of pro rata share of fraction described in § 1.951– (B) Determination of pro rata share of qualified business asset investment. The 1(b)(1)(ii)(A). hypothetical tangible return. For special rule of paragraph (d)(3)(ii)(A) of this (ii) Special rule for prior allocation of purposes of paragraph (d)(3)(ii)(A) of section does not apply because FS’s tested tested loss. In any case in which tested this section, a United States income of $120x is not less than FS’s loss has been allocated to any class of shareholder’s pro rata share of the hypothetical tangible return of $75x, which stock in a prior CFC inclusion year hypothetical tangible return of a CFC for is 10% of FS’s qualified business asset under paragraph (d)(4)(iii) of this a CFC inclusion year is determined in investment of $750x. Accordingly, under the section, tested income is first allocated the same manner as the United States general rule of paragraph (d)(3)(i) of this to each such class of stock in the order shareholder’s pro rata share of the tested section, Individual A’s and P Corp’s respective pro rata shares of FS’s qualified of its liquidation priority to the extent income of the CFC for the CFC inclusion business asset investment bears the same of the excess (if any) of the sum of the year under paragraph (d)(2) of this ratio to FS’s total qualified business asset tested loss allocated to each such class section by treating the amount of the investment as their respective pro rata shares of stock for each prior CFC inclusion hypothetical tangible return as the of FS’s tested income bears to FS’s total year under paragraph (d)(4)(iii) of this amount of tested income. tested income. Thus, Individual A’s pro rata

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share of FS’s qualified business asset and FS all use the calendar year as their Accordingly, R Corp’s pro rata share of the investment is $75x ($750x × $12x/$120x), taxable year. hypothetical tangible return of FS for Year 1 and P Corp’s pro rata share of FS’s qualified (2) Analysis—(i) Determination of pro rata is $130x ($150x ¥ $20x), and R Corp’s pro business asset investment is $675x ($750x × share of tested income. For purposes of rata share of FS’s qualified business asset $108x/$120x). determining R Corp’s pro rata share of FS’s investment is $1,300x ($1,500x × $130x/ (B) Example 2—(1) Facts. The facts are the tested income under paragraph (d)(2) of this $150x). same as in paragraph (d)(3)(iv)(A)(1) of this section, the amount of FS’s allocable earnings (4) Tested loss—(i) In general. A section (the facts in Example 1 of this and profits for purposes of the hypothetical section), except that FS has $1,500x of distribution described in § 1.951–1(e)(1)(i) is United States shareholder’s pro rata qualified business asset investment for Year $50x, the greater of its earnings and profits share of the tested loss of each tested 4. as determined under section 964 ($50x) or loss CFC for a U.S. shareholder (2) Analysis—(i) Determination of pro rata the sum of its subpart F income and tested inclusion year is determined under share of tested income. The analysis and the income ($0 + $50x). Under paragraph (d)(2) section 951(a)(2) and § 1.951–1(b) and result are the same as in paragraph of this section and § 1.951–1(e)(1), FS’s (e) with the following modifications— (d)(3)(iv)(A)(2)(i) of this section (paragraph (i) allocable earnings and profits of $50x are (A) ‘‘Tested loss’’ is substituted for of the analysis in Example 1 of this section). distributed in the hypothetical distribution ‘‘subpart F income’’ each place it (ii) Determination of pro rata share of pro rata to each share of stock. R Corp’s pro qualified business asset investment. The rata share of FS’s tested income for Year 1 appears; special rule of paragraph (d)(3)(ii)(A) of this is its pro rata share under section (B) For purposes of the hypothetical section applies because FS’s tested income of 951(a)(2)(A) and § 1.951–1(b)(1)(i) ($50x), distribution described in section $120x is less than FS’s hypothetical tangible reduced under section 951(a)(2)(B) and 951(a)(2)(A) and § 1.951–1(b)(1)(i) and return of $150x, which is 10% of FS’s § 1.951–1(b)(1)(ii) by $20x, which is the (e)(1)(i), the amount of allocable qualified business asset investment of lesser of $20x, the dividend received by P earnings and profits of a controlled $1,500x. Under paragraph (d)(3)(ii)(A) of this Corp during Year 1 with respect to the FS foreign corporation for a CFC inclusion section, Individual A’s and P Corp’s stock acquired by R Corp ($20x), multiplied year is treated as being equal to the respective pro rata shares of FS’s qualified by a fraction, the numerator of which is the tested loss of the tested loss CFC for the business asset investment bears the same tested income ($50x) of FS for Year 1 and the CFC inclusion year; ratio to FS’s qualified business asset denominator of which is the sum of the (C) Except as provided in paragraphs investment as their respective pro rata shares subpart F income ($0) and the tested income of the hypothetical tangible return of FS ($50x) of FS for Year 1 ($20x × $50x/$50x), (d)(4)(ii) and (iii) of this section, the bears to the total hypothetical tangible return and $20x, which is P Corp’s pro rata share hypothetical distribution described in of FS. Under paragraph (d)(3)(ii)(B) of this (100%) of the amount which bears the same section 951(a)(2)(A) and § 1.951– section, P Corp’s and Individual A’s ratio to FS’s tested income for Year 1 ($50x) 1(b)(1)(i) and (e)(1)(i) is treated as made respective pro rata share of FS’s hypothetical as the period during which R Corp did not solely with respect to the common stock tangible return is determined under own (within the meaning of section 958(a)) of the tested loss CFC; and paragraph (d)(2) of this section in the same the FS stock (146 days) bears to the entire (D) In lieu of applying section manner as their respective pro rata shares of taxable year (1 × $50x × 146/365). 951(a)(2)(B) and § 1.951–1(b)(1)(ii), the the tested income of FS by treating the Accordingly, R Corp’s pro rata share of tested ¥ United States shareholder’s pro rata hypothetical tangible return as the amount of income of FS for Year 1 is $30x ($50x share of the tested loss allocated to tested income. The amount of FS’s allocable $20x). earnings and profits for purposes of the (ii) Determination of pro rata share of section 958(a) stock of the tested loss hypothetical distribution described in qualified business asset investment. The CFC is reduced by an amount that bears § 1.951–1(e)(1)(i) is $150x, the greater of its special rule of paragraph (d)(3)(ii) of this the same ratio to the amount of the earnings and profits as determined under section applies because FS’s tested income of tested loss as the part of such year section 964 ($100x) and the sum of its $50x is less than FS’s hypothetical tangible during which such shareholder did not subpart F income and hypothetical tangible return of $150x, which is 10% of FS’s own (within the meaning of section return ($0 + $150x). The amount of FS’s qualified business asset investment of 958(a)) such stock bears to the entire allocable earnings and profits distributed in $1,500x. Under paragraph (d)(3)(ii) of this × taxable year. the hypothetical distribution is $12x (.04 section, R Corp’s pro rata share of FS’s (ii) Special rule in case of accrued but $10x × 30) with respect to Individual A’s qualified business asset investment is the preferred shares and $138x ($150x ¥ $12x) amount that bears the same ratio to FS’s unpaid dividends. If a tested loss CFC’s with respect to P Corp’s common shares. qualified business asset investment as R earnings and profits that have Accordingly, Individual A’s pro rata share of Corp’s pro rata share of the hypothetical accumulated since the issuance of FS’s qualified business asset investment is tangible return of FS bears to the total preferred shares are reduced below the $120x ($1,500x × $12x/$150x), and P Corp’s hypothetical tangible return of FS. R Corp’s amount necessary to satisfy any accrued pro rata share of FS’s qualified business asset pro rata share of FS’s hypothetical tangible but unpaid dividends with respect to investment is $1,380x ($1,500x × $138x/ return is its pro rata share under section such preferred shares, then the amount $150x). 951(a)(2)(A) and § 1.951–1(b)(1)(i) ($150x), by which the tested loss reduces the (C) Example 3—(1) Facts. P Corp, a reduced under section 951(a)(2)(B) and earnings and profits below the amount domestic corporation and a United States § 1.951–1(b)(1)(ii) by $20x, which is the shareholder, owns 100% of the only class of lesser of $20x, the dividend received by P necessary to satisfy the accrued but stock of FS, a controlled foreign corporation, Corp during Year 1 with respect to the FS unpaid dividends is allocated in the from January 1 of Year 1, until May 26 of stock acquired by R Corp ($20x) multiplied hypothetical distribution described in Year 1. On May 26 of Year 1, P Corp sells by a fraction, the numerator of which is the section 951(a)(2)(A) and § 1.951– all of its FS stock to R Corp, a domestic hypothetical tangible return ($150x) of FS for 1(b)(1)(i) and (e)(1)(i) to the preferred corporation that is not related to P Corp, and Year 1 and the denominator of which is the stock of the tested loss CFC and the recognizes no gain or loss on the sale. R Corp, sum of the subpart F income ($0) and the remainder of the tested loss is allocated a United States shareholder of FS, owns hypothetical tangible return ($150x) of FS for × in the hypothetical distribution to the 100% of the stock of FS from May 26 through Year 1 ($20x $150x/$150x), and $60x, common stock of the tested loss CFC. December 31 of Year 1. For Year 1, FS has which is P Corp’s pro rata share (100%) of (iii) Special rule for stock with no $50x of earnings and profits, $50x of tested the amount which bears the same ratio to income, and no subpart F income within the FS’s hypothetical tangible return for Year 1 liquidation value. If a tested loss CFC’s meaning of section 952. FS also has $1,500x ($150x) as the period during which R Corp common stock has a liquidation value of of qualified business asset investment for did not own (within the meaning of section zero and there is at least one other class Year 1. On May 1 of Year 1, FS distributes 958(a)) the FS stock (146 days) bears to the of equity with a liquidation preference a $20x dividend to P Corp. P Corp, R Corp, entire taxable year (1 × $150x × 146/365). relative to the common stock, then the

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tested loss is allocated in the preferred stock has a liquidation value of income increases the shareholder’s pro hypothetical distribution described in $5,000x and no accrued but unpaid rata share of tested income of the section 951(a)(2)(A) and § 1.951– dividends. In Year 1, FS has a tested loss of controlled foreign corporation for the $1,000x and no other items of income, gain, U.S. shareholder inclusion year, reduces 1(b)(1)(i) and (e)(1)(i) to the most junior deduction, or loss. In Year 2, FS has tested class of equity with a positive income of $3,000x and no other items of the shareholder’s pro rata share of tested liquidation value to the extent of such income, gain, deduction, or loss. FS has loss of the controlled foreign liquidation value. Thereafter, tested loss earnings and profits of $3,000x for Year 2. At corporation for the U.S. shareholder is allocated to the next most junior class the end of Year 2, FS has accrued but unpaid inclusion year, or both. of equity to the extent of its liquidation dividends of $400x with respect to the (e) Treatment of domestic preferred stock, the sum of $200x for Year 1 partnerships—(1) In general. For value and so on. All determinations of × × liquidation value are to be made as of (0.04 $100x 50) and $200x for Year 2 purposes of section 951A and the (0.04 × $100x × 50). the beginning of the CFC inclusion year section 951A regulations, and for (2) Analysis—(i) Year 1. FS is a tested loss purposes of any other provision that of the tested loss CFC. CFC in Year 1. The common stock of FS has (iv) Examples. The following liquidation value of zero, and the preferred applies by reference to section 951A or examples illustrate the application of stock has a liquidation preference relative to the section 951A regulations, a domestic this paragraph (d)(4). See also § 1.951– the common stock. The tested loss ($1,000x) partnership is not treated as owning 1(e)(7)(viii) (Example 7) (illustrating a does not exceed the liquidation value of the stock of a foreign corporation within the United States shareholder’s pro rata preferred stock ($5,000x). Accordingly, under meaning of section 958(a). When the share of subpart F income and tested paragraph (d)(4)(iii) of this section, the tested preceding sentence applies, a domestic loss). loss is allocated to the preferred stock in the partnership is treated in the same hypothetical distribution described in section manner as a foreign partnership under (A) Example 1—(1) Facts. FS, a controlled 951(a)(2)(A) and § 1.951–1(b)(1)(i) and foreign corporation, has outstanding 70 (e)(1)(i). Individual A’s pro rata share of the section 958(a)(2) for purposes of shares of common stock and 30 shares of 4% tested loss is $1,000x, and P Corp’s pro rata determining the persons that own stock nonparticipating, cumulative preferred stock share of the tested loss is $0. of the foreign corporation within the with a par value of $10x per share. P Corp, (ii) Year 2. FS is a tested income CFC in meaning of section 958(a). a domestic corporation and a United States Year 2. Because $1,000x of tested loss was (2) Non-application for determination shareholder of FS, owns all of the common allocated to the preferred stock in Year 1 of status as United States shareholder shares. Individual A, a United States citizen under paragraph (d)(4)(iii) of this section, the and controlled foreign corporation. and a United States shareholder, owns all of first $1,000x of tested income in Year 2 is Paragraph (e)(1) of this section does not the preferred shares. FS, Individual A, and P allocated to the preferred stock under apply for purposes of determining Corp all use the calendar year as their taxable paragraph (d)(2)(ii) of this section. P Corp’s whether any United States person is a year. Individual A and P Corp are and Individual A’s pro rata shares of the shareholders of FS for all of Year 5. At the remaining $2,000x of tested income are United States shareholder (as defined in beginning of Year 5, FS had earnings and determined under the general rule of section 951(b)), whether any United profits of $120x, which accumulated after the paragraph (d)(2)(i) of this section, except that States shareholder is a controlling issuance of the preferred stock. At the end of for purposes of the hypothetical distribution domestic shareholder (as defined in Year 5, the accrued but unpaid dividends the amount of FS’s allocable earnings and § 1.964–1(c)(5)), or whether any foreign with respect to the preferred stock are $36x. profits is reduced by the tested income corporation is a controlled foreign For Year 5, FS has a $100x tested loss, and allocated under paragraph (d)(2)(ii) of this corporation (as defined in section no other items of income, gain, deduction or section to $2,000x ($3,000x ¥ $1,000x). loss. At the end of Year 5, FS has earnings 957(a)). Accordingly, under paragraph (d)(2)(i) of this (3) Examples. The following examples and profits of $20x. section and § 1.951–1(e), the amount of FS’s (2) Analysis. FS is a tested loss CFC for allocable earnings and profits distributed in illustrate the application of this Year 5. Before taking into account the tested the hypothetical distribution with respect to paragraph (e). loss in Year 5, FS had sufficient earnings and Individual A’s preferred stock is $400x (i) Example 1—(A) Facts. USP, a domestic profits to satisfy the accrued but unpaid ($400x of accrued but unpaid dividends) and corporation, and Individual A, a United dividends of $36x. The amount of the with respect to P Corp’s common stock is States citizen unrelated to USP, own 95% reduction in earnings below the amount $1,600x ($2,000x ¥ $400x). Individual A’s and 5%, respectively, of PRS, a domestic necessary to satisfy the accrued but unpaid pro rata share of the tested income is $1,400x partnership. PRS owns 100% of the single dividends attributable to the tested loss is ($1,000x + $400x), and P Corp’s pro rata class of stock of FC, a foreign corporation. ¥ ¥ $16x ($36x ($120x $100x)). share of the tested income is $1,600x. (B) Analysis—(1) CFC and United States Accordingly, under paragraph (d)(4)(ii) of (5) Tested interest expense. A United shareholder determinations. Under this section, $16x of the tested loss is paragraph (e)(2) of this section, the allocated to Individual A’s preferred stock in States shareholder’s pro rata share of determination of whether PRS, USP, and the hypothetical distribution described in tested interest expense of a controlled Individual A (each a United States person) section 951(a)(2)(A) and § 1.951–1(b)(1)(i) foreign corporation for a U.S. are United States shareholders of FC and and (e)(1)(i), and $84x ($100x ¥ $16x) of the shareholder inclusion year is equal to whether FC is a controlled foreign tested loss is allocated to P Corp’s common the amount by which the tested interest corporation is made without regard to shares in the hypothetical distribution. expense reduces the shareholder’s pro paragraph (e)(1) of this section. PRS, a United (B) Example 2—(1) Facts. FS, a controlled rata share of tested income of the States person, owns 100% of the total foreign corporation, has outstanding 100 combined voting power or value of the FC shares of common stock and 50 shares of 4% controlled foreign corporation for the stock within the meaning of section 958(a). nonparticipating, cumulative preferred stock U.S. shareholder inclusion year, Accordingly, PRS is a United States with a par value of $100x per share. P Corp, increases the shareholder’s pro rata shareholder under section 951(b), and FC is a domestic corporation and a United States share of tested loss of the controlled a controlled foreign corporation under shareholder of FS, owns all of the common foreign corporation for the U.S. section 957(a). USP is a United States shares. Individual A, a United States citizen shareholder inclusion year, or both. shareholder of FC because it owns 95% of the and a United States shareholder, owns all of (6) Tested interest income. A United total combined voting power or value of the the preferred shares. FS, Individual A, and P States shareholder’s pro rata share of FC stock under sections 958(b) and Corp all use the calendar year as their taxable 318(a)(2)(A). Individual A, however, is not a year. Individual A and P Corp are tested interest income of a controlled United States shareholder of FC because shareholders of FS for all of Year 1 and Year foreign corporation for a U.S. Individual A owns only 5% of the total 2. At the beginning of Year 1, the common shareholder inclusion year is equal to combined voting power or value of the FC stock has no liquidation value and the the amount by which the tested interest stock under sections 958(b) and 318(a)(2)(A).

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(2) Application of section 951A. Under purposes of determining the GILTI inclusion (b) Definitions related to tested paragraph (e)(1) of this section, for purposes of USP and Individual A, USP is treated as income and tested loss—(1) Tested × × of determining a GILTI inclusion amount owning 81% (100% 90% 90%) of the FC income and tested income CFC. The under section 951A and paragraph (b) of this stock under section 958(a), and Individual A term tested income means the excess (if section, PRS is not treated as owning (within × × is treated as owning 9% (100% 90% any) of a controlled foreign the meaning of section 958(a)) the FC stock; 10%) of the FC stock under section 958(a). instead, PRS is treated in the same manner Because USP and Individual A are both corporation’s gross tested income for a as a foreign partnership for purposes of United States shareholders of FC, USP and CFC inclusion year, over the allowable determining the FC stock owned by USP and Individual A determine their respective pro deductions (including taxes) properly Individual A under section 958(a)(2). rata shares of any tested item of FC based on allocable to the gross tested income for Therefore, for purposes of determining the their ownership of section 958(a) stock of FC. the CFC inclusion year (a controlled GILTI inclusion amount of USP and (f) Definitions. This paragraph (f) foreign corporation with tested income Individual A, USP is treated as owning 95% for a CFC inclusion year, a tested of the FC stock under section 958(a), and provides additional definitions that apply for purposes of this section and income CFC). Individual A is treated as owning 5% of the (2) Tested loss and tested loss CFC. FC stock under section 958(a). USP is a the section 951A regulations. Other The term tested loss means the excess (if United States shareholder of FC, and definitions relevant to the section 951A therefore USP determines its pro rata share any) of a controlled foreign regulations are included in §§ 1.951A–2 corporation’s allowable deductions of any tested item of FC based on its through 1.951A–4. ownership of section 958(a) stock of FC. (including taxes) properly allocable to However, because Individual A is not a (1) CFC inclusion year. The term CFC gross tested income (or that would be United States shareholder of FC, Individual inclusion year means any taxable year of allocable to gross tested income if there A does not have a pro rata share of any tested a foreign corporation beginning after were gross tested income) for a CFC item of FC. December 31, 2017, at any time during inclusion year, over the gross tested (ii) Example 2—(A) Facts. USP, a domestic which the corporation is a controlled income of the controlled foreign corporation, and Individual A, a United foreign corporation. corporation for the CFC inclusion year States citizen, own 90% and 10%, (2) Controlled foreign corporation. respectively, of PRS1, a domestic (a controlled foreign corporation The term controlled foreign corporation without tested income for a CFC partnership. PRS1 and Individual B, a has the meaning set forth in section nonresident alien individual, own 90% and inclusion year, a tested loss CFC). 10%, respectively, of PRS2, a domestic 957(a). (c) Rules relating to the determination partnership. PRS2 owns 100% of the single (3) Hypothetical distribution date. of tested income and tested loss—(1) class of stock of FC, a foreign corporation. The term hypothetical distribution date Definition of gross tested income. The USP, Individual A, and Individual B are has the meaning set forth in § 1.951– term gross tested income means the unrelated to each other. 1(e)(1)(i). gross income of a controlled foreign (B) Analysis—(1) CFC and United States (4) Section 958(a) stock. The term corporation for a CFC inclusion year shareholder determination. Under paragraph section 958(a) stock means stock of a (e)(2) of this section, the determination of determined without regard to— controlled foreign corporation owned (i) Items of income described in whether PRS1, PRS2, USP, and Individual A (directly or indirectly) by a United (each a United States person) are United section 952(b), States shareholders of FC and whether FC is States shareholder within the meaning (ii) Gross income taken into account a controlled foreign corporation is made of section 958(a), as modified by in determining the subpart F income of without regard to paragraph (e)(1) of this paragraph (e)(1) of this section. the corporation, section. PRS2 owns 100% of the total (5) Tested item. The term tested item (iii) Gross income excluded from the combined voting power or value of the FC means tested income, tested loss, foreign base company income (as stock within the meaning of section 958(a). qualified business asset investment, defined in section 954) or the insurance Accordingly, PRS2 is a United States tested interest expense, or tested interest income (as defined in section 953) of the shareholder under section 951(b), and FC is income. corporation solely by reason of an a controlled foreign corporation under section 957(a). Under sections 958(b) and (6) United States shareholder. The election made under section 954(b)(4) 318(a)(2)(A), PRS1 is treated as owning 90% term United States shareholder has the and § 1.954–1(d)(5), of the FC stock owned by PRS2. Accordingly, meaning set forth in section 951(b). (iv) Dividends received by the PRS1 is a United States shareholder under (7) U.S. shareholder inclusion year. corporation from related persons (as section 951(b). Further, under section The term U.S. shareholder inclusion defined in section 954(d)(3)), and 958(b)(2), PRS1 is treated as owning 100% of year means any taxable year of a United (v) Foreign oil and gas extraction the FC stock for purposes of determining the States shareholder in which or with income (as defined in section 907(c)(1)) FC stock treated as owned by USP and which a CFC inclusion year of a of the corporation. Individual A under section 318(a)(2)(A). controlled foreign corporation ends. (2) Determination of gross income and Therefore, USP is treated as owning 90% of × allowable deductions—(i) In general. the FC stock under section 958(b) (100% § 1.951A–2 Tested income and tested loss. For purposes of determining tested 100% × 90%), and Individual A is treated as owning 10% of the FC stock under section (a) Scope. This section provides rules income and tested loss, the gross 958(b) (100% × 100% × 10%). Accordingly, for determining the tested income or income and allowable deductions of a both USP and Individual A are United States tested loss of a controlled foreign controlled foreign corporation for a CFC shareholders of FC under section 951(b). corporation for purposes of determining inclusion year are determined under the (2) Application of section 951A. Under a United States shareholder’s net CFC rules of § 1.952–2 for determining the paragraph (e)(1) of this section, for purposes tested income under § 1.951A–1(c)(2). subpart F income of the controlled of determining a GILTI inclusion amount Paragraph (b) of this section provides foreign corporation, except, for a under section 951A and paragraph (b) of this definitions related to tested income and controlled foreign corporation which is section, PRS1 and PRS2 are not treated as tested loss. Paragraph (c) of this section engaged in the business of reinsuring or owning (within the meaning of section 958(a)) the FC stock; instead, PRS1 and PRS2 provides rules for determining the gross issuing insurance or annuity contracts are treated in the same manner as foreign tested income of a controlled foreign and which, if it were a domestic partnerships for purposes of determining the corporation and the deductions that are corporation engaged only in such FC stock owned by USP and Individual A properly allocable to gross tested business, would be taxable as an under section 958(a)(2). Therefore, for income. insurance company to which subchapter

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L of chapter 1 of the Code applies, paragraph (c)(4)(ii)(C) is the product of (iv) Examples. The following substituting ‘‘the rules of sections 953 the gross income of the controlled examples illustrate the application of and 954(i)’’ for ‘‘the principles of foreign corporation for the CFC this paragraph (c)(4). §§ 1.953–4 and 1.953–5’’ in § 1.952– inclusion year that gives rise to the (A) Example 1—(1) Facts. A Corp, a 2(b)(2). income described in section 952(a)(3)(A) domestic corporation, owns 100% of the (ii) Deemed payment under section multiplied by the international boycott single class of stock of FS, a controlled 367(d). The allowable deductions of a factor described in section 952(a)(3)(B). foreign corporation. Both A Corp and FS use controlled foreign corporation include a (D) Illegal bribes, kickbacks, or other the calendar year as their taxable year. In deemed payment of the controlled payments. Gross income described in Year 1, FS has passive category foreign foreign corporation under section personal holding company income of $100x, this paragraph (c)(4)(ii)(D) is the sum of a general category loss in foreign oil and gas 367(d)(2)(A). the amounts of the controlled foreign (3) Allocation of deductions to gross extraction income of $100x, and earnings and corporation for the CFC inclusion year tested income. Except as provided in profits of $0. FS has no other income. In Year described in section 952(a)(4). paragraph (c)(5) of this section, any 2, FS has general category gross income of (E) Income earned in certain foreign $100x and earnings and profits of $100x. deductions of a controlled foreign Without regard to section 952(c)(2), in Year corporation allowable under paragraph countries. Gross income described in this paragraph (c)(4)(ii)(E) is income of 2 FS has no income described in any of the (c)(2) of this section are allocated and categories of income excluded from gross apportioned to gross tested income the controlled foreign corporation for tested income in paragraphs (c)(1)(i) through under the principles of section 954(b)(5) the CFC inclusion year described in (v) of this section. FS has no allowable and § 1.954–1(c), by treating gross tested section 952(a)(5). deductions properly allocable to gross tested income that falls within a single (iii) Coordination rules—(A) income for Year 2. separate category (as defined in § 1.904– Coordination with E&P limitation. Gross (2) Analysis—(i) Year 1. As a result of the 5(a)) as a single item of gross income, income of a controlled foreign earnings and profits limitation of section separate and in addition to the items set 952(c)(1)(A), FS has no subpart F income in corporation for a CFC inclusion year Year 1, and A Corp has no inclusion with forth in § 1.954–1(c)(1)(iii). Losses in described in section 951A(c)(2)(A)(i)(II) respect to FS under section 951(a)(1)(A). other separate categories of income and paragraph (c)(1)(ii) of this section Under paragraph (c)(4)(ii)(A) of this section, resulting from the application of includes any item of gross income that gross income described in section § 1.954–1(c)(1)(i) cannot reduce any is excluded from subpart F income of 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of separate category of gross tested income, the controlled foreign corporation for this section includes any item of gross and losses in a separate category of gross the CFC inclusion year, or that is income excluded from the subpart F income tested income cannot reduce income in otherwise excluded from the amount of FS for Year 1 under section 952(c)(1)(A) a category of subpart F income. In included under section 951(a)(1)(A) in and § 1.952–1(c). Therefore, the $100x foreign personal holding company income of addition, deductions of a controlled the gross income of a United States foreign corporation that are allocated FS in Year 1 is excluded from gross tested shareholder of the controlled foreign income by reason of section and apportioned to gross tested income corporation for the U.S. shareholder 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of under this paragraph (c)(3) are not taken inclusion year in which or with which this section, and FS has no gross tested into account for purposes of the CFC inclusion year ends, under income in Year 1. determining a qualified deficit as section 952(c)(1) and § 1.952–1(c), (d), (ii) Year 2. In Year 2, under section defined in section 952(c)(1)(B)(ii). or (e). 952(c)(2) and § 1.952–1(f)(2), FS’s general (4) Gross income taken into account category earnings and profits ($100x) in (B) Coordination with E&P recapture. in determining subpart F income—(i) In excess of its subpart F income ($0) give rise Gross income of a controlled foreign general. Except as provided in to the recharacterization of its passive corporation for a CFC inclusion year paragraph (c)(4)(iii) of this section, gross category recapture account as subpart F described in section 951A(c)(2)(A)(i)(II) income of a controlled foreign income. Therefore, FS has passive category and paragraph (c)(1)(ii) of this section subpart F income of $100x in Year 2, and A corporation for a CFC inclusion year does not include any item of gross Corp has an inclusion of $100x with respect described in section 951A(c)(2)(A)(i)(II) income that results in the to FS under section 951(a)(1)(A). Under and paragraph (c)(1)(ii) of this section is recharacterization of earnings and paragraph (c)(4)(ii)(B) of this section, gross gross income described in paragraphs profits as subpart F income of the income described in section (c)(4)(ii)(A) through (E) of this section. 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of (ii) Items of gross income included in controlled foreign corporation for the this section does not include any item of subpart F income—(A) Insurance CFC inclusion year under section gross income that results in the income. Gross income described in this 952(c)(2) and § 1.952–1(f)(2). recharacterization of earnings and profits as paragraph (c)(4)(ii)(A) is any item of (C) Coordination with full inclusion subpart F income in FS’s taxable year under gross income included in the insurance rule and high tax exception. Gross section 952(c)(2) and § 1.952–1(f)(2). income of a controlled foreign Accordingly, the $100x of general category income (adjusted net insurance income gross income of FS in Year 2 is not excluded as defined in § 1.954–1(a)(6)) of the corporation for a CFC inclusion year from gross tested income by reason of section controlled foreign corporation for the described in section 951A(c)(2)(A)(i)(II) 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of CFC inclusion year. and paragraph (c)(1)(ii) of this section this section, and FS has $100x of general (B) Foreign base company income. does not include full inclusion foreign category gross tested income in Year 2. Gross income described in this base company income that is excluded (B) Example 2—(1) Facts. A Corp, a paragraph (c)(4)(ii)(B) is any item of from subpart F income under § 1.954– domestic corporation, owns 100% of the gross income included in the foreign 1(d)(6). Full inclusion foreign base single class of stock of FC1 and FC2, base company income (adjusted net company income that is excluded from controlled foreign corporations. A Corp, FC1, subpart F income under § 1.954–1(d)(6) and FC2 use the calendar year as their foreign base company income as defined taxable year. In Year 1, FC1 has gross income in § 1.954–1(a)(5)) of the controlled is also not included in gross income of of $290x from product sales to unrelated foreign corporation for the CFC a controlled foreign corporation for a persons within its country of incorporation, inclusion year. CFC inclusion year described in section gross interest income of $10x (an amount that (C) International boycott income. 951A(c)(2)(A)(i)(III) and paragraph is less than $1,000,000) that does not qualify Gross income described in this (c)(1)(iii) of this section. for an exception to foreign personal holding

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company income, and earnings and profits of calendar year as their taxable year. In Year within FS’s country of incorporation is not $300x. In Year 1, FC2 has gross income of 1, FS has gross income of $1,000x, of which excluded from gross tested income under $45x for performing consulting services $720x is general category foreign base either section 951A(c)(2)(A)(i)(II) and within its country of incorporation for company sales income and $280x is general paragraph (c)(1)(ii) of this section or section unrelated persons, gross interest income of category income from sales within its country 951A(c)(2)(A)(i)(III) and paragraph (c)(1)(iii) $150x (an amount that is not less than of incorporation; FS has expenses of $650x of this section. Under paragraph (c)(4)(ii)(B) $1,000,000) that does not qualify for an (including creditable foreign income taxes), of this section, the $280x of gross sales exception to foreign personal holding of which $500x are allocated and income earned from sales within FS’s company income, and earnings and profits of apportioned to foreign base company sales country of incorporation is not excluded $195x. income and $150x are allocated and from gross tested income under section (2) Analysis—(i) FC1. In Year 1, by apportioned to sales income from sales 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of application of the de minimis rule of section within FS’s country of incorporation; and FS this section, because gross income described 954(b)(3)(A) and § 1.954–1(b)(1)(i), the $10x has earnings and profits of $350x for Year 1. in paragraph (c)(1)(ii) of this section does not of gross interest income earned by FC1 is not Foreign income tax of $55x is considered include any item of gross income that results treated as foreign base company income imposed on the $220x ($720x¥$500x) of net in the recharacterization of earnings and ($10x of gross foreign base company income foreign base company sales income, and $26x profits as subpart F income under section is less than $15x, the lesser of 5% of $300x, is considered imposed on the $130x 952(c)(2) and § 1.952–1(f)(2). Further, under FC’s total gross income for Year 1, or ($280x¥$150x) of net income from sales paragraph (c)(4)(iii) of this section, the $280x $1,000,000). Accordingly, FC1 has no subpart within FS’s country of operation. The of gross sales income earned from sales F income in Year 1, and A Corp has no maximum rate of tax in section 11 for the within FS’s country of incorporation is not inclusion with respect to FC1 under section taxable year is 21%, and FS elects the high excluded from gross tested income under 951(a)(1)(A). Under paragraph (c)(4)(i) of this tax exception of section 954(b)(4) under either section 951A(c)(2)(A)(i)(II) and section, gross income described in section § 1.954–1(d)(1) for Year 1 for its foreign base paragraph (c)(1)(ii) of this section or section 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of company sales income. In a prior taxable 951A(c)(2)(A)(i)(III) and paragraph (c)(1)(iii) this section is any item of gross income year, FS had losses with respect to income of this section, because gross income included in foreign base company income, other than foreign base company or insurance described in section 951A(c)(2)(A)(i)(II) and and thus gross income described in section income that, by reason of the limitation in paragraph (c)(1)(ii) of this section or section 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of section 952(c)(1)(A), reduced the subpart F 951A(c)(2)(A)(i)(III) and paragraph (c)(1)(iii) this section does not include any item of income of FS (consisting entirely of foreign of this section does not include full inclusion gross income excluded from foreign base source general category income) by $600x; as foreign base company income that is company income under the de minimis rule of the beginning of Year 1, such amount has excluded from subpart F income under in section 954(b)(3)(A) and § 1.954–1(b)(1)(i). not been recharacterized as subpart F income § 1.954–1(d)(6). Accordingly, FS has $280x of Accordingly, FS’s $10x of gross interest in a subsequent taxable year under section gross tested income for Year 1. income in Year 1 is not excluded from gross 952(c)(2). (5) Allocation of deduction or loss tested income by reason of section (2) Analysis—(i) Foreign base company attributable to disqualified basis—(i) In 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of income. In Year 1, by application of the full general. A deduction or loss attributable this section, and FC1 has $300x ($290x of inclusion rule in section 954(b)(3)(B) and to disqualified basis is allocated and gross sales income and $10x of gross interest § 1.954–1(b)(1)(ii), the $280x of gross income income) of gross tested income in Year 1. earned by FS for sales within its country of apportioned solely to residual CFC gross (ii) FC2. In Year 1, by application of the incorporation is treated as foreign base income, and any depreciation, full inclusion rule in section 954(b)(3)(B) and company income ($720x of gross foreign base amortization, or cost recovery § 1.954–1(b)(1)(ii), the $45x of gross income company income exceeds $700x, which is allowances attributable to disqualified earned by FC2 for performing consulting 70% of $1,000x, FS’s total gross income for basis is not properly allocable to services within its country of incorporation the taxable year). However, the $220x of property produced or acquired for resale for unrelated persons is treated as foreign foreign base company sales income qualifies under section 263, 263A, or 471. base company income ($150x of gross foreign for the high tax exception of section 954(b)(4) (ii) Determination of deduction or loss base company income exceeds $136.5x, and § 1.954–1(d)(1), because the effective rate attributable to disqualified basis. Except which is 70% of $195x, FC2’s total gross of tax with respect to the net foreign base as otherwise provided in this paragraph income for Year 1). Therefore, FC2 has $195x company sales income ($220x) is 20% ($55x/ of foreign base company income in Year 1, ($220x + $55x)) which is greater than 18.9% (c)(5)(ii), in the case of a depreciation or including $45x of full inclusion foreign base (90% of 21%, the maximum rate of tax in amortization deduction with respect to company income as defined in § 1.954– section 11 for the taxable year). Because the property with disqualified basis and 1(b)(2), and A Corp has an inclusion of $195x $220x of net foreign base company sales adjusted basis other than disqualified with respect to FC2 under section income qualifies for the high tax exception of basis, the deduction or loss is treated as 951(a)(1)(A). Under paragraph (c)(4)(i) of this section 954(b)(4) and § 1.954–1(d)(1), the attributable to the disqualified basis in section, gross income described in section $130x of full inclusion foreign base company the same proportion that the 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of income is also excluded from subpart F disqualified basis bears to the total this section is any item of gross income income under § 1.954–1(d)(6). adjusted basis in the property. In the included in foreign base company income, (ii) Recapture of subpart F income. Under and thus gross income described in section section 952(c)(2) and § 1.952–1(f)(2), FS’s case of a loss from a taxable sale or 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of general category earnings and profits ($350x) exchange of property with disqualified this section includes any item of gross in excess of its subpart F income ($0) give basis and adjusted basis other than income included as foreign base company rise to the recharacterization of its general disqualified basis, the loss is treated as income under the full inclusion rule in category recapture account ($600x) as subpart attributable to disqualified basis to the section 954(b)(3)(B) and § 1.954–1(b)(1)(ii). F income to the extent of current year extent thereof. Accordingly, FC2’s $45x of gross services earnings and profits. Therefore, FS has (iii) Definitions. The following income and its $150x of gross interest income general category subpart F income of $350x definitions apply for purposes of this in Year 1 are excluded from gross tested in Year 1, and A Corp has an inclusion of paragraph (c)(5). income by reason of section $350x with respect to FS under section (A) Disqualified basis. The term 951A(c)(2)(A)(i)(II) and paragraph (c)(1)(ii) of 951(a)(1)(A). this section, and FC2 has no gross tested (iii) Gross tested income. The $720x of disqualified basis has the meaning set income in Year 1. gross foreign base company income is forth in § 1.951A–3(h)(2)(ii). (C) Example 3—(1) Facts. A Corp, a excluded from gross tested income under (B) Residual CFC gross income. The domestic corporation, owns 100% of the section 951A(c)(2)(A)(i)(III) and paragraph term residual CFC gross income means single class of stock of FS, a controlled (c)(1)(iii) of this section. However, the $280x gross income other than gross tested foreign corporation. A Corp and FS use the of gross sales income earned from sales income, gross income taken into

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account in determining subpart F A to CFC3, a related person, and CFC2 did determining the qualified business asset income, or gross income that is not recognize a deduction or loss on the sale, investment of a tested income CFC. effectively connected, or treated as the disqualified basis in Asset A is not (b) Qualified business asset effectively connected, with the conduct reduced or eliminated by reason of the sale. investment. The term qualified business of a trade or business in the United Accordingly, under paragraph (c)(5)(i) of this asset investment means the average of a section, any deduction or loss of CFC3 tested income CFC’s aggregate adjusted States (as described in § 1.882–4(a)(1)). attributable to the $72x of disqualified basis (iv) Examples. The following in Asset A is allocated and apportioned bases as of the close of each quarter of examples illustrate the application of solely to residual CFC gross income of CFC3. a CFC inclusion year in specified this paragraph (c)(5). (C) Example 3: Related party transfer after tangible property that is used in a trade (A) Example 1: Sale of intangible property the disqualified period; loss recognition—(1) or business of the tested income CFC during the disqualified period—(1) Facts. Facts. The facts are the same as in paragraph and is of a type with respect to which USP, a domestic corporation, owns all of the (c)(5)(iv)(B)(1) of this section (the facts in a deduction is allowable under section stock in CFC1 and CFC2, each a controlled Example 2), except that CFC2 sells Asset A 167. In the case of partially depreciable foreign corporation. Both USP and CFC2 use to CFC3 in exchange for $70x of cash. property, only the depreciable portion the calendar year as their taxable year. CFC1 (2) Analysis. Under paragraph (c)(5)(ii) of of the property is of a type with respect uses a taxable year ending November 30. On this section, the $20x loss recognized by to which a deduction is allowable under November 1, 2018, before the start of its first CFC2 on the sale is attributable to section 167. A tested loss CFC has no disqualified basis, to the extent thereof, CFC inclusion year, CFC1 sells Asset A to qualified business asset investment. notwithstanding that the loss may be CFC2 in exchange for $100x of cash. Asset A (c) Specified tangible property—(1) In is intangible property that is amortizable deferred under section 267(f). Thus, under under section 197. Immediately before the paragraph (c)(5)(i) of this section, the loss is general. The term specified tangible sale, the adjusted basis in Asset A is $20x, allocated and apportioned solely to residual property means, with respect to a tested and CFC1 recognizes $80x of gain as a result CFC gross income of CFC2 in the CFC income CFC and a CFC inclusion year, of the sale ($100x¥$20x). CFC1’s gain is not inclusion year in which the loss is taken into tangible property of the tested income subject to U.S. tax or taken into account in account pursuant to section 267(f). Under CFC used in the production of gross determining an inclusion to USP under § 1.951A–3(h)(2)(ii)(B)(1)(ii), the disqualified tested income for the CFC inclusion section 951(a)(1)(A). basis in Asset A is reduced by $20x, the loss year. For purposes of the preceding (2) Analysis. The sale by CFC1 is a of CFC2 that is attributable to disqualified sentence, tangible property of a tested disqualified transfer (within the meaning of basis under paragraph (c)(5)(ii) of this income CFC is used in the production § 1.951A–3(h)(2)(ii)(C)(2)) because it is a section. Accordingly, under paragraph transfer of property in which gain was of gross tested income for a CFC (c)(5)(i) of this section, any deduction or loss inclusion year if some or all of the recognized by CFC1, CFC1 and CFC2 are of CFC3 attributable to the remaining $52x of related persons, and the transfer occurs disqualified basis in Asset A is allocated and depreciation or cost recovery allowance during the disqualified period (within the apportioned solely to residual CFC gross with respect to the tangible property is meaning of § 1.951A–3(h)(2)(ii)(C)(1)). The income of CFC3. either allocated and apportioned to the disqualified basis in Asset A is $80x, the gross tested income of the tested income excess of CFC2’s adjusted basis in Asset A § 1.951A–3 Qualified business asset CFC for the CFC inclusion year under immediately after the disqualified transfer § 1.951A–2(c)(3) or capitalized to ($100x), over the sum of CFC1’s basis in investment. Asset A immediately before the transfer inventory or other property held for (a) Scope. This section provides rules sale, some or all of the gross income or ($20x) and the qualified gain amount (as for determining the qualified business defined in § 1.951A–3(h)(2)(ii)(C)(3)) ($0). loss from the sale of which is taken into Accordingly, under paragraph (c)(5)(i) of this asset investment of a controlled foreign account in determining tested income of section, any deduction or loss of CFC2 corporation for purposes of determining the tested income CFC for the CFC attributable to the disqualified basis is a United States shareholder’s deemed inclusion year. None of the tangible allocated and apportioned solely to residual tangible income return under § 1.951A– property of a tested loss CFC is specified CFC gross income of CFC2 and, therefore, is 1(c)(3)(ii). Paragraph (b) of this section tangible property. not taken into account in determining the defines qualified business asset (2) Tangible property. The term tested income, tested loss, subpart F income, investment. Paragraph (c) of this section tangible property means property for or effectively connected income of CFC2 for defines tangible property and specified any CFC inclusion year. which the depreciation deduction (B) Example 2: Related party transfer after tangible property. Paragraph (d) of this provided by section 167(a) is eligible to the disqualified period; gain recognition—(1) section provides rules for determining be determined under section 168 Facts. The facts are the same as in paragraph the portion of tangible property that is without regard to section 168(f)(1), (2), (c)(5)(iv)(A)(1) of this section (the facts in specified tangible property when the or (5), section 168(k)(2)(A)(i)(II), (IV), or Example 1), except that, on November 30, property is used in the production of (V), and the date placed in service. 2020, CFC2 sells Asset A to CFC3, a both gross tested income and gross (d) Dual use property—(1) In general. controlled foreign corporation wholly-owned income that is not gross tested income. The amount of the adjusted basis in by CFC2, in exchange for $120x of cash. Paragraph (e) of this section provides Immediately before the sale, the adjusted dual use property of a tested income basis in Asset A is $90x, $72x of which is rules for determining the adjusted basis CFC for a CFC inclusion year that is disqualified basis. The gain recognized by in specified tangible property. treated as adjusted basis in specified CFC2 on the sale of Asset A is not described Paragraph (f) of this section provides tangible property for the CFC inclusion in paragraphs (c)(1)(i) through (v) of this rules for determining qualified business year is the average of the tested income section. asset investment of a tested income CFC CFC’s adjusted basis in the property (2) Analysis. Paragraph (c)(5)(i) of this with a short taxable year. Paragraph (g) multiplied by the dual use ratio with section does not apply to the sale of Asset A of this section provides rules for respect to the property for the CFC from CFC2 to CFC3 because the sale does not increasing the qualified business asset inclusion year. give rise to a deduction or loss attributable investment of a tested income CFC by (2) Definition of dual use property. to disqualified basis, but instead gives rise to gain. Therefore, CFC2 recognizes $30x reason of property owned by a The term dual use property means, with ($120x¥$90x) of gain that is included in partnership. Paragraph (h) of this respect to a tested income CFC and a gross tested income for its CFC inclusion year section provides anti-avoidance rules CFC inclusion year, specified tangible ending November 30, 2019. Under § 1.951A– that disregard the basis in property property of the tested income CFC that 3(h)(2)(ii)(B)(1)(ii), because CFC2 sold Asset transferred in certain transactions when is used in both the production of gross

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tested income and the production of inventory of Product A, $500x is capitalized the warehouse that is capitalized to inventory gross income that is not gross tested to FS’s ending inventory of Product A, and included in cost of goods sold. income for the CFC inclusion year. For $1,200x is capitalized to inventory of Product Therefore, under paragraph (d)(3) of this purposes of the preceding sentence, A, the gross income or loss from the sale of section, FS’s dual use ratio with respect to which is taken into account in determining the warehouse for Year 1 is 80%, which is specified tangible property of a tested FS’s tested income for Year 1, and $300x is FS’s depreciation with respect to the income CFC is used in the production capitalized to inventory of Product A, the warehouse that is capitalized to inventory of of gross tested income and the gross income or loss from the sale of which Product A, the gross income or loss from the production of gross income that is not is taken into account in determining FS’s sale of which is taken into account in gross tested income for a CFC inclusion foreign base company sales income for Year determining in FS’s tested income for Year 1 year if less than all of the depreciation 1. The trucks have an average adjusted basis ($1,200x), divided by FS’s depreciation with or cost recovery allowance with respect for Year 1 of $4,000x. FS does not capitalize respect to the warehouse that is capitalized to the property is either allocated and depreciation with respect to the trucks to to inventory of Product A, the gross income inventory or other property held for sale. FS’s apportioned to the gross tested income or loss from the sale of which is taken into depreciation deduction with respect to the account in determining FS’s income for Year of the tested income CFC for the CFC trucks is $20x for Year 1, $15x of which is 1 ($1,500x). Accordingly, under paragraph inclusion year under § 1.951A–2(c)(3) or allocated and apportioned to FS’s gross (d)(1) of this section, $16,000x ($20,000x × capitalized to inventory or other tested income under § 1.951A–2(c)(3). 0.8) of FS’s average adjusted basis in the property held for sale, the gross income (ii) Analysis—(A) Dual use property. The warehouse is taken into account under or loss from the sale of which is taken warehouse and trucks are property for which paragraph (b) of this section in determining into account in determining the tested the depreciation deduction provided by FS’s qualified business asset investment for income of the tested income CFC for the section 167(a) is eligible to be determined Year 1. under section 168 (without regard to section CFC inclusion year. 168(f)(1), (2), or (5), section 168(k)(2)(A)(i)(II), (e) Determination of adjusted basis in (3) Dual use ratio. The term dual use (IV), or (V), and the date placed in service). specified tangible property—(1) In ratio means, with respect to dual use Therefore, under paragraph (c)(2) of this general. Except as provided in property, a tested income CFC, and a section, the warehouse and trucks are paragraph (e)(3)(ii) of this section, the CFC inclusion year, a ratio (expressed as tangible property. Furthermore, because the adjusted basis in specified tangible a percentage) calculated as— warehouse and trucks are used in the property for purposes of this section is (i) The sum of— production of gross tested income in Year 1 determined by using the cost within the meaning of paragraph (c)(1) of this (A) The depreciation deduction or capitalization methods of accounting cost recovery allowance with respect to section, the warehouse and trucks are specified tangible property. Finally, because used by the controlled foreign the property that is allocated and the warehouse and trucks are used in both corporation for purposes of determining apportioned to the gross tested income the production of gross tested income and the the gross income and allowable of the tested income CFC for the CFC production of gross income that is not gross deductions of the controlled foreign inclusion year under § 1.951A–2(c)(3), tested income in Year 1 within the meaning corporation under § 1.951A–2(c)(2) and and of paragraph (d)(2) of this section, the the alternative depreciation system (B) The depreciation or cost recovery warehouse and trucks are dual use property. under section 168(g), and by allocating allowance with respect to the property Therefore, under paragraph (d)(1) of this the depreciation deduction with respect section, the amount of FS’s adjusted basis in that is capitalized to inventory or other to such property for a CFC inclusion property held for sale, the gross income the warehouse and trucks that is treated as adjusted basis in specified tangible property year ratably to each day during the or loss from the sale of which is taken for Year 1 is determined by multiplying FS’s period in the CFC inclusion year to into account in determining the tested adjusted basis in the warehouse and trucks which such depreciation relates. For income of the tested income CFC for the by FS’s dual use ratio with respect to the purposes of the preceding sentence, the CFC inclusion year, divided by warehouse and trucks determined under period in the CFC inclusion year to (ii) The sum of— paragraph (d)(3) of this section. which such depreciation relates is (A) The total amount of the tested (B) Depreciation not capitalized to determined without regard to the income CFC’s depreciation deduction or inventory. Because none of the depreciation applicable convention under section with respect to the trucks is capitalized to cost recovery allowance with respect to 168(d). the property for the CFC inclusion year, inventory or other property held for sale, FS’s dual use ratio with respect to the trucks is (2) Effect of change in law. The and determined entirely by reference the adjusted basis in specified tangible (B) The total amount of the tested depreciation deduction with respect to the property is determined without regard income CFC’s depreciation or cost trucks. Therefore, under paragraph (d)(3) of to any provision of law enacted after recovery allowance with respect to the this section, FS’s dual use ratio with respect December 22, 2017, unless such later property capitalized to inventory or to the trucks for Year 1 is 75%, which is FS’s enacted law specifically and directly other property held for sale, the gross depreciation deduction with respect to the amends the definition of qualified income or loss from the sale of which trucks that is allocated and apportioned to business asset investment under section gross tested income under § 1.951A–2(c)(3) is taken into account in determining the 951A. income or loss of the tested income CFC for Year 1 ($15x), divided by the total amount of FS’s depreciation deduction with respect (3) Specified tangible property placed for the CFC inclusion year. to the trucks for Year 1 ($20x). Accordingly, in service before enactment of section (4) Example. The following example under paragraph (d)(1) of this section, 951A—(i) In general. Except as provided illustrates the application of this paragraph $3,000x ($4,000x × 0.75) of FS’s average in paragraph (e)(3)(ii) of this section, the (d). adjusted bases in the trucks is taken into adjusted basis in specified tangible (i) Facts. FS is a tested income CFC and a account under paragraph (b) of this section property placed in service before wholesale distributor of Product A. FS owns in determining FS’s qualified business asset December 22, 2017, is determined using a warehouse and trucks that store and deliver investment for Year 1. the alternative depreciation system Product A, respectively. The warehouse has (C) Depreciation capitalized to inventory. an average adjusted basis for Year 1 of Because all of the depreciation with respect under section 168(g), as if this system $20,000x. The depreciation with respect to to the warehouse is capitalized to inventory, had applied from the date that the the warehouse for Year 1 is $2,000x, which FS’s dual use ratio with respect to the property was placed in service. is capitalized to inventory of Product A. Of warehouse is determined entirely by (ii) Election to use income and the $2,000x depreciation capitalized to reference to the depreciation with respect to earnings and profits depreciation

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method for property placed in service (e)(3) only if the shareholder determined $275x as of July 15, $500x as of September before the first taxable year beginning the adjusted basis in specified tangible 30, and $450x as of December 31. after December 22, 2017—(A) In property placed in service before the (ii) Analysis—(A) Determination of short general. If a controlled foreign first taxable year beginning after taxable years and quarters. FS has two short taxable years in Year 1. The first short taxable corporation is not required to use, and December 22, 2017, by applying the year is from January 1 to July 15, with two does not in fact use, the alternative method described in paragraph full quarters (January 1 through March 31 depreciation system under section (e)(3)(ii)(A) of this section with respect and April 1 through June 30) and one short 168(g) for purposes of determining to the first taxable year of the controlled quarter (July 1 through July 15). The second income under § 1.952–2 and earnings foreign corporation beginning after taxable year is from July 16 to December 31, and profits under § 1.964–1 with respect December 22, 2017, and each with one short quarter (July 16 through to property placed in service before the subsequent taxable year. The election September 30) and one full quarter (October first taxable year beginning after statement must be filed in accordance 1 through December 31). (B) Calculation of qualified business asset December 22, 2017, and the controlling with the rules provided in forms or investment for the first short taxable year. domestic shareholders (as defined in instructions. Under paragraph (f)(2) of this section, for the § 1.964–1(c)(5)) of the controlled foreign (f) Special rules for short taxable first short taxable year in Year 1, FS has three corporation make an election described years—(1) In general. In the case of a quarter closes (March 31, June 30, and July in this paragraph (e)(3)(ii), the adjusted tested income CFC that has a CFC 15). Under paragraph (f)(3) of this section, the basis in specified tangible property of inclusion year that is less than twelve qualified business asset investment of FS for the controlled foreign corporation that months (a short taxable year), the rules the first short taxable year is $148.80x, the was placed in service before the first for determining the qualified business sum of $137.50x (($250x + $300x)/4) asset investment of the tested income attributable to the two full quarters and taxable year of the controlled foreign $11.30x ($275x × 15/365) attributable to the corporation beginning after December CFC under this section are modified as short quarter. 22, 2017, and the partner adjusted basis provided in paragraphs (f)(2) and (3) of (C) Calculation of qualified business asset in partnership specified tangible this section with respect to the CFC investment for the second short taxable year. property of any partnership of which inclusion year. Under paragraph (f)(2) of this section, for the the controlled foreign corporation is a (2) Determination of quarter closes. second short taxable year in Year 1, FS has partner that was placed in service before For purposes of determining quarter two quarter closes (September 30 and the first taxable year of the partnership closes, in determining the qualified December 31). Under paragraph (f)(3) of this beginning after December 22, 2017, is business asset investment of a tested section, the qualified business asset income CFC for a short taxable year, the investment of FS for the second short taxable determined for purposes of this section year is $217.98x, the sum of $112.50x based on the method of accounting for quarters of the tested income CFC for ($450x/4) attributable to the one full quarter depreciation used by the controlled purposes of this section are the full and $105.48x ($500x × 77/365) attributable to foreign corporation for purposes of quarters beginning and ending within the short quarter. the short taxable year (if any), determining income under § 1.952–2, (g) Partnership property—(1) In determining quarter length as if the subject to the modification described in general. If a tested income CFC holds an tested income CFC did not have a short this paragraph (e)(3)(ii)(A). If the interest in one or more partnerships taxable year, plus one or more short controlled foreign corporation’s method during a CFC inclusion year (including of accounting for depreciation takes into quarters (if any). (3) Reduction of qualified business indirectly through one or more account salvage value of the property, partnerships that are partners in a the salvage value is reduced to zero by asset investment. The qualified business asset investment of a tested income CFC lower-tier partnership), the qualified allocating the salvage value ratably to business asset investment of the tested each day of the taxable year for a short taxable year is the sum of— (i) The sum of the tested income income CFC for the CFC inclusion year immediately after the last taxable year (determined without regard to this in which the method of accounting CFC’s aggregate adjusted bases in specified tangible property as of the paragraph (g)(1)) is increased by the sum determined an amount of depreciation of the tested income CFC’s partnership deduction for the property. close of each full quarter (if any) in the CFC inclusion year divided by four, QBAI with respect to each partnership (B) Manner of making the election. plus for the CFC inclusion year. A tested loss The controlling domestic shareholders (ii) The tested income CFC’s aggregate CFC has no partnership QBAI for a CFC making the election described in this adjusted bases in specified tangible inclusion year. paragraph (e)(3) must file a statement property as of the close of each short (2) Determination of partnership that meets the requirements of § 1.964– quarter (if any) in the CFC inclusion QBAI. For purposes of paragraph (g)(1) 1(c)(3)(ii) with their income tax returns year multiplied by the sum of the of this section, the term partnership for the taxable year that includes the last number of days in each short quarter QBAI means, with respect to a day of the controlled foreign divided by 365. partnership, a tested income CFC, and a corporation’s applicable taxable year CFC inclusion year, the sum of the and follow the notice requirements of (4) Example. The following example tested income CFC’s partner adjusted § 1.964–1(c)(3)(iii). The controlled illustrates the application of this paragraph (f). basis in each partnership specified foreign corporation’s applicable taxable (i) Facts. USP1, a domestic corporation, tangible property of the partnership for year is the first CFC inclusion year that owns all of the stock of FS, a controlled each partnership taxable year that ends begins after December 31, 2017, and foreign corporation. USP1 owns FS from the with or within the CFC inclusion year. ends within the controlling domestic beginning of Year 1. On July 15, Year 1, USP1 If a partnership taxable year is less than shareholder’s taxable year. For purposes sells FS to USP2, an unrelated person. USP2 twelve months, the principles of of § 301.9100–3 of this chapter makes a section 338(g) election with respect paragraph (f) of this section apply in (addressing requests for extensions of to the purchase of FS, as a result of which FS’s taxable year is treated as ending on July determining a tested income CFC’s time for filing certain regulatory 15. USP1, USP2, and FS all use the calendar partnership QBAI with respect to the elections), a controlling domestic year as their taxable year. FS’s aggregate partnership. shareholder is qualified to make the adjusted bases in specified tangible property (3) Determination of partner adjusted election described in this paragraph is $250x as of March 31, $300x as of June 30, basis—(i) In general. For purposes of

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paragraph (g)(2) of this section, the term partnership adjusted basis in the the property for the partnership taxable partner adjusted basis means the property for the partnership taxable year year, and amount described in paragraph (g)(3)(ii) and the tested income CFC’s partner- (2) The total amount of the of this section with respect to sole use specific QBAI basis in the property for partnership’s depreciation or cost partnership property or paragraph the partnership taxable year, multiplied recovery allowance with respect to the (g)(3)(iii) of this section with respect to by the tested income CFC’s dual use property capitalized to inventory or dual use partnership property. The ratio with respect to the property for the other property held for sale, the gross principles of section 706(d) apply to this partnership taxable year determined income or loss from the sale of which determination. under the principles of paragraph (d)(3) is taken into account in determining the (ii) Sole use partnership property— of this section, except that the ratio partnership’s income or loss for the (A) In general. The amount described in described in paragraph (d)(3) of this partnership taxable year. this paragraph (g)(3)(ii), with respect to section is determined by reference to the (5) Definition of partnership specified sole use partnership property, a tested income CFC’s distributive share tangible property. The term partnership partnership taxable year, and a tested of the amounts described in paragraph specified tangible property means, with income CFC, is the sum of the tested (d)(3) of this section. respect to a tested income CFC, tangible income CFC’s proportionate share of the (B) Definition of dual use partnership property (as defined in paragraph (c)(2) partnership adjusted basis in the sole property. The term dual use partnership of this section) of a partnership that is— use partnership property for the property means partnership specified (i) Used in the trade or business of the partnership taxable year and the tested tangible property other than sole use partnership, (ii) Of a type with respect to which a income CFC’s partner-specific QBAI partnership property. basis in the sole use partnership deduction is allowable under section (4) Determination of proportionate 167, and property for the partnership taxable share of the partnership’s adjusted basis year. (iii) Used in the production of gross in partnership specified tangible income included in the tested income (B) Definition of sole use partnership property—(i) In general. For purposes of property. The term sole use partnership CFC’s gross tested income. paragraph (g)(3) of this section, the (6) Determination of partnership property means, with respect to a tested income CFC’s proportionate share partnership, a partnership taxable year, adjusted basis. For purposes of this of the partnership adjusted basis in and a tested income CFC, partnership paragraph (g), the term partnership partnership specified tangible property specified tangible property of the adjusted basis means, with respect to a for a partnership taxable year is the partnership that is used in the partnership, partnership specified partnership adjusted basis in the production of only gross tested income tangible property, and a partnership property multiplied by the tested of the tested income CFC for the CFC taxable year, the amount equal to the income CFC’s proportionate share ratio inclusion year in which or with which average of the partnership’s adjusted with respect to the property for the the partnership taxable year ends. For basis in the partnership specified partnership taxable year. Solely for purposes of the preceding sentence, tangible property as of the close of each purposes of determining the partnership specified tangible property quarter in the partnership taxable year of a partnership is used in the proportionate share ratio under determined without regard to any production of only gross tested income paragraph (g)(4)(ii) of this section, the adjustments under section 734(b) except for a CFC inclusion year if all the tested partnership’s calculation of, and a for adjustments under section income CFC’s distributive share of the partner’s distributive share of, any 734(b)(1)(B) or section 734(b)(2)(B) that partnership’s depreciation deduction or income, loss, depreciation, or cost are attributable to distributions of cost recovery allowance with respect to recovery allowance is determined under tangible property (as defined in the property (if any) for the partnership section 704(b). paragraph (c)(2) of this section) and for taxable year that ends with or within the (ii) Proportionate share ratio. The adjustments under section 734(b)(1)(A) CFC inclusion year is allocated and term proportionate share ratio means, or 734(b)(2)(A). The principles of apportioned to the tested income CFC’s with respect to a partnership, a paragraphs (e) and (h) of this section gross tested income for the CFC partnership taxable year, and a tested apply for purposes of determining a inclusion year under § 1.951A–2(c)(3) income CFC, the ratio (expressed as a partnership’s adjusted basis in and, if any of the partnership’s percentage) calculated as— partnership specified tangible property depreciation or cost recovery allowance (A) The sum of— and the proportionate share of the with respect to the property is (1) The tested income CFC’s partnership’s adjusted basis in capitalized to inventory or other distributive share of the partnership’s partnership specified tangible property. property held for sale, all the tested depreciation deduction or cost recovery (7) Determination of partner-specific income CFC’s distributive share of the allowance with respect to the property QBAI basis. For purposes of this partnership’s gross income or loss from for the partnership taxable year, and paragraph (g), the term partner-specific the sale of such inventory or other (2) The amount of the partnership’s QBAI basis means, with respect to a property for the partnership taxable year depreciation or cost recovery allowance tested income CFC, a partnership, and that ends with or within the CFC with respect to the property that is partnership specified tangible property, inclusion year is taken into account in capitalized to inventory or other the amount that is equal to the average determining the tested income of the property held for sale, the gross income of the basis adjustment under section tested income CFC for the CFC or loss from the sale of which is taken 743(b) that is allocated to the inclusion year. into account in determining the tested partnership specified tangible property (iii) Dual use partnership property— income CFC’s distributive share of the of the partnership with respect to the (A) In general. The amount described in partnership’s income or loss for the tested income CFC as of the close of this paragraph (g)(3)(iii), with respect to partnership taxable year, divided by each quarter in the partnership taxable dual use partnership property, a (B) The sum of— year. For this purpose, a negative basis partnership taxable year, and a tested (1) The total amount of the adjustment under section 743(b) is income CFC, is the sum of the tested partnership’s depreciation deduction or expressed as a negative number. The income CFC’s proportionate share of the cost recovery allowance with respect to principles of paragraphs (e) and (h) of

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this section apply for purposes of 1 is 80%, which is the ratio of FC’s section Asset D capitalized to inventory of Product determining the partner-specific QBAI 704(b) distributive share of PRS’s section A is capitalized to ending inventory. basis with respect to partnership 704(b) depreciation deduction with respect to However, of the $40x capitalized to inventory specified tangible property. Asset A for Year 1 ($8x), divided by the total of Product B, $10x is capitalized to ending amount of PRS’s section 704(b) depreciation inventory. Therefore, the amount of (8) Examples. The following examples deduction with respect to Asset A for Year depreciation with respect to Asset D illustrate the rules of this paragraph (g). 1 ($10x). FC’s proportionate share ratio with capitalized to inventory of Product A that is (i) Facts. Except as otherwise stated, respect to Asset B for Year 1 is 20%, which taken into account in determining FC’s the following facts are assumed for is the ratio of FC’s section 704(b) distributive distributive share of the income or loss of purposes of the examples: share of PRS’s section 704(b) depreciation PRS for Year 1 is $5x ($10x × 0.5), and the (A) FC, FC1, FC2, and FC3 are tested deduction with respect to Asset B for Year 1 amount of depreciation with respect to Asset income CFCs. ($1x), divided by the total amount of PRS’s D capitalized to inventory of Product B that (B) PRS is a partnership and its section 704(b) depreciation deduction with is taken into account in determining FC’s respect to Asset B for Year 1 ($5x). distributive share of the income or loss of allocations satisfy the requirements of Accordingly, under paragraph (g)(4)(i) of this PRS for Year 1 is $15x ($30x × 0.5). section 704. section, FC’s proportionate share of PRS’s (3) Asset E. The average of PRS’s adjusted (C) All properties are partnership partnership adjusted basis in Asset A is $80x basis as of the close of each quarter of PRS’s specified tangible property. ($100x × 0.8), and FC’s proportionate share taxable year in Asset E is $600x. In Year 1, (D) All persons use the calendar year of PRS’s partnership adjusted basis in Asset PRS’s depreciation is $60x with respect to as their taxable year. B is $100x ($500x × 0.2). Asset E. Of the $60x depreciation with (E) There is neither disqualified basis (3) Partner adjusted basis. Because FC has respect to Asset E, $20x is allowed as a nor partner-specific QBAI basis with no partner-specific QBAI basis with respect deduction, $24x is capitalized to inventory of to Asset A and Asset B, FC’s partner adjusted Product A, and $16x is capitalized to respect to any property. basis in Asset A and Asset B is determined inventory of Product B. FC’s distributive (ii) Example 1: Sole use partnership entirely by reference to its proportionate share of the depreciation deduction with property—(A) Facts. FC is a partner in PRS. share of PRS’s partnership adjusted basis in respect to Asset E is $10x ($20x × 0.5), $8x PRS owns two properties, Asset A and Asset Asset A and Asset B. Therefore, under of which is allocated and apportioned to FC’s B. The average of PRS’s adjusted basis as of paragraph (g)(3)(ii)(A) of this section, FC’s gross tested income under § 1.951A–2(c)(3). the close of each quarter of PRS’s taxable year partner adjusted basis in Asset A is $80x, None of the $24x depreciation with respect in Asset A is $100x and in Asset B is $500x. FC’s proportionate share of PRS’s partnership to Asset E capitalized to inventory of Product In Year 1, PRS’s section 704(b) depreciation adjusted basis in Asset A, and FC’s partner A is capitalized to ending inventory. deduction is $10x with respect to Asset A adjusted basis in Asset B is $100x, FC’s However, of the $16x depreciation with and $5x with respect to Asset B, and FC’s proportionate share of PRS’s partnership respect to Asset E capitalized to inventory of section 704(b) distributive share of the adjusted basis in Asset A. Product B, $10x is capitalized to ending depreciation deduction is $8x with respect to (4) Partnership QBAI. Under paragraph inventory. Therefore, the amount of Asset A and $1x with respect to Asset B. (g)(2) of this section, FC’s partnership QBAI depreciation with respect to Asset E None of the depreciation with respect to with respect to PRS is $180x, the sum of FC’s capitalized to inventory of Product A that is Asset A or Asset B is capitalized to inventory partner adjusted basis in Asset A ($80x) and taken into account in determining FC’s or other property held for sale. FC’s entire FC’s partner adjusted basis in Asset B distributive share of the income or loss of distributive share of the depreciation ($100x). Accordingly, under paragraph (g)(1) PRS for Year 1 is $12x ($24x × 0.5), and the deduction with respect to Asset A and Asset of this section, FC increases its qualified amount of depreciation with respect to Asset B is allocated and apportioned to FC’s gross business asset investment for Year 1 by E capitalized to inventory of Product B that tested income for Year 1 under § 1.951A– $180x. is taken into account in determining FC’s 2(c)(3). (iii) Example 2: Dual use partnership distributive share of the income or loss of (B) Analysis—(1) Sole use partnership property—(A) Facts. FC owns a 50% interest PRS for Year 1 is $3x ($6x × 0.5). property. Because all of FC’s distributive in PRS. All section 704(b) and tax items are (B) Analysis. Because Asset C, Asset D, and share of the depreciation deduction with identical and are allocated equally between Asset E are not used in the production of respect to Asset A and B is allocated and FC and its other partner. PRS owns three only gross tested income in Year 1 within the apportioned to gross tested income for Year properties, Asset C, Asset D, and Asset E. meaning of paragraph (g)(3)(ii)(B) of this 1, Asset A and Asset B are sole use PRS sells two products, Product A and section, Asset C, Asset D, and Asset E are partnership property within the meaning of Product B. All of FC’s distributive share of partnership dual use property within the paragraph (g)(3)(ii)(B) of this section. the gross income or loss from the sale of meaning of paragraph (g)(3)(iii)(B) of this Therefore, under paragraph (g)(3)(ii)(A) of Product A is taken into account in section. Therefore, under paragraph this section, FC’s partner adjusted basis in determining FC’s tested income, and none of (g)(3)(iii)(A) of this section, FC’s partner Asset A and Asset B is equal to the sum of FC’s distributive share of the gross income or adjusted basis in Asset C, Asset D, and Asset FC’s proportionate share of PRS’s partnership loss from the sale of Product B is taken into E is the sum of FC’s proportionate share of adjusted basis in Asset A and Asset B for account in determining FC’s tested income. PRS’s partnership adjusted basis in Asset C, Year 1 and FC’s partner-specific QBAI basis (1) Asset C. The average of PRS’s adjusted Asset D, and Asset E, respectively, for Year in Asset A and Asset B for Year 1, basis as of the close of each quarter of PRS’s 1, and FC’s partner-specific QBAI basis in respectively. taxable year in Asset C is $100x. In Year 1, Asset C, Asset D, and Asset E, respectively, (2) Proportionate share. Under paragraph PRS’s depreciation is $10x with respect to for Year 1, multiplied by FC’s dual use ratio (g)(4)(i) of this section, FC’s proportionate Asset C, none of which is capitalized to with respect to Asset C, Asset D, and Asset share of PRS’s partnership adjusted basis in inventory or other property held for sale. E, respectively, for Year 1, determined under Asset A and Asset B is PRS’s partnership FC’s distributive share of the depreciation the principles of paragraph (d)(3) of this adjusted basis in Asset A and Asset B for deduction with respect to Asset C is $5x section, except that the ratio described in Year 1, multiplied by FC’s proportionate ($10x × 0.5), $3x of which is allocated and paragraph (d)(3) of this section is determined share ratio with respect to Asset A and Asset apportioned to FC’s gross tested income by reference to FC’s distributive share of the B for Year 1, respectively. Because none of under § 1.951A–2(c)(3). amounts described in paragraph (d)(3) of this the depreciation with respect to Asset A or (2) Asset D. The average of PRS’s adjusted section. Asset B is capitalized to inventory or other basis as of the close of each quarter of PRS’s (1) Asset C—(i) Proportionate share. Under property held for sale, FC’s proportionate taxable year in Asset D is $500x. In Year 1, paragraph (g)(4)(i) of this section, FC’s share ratio with respect to Asset A and Asset PRS’s depreciation is $50x with respect to proportionate share of PRS’s partnership B is determined entirely by reference to the Asset D, $10x of which is capitalized to adjusted basis in Asset C is PRS’s partnership depreciation deduction with respect to Asset inventory of Product A and $40x is adjusted basis in Asset C for Year 1, A and Asset B. Therefore, FC’s proportionate capitalized to inventory of Product B. None multiplied by FC’s proportionate share ratio share ratio with respect to Asset A for Year of the $10x depreciation with respect to with respect to Asset C for Year 1. Because

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none of the depreciation with respect to ($40x). Accordingly, under paragraph (g)(4)(i) (ii) Dual use ratio. Because the Asset C is capitalized to inventory or other of this section, FC’s proportionate share of depreciation with respect to Asset E is partly property held for sale, FC’s proportionate PRS’s partnership adjusted basis in Asset D deducted and partly capitalized to inventory, share ratio with respect to Asset C is is $250x ($500x × 0.5). FC’s dual use ratio with respect to Asset E determined entirely by reference to the (ii) Dual use ratio. Because all of the is determined by reference to the depreciation deduction with respect to Asset depreciation with respect to Asset D is depreciation that is deducted and the C. Therefore, FC’s proportionate share ratio capitalized to inventory, FC’s dual use ratio depreciation that is capitalized to inventory with respect to Asset C is 50%, which is the with respect to Asset D is determined and included in cost of goods sold. ratio calculated as the amount of FC’s section entirely by reference to the depreciation with Therefore, FC’s dual use ratio with respect to 704(b) distributive share of PRS’s section respect to Asset D that is capitalized to Asset E is 80%, which is the ratio calculated 704(b) depreciation deduction with respect to inventory and included in cost of goods sold. as the sum ($20x) of the amount of FC’s Asset C for Year 1 ($5x), divided by the total Therefore, FC’s dual use ratio with respect to distributive share of PRS’s depreciation amount of PRS’s section 704(b) depreciation Asset D is 25%, which is the ratio calculated deduction with respect to Asset E that is deduction with respect to Asset C for Year 1 as the amount of depreciation with respect to allocated and apportioned to FC’s gross ($10x). Accordingly, under paragraph (g)(4)(i) Asset D capitalized to inventory of Product tested income under § 1.951A–2(c)(3) for of this section, FC’s proportionate share of A and Product B that is taken into account Year 1 ($8x) and the amount of depreciation PRS’s partnership adjusted basis in Asset C in determining FC’s tested income for Year with respect to Asset E capitalized to is $50x ($100x × 0.5). 1 ($5x), divided by the total amount of inventory of Product A and Product B that is (ii) Dual use ratio. Because none of the depreciation with respect to Asset D taken into account in determining FC’s tested depreciation with respect to Asset C is capitalized to inventory of Product A and income for Year 1 ($12x), divided by the sum capitalized to inventory or other property Product B that is taken into account in ($25x) of the total amount of FC’s distributive held for sale, FC’s dual use ratio with respect determining FC’s income or loss for Year 1 share of PRS’s depreciation deduction with to Asset C is determined entirely by reference ($20x). respect to Asset E for Year 1 ($10x) and the to the depreciation deduction with respect to (iii) Partner adjusted basis. Because FC has total amount of depreciation with respect to Asset C. Therefore, FC’s dual use ratio with no partner-specific QBAI basis with respect Asset E capitalized to inventory of Product A respect to Asset C is 60%, which is the ratio to Asset D, FC’s partner adjusted basis in and Product B that is taken into account in calculated as the amount of FC’s distributive Asset D is determined entirely by reference determining FC’s income or loss for Year 1 share of PRS’s depreciation deduction with to FC’s proportionate share of PRS’s ($15x). respect to Asset C that is allocated and partnership adjusted basis in Asset D, (iii) Partner adjusted basis. Because FC has apportioned to FC’s gross tested income multiplied by FC’s dual use ratio with no partner-specific QBAI basis with respect under § 1.951A–2(c)(3) for Year 1 ($3x), respect to Asset D. Under paragraph to Asset E, FC’s partner adjusted basis in divided by the total amount of FC’s (g)(3)(iii)(A) of this section, FC’s partner Asset E is determined entirely by reference distributive share of PRS’s depreciation adjusted basis in Asset D is $62.50x, FC’s to FC’s proportionate share of PRS’s deduction with respect to Asset C for Year 1 proportionate share of PRS’s partnership partnership adjusted basis in Asset E, ($5x). adjusted basis in Asset D for Year 1 ($250x), multiplied by FC’s dual use ratio with (iii) Partner adjusted basis. Because FC has multiplied by FC’s dual use ratio with respect to Asset E. Under paragraph no partner-specific QBAI basis with respect respect to Asset D for Year 1 (25%). (g)(3)(iii)(A) of this section, FC’s partner to Asset C, FC’s partner adjusted basis in (4) Asset E—(i) Proportionate share. Under adjusted basis in Asset E is $240x, FC’s Asset C is determined entirely by reference paragraph (g)(4)(i) of this section, FC’s proportionate share of PRS’s partnership to FC’s proportionate share of PRS’s proportionate share of PRS’s partnership adjusted basis in Asset E for Year 1 ($300x), partnership adjusted basis in Asset C, adjusted basis in Asset E is PRS’s partnership multiplied by FC’s dual use ratio with multiplied by FC’s dual use ratio with adjusted basis in Asset E for Year 1, respect to Asset E for Year 1 (80%). respect to Asset C. Under paragraph multiplied by FC’s proportionate share ratio (5) Partnership QBAI. Under paragraph (g)(3)(iii)(A) of this section, FC’s partner with respect to Asset E for Year 1. Because (g)(2) of this section, FC’s partnership QBAI adjusted basis in Asset C is $30x, FC’s the depreciation with respect to Asset E is with respect to PRS is $332.50x, the sum of proportionate share of PRS’s partnership partly deducted and partly capitalized to FC’s partner adjusted basis in Asset C ($30x), adjusted basis in Asset C for Year 1 ($50x), inventory, FC’s proportionate share ratio FC’s partner adjusted basis in Asset D multiplied by FC’s dual use ratio with with respect to Asset E is determined by ($62.50x), and FC’s partner adjusted basis in respect to Asset C for Year 1 (60%). reference to both the depreciation that is Asset E ($240x). Accordingly, under (3) Asset D—(i) Proportionate share. Under deducted and the depreciation that is paragraph (g)(1) of this section, FC increases paragraph (g)(4)(i) of this section, FC’s capitalized to inventory and included in cost its qualified business asset investment for proportionate share of PRS’s partnership of goods sold. Therefore, FC’s proportionate Year 1 by $332.50x. adjusted basis in Asset D is PRS’s partnership share ratio with respect to Asset E is 50%, (iv) Example 3: Sole use partnership adjusted basis in Asset D for Year 1, which is the ratio calculated as the sum specified tangible property; section 743(b) multiplied by FC’s proportionate share ratio ($25x) of the amount of FC’s section 704(b) adjustments—(A) Facts. The facts are the with respect to Asset D for Year 1. Because distributive share of PRS’s section 704(b) same as in paragraph (g)(8)(ii)(A) of this all of the depreciation with respect to Asset depreciation deduction with respect to Asset section (the facts in Example 1), except that D is capitalized to inventory, FC’s E for Year 1 ($10x) and the amount of PRS’s there is an average of $40x positive proportionate share ratio with respect to section 704(b) depreciation with respect to adjustment to the adjusted basis in Asset A Asset D is determined entirely by reference Asset E capitalized to inventory of Product A as of the close of each quarter of PRS’s to the depreciation with respect to Asset D and Product B that is taken into account in taxable year with respect to FC under section that is capitalized to inventory and included determining FC’s section 704(b) distributive 743(b) and an average of $20x negative in cost of goods sold. Therefore, FC’s share of PRS’s income or loss for Year 1 adjustment to the adjusted basis in Asset B proportionate share ratio with respect to ($15x), divided by the sum ($50x) of the total as of the close of each quarter of PRS’s Asset D is 50%, which is the ratio calculated amount of PRS’s section 704(b) depreciation taxable year with respect to FC under section as the amount of PRS’s section 704(b) deduction with respect to Asset E for Year 1 743(b). depreciation with respect to Asset D ($20x) and the total amount of PRS’s section (B) Analysis. Under paragraph (g)(3)(ii)(A) capitalized to Product A and Product B that 704(b) depreciation with respect to Asset E of this section, FC’s partner adjusted basis in is taken into account in determining FC’s capitalized to inventory of Product A and Asset A is $120x, which is the sum of $80x section 704(b) distributive share of PRS’s Product B that is taken into account in (FC’s proportionate share of PRS’s income or loss for Year 1 ($20x), divided by determining PRS’s section 704(b) income or partnership adjusted basis in Asset A as the total amount of PRS’s section 704(b) loss for Year 1 ($30x). Accordingly, under illustrated in paragraph (g)(8)(ii)(B)(2) of this depreciation with respect to Asset D paragraph (g)(4)(i) of this section, FC’s section (paragraph (B)(2) of the analysis in capitalized to Product A and Product B that proportionate share of PRS’s partnership Example 1)) and $40x (FC’s partner-specific is taken into account in determining PRS’s adjusted basis in Asset E is $300x ($600x × QBAI basis in Asset A). Under paragraph section 704(b) income or loss for Year 1 0.5). (g)(3)(ii)(A) of this section, FC’s partner

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adjusted basis in Asset B is $80x, the sum of share of partnership items of the partnership adjusted basis in specified tangible $100x (FC’s proportionate share of the under section 706(d), FC1 has partnership property is disregarded as of the tested partnership adjusted basis in the property as QBAI with respect to PRS in the amount quarter close if the controlled foreign illustrated in paragraph (g)(8)(ii)(B)(2) of this determined under paragraph (g)(2) of this corporation (acquiring CFC) acquires the section (paragraph (B)(2) of the analysis in section. Under paragraph (g)(3)(i) of this Example 1)) and (¥$20x) (FC’s partner- section, FC1’s partner adjusted basis in Asset property temporarily before the tested specific QBAI basis in Asset B). Therefore, G is $25x, the product of $100x (the quarter close with a principal purpose under paragraph (g)(2) of this section, FC’s partnership’s adjusted basis in the property) of increasing the deemed tangible partnership QBAI with respect to PRS is and 25% (FC1’s section 704(b) distributive income return of a U.S. shareholder $200x ($120x + $80x). Accordingly, under share of depreciation deduction with respect (applicable U.S. shareholder) for a U.S. paragraph (g)(1) of this section, FC increases to Asset G). Therefore, FC1’s partnership shareholder year, and the holding of the its qualified business asset investment for QBAI with respect to PRS is $25x. property by the acquiring CFC as of the Year 1 by $200x. Accordingly, under paragraph (g)(1) of this tested quarter close would, without (v) Example 4: Tested income CFC with section, FC1 increases its qualified business regard to this paragraph (h)(1)(i), distributive share of loss from a asset investment by $25x for Year 1. partnership—(A) Facts. FC owns a 50% (2) FC2. FC2’s partner adjusted basis in increase the deemed tangible income interest in PRS. All section 704(b) and tax Asset G is also $25x, the product of $100x return of the applicable U.S. items are identical and are allocated equally (the partnership’s adjusted basis in the shareholder for the U.S. shareholder between FC and its other partner. PRS owns property) and 25% (FC2’s section 704(b) inclusion year. Asset F. None of the depreciation with distributive share of depreciation deduction (ii) Disregard of first quarter close. respect to Asset F is capitalized to inventory with respect to Asset G). Therefore, FC2’s The adjusted basis in specified tangible or other property held for sale. The average partnership QBAI with respect to PRS is property may be disregarded under of PRS’s adjusted basis as of the close of each $25x. Accordingly, under paragraph (g)(1) of paragraph (h)(1)(i) of this section for quarter of PRS’s taxable year in Asset F is this section, FC2 increases its qualified purposes of multiple tested quarter $220x. PRS has $20x of gross income, a $22x business asset investment by $25x for Year 1. closes that follow an acquisition and on depreciation deduction with respect to Asset (vii) Example 6: Partnership adjusted F, and no other income or expense in Year basis; distribution of property in liquidation which the acquiring CFC holds the 1. FC’s distributive share of the gross income of partnership interest—(A) Facts. FC1, FC2, property. However, if the holding of is $10x, all of which is includible in FC’s and FC3 are equal partners in PRS, a specified tangible property would, gross tested income in Year 1, and FC’s partnership. FC1 and FC2 each has an without regard to paragraph (h)(1)(i) of distributive share of PRS’s depreciation adjusted basis of $100x in its partnership this section, increase the deemed deduction with respect to Asset F is $11x in interest. FC3 has an adjusted basis of $50x in tangible income return of an applicable Year 1, all of which is allocated and its partnership interest. PRS has a section 754 U.S. shareholder because the adjusted apportioned to FC’s gross tested income election in effect. PRS owns Asset H with a basis in such property is taken into under § 1.951A–2(c)(3). FC’s distributive fair market value of $50x and an adjusted basis of $0, Asset I with a fair market value account for only one additional quarter share of loss from PRS is $1x. FC also has $8x close of a tested income CFC of the of gross tested income from other sources in of $100x and an adjusted basis of $100x, and Year 1 and no other deductions. Therefore, Asset J with a fair market value of $150x and applicable U.S. shareholder in FC has tested income of $7x for Year 1. an adjusted basis of $150x. Asset H and Asset determining the deemed tangible (B) Analysis. FC’s partner adjusted basis in J are tangible property, but Asset I is not income return of the applicable U.S. Asset F is $110x, which is the sum of FC’s tangible property. PRS distributes Asset I to shareholder of the U.S. shareholder proportionate share of the partnership FC3 in liquidation of FC3’s interest in PRS. inclusion year, the adjusted basis in the adjusted basis in the property ($220x × 0.5) None of FC1, FC2, FC3, or PRS recognizes property is disregarded for purposes of and FC’s partnership-specific QBAI basis in gain on the distribution. Under section determining the acquiring CFC’s 732(b), FC3’s adjusted basis in Asset I is Asset F ($0). Therefore, FC’s partnership aggregate adjusted bases in specified QBAI with respect to PRS is $110x. $50x. PRS’s adjusted basis in Asset H is increased by $50x to $50x under section tangible property only as of the first Accordingly, under paragraph (g)(1) of this tested quarter close that follows the section, FC increases its qualified business 734(b)(1)(B), which is the amount by which asset investment by $110x, notwithstanding PRS’s adjusted basis in Asset I immediately acquisition. that FC would not be a tested income CFC before the distribution exceeds FC3’s (iii) Safe harbor for certain transfers but for its $8x of gross tested income from adjusted basis in Asset I. involving CFCs. The holding of specified other sources. (B) Analysis. Under paragraph (g)(6) of this tangible property as of a tested quarter (vi) Example 5: Tested income CFC sale of section, PRS’s adjusted basis in Asset H is close does not increase the deemed partnership interest before CFC inclusion determined without regard to any tangible income return of an applicable date—(A) Facts. FC1 owns a 50% interest in adjustments under section 734(b) except for U.S. shareholder within the meaning of PRS on January 1 of Year 1. On July 1 of Year adjustments under section 734(b)(1)(B) or section 734(b)(2)(B) that are attributable to paragraph (h)(1)(i) of this section if each 1, FC1 sells its entire interest in PRS to FC2. of the following conditions is satisfied PRS owns Asset G. The average of PRS’s distributions of tangible property and for adjustments under section 734(b)(1)(A) or with respect to the acquisition and adjusted basis as of the close of each quarter subsequent transfer of property by the of PRS’s taxable year in Asset G is $100x. 734(b)(2)(A). The adjustment to the adjusted FC1’s section 704(b) distributive share of the basis in Asset H is under section 734(b)(1)(B) acquiring CFC— depreciation deduction with respect to Asset and is attributable to the distribution of Asset (A) A controlled foreign corporation G is 25% with respect to PRS’s entire year. I, which is not tangible property. (predecessor CFC) holds the property on FC2’s section 704(b) distributive share of the Accordingly, for purposes of applying a quarter close of the predecessor CFC depreciation deduction with respect to Asset paragraph (g)(1) of this section, PRS’s (preceding quarter close) that occurs on G is also 25% with respect to PRS’s entire adjusted basis in Asset H is $0. the same date as the last quarter close year. Both FC1’s and FC2’s entire distributive (h) Anti-avoidance rules related to of the acquiring CFC preceding the shares of the depreciation deduction with certain transfers of property—(1) acquisition. respect to Asset G are allocated and Disregard of adjusted basis in specified (B) A controlled foreign corporation apportioned under § 1.951A–2(c)(3) to FC1’s tangible property held temporarily—(i) (successor CFC) holds the property on a and FC2’s gross tested income, respectively, for Year 1. PRS’s allocations satisfy section In general. For purposes of determining quarter close of the successor CFC 706(d). a controlled foreign corporation’s (succeeding quarter close) that occurs (B) Analysis—(1) FC1. Because FC1 owns aggregate adjusted bases in specified on the same date as the first quarter an interest in PRS during FC1’s CFC tangible property as of the close of a close of the acquiring CFC following the inclusion year and receives a distributive quarter (tested quarter close), the subsequent transfer.

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(C) The proportion of the stock that presumption described in the preceding satisfied because CFC1, a predecessor CFC, the applicable U.S. shareholder owns sentence may be rebutted only if the held Asset A on September 30, Year 1, a (within the meaning of section 958(a)) of facts and circumstances clearly establish quarter close of CFC1 that occurs on the same the acquiring CFC on the tested quarter that the subsequent transfer of the date as the last quarter close of CFC2, the acquiring CFC, preceding the December 30, close does not exceed the proportion of property by the acquiring CFC was Year 1 acquisition of Asset A. The the stock that the applicable U.S. contemplated when the property was requirement in paragraph (h)(1)(iii)(B) of this shareholder owns of either the acquired by the acquiring CFC and that section is satisfied because CFC3, a successor predecessor CFC on the preceding a principal purpose of the acquisition of CFC, holds Asset A on June 30, Year 2, a quarter close or the successor CFC on the property was to increase the deemed quarter close of CFC3 that occurs on the same the succeeding quarter close; and tangible income return of the applicable date as the first quarter close of CFC2 (D) Each of the predecessor CFC and U.S. shareholder for a U.S. shareholder following April 10, Year 2, the date of the the successor CFC is a tested income inclusion year. subsequent transfer of Asset A. The requirement in paragraph (h)(1)(iii)(C) of this CFC for its CFC inclusion year that (v) Determination of holding period. includes the date of the tested quarter section is satisfied because the proportion of For purposes of this paragraph (h)(1), stock that USP, the applicable U.S. close. the period during which an acquiring shareholder, owns (within the meaning of (iv) Determination of principal CFC holds specified tangible property is section 958(a)) of CFC2, the acquiring CFC, purpose and transitory holding—(A) determined without regard to section on each of the December 31, Year 1 tested Presumption for ownership less than 12 1223. quarter close and the March 31, Year 2 tested months. For purposes of paragraph (vi) Treatment as single applicable quarter close (100%), does not exceed the (h)(1)(i) of this section, specified U.S. shareholder. For purposes of this proportion of the stock that USP owns of either CFC1 (100%) on the preceding quarter tangible property is presumed to be paragraph (h)(1), all U.S. persons that acquired temporarily with a principal close (September 30, Year 1) or of CFC3 are related persons are treated as a (100%) on the succeeding quarter close (June purpose of increasing the deemed single applicable U.S. shareholder. For tangible income return of an applicable 30, Year 2). Finally, the requirement in purposes of the preceding sentence, U.S. paragraph (h)(1)(iii)(D) of this section is U.S. shareholder for a U.S. shareholder persons are related if they bear a satisfied because each of CFC1 and CFC3 is inclusion year if the property is held by relationship described in section 267(b) a tested income CFC for Year 1 and Year 2, the acquiring CFC for less than 12 or 707(b) immediately before or the CFC inclusion years that include the months and the holding of the property immediately after a transaction. December 31, Year 1 tested quarter close and by the acquiring CFC as of the tested (vii) Examples. The following the March 31, Year 2 tested quarter close. Accordingly, paragraph (h)(1)(i) of this quarter close would have the effect of examples illustrate the application of increasing the deemed tangible income section does not apply to disregard the this paragraph (h)(1). adjusted basis in Asset A in determining return of the applicable U.S. (A) Facts. Except as otherwise stated, shareholder for a U.S. shareholder CFC2’s aggregate adjusted basis in specified the following facts are assumed for inclusion year. The presumption tangible property as of December 31, Year 1, purposes of the examples: or March 30, Year 2. described in the preceding sentence (1) USP is a domestic corporation. (C) Example 2: Transfers between CFCs may be rebutted only if the facts and (2) CFC1, CFC2 and CFC3 are tested with different taxable year ends—(1) Facts. circumstances clearly establish that the income CFCs. The facts are the same as in paragraph subsequent transfer of the property by (3) R is unrelated to USP. (h)(1)(vii)(B)(1) of this section (the facts in the acquiring CFC was not contemplated Example 1), except that CFC1 has a taxable (4) All persons use the calendar year when the property was acquired by the year ending November 30, and the facts and as their taxable year. acquiring CFC and that a principal circumstances do not clearly establish that (5) Asset A is specified tangible purpose of the acquisition of the the April 10, Year 2 transfer of Asset A by property was not to increase the deemed property. CFC2 was not contemplated when Asset A tangible income return of the applicable (6) Both Year 1 and Year 2 begin on was acquired by CFC2 and that a principal purpose of the acquisition of the property U.S. shareholder for a U.S. shareholder or after January 1, 2018, and have 365 days. was not to increase the deemed tangible inclusion year. In order to rebut the income return of USP, the applicable U.S. presumption, a statement must be (7) USP has no specified interest expense (as defined in § 1.951A– shareholder. attached to the Form 5471 filed by the (2) Analysis. CFC2’s holding of Asset A as taxpayer for the taxable year of the CFC 1(c)(3)(iii)). of each of the December 31, Year 1 tested in which the subsequent transfer occurs (B) Example 1: Qualification for safe quarter close and the March 31, Year 2 tested and include any information required harbor—(1) Facts. USP owns all of the stock quarter close does not satisfy the safe harbor by applicable administrative of CFC1, which owns all of the stock of under paragraph (h)(1)(iii) of this section announcements, forms or instructions. CFC2, which owns all the stock of CFC3. As because CFC1, the predecessor CFC, does not The statement must explain the facts of January 1, Year 1, CFC1 owns Asset A, hold Asset A on a quarter close of CFC1 that which is specified tangible property. On occurs on the same date as the September 30, and circumstances supporting the December 30, Year 1, CFC1 transfers Asset A Year 1, quarter close of CFC2, the acquiring rebuttal and be in accordance with any to CFC2. On April 10, Year 2, CFC2 transfers CFC, which is the last quarter close of CFC2 rules provided in forms and Asset A to CFC3. CFC3 holds Asset A for the preceding the December 30, Year 1 instructions. rest of Year 2. acquisition of Asset A. In addition, because (B) Presumption for ownership greater (2) Analysis. Under the safe harbor of CFC2 held Asset A for less than 12 months than 36 months. For purposes of paragraph (h)(1)(iii) of this section, CFC2’s (from December 31, Year 1, until April 10, paragraph (h)(1)(i) of this section, holding of Asset A as of each of the Year 2), the presumption in paragraph specified tangible property is presumed December 31, Year 1 tested quarter close and (h)(1)(iv)(A) of this section applies such that not to be acquired temporarily with a the March 31, Year 2 tested quarter close CFC2 is presumed to have acquired Asset A principal purpose of increasing the does not increase the deemed tangible temporarily with a principal purpose of income return of USP, the applicable United increasing the deemed tangible income deemed tangible income return of an States shareholder, for Year 1 or Year 2 return of USP for the shareholder inclusion applicable U.S. shareholder for a U.S. because each of the requirements in year, and the facts and circumstances do not shareholder inclusion year if the paragraphs (h)(1)(iii)(A) through (D) of this clearly establish that CFC2 did not acquire property is held by the acquiring CFC section is satisfied. The requirement in Asset A with such a principal purpose. for more than 36 months. The paragraph (h)(1)(iii)(A) of this section is Because CFC2 holds Asset A as of December

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31, Year 1, the tested quarter close, the close on November 30, Year 1, and CFC2’s of paragraph (d)(2) of this section and adjusted basis in Asset A would be, without quarter close on December 31, Year 1). If for purposes of determining the dual use regard to paragraph (h)(1)(i) of this section, instead CFC2 had acquired Asset B directly ratio with respect to dual use property taken into account for purposes of from R, the adjusted basis in Asset B would under paragraph (d)(3) of this section, determining USP’s deemed tangible income have been taken into account for purposes of return for its Year 1 taxable year as of five determining USP’s deemed tangible income the rules of § 1.951A–2(c)(5) are not quarter closes (CFC1’s quarter closes on return for its Year 1 taxable year as of only taken into account. February 28, May 31, August 31, and one quarter close (CFC2’s quarter close on (C) Application to partnership November 30, and CFC2’s quarter close on December 31, Year 1). Accordingly, under specified tangible property. In the case December 31). If instead CFC1 had retained paragraph (h)(1)(i) of this section, the of partnership specified tangible Asset A during the period CFC2 temporarily adjusted basis in Asset B is disregarded in property (as defined in paragraph (g)(5) held the asset and had transferred Asset A determining CFC1’s aggregate adjusted basis of this section), paragraph (h)(2)(i)(A) of directly to CFC3 on January 10, Year 2, the in specified tangible property as of November this section applies by reducing a tested adjusted basis in Asset A would have been 30, Year 1. income CFC’s partner adjusted basis taken into account for purposes of (E) Example 4: Acquisitions from tested with respect to partnership specified determining USP’s deemed tangible income loss CFCs—(1) Facts. USP owns all of the return for its Year 1 taxable year as of only stock of CFC1 and CFC2. As of January 1, tangible property under paragraph four quarter closes (CFC1’s quarter closes on Year 1, CFC1 owns Asset C. On March 30, (g)(3)(i) of this section by the tested February 28, May 30, August 30, and Year 1, CFC1 transfers Asset C to CFC2. For income CFC’s share of the disqualified November 30). Under paragraph (h)(1)(ii) of Year 1, CFC1 is a tested loss CFC and CFC2 basis in the partnership specified this section, because the adjusted basis in is a tested income CFC. On March 30, Year tangible property. A tested income Asset A would (without regard to paragraph 2, CFC2 transfers Asset C back to CFC1. For CFC’s share of disqualified basis in (h)(1)(i) of this section) be taken into account Year 2, both CFC1 and CFC2 are tested partnership specified tangible property for only one additional quarter close of a income CFCs. A principal purpose of CFC2 is the sum of the tested income CFC’s tested income CFC of USP in determining holding Asset C as of March 31, Year 1, June proportionate share of the disqualified USP’s deemed tangible income return for 30, Year 1, September 30, Year 1, and basis in the partnership specified Year 1 and Year 2, the adjusted basis in Asset December 31, Year 1, was to increase USP’s A is disregarded for purposes of determining deemed tangible income return. tangible property determined under the CFC’s aggregate adjusted bases in specified (2) Analysis. CFC2’s holding of Asset C as principles of paragraph (g)(4) of this tangible property only as of December 31, of March 31, Year 1, June 30, Year 1, section and the tested income CFC’s Year 1, the first tested quarter close that September 30, Year 1, and December 31, Year partner-specific QBAI basis in the follows the acquisition. Accordingly, under 1 does not satisfy the safe harbor under property determined under the paragraph (h)(1)(i) of this section, the paragraph (h)(1)(iii) of this section because principles of paragraph (g)(7) of this adjusted basis in Asset A is disregarded in CFC1 is not a tested income CFC for Year 1 section that is disqualified basis. For determining CFC2’s aggregate adjusted basis and thus the requirement in paragraph purposes of determining the amount in specified tangible property as of December (h)(1)(iii)(D) of this section is not satisfied. described in paragraph (g)(3)(i) of this 31, Year 1. Because CFC2 acquired Asset C before, and section, including for purposes of (D) Example 3: Acquisition from unrelated temporarily held as of, March 31, Year 1, person—(1) Facts. USP owns all of the stock June 30, Year 1, September 30, Year 1, determining whether partnership of CFC1 and CFC2. CFC1 has a taxable year December 31, Year 1 and the holding of the specified tangible property is sole use ending November 30. On October 30, Year 1, property by CFC2 as of each such tested partnership property within the CFC1 acquires Asset B from R. On December quarter close would increase the deemed meaning of paragraph (g)(3)(ii)(B) of this 30, Year 1, CFC1 transfers Asset B to CFC2. tangible income return of USP, under section or dual use partnership property The facts and circumstances do not clearly paragraph (h)(1)(i) of this section, the within the meaning of paragraph establish that the December 31, Year 1, adjusted basis in Asset C is disregarded in (g)(3)(iii)(B) of this section and for transfer of Asset B by CFC1 was not determining CFC2’s aggregate adjusted basis purposes of determining the dual use contemplated when Asset B was acquired by in specified tangible property as of each of ratio with respect to dual use CFC1 and that a principal purpose of the March 31, Year 1, June 30, Year 1, September partnership property under the acquisition of the property was not to 30, Year 1, and December 31, Year 1. increase the deemed tangible income return principles of paragraph (d)(3) of this of USP, the applicable U.S. shareholder. (2) Disregard of adjusted basis in section, the rules of § 1.951A–2(c)(5) are (2) Analysis. CFC1’s holding of Asset B as property transferred during the not taken into account. of the November 30, Year 1 tested quarter disqualified period—(i) Operative (ii) Determination of disqualified close does not satisfy the safe harbor under rules—(A) In general. For purposes of basis—(A) In general. Subject to the paragraph (h)(1)(iii) of this section because determining the qualified business asset adjustments described in paragraph the requirements in paragraphs (h)(1)(iii)(A) investment of a tested income CFC for (h)(2)(ii)(B) of this section, the term through (D) of this section are not satisfied. any CFC inclusion year, disqualified disqualified basis means, with respect to Because CFC1 held Asset B for less than 12 basis in property is disregarded. property (other than property described months (from October 30, Year 1, until (B) Application to dual use property. in section 1221(a)(1)), the excess (if any) December 30, Year 1), the presumption in In the case of dual use property (as paragraph (h)(1)(iv)(A) of this section applies of the property’s adjusted basis such that CFC1 is presumed to have held defined in paragraph (d)(2) of this immediately after a disqualified Asset B temporarily with a principal purpose section), paragraph (h)(2)(i)(A) of this transfer, over the sum of the property’s of increasing the deemed tangible income section applies by reducing the amount adjusted basis immediately before the return of USP for the taxable year, and the of the adjusted basis in the property disqualified transfer and the qualified facts and circumstances do not clearly treated as adjusted basis in specified gain amount with respect to the establish that CFC1 did not acquire Asset B tangible property for the CFC inclusion disqualified transfer. For this purpose, with a principal purpose of increasing the year under paragraph (d)(1) of this the adjusted basis in property deemed tangible income return of USP. section by the amount of the immediately after a disqualified transfer Because CFC1 holds Asset B as of November disqualified basis in the property. For 30, Year 1, the adjusted basis in Asset B includes a positive adjustment to the would be, without regard to paragraph purposes of determining the amount adjusted basis in partnership property (h)(1)(i) of this section, taken into account for described in paragraph (d)(1) of this with respect to a partner under section purposes of determining USP’s deemed section, including for purposes of 734(b)(1)(A) or 743(b). tangible income return for its Year 1 taxable determining whether tangible property (B) Adjustments to disqualified year as of two quarter closes (CFC1’s quarter is dual use property within the meaning basis—(1) Reduction or elimination of

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disqualified basis—(i) In general. Except (iii) Increase by reason of section (iv) Conditions of making an election. to the extent provided in this paragraph 732(d). Disqualified basis in property is An election under this paragraph (h)(2)(ii)(B)(1), disqualified basis in increased by the amount of a positive (h)(2)(ii)(B)(3) with respect to a property is reduced or eliminated to the adjustment to the adjusted basis in controlled foreign corporation or a extent that such basis reduces taxable property under section 732(d) to the partnership is not effective unless the income through, for example, extent that, if an election provided in election is made with respect to each depreciation, amortization, and taxable section 754 were in effect at the time of controlled foreign corporation or sales or exchanges, or is otherwise the acquisition described in section partnership that holds property with reduced or eliminated, for example, 732(d), the adjusted basis in the disqualified basis and that is related through the application of section 362(e) property immediately after the (within the meaning of section 267(b) or 732(a) or (b). In such circumstances, acquisition would have been and 707(b)) to the controlled foreign in the case of property with disqualified disqualified basis under paragraph corporation or partnership and unless basis and adjusted basis other than (h)(2)(ii)(A) of this section. any return that has been filed that is disqualified basis, disqualified basis in (3) Election to eliminate disqualified inconsistent with the elimination of the the property is reduced or eliminated in basis—(i) In general. If an election made adjusted basis and disqualified basis the same proportion that the under this paragraph (h)(2)(ii)(B)(3) with immediately after the disqualified disqualified basis bears to the total respect to a controlled foreign transfer by reason of this paragraph adjusted basis in the property. However, corporation or a partnership is effective, (h)(2)(ii)(B)(3) is amended to take into in the case of a loss from a taxable sale the adjusted basis in each property with account the elimination of the adjusted or exchange, disqualified basis in the disqualified basis held by the controlled basis and disqualified basis immediately property is reduced or eliminated to the foreign corporation or the partnership is after the disqualified transfer by reason extent the loss is treated as attributable reduced by the amount of the of this paragraph (h)(2)(ii)(B)(3). to disqualified basis under § 1.951A– disqualified basis and the disqualified (C) Definitions related to disqualified 2(c)(5)(ii). basis in each property is eliminated. basis. The following definitions apply (ii) Exception for related party The reduction of the adjusted basis and for purposes of this paragraph (h)(2). (1) Disqualified period. The term transfers. Disqualified basis in property the elimination of the disqualified basis disqualified period means, with respect is not reduced or eliminated by reason described in the preceding sentence is to a transferor CFC, the period of any transfer of the property to a treated as occurring immediately after beginning on January 1, 2018, and related person, except to the extent any the disqualified transfer of each ending as of the close of the transferor loss recognized on the transfer of such property. CFC’s last taxable year that is not a CFC property is treated as attributable to the (ii) Manner of making the election inclusion year. A transferor CFC that disqualified basis under § 1.951A– with respect to a controlled foreign has a CFC inclusion year beginning 2(c)(5)(ii), or the basis is reduced or corporation. The election described in January 1, 2018, has no disqualified eliminated in a nonrecognition this paragraph (h)(2)(ii)(B)(3) with period. transaction within the meaning of respect to a controlled foreign (2) Disqualified transfer. The term section 7701(a)(45), for example, corporation is made by each controlling disqualified transfer means a transfer of through the application of section 362(e) domestic shareholder (as defined in property during a transferor CFC’s or 732(a) or (b). § 1.964–1(c)(5)) of the controlled foreign disqualified period by the transferor (2) Increase to disqualified basis for corporation by filing a statement as CFC to a related person in which gain nonrecognition transactions—(i) described in § 1.964–1(c)(3)(ii) with its was recognized, in whole or in part, by Increase corresponding to adjustments income tax return for its taxable year the transferor CFC. in other property. If the adjusted basis that includes the last day of the taxable (3) Qualified gain amount. The term in property is increased by reason of a year of the controlled foreign qualified gain amount means, with nonrecognition transaction (as defined corporation that includes the respect to a disqualified transfer by a in section 7701(a)(45)), for example, disqualified transfer and follow the transferor CFC, the sum of the following through the application of section notice requirements of § 1.964– amounts: 732(b) or section 734(b)(1)(B), the 1(c)(3)(iii). If the return for the taxable (i) The amount of gain recognized by disqualified basis in the property is year has been filed before July 22, 2019, the transferor CFC on the disqualified increased by a proportionate share of the statement must be included with an transfer of property that is subject to the aggregate reduction to the amended return filed within 180 days Federal income tax under section 882 disqualified basis (if any) in one or more June 21, 2019. The election statement (except to the extent the gain is exempt other properties by reason of such must be filed in accordance with the from tax pursuant to an applicable nonrecognition transaction under rules provided in forms or instructions. treaty obligation of the United States); paragraph (h)(2)(ii)(B)(1) of this section. (iii) Manner of making the election and (ii) Exchanged basis property. with respect to a partnership. The (ii) Any United States shareholder’s Disqualified basis in exchanged basis election described in this paragraph pro rata share of the gain recognized by property (as defined in section (h)(2)(ii)(B)(3) with respect to a the transferor CFC on the disqualified 7701(a)(44)) includes the amount of the partnership is made by the partnership transfer of property (determined without disqualified basis in any property by by filing a statement as described in regard to properly allocable deductions) reference to which the adjusted basis in § 1.754–1(b)(1) for the taxable year that taken into account in determining the the exchanged basis property was includes the date of the disqualified United States shareholder’s inclusion determined, in whole or in part, transfer. If a return for the taxable year under section 951(a)(1)(A), excluding provided that the nonrecognition has been filed before July 22, 2019, the any amount that is described in transaction giving rise to such statement must be included with an paragraph (h)(2)(ii)(C)(3)(i) of this exchanged basis did not also increase amended return filed within 180 days of section. the disqualified basis in the exchanged June 21, 2019. The election statement (4) Related person. The term related basis property under paragraph must be filed in accordance with the person means, with respect to a person (h)(2)(ii)(B)(2)(i) of this section. rules provided in forms or instructions. that transfers property, any person that

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bears a relationship to such person this section (the facts in Example 1), except Asset C exceeds PRS’s adjusted basis in Asset described in section 267(b) or 707(b) that CFC1 uses the calendar year as its C immediately before the distribution. immediately before or immediately after taxable year. (2) Analysis. The distribution of Asset C is the transfer. (2) Analysis. Because CFC1 has a taxable a nonrecognition transaction under section year beginning January 1, 2018, CFC1 has no 7701(a)(45). Under paragraph (5) Transfer. The term transfer disqualified period. Accordingly, the (h)(2)(ii)(B)(1)(i) of this section, the includes any disposition of property, property was not transferred during a disqualified bases in Asset D and Asset E are including any sale, exchange, disqualified period of CFC1, and there is no reduced, in the aggregate, by $50x. Further, contribution, or distribution of property, disqualified basis with respect to the under paragraph (h)(2)(ii)(B)(2)(i) of this and includes an indirect transfer. For property. section, the disqualified basis in Asset C is example, a transfer of an interest in a (C) Example 3: Sale of partnership increased by $50x, the aggregate reduction to partnership is treated as an indirect interest—(1) Facts. USP, a domestic the disqualified basis in Asset D and Asset transfer of the property of the corporation, owns all of the stock of CFC1, E. CFC2, and CFC3, each a controlled foreign (E) Example 5: Distribution of property to partnership and a transfer by or to a corporation. CFC1 and CFC2 are equal a partner in basis reduction transaction—(1) partnership is treated as an indirect partners in PRS, a partnership. PRS owns Facts. The facts are the same as in paragraph transfer by or to its partners. In addition, Asset B with an adjusted basis of $20x and (h)(2)(iii)(D)(1) of this section (the facts in a distribution of property to a partner a fair market value of $100x. PRS has a Example 4), except PRS distributes Asset D with respect to which gain is recognized section 754 election in effect. USP, CFC2, to FC1. Under section 732(a), FC1’s adjusted to the distributee partner under section and CFC3 all use the calendar year as their basis in Asset D is $0. PRS’s adjusted basis 731(a)(1) is treated as an indirect taxable year. CFC1 uses a taxable year ending in Asset C is increased by $50x under section transfer of the property of the November 30. On November 1, 2018, before 734(b)(1)(B), which is the amount by which partnership. the start of its first CFC inclusion year, CFC1 PRS’s adjusted basis in Asset D immediately (6) Transferor CFC. The term sells its interest in the partnership to CFC3 before the distribution exceeds FC1’s for $50x of cash. CFC1 has an adjusted basis adjusted basis in Asset D under section transferor CFC means any controlled of $10x in its partnership interest, and thus 732(a). foreign corporation that transfers CFC1 recognizes $40x of gain as a result of (2) Analysis. The distribution of Asset D is property during the disqualified period the sale ($50x ¥ $10x), none of which is a nonrecognition transaction under section of the controlled foreign corporation. foreign base company income or otherwise 7701(a)(45). Under paragraph (iii) Examples. The following subject to U.S. tax. As a result of the sale, (h)(2)(ii)(B)(1)(i) of this section, the examples illustrate the application of there is a $40x adjustment to the adjusted disqualified basis in Asset D is reduced by this paragraph (h)(2). basis in Asset B with respect to CFC3 under $50x. Further, under paragraph section 743(b). (h)(2)(ii)(B)(2)(i) of this section, the (A) Example 1: Sale of asset; disqualified (2) Analysis. The transfer of the PRS disqualified basis in Asset C is increased by period—(1) Facts. USP, a domestic partnership interest is a disqualified transfer $50x, the reduction to the disqualified basis corporation, owns all of the stock of CFC1 of Asset B because it is an indirect transfer in Asset D. and CFC2, each a controlled foreign of property (other than property described in (F) Example 6: Dual use property with corporation. Both USP and CFC2 use the section 1221(a)(1)) by CFC1; CFC1 and CFC3 disqualified basis—(1) Facts. FS is a tested calendar year as their taxable year. CFC1 uses are related persons; and the transfer occurs income CFC and a wholesale distributor of a taxable year ending November 30. On during the disqualified period, the period Product A. FS owns trucks that deliver November 1, 2018, before the start of its first that begins on January 1, 2018, and ends the Product A. The trucks are specified tangible CFC inclusion year, CFC1 sells Asset A, which has an adjusted basis of $10x in the last day before the first CFC inclusion year property. In Year 1, FS earns $250x in total hands of CFC1, to CFC2 in exchange for of CFC1 (November 30, 2018). Accordingly, gross income from inventory sales of Product $100x of cash. CFC1 recognizes $90x of gain under paragraph (h)(2)(ii)(A) of this section, A, $200x of which is included in gross tested as a result of the sale ($100x ¥ $10x), $30x the disqualified basis in Asset B immediately income. The trucks have an average adjusted of which is foreign base company income. after the disqualified transfer is $40x, the basis for Year 1 of $4,000x, of which $2,500x USP includes in gross income under section excess of CFC3’s share of adjusted basis in is disqualified basis. FS does not capitalize 951(a)(1)(A) its pro rata share of the subpart Asset B immediately after the disqualified depreciation with respect to the trucks to F income of $30x. CFC1’s gain is not transfer ($50x), taking into account the basis inventory or other property held for sale. The otherwise subject to U.S. tax or taken into adjustment with respect to CFC3 under depreciation deduction with respect to the account in determining USP’s inclusion section 743(b), over CFC1’s share of adjusted trucks is $20x, $15x of which would be under section 951(a)(1)(A). basis in the property immediately before the allocated and apportioned to gross tested (2) Analysis. The transfer of Asset A is a transfer ($10x). income under § 1.951A–2(c)(3) without disqualified transfer of Asset A because it is (D) Example 4: Distribution of property in regard to § 1.951A–2(c)(5). a transfer of property (other than property liquidation of partnership interest—(1) Facts. (2) Analysis. Because the trucks are used in described in section 1221(a)(1)) by CFC1; FC1, FC2, and FC3 are controlled foreign both the production of gross tested income CFC1 and CFC2 are related persons; and the corporations that are equal partners in PRS, and the production of gross income that is transfer occurs during the disqualified a partnership. FC1’s adjusted basis in its not gross tested income in Year 1, the trucks period, the period that begins on January 1, partnership interest in PRS is $0, FC2’s basis are dual use property within the meaning of 2018, and ends the last day before the first is $50x, and FC3’s basis is $50x. PRS has a paragraph (d)(2) of this section. Under CFC inclusion year of CFC1 (November 30, section 754 election in effect. PRS owns paragraph (h)(2)(i)(A) of this section, the 2018). Accordingly, under paragraph Asset C with a fair market value of $50x and disqualified basis in the trucks is disregarded (h)(2)(ii)(A) of this section, the disqualified an adjusted basis of $0, Asset D with a fair for purposes of determining FS’s qualified basis in Asset A immediately after the market value of $50x and an adjusted basis business asset investment for Year 1. Under disqualified transfer is $60x, the excess of of $50x, and Asset E with a fair market value paragraph (h)(2)(i)(B) of this section, CFC2’s adjusted basis in Asset A of $50x and an adjusted basis of $50x, and paragraph (h)(2)(i)(A) of this section applies immediately after the disqualified transfer all the adjusted basis in Asset D and Asset by reducing the amount of FS’s adjusted ($100x), over the sum of CFC1’s adjusted E is disqualified basis. PRS distributes Asset basis in the trucks treated as adjusted basis basis in Asset A immediately before the C to FC3 in liquidation of FC3’s interest in in specified tangible property for Year 1 transfer ($10x) and USP’s pro rata share of PRS. None of FC1, FC2, FC3, or PRS under paragraph (d)(1) of this section the gain recognized by CFC1 on the transfer recognizes gain on the distribution. Under (determined without regard to § 1.951A– of the property taken into account by USP section 732(b), FC3’s adjusted basis in Asset 2(c)(5)) by the amount of the disqualified under section 951(a)(1)(A) ($30x). C is $50x. PRS’s adjusted bases in Asset D basis in the trucks. Without regard to (B) Example 2: Sale of asset; no and Asset E are decreased, in the aggregate, § 1.951A–2(c)(5), FS’s adjusted basis in the disqualified period—(1) Facts. The facts are by $50x under section 734(b)(2)(B), which is trucks treated as adjusted basis in specified the same as in paragraph (h)(2)(iii)(A)(1) of the amount by which FC3’s adjusted basis in tangible property for Year 1 under paragraph

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(d)(1) of this section is FS’s adjusted basis in (ii) Interest expense. The term interest property held by the partnership, as the trucks multiplied by FS’s dual use ratio expense means any expense or loss that determined under the principles of with respect to the trucks for Year 1. Because is treated as interest expense under § 1.956–4(b), and the controlled foreign none of the depreciation with respect to the section 163(j). corporation’s basis in the partnership trucks is capitalized into inventory or other property held for sale, FS’s dual use ratio (iii) Qualified interest expense—(A) In interest is not taken into account. with respect to the trucks is determined general. The term qualified interest (iv) Tested loss QBAI amount. The entirely by reference to the depreciation expense means, with respect to a term tested loss QBAI amount means, deduction with respect to the trucks. controlled foreign corporation for a CFC with respect to a tested loss CFC for a Therefore, under paragraph (d)(3) of this inclusion year, to the extent established CFC inclusion year, 10 percent of the section, without regard to § 1.951A–2(c)(5), by the controlled foreign corporation, amount that would be the qualified FS’s dual use ratio with respect to the trucks the interest expense paid or accrued by business asset investment of the tested for Year 1 is 75%, which is FS’s depreciation the controlled foreign corporation that is deduction with respect to the trucks that is loss CFC for the CFC inclusion year allocated and apportioned to gross tested allocated and apportioned to gross under section 951A(d) and § 1.951A–3 if income under § 1.951A–2(c)(3) for Year 1 tested income of the controlled foreign the tested loss CFC were a tested income ($15x), divided by FS’s depreciation corporation for the CFC inclusion year CFC for the CFC inclusion year. deduction with respect to the trucks for Year under § 1.951A–2(c)(3), multiplied by a (2) Tested interest income—(i) In 1 ($20x). Accordingly, paragraph (d)(1) of fraction, the numerator of which is the general. The term tested interest income this section, without regard to paragraph average of the aggregate adjusted bases means, with respect to a controlled (h)(2)(i)(A) of this section, FS’s adjusted basis as of the close of each quarter of the CFC foreign corporation for a CFC inclusion in the trucks treated as adjusted basis in inclusion year of qualified assets held specified tangible property is $3,000x year, interest income included in gross ($4,000x × 0.75). Under paragraph (h)(2)(i)(A) by the controlled foreign corporation, tested income of the controlled foreign and (B) of this section, the amount of the and the denominator of which is the corporation for the CFC inclusion year, adjusted basis in the trucks treated as average of the aggregate adjusted bases reduced by qualified interest income of adjusted basis in specified tangible property as of the close of each quarter of the CFC the controlled foreign corporation for is reduced by the $2,500x of disqualified inclusion year of all assets held by the the CFC inclusion year. basis in the trucks. Accordingly, $500x controlled foreign corporation. (ii) Interest income. The term interest ¥ ($3,000x $2,500x) of FS’s average adjusted (B) Qualified asset—(1) In general. income means any income or gain that basis in the trucks is taken into account Except as provided in paragraph is treated as interest income under under paragraph (b) of this section in (b)(1)(iii)(B)(2) of this section, the term determining FS’s qualified business asset section 163(j). investment for Year 1. qualified asset means, with respect to a (iii) Qualified interest income—(A) In controlled foreign corporation for a CFC general. Except as provided in § 1.951A–4 Tested interest expense and inclusion year, any obligation or paragraph (b)(2)(iii)(B) of this section, tested interest income. financial instrument held by the the term qualified interest income (a) Scope. This section provides rules controlled foreign corporation that gives means, with respect to a controlled for determining the tested interest rise to income included in the gross foreign corporation for a CFC inclusion expense and tested interest income of a tested income of the controlled foreign year, interest income of the controlled controlled foreign corporation for corporation for the CFC inclusion year foreign corporation for the CFC purposes of determining a United States that is excluded from foreign personal inclusion year included in the gross shareholder’s specified interest expense holding company income (as defined in tested income of the controlled foreign under § 1.951A–1(c)(3)(iii). Paragraph section 954(c)(1)) by reason of section corporation for the CFC inclusion year (b) of this section provides definitions 954(c)(2)(C)(ii) or section 954(h) or (i). that is excluded from foreign personal related to tested interest expense and (2) Exclusion for related party holding company income (as defined in tested interest income. Paragraph (c) of receivables. A qualified asset does not section 954(c)(1)) by reason of section this section provides examples include an asset that gives rise to 954(c)(2)(C)(ii) or section 954(h) or (i). illustrating these definitions and the interest income that is also excludible (B) Exclusion for related party application of § 1.951A–1(c)(3)(iii). The from foreign personal holding company interest. Qualified interest income does amount of specified interest expense income by reason of section 954(c)(3) or not include interest income that is also determined under § 1.951A–1(c)(3)(iii) (6). excludable from foreign personal and this section is the amount of (3) Look-through rule for subsidiary holding company income by reason of interest expense described in section stock. For purposes of paragraph section 954(c)(3) or (6). 951A(b)(2)(B). (b)(1)(iii)(A) of this section, the adjusted (c) Examples. The following examples (b) Definitions related to specified basis in the stock of another controlled illustrate the application of this section. interest expense—(1) Tested interest foreign corporation held by a controlled expense—(i) In general. The term tested foreign corporation is treated as (1) Example 1: Wholly-owned CFCs—(i) interest expense means, with respect to Facts. A Corp, a domestic corporation, owns adjusted basis in a qualified asset in an 100% of the single class of stock of each of a controlled foreign corporation for a amount equal to the adjusted basis in FS1 and FS2, each a controlled foreign CFC inclusion year, interest expense the stock multiplied by the fraction corporation. A Corp, FS1, and FS2 all use the paid or accrued by the controlled described in paragraph (b)(1)(iii)(A) of calendar year as their taxable year. For Year foreign corporation that is allocated and this section determined with respect to 1, FS1 and FS2 are both tested income CFCs. apportioned to gross tested income of the assets of such other controlled In Year 1, FS1 pays $100x of interest to FS2. the controlled foreign corporation for foreign corporation. The interest expense of FS1 is allocated and the CFC inclusion year under § 1.951A– (4) Look-through rule for certain apportioned to its gross tested income under 2(c)(3), reduced (but not below zero) by partnership interests. For purposes of § 1.951A–2(c)(3). The interest income of FS2 the sum of the qualified interest expense paragraph (b)(1)(iii)(A) of this section, if is excluded from its foreign personal holding company income under section 954(c)(6). of the controlled foreign corporation for a controlled foreign corporation owns Also, in Year 1, FS2 pays $100x of interest the CFC inclusion year and the tested 25 percent or more of the capital or to a bank that is not related to FS2, which loss QBAI amount of the controlled profits interest in a partnership the interest expense is allocated and apportioned foreign corporation for the CFC controlled foreign corporation is treated to FS2’s gross tested income under § 1.951A– inclusion year. as holding its attributable share of any 2(c)(3). Neither FS1 nor FS2 holds qualified

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assets or owns stock of another controlled is excluded from its foreign personal holding single class of stock of each of FS1 and FS2, foreign corporation. company income by reason of section each a controlled foreign corporation. FS2 (ii) Analysis—(A) CFC-level determination; 954(c)(6). In addition, in Year 1, FS2 receives owns 100% of the single class of stock of tested interest expense and tested interest $300x of interest from customers that are not FS3, a qualifying insurance company within income—(1) Tested interest expense and related to FS2, which interest income is the meaning of section 953(e)(3). For Year 1, tested interest income of FS1. FS1 has $100x excluded from FS2’s foreign personal holding FS1, FS2, and FS3 are all tested income of interest expense that is allocated and company income by reason of section 954(h), CFCs. C Corp, FS1, FS2, and FS3 all use the apportioned to its gross tested income under and FS2 pays $300x of interest to a bank, calendar year as their taxable year. In Year § 1.951A–2(c)(3). FS1 has no interest income. which interest expense is allocated and 1, FS1 pays $100x of interest to FS3. The Accordingly, FS1 has $100x of tested interest apportioned to FS2’s gross tested income interest expense of FS1 is allocated and expense and no tested interest income for under § 1.951A–2(c)(3). Neither FS1 nor FS2 apportioned to its gross tested income under Year 1. owns stock of another controlled foreign § 1.951A–2(c)(3). The interest income of FS3 (2) Tested interest expense and tested corporation. FS1 does not hold qualified is excluded from its foreign personal holding interest income of FS2. FS2 has $100x of assets. FS2’s average adjusted bases in company income by reason of section interest expense that is allocated and qualified assets is $8,000x, and FS2’s average 954(c)(6). In addition, FS3 receives $300x of apportioned to its gross tested income under adjusted bases in all its assets is $12,000x. interest from persons that are not related to § 1.951A–2(c)(3) and $100x of interest (ii) Analysis—(A) CFC-level determination; FS3, which interest income is excluded from income that is included in its gross tested tested interest expense and tested interest FS’s foreign personal holding company income. Accordingly, FS2 has $100x of tested income—(1) Tested interest expense and income by reason of section 954(i). Also in interest expense and $100x of tested interest tested interest income of FS1. FS1 has $100x Year 1, FS2 pays $300x of interest to a bank, income for Year 1. of interest expense that is allocated and which interest expense is allocated and (B) United States shareholder-level apportioned to its gross tested income under apportioned to FS2’s gross tested income determination; pro rata share and specified § 1.951A–2(c)(3). FS1 has no interest income. under § 1.951A–2(c)(3). None of FS1, FS2, or interest expense. Under § 1.951A–1(d)(5) and Accordingly, FS1 has $100x of tested interest FS3 owns stock of another controlled foreign (6), A Corp’s pro rata share of FS1’s tested expense and no tested interest income for corporation, except for the stock of FS3 interest expense is $100x, its pro rata share Year 1. owned by FS2. FS2 has no assets other than of FS2’s tested interest expense is $100x, and (2) Tested interest expense and tested the stock of FS3. Neither FS1 nor FS2 hold its pro rata share of FS2’s tested interest interest income of FS2. FS2 has $300x of qualified assets directly. FS2’s average income is $100x. For Year 1, A Corp’s interest expense that is allocated and adjusted bases in the FS3 stock is $6,000x. aggregate pro rata share of tested interest apportioned to its gross tested income under FS3’s average adjusted bases in qualified expense is $200x and its aggregate pro rata § 1.951A–2(c)(3) and $400x of interest assets is $8,000x, and FS3’s average adjusted share of tested interest income is $100x. income that is included in gross tested bases in all its assets is $12,000x. Accordingly, under § 1.951A–1(c)(3)(iii), A income. However, a portion of FS2’s interest (ii) Analysis—(A) CFC-level determination; Corp’s specified interest expense is $100x income is excluded from foreign personal tested interest expense and tested interest ($200x¥$100x) for Year 1. holding company income by reason of income—(1) Tested interest expense and (2) Example 2: Less than wholly-owned section 954(h), and a portion of FS2’s assets tested interest income of FS1. In Year 1, FS1 CFCs—(i) Facts. The facts are the same as in are qualified assets. As a result, in has $100x of interest expense allocated and paragraph (c)(1)(i) of this section (the facts in determining the tested interest income and apportioned to its gross tested income under Example 1), except that A Corp owns 50% of tested interest expense of FS2, the qualified § 1.951A–2(c)(3). FS1 has no interest income. the single class of stock of FS1 and 80% of interest income and qualified interest Accordingly, FS1 has $100x of tested interest the single class of stock of FS2. expense of FS2 are excluded. FS2 has expense and no tested interest income for (ii) Analysis—(A) CFC-level determination; qualified interest income of $300x, the Year 1. tested interest expense and tested interest amount of FS2’s interest income that is (2) Tested interest expense and tested income. The analysis is the same as in excluded from foreign personal holding interest income of FS2. FS2 has $300x of paragraph (c)(1)(ii)(A) of this section company income by reason of section 954(h). interest expense that is allocated and (paragraph (A) of the analysis in Example 1). In addition, FS2 has qualified interest apportioned to its gross tested income under (B) United States shareholder-level expense of $200x, the amount of FS2’s § 1.951A–2(c)(3). FS2 has no interest income. determination; pro rata share and specified interest expense that is allocated and While FS2 holds no qualified assets directly, interest expense. Under § 1.951A–1(d)(5) and apportioned to its gross tested income under $4,000x of FS3’s average adjusted basis in (6), A Corp’s pro rata share of FS1’s tested § 1.951A–2(c)(3) ($300x), multiplied by a FS3 stock is treated as adjusted basis in a interest expense is $50x ($100x × 0.50), its fraction, the numerator of which is FS2’s qualified asset, which is equal to FS3’s pro rata share of FS2’s tested interest expense average adjusted bases in qualified assets average adjusted basis in FS3 stock ($6,000x) is $80x ($100x × 0.80), and its pro rata share ($8,000x), and the denominator of which is multiplied by a fraction, the numerator of of FS2’s tested interest income is $80x ($100x FS2’s average adjusted bases in all its assets which is FS3’s average adjusted bases in × 0.80). For Year 1, A Corp’s aggregate pro ($12,000x). Accordingly, FS2 has tested qualified assets ($8,000x), and the rata share of the tested interest expense is interest income of $100x ($400x¥$300x) and denominator of which is FS3’s average $130x ($50x + $80x) and its aggregate pro tested interest expense of $100x adjusted bases in all its assets ($12,000x). rata share of the tested interest income is ($300x¥$200x) for Year 1. Accordingly, FS2 has qualified interest $80x ($0 + $80x). Accordingly, under (B) United States shareholder-level expense of $200x, the amount of FS2’s § 1.951A–1(c)(3)(iii), A Corp’s specified determination; pro rata share and specified interest expense allocated and apportioned to interest expense is $50x ($130x¥$80x) for interest expense. Under § 1.951A–1(d)(5) and FS2’s gross tested income under § 1.951A– Year 1. (6), B Corp’s pro rata share of FS1’s tested 2(c)(3) ($300x), multiplied by a fraction, the (3) Example 3: Operating company; interest expense is $100x, its pro rata share numerator of which is FS2’s average adjusted qualified interest expense—(i) Facts. B Corp, of FS2’s tested interest expense is $100x, and bases in qualified assets ($4,000x), and the a domestic corporation, owns 100% of the its pro rata share of FS2’s tested interest denominator of which is FS2’s average single class of stock of each of FS1 and FS2, income is $100x. For Year 1, B Corp’s adjusted bases in all its assets ($6,000x). each a controlled foreign corporation. For aggregate pro rata share of tested interest Therefore, FS2 has tested interest expense of Year 1, FS1 and FS2 are both tested income expense is $200x ($100x + $100x) and its $100x ($300x¥$200x) and no tested interest CFCs. B Corp, FS1, and FS2 all use the aggregate pro rata share of tested interest income for Year 1. calendar year as their taxable year. FS2 is an income is $100x ($0 + $100x). Accordingly, (3) Tested interest expense and tested eligible controlled foreign corporation within under § 1.951A–1(c)(3)(iii), B Corp’s interest income of FS3. In Year 1, FS3 has no the meaning of section 954(h)(2). In Year 1, specified interest expense is $100x interest expense, but FS3 has $400x of FS1 pays $100x of interest to FS2. The ($200x¥$100x) for Year 1. interest income that is included in gross interest expense of FS1 is allocated and (4) Example 4: Holding company; qualified tested income. However, a portion of FS3’s apportioned to its gross tested income under interest expense—(i) Facts. C Corp, a interest income is excluded from foreign § 1.951A–2(c)(3). The interest income of FS2 domestic corporation, owns 100% of the personal holding company income by reason

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of section 954(i). As a result, in determining (B) United States shareholder-level U.S. shareholder inclusion year bears to the tested interest income of FS3, the determination; pro rata share and specified the aggregate amount of the United qualified interest income of FS3 is excluded. interest expense. Under § 1.951A–1(d)(5) and States shareholder’s pro rata share of the FS3 has qualified interest income of $300x, (6), D Corp’s pro rata share of FS1’s tested tested income of each tested income the amount of FS3’s interest income that is interest expense is $100x, its pro rata share excluded from foreign personal holding of FS2’s tested interest expense is $0, and its CFC for the U.S. shareholder inclusion company income by reason of section 954(i). pro rata share of FS2’s tested interest income year. Therefore, FS2 has tested interest income of is $100x. For Year 1, D Corp’s aggregate pro (ii) Example. The following example $100x ($400x¥$300x) and no tested interest rata share of tested interest expense is $100x, illustrates the application of paragraph expense for Year 1. and its aggregate pro rata share of tested (b)(2)(i) of this section. (B) United States shareholder-level interest income is $100x. Accordingly, under (A) Facts. USP, a domestic corporation, determination; pro rata share and specified § 1.951A–1(c)(3)(iii), D Corp’s specified owns all of the stock of three controlled interest expense. Under § 1.951A–1(d)(5) and interest expense is $0 ($100x¥$100x) for foreign corporations, CFC1, CFC2, and CFC3. (6), C Corp’s pro rata share of FS1’s tested Year 1. USP, CFC1, CFC2, and CFC3 all use the interest expense is $100x, its pro rata share calendar year as their taxable year. In Year of FS2’s tested interest expense is $100x, and § 1.951A–5 Treatment of GILTI inclusion 1, CFC1 has tested income of $100x, CFC2 its pro rata share of FS3’s tested interest amounts. has tested income of $300x, and CFC3 has income is $100x. For Year 1, C Corp’s tested loss of $50x. USP has no net deemed aggregate pro rata share of tested interest (a) Scope. This section provides rules relating to the treatment of GILTI tangible income return for Year 1. expense is $200x ($100x + $100x + $0) and (B) Analysis. In Year 1, USP has net CFC its aggregate pro rata share of tested interest inclusion amounts and adjustments to tested income (as defined in § 1.951A– income is $100x ($0 + $0 + $100x). earnings and profits to account for 1(c)(2)) of $350x ($100x + $300x¥$50x) and, Accordingly, under § 1.951A–1(c)(3)(iii), C tested losses. Paragraph (b) of this because USP has no net deemed tangible Corp’s specified interest expense is $100x section provides that a GILTI inclusion income return, a GILTI inclusion amount (as ($200x¥$100x) for Year 1. amount is treated in the same manner as defined in § 1.951A–1(c)(1)) of $350x (5) Example 5: Specified interest expense an amount included under section ($350x¥$0). The aggregate amount of USP’s and tested loss QBAI amount—(i) Facts. D 951(a)(1)(A) for purposes of applying pro rata share of tested income is $400x Corp, a domestic corporation, owns 100% of certain Code sections. Paragraph (c) of ($100x from CFC1 + $300x from CFC2). a single class of stock of each of FS1 and FS2, Therefore, under paragraph (b)(2)(i) of this each a controlled foreign corporation. For this section provides rules for the section, the portion of USP’s GILTI inclusion Year 1, FS1 is a tested income CFC and FS2 treatment of amounts taken into account amount treated as being with respect to CFC1 is a tested loss CFC. D Corp, FS1, and FS2 in determining the net CFC tested is $87.50x ($350x × $100x/$400x). The all use the calendar year as their taxable year. income of a United States shareholder portion of USP’s GILTI inclusion amount In Year 1, FS1 pays $100x of interest to FS2. when applying sections 163(e)(3)(B)(i) treated as being with respect to CFC2 is The interest expense of FS1 is allocated and and 267(a)(3)(B). Paragraph (d) of this $262.50x ($350x × $300x/$400x). The portion apportioned to its gross tested income under section provides a rule for the treatment of USP’s GILTI inclusion amount treated as § 1.951A–2(c)(3). The interest income of FS2 of a GILTI inclusion amount for being with respect to CFC3 is $0 because is excluded from its foreign personal holding CFC3 is a tested loss CFC. purposes of determining the personal company income by reason of section (3) Translation of portion of GILTI 954(c)(6). Also, in Year 1, FS2 pays $100x of holding company income of a United interest to a bank that is not related to FS2, States shareholder that is a domestic inclusion amount allocated to tested which interest expense is allocated and corporation under section 543. income CFC. The portion of the GILTI apportioned to FS2’s gross tested income (b) Treatment as subpart F income for inclusion amount of a United States under § 1.951A–2(c)(3). Neither FS1 nor FS2 certain purposes—(1) In general. A shareholder allocated to a tested income holds qualified assets or owns stock of GILTI inclusion amount is treated in the CFC under section 951A(f)(2) and another controlled foreign corporation. same manner as an amount included paragraph (b)(2)(i) of this section is Because FS2 is a tested loss CFC, FS2 has no under section 951(a)(1)(A) for purposes translated into the functional currency QBAI. See § 1.951A–3(b). However, if FS2 of applying sections 168(h)(2)(B), of the tested income CFC using the were a tested income CFC, FS2 would have average exchange rate for the CFC QBAI of $1,000x. 535(b)(10), 851(b), 904(h)(1), 959, 961, (ii) Analysis—(A) CFC-level determination; 962, 993(a)(1)(E), 996(f)(1), 1248(b)(1), inclusion year of the tested income CFC. tested interest expense and tested interest 1248(d)(1), 1411, 6501(e)(1)(C), (c) Treatment as an amount income—(1) Tested interest expense and 6654(d)(2)(D), and 6655(e)(4). includible in the gross income of a tested interest income of FS1. In Year 1, FS1 (2) Allocation of GILTI inclusion United States person. For purposes of has $100x of interest expense that is amount to tested income CFCs—(i) In sections 163(e)(3)(B)(i) and 267(a)(3)(B), allocated and apportioned to its gross tested general. For purposes of the sections an item (including original issue income under § 1.951A–2(c)(3). FS1 has no referred to in paragraph (b)(1) of this discount) is treated as includible in the interest income. Accordingly, FS1 has $100x section, the portion of the GILTI gross income of a United States person of tested interest expense and no tested inclusion amount of a United States to the extent that the item increases a interest income for Year 1. (2) Tested interest expense and tested shareholder for a U.S. shareholder United States shareholder’s pro rata interest income of FS2. FS2 has $100x of inclusion year treated as being with share of tested income of a controlled interest income that is included in gross respect to each controlled foreign foreign corporation for a U.S. tested income. Accordingly, FS2 has $100x of corporation of the United States shareholder inclusion year, reduces the tested interest income. FS2 also has 100x of shareholder for the U.S. shareholder shareholder’s pro rata share of tested interest expense that is allocated and inclusion year is— loss of a controlled foreign corporation apportioned to its gross tested income. (A) In the case of a tested loss CFC, for the U.S. shareholder inclusion year, However, because FS2 is a tested loss CFC, zero, and or both. FS2’s tested interest expense is reduced by (B) In the case of a tested income CFC, (d) Treatment for purposes of its tested loss QBAI amount. FS2’s tested loss the portion of the GILTI inclusion personal holding company rules. For QBAI amount is $100x (10% of $1,000x, the amount that would be QBAI if FS2 were a amount of the United States shareholder purposes of determining whether a tested income CFC). Accordingly, FS2’s which bears the same ratio to such United States shareholder that is a tested interest expense is $0 ($100x interest amount as the United States domestic corporation is a personal expense¥$100x tested loss QBAI amount) shareholder’s pro rata share of the tested holding company under section 542, no for Year 1. income of the tested income CFC for the portion of the adjusted ordinary gross

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income of such domestic corporation year. The source and separate category allowed as a deduction for the taxable that consists of its GILTI inclusion (as defined in § 1.904–5(a)) components year. See paragraph (e)(1)(i) of this amount for the U.S. shareholder of the deferred amount are determined section. The deferred amount (which is inclusion year is personal holding in accordance with paragraph (e)(1)(iv) the corresponding addition to the net company income (as defined in section of this section. operating loss for the taxable year) 543(a)). * * * * * comprises a ratable portion of the (iv) Effect of section 965(n) election— deductions (including the deduction § 1.951A–6 Adjustments related to tested allowed under section 965(c)) allocated losses. (A) In general. The section 965(n) election for a taxable year applies solely and apportioned to each statutory and (a) Scope. This section provides rules for purposes of determining the amount residual grouping under paragraph relating to adjustments related to tested of net operating loss under section 172 (e)(1)(iv)(B)(1) of this section. Such losses. Paragraph (b) of this section for the taxable year and determining the ratable portion equals the deferred provides rules that increase the earnings amount of taxable income for the amount multiplied by a fraction, the and profits of a tested loss CFC for taxable year (computed without regard numerator of which is the deductions purposes of section 952(c)(1)(A). to the deduction allowable under allocated and apportioned to the Paragraph (c) of this section is reserved section 172) that may be reduced by net statutory or residual grouping under for a rule for tested loss adjustments. operating loss carryovers or carrybacks paragraph (e)(1)(iv)(B)(1) of this section (b) Increase of earnings and profits of to such taxable year under section 172. and the denominator of which is the tested loss CFC for purposes of section Paragraph (e)(1)(iv)(B) of this section total deductions described in paragraph 952(c)(1)(A). For purposes of section provides a rule for coordinating the (e)(1)(iv)(B)(1) of this section. 952(c)(1)(A) with respect to a CFC section 965(n) election’s effect on Accordingly, the fraction described in inclusion year, the earnings and profits section 172 with the computation of the the previous sentence takes into account of a tested loss CFC are increased by an separate foreign tax credit limitations the deferred amount. amount equal to the tested loss of the (3) Taxable income and the separate under section 904. tested loss CFC for the CFC inclusion foreign tax credit limitations under (B) Ordering rule for allocation and year. section 904 for the taxable year are apportionment of deductions for (c) [Reserved] computed without taking into account purposes of the section 904 limitation. any deferred amount. Deductions § 1.951A–7 Applicability dates. The effect of a section 965(n) election allocated and apportioned to the Sections 1.951A–1 through 1.951A–6 with respect to a taxable year on the statutory and residual groupings under apply to taxable years of foreign computation of the separate foreign tax paragraph (e)(1)(iv)(B)(1) of this section, corporations beginning after December credit limitations under section 904 is to the extent deducted in the taxable 31, 2017, and to taxable years of United computed as follows and in the year rather than deferred to create or States shareholders in which or with following order. increase a net operating loss, are which such taxable years of foreign (1) Deductions, including those that combined with income in the statutory corporations end. create or increase a net operating loss and residual groupings to which those ■ Par. 7. Section 1.965–7 is amended by: for the taxable year by reason of the deductions are assigned in order to ■ 1. Revising the last sentence of section 965(n) election, are allocated compute the amount of separate paragraph (e)(1)(i). and apportioned under §§ 1.861–8 limitation income or loss in each ■ 2. Adding three sentences at the end through 1.861–17 to the relevant separate category and U.S. source of paragraph (e)(1)(i). statutory and residual groupings, taking income or loss for the taxable year. ■ 3. Adding paragraph (e)(1)(iv). into account the amount described in Section 904(b), (f), and (g) are then ■ 4. Revising paragraph (e)(2)(ii). paragraph (e)(1)(ii) of this section. The applied to determine the applicable ■ 5. Adding paragraph (e)(3). source and separate category of the net foreign tax credit limitations for the The revisions and additions read as operating loss carryover or carryback to taxable year. follows: the taxable year, if any, is determined (2) * * * under the rules of § 1.904(g)–3(b), taking (ii) Timing—(A) In general. A section § 1.965–7 Elections, payment, and other into account the amount described in 965(n) election must be made no later special rules. paragraph (e)(1)(ii) of this section. than the due date (taking into account * * * * * Therefore, if the amount of the net extensions, if any) for the person’s (e) * * * operating loss carryover or carryback to return for the taxable year to which the (1) . . . (i) . . . Except as provided in the taxable year (as reduced by reason election applies. Relief is not available paragraph (e)(2)(ii)(B) of this section, the of the section 965(n) election) exceeds under § 301.9100–2 or § 301.9100–3 of election for each taxable year is the U.S. source loss component of the this chapter to make a late election. irrevocable. If the section 965(n) net operating loss that is carried over (B) Transition rule. In the case of a election creates or increases a net under § 1.904(g)–3(b)(3)(i), but such section 965(n) election made before June operating loss under section 172 for the excess is less than the potential 21, 2019, the election may be revoked taxable year, then the taxable income of carryovers (or carrybacks) of the by attaching a statement, signed under the person for the taxable year cannot be separate limitation losses that are part of penalties of perjury, to an amended less than the amount described in the net operating loss, the potential return for the taxable year to which the paragraph (e)(1)(ii) of this section. The carryovers (or carrybacks) are election applies (the election year). The amount of deductions equal to the proportionately reduced as provided in statement must include the person’s amount by which a net operating loss is § 1.904(g)–3(b)(3)(ii) or (iii), as name, taxpayer identification number, created or increased for the taxable year applicable. and a statement that the person revokes by reason of the section 965(n) election (2) If a net operating loss is created or the section 965(n) election. The (the deferred amount) is not taken into increased for the taxable year by reason amended return to which the statement account in computing taxable income or of the section 965(n) election, the is attached must be filed by— the separate foreign tax credit deferred amount (as defined in (1) In the case of a revocation with limitations under section 904 for that paragraph (e)(1)(i) of this section) is not respect to an election due before

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February 5, 2019, the due date (taking (B) Analysis—(1) The amount described in foreign source general category income for into account extensions, if any, or any paragraph (e)(1)(ii) of this section is $80x the taxable year is computed without taking ¥ additional time that would have been ($100x section 965(a) inclusion $70x into account the $37.5x of the deferred granted if the person had made an section 965(c) deduction + $50x section 78 amount that is attributable to the deductions dividends). Not taking into account the $80x extension request) for the return for the allocated and apportioned to the foreign creates a net operating loss under section 172 source general category. Therefore, for the taxable year following the election year; of $60x ($20x taxable income without regard 2017 taxable year, foreign source general ¥ or to the section 965(n) election $80x) for the category income is $12.5x ($100x section (2) In the case of a revocation with taxable year (the ‘‘deferred amount’’). Under 965(a) inclusion + $50x section 78 respect to an election due on or after paragraph (e)(1)(i) of this section, the dividends¥($175x deductions¥$37.5x February 5, 2019, the due date (taking deferred amount of $60x constitutes a net deferred amount). The remaining taxable into account extensions, if any, or any operating loss and is not allowed as a income of $67.5x is U.S. source income. additional time that would have been deduction for the taxable year. USP’s taxable (ii) Example 2: Net operating loss carryover granted if the person had made an income for the year is $80x ($100x + $50x + to the inclusion year—(A) Facts. USP, a $150x¥($280x¥$60x)). domestic corporation, has a section 965(a) extension request) for the return for the (2) Under paragraph (e)(1)(iv)(B)(1) of this inclusion of $100x and has a section 965(c) election year. section, deductions are allocated and deduction of $60x for its taxable year ending * * * * * apportioned under §§ 1.861–8 through 1.861– December 31, 2017. USP also includes in (3) Examples. The following examples 17 to the relevant statutory and residual gross income the amount treated as groupings, taking into account the amount illustrate the application of paragraph dividends under section 78 of $40x (the (e)(1)(iv) of this section. described in paragraph (e)(1)(ii) of this section. Under § 1.861–8(b), USP’s section foreign taxes deemed paid under section (i) Example 1: Net operating loss in 965(c) deduction is definitely related to the 960(a) for the taxable year with respect to inclusion year—(A) Facts. USP, a domestic section 965(a) inclusion, and, therefore, is USP’s section 965(a) inclusion). The section corporation, has a section 965(a) inclusion of 965(a) inclusion and the section 78 dividends $100x and has a section 965(c) deduction of allocated solely to foreign source general category income. Under § 1.861–9T, based on are foreign source general category income. $70x for its taxable year ending December 31, USP also has U.S. source gross income of 2017. USP also includes in gross income the USP’s asset values, the interest expense of $60x is ratably apportioned $30x to foreign $200x, foreign source passive category gross amount treated as dividends under section 78 income of $100x, and other deductions of of $50x (the foreign taxes deemed paid under source general category income and $30x to U.S. source income. Under § 1.861–8(c)(3), $140x. Under § 1.861–8(b), USP’s $60x section 960(a) for the taxable year with section 965(c) deduction is definitely related respect to USP’s section 965(a) inclusion). based on $150x of gross U.S. source income to the section 965(a) inclusion, and, The section 965(a) inclusion and the section and $150x of gross foreign source general therefore, is allocated solely to foreign source 78 dividends are foreign source general category income, the other expenses of $150x general category income. Under §§ 1.861–8 category income. During the 2017 taxable are ratably apportioned $75x to foreign year, USP also has U.S. source gross income source general category income and $75x to through 1.861–17, USP allocates and of $150x and other deductions of $210x, U.S. source income. Therefore, USP’s apportions the other $140x of deductions as comprising $60x of interest expense and deductions allocated and apportioned to follows: $40x to foreign source general $150x of other deductible expenses that are foreign source general category income are category income, $40x to foreign source not definitely related to any gross income. $175x ($70x + $30x + $75x) and its passive category income, and $60x to U.S. USP’s total tax book value of its assets, as deductions allocated and apportioned to U.S. source income. USP has a net operating loss determined under §§ 1.861–9(g)(2) and source income are $105x ($30x + $75x). of $260x for the 2016 taxable year consisting 1.861–9T(g)(3), is divided equally between (3) Under paragraph (e)(1)(iv)(B)(2) of this of a $120x U.S. source loss, a $75x general assets that generate foreign source general section, the deferred amount of $60x category separate limitation loss, and a $65x category income and assets that generate U.S. comprises a ratable portion of the allocated passive category separate limitation loss. source income. USP elects under paragraph and apportioned deductions. Therefore, Under paragraph (e)(1)(i) of this section, USP (e)(1)(i) of this section to not take into $37.5x ($60x × $175x/$280x) of the deferred elects to not take into account the amount account the amount described in paragraph amount comprises deductions allocated and described in paragraph (e)(1)(ii) of this (e)(1)(ii) of this section in determining its net apportioned to foreign source general section in determining the amount of taxable operating loss under section 172 for the category income, and $22.5x ($60x × $105x/ income that may be reduced by net operating taxable year. Before taking into account the $280x) comprises deductions allocated and loss carryovers and carrybacks to the taxable section 965(n) election, USP’s total apportioned to U.S. source income. year under section 172. USP’s taxable income deductions are $280x ($210x + $70x) and (4) Under paragraph (e)(1)(iv)(B)(3) of this before taking into account the section 965(n) USP’s taxable income is $20x ($100x + $50x section, for purposes of the separate foreign election and any net operating loss carryover + $150x¥$70x¥$210x). tax credit limitation under section 904, deduction is $240x:

TABLE 1 TO PARAGRAPH (e)(3)(ii)(A)

General Passive U.S. Total

Section 965(a) inclusion ...... $100x ...... $100x Section 78 dividend ...... 40x ...... 40x Other gross income ...... 100x 200x 300x Section 965(c) deduction ...... (60x) ...... (60x) Other deductions ...... (40x) (40x) (60x) (140x)

Net Income ...... 40x 60x 140x 240x

(B) Analysis—(1) The amount described in from $240x to $160x (the amount of USP’s the 2017 taxable year is determined under paragraph (e)(1)(ii) of this section is $80x taxable income reduced by the amount the rules of § 1.904(g)–3(b), taking into ($100x section 965(a) inclusion¥$60x described in paragraph (e)(1)(ii) of this account the amount described in paragraph section 965(c) deduction + $40x section 78 section). (e)(1)(ii) of this section. Under § 1.904(g)– dividends). As a result of the section 965(n) (2) Under paragraph (e)(1)(iv)(B)(1) of this 3(b)(3)(i), first the $120x U.S. source election, the net operating loss deduction section, the source and separate category of component of the net operating loss is allowed in the 2017 taxable year is reduced the net operating loss deduction allowed in allocated to U.S. source income for the 2017

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taxable year. Because the total tentative reduced proportionately, to $16x ($40x × is carried forward and combined with carryover under § 1.904(g)–3(b)(3)(ii) of $40x/$100x) for the general category and income in the same respective categories for $100x ($40x in the general category and $60x $24x ($40x × $60x/$100x) for the passive the 2017 taxable year. After allocation of the in the passive category) exceeds the category. Accordingly, $16x of the general net operating loss carryover from 2016, USP’s remaining net operating loss deduction of category component of the net operating loss taxable income for the 2017 taxable year is $40x ($160x¥$120x), the tentative carryover is carried forward, and $24x of the passive as follows: amount from each separate category is category component of the net operating loss

TABLE 1 TO PARAGRAPH (e)(3)(ii)(B)(2)

General Passive U.S. Total

Net income before NOL deduction ...... $40x $60x $140x $240x NOL deduction ...... (16x) (24x) (120x) (160x) Net income after NOL deduction ...... 24x 36x 20x 80x

* * * * * 951A(a) and § 1.951A–1(b). The GILTI consolidated tested loss of the member’s ■ Par. 8. Section 1.1502–12 is amended inclusion amount of a member for a U.S. consolidated group and the member’s by adding paragraph (s) to read as shareholder inclusion year is the excess GILTI allocation ratio. follows: (if any) of the member’s net CFC tested (4) Consolidated QBAI. With respect income for the U.S. shareholder to a consolidated group, the term § 1.1502–12 Separate taxable income. inclusion year, over the member’s net consolidated QBAI means the sum of * * * * * deemed tangible income return for the each member’s pro rata share (s) See § 1.1502–51 for rules relating U.S. shareholder inclusion year, (determined under § 1.951A–1(d)(3)) of to the computation of a member’s GILTI determined using the definitions the qualified business asset investment inclusion amount under section 951A provided in paragraph (e) of this of each tested income CFC for a CFC and related basis adjustments. section. In addition, see § 1.951A–1(e). inclusion year that ends with or within ■ Par. 9. Section 1.1502–32 is amended (c) [Reserved] the U.S. shareholder inclusion year. by adding and reserving paragraphs (d) [Reserved] (5) Consolidated specified interest (b)(3)(ii)(E) and (b)(3)(iii)(C). (e) Definitions. Any term used but not expense. With respect to a consolidated defined in this section has the meaning group, the term consolidated specified § 1.1502–32 Investment adjustments. set forth in §§ 1.951A–1 through interest expense means the excess (if * * * * * 1.951A–6. In addition, the following any) of— (b) * * * definitions apply for purposes of this (i) The sum of each member’s pro rata (3) * * * section. (ii) * * * share (determined under § 1.951A– (1) Aggregate tested income. With 1(d)(5)) of the tested interest expense of (E) [Reserved] respect to a member, the term aggregate (iii) * * * each controlled foreign corporation for a tested income means the aggregate of the CFC inclusion year that ends with or (C) [Reserved] member’s pro rata share (determined * * * * * within the U.S. shareholder inclusion under § 1.951A–1(d)(2)) of the tested year, over ■ Par. 10. Section 1.1502–51 is added to income of each tested income CFC for (ii) The sum of each member’s pro read as follows: a CFC inclusion year that ends with or rata share (determined under § 1.951A– within the U.S. shareholder inclusion 1(d)(6)) of the tested interest income of § 1.1502–51 Consolidated section 951A. year. (a) In general. This section provides (2) Aggregate tested loss. With respect each controlled foreign corporation for a rules for applying section 951A to each to a member, the term aggregate tested CFC inclusion year that ends with or member of a consolidated group (each, loss means the aggregate of the within the U.S. shareholder inclusion a member) that is a United States member’s pro rata share (determined year. shareholder of any controlled foreign under § 1.951A–1(d)(4)) of the tested (6) Consolidated tested income. With corporation. Paragraph (b) of this loss of each tested loss CFC for a CFC respect to a consolidated group, the section describes the inclusion of the inclusion year that ends with or within term consolidated tested income means GILTI inclusion amount by a member of the U.S. shareholder inclusion year. the sum of each member’s aggregate a consolidated group. Paragraphs (c) and (3) Allocable share. The term tested income for the U.S. shareholder (d) of this section are reserved. allocable share means, with respect to a inclusion year. Paragraph (e) of this section provides member that is a United States (7) Consolidated tested loss. With definitions for purposes of this section. shareholder and a U.S. shareholder respect to a consolidated group, the Paragraph (f) of this section provides inclusion year— term consolidated tested loss means the examples illustrating the rules of this (i) With respect to consolidated QBAI, sum of each member’s aggregate tested section. Paragraph (g) of this section the product of the consolidated QBAI of loss for the U.S. shareholder inclusion provides an applicability date. the member’s consolidated group and year. (b) Calculation of the GILTI inclusion the member’s GILTI allocation ratio. (8) Controlled foreign corporation. amount for a member of a consolidated (ii) With respect to consolidated The term controlled foreign corporation group. Each member who is a United specified interest expense, the product has the meaning provided in § 1.951A– States shareholder of any controlled of the consolidated specified interest 1(f)(2). foreign corporation includes in gross expense of the member’s consolidated (9) Deemed tangible income return. income in the U.S. shareholder group and the member’s GILTI With respect to a member, the term inclusion year the member’s GILTI allocation ratio. deemed tangible income return means inclusion amount, if any, for the U.S. (iii) With respect to consolidated 10 percent of the member’s allocable shareholder inclusion year. See section tested loss, the product of the share of the consolidated QBAI.

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(10) GILTI allocation ratio. With P consolidated group; CFC1, CFC2, income and a GILTI allocation ratio of 0, respect to a member, the term GILTI CFC3, and CFC4 are all controlled USS2 has $200x of aggregate tested income allocation ratio means the ratio of— foreign corporations (within the and a GILTI allocation ratio of 0.25, and (i) The aggregate tested income of the USS3 has $600x of aggregate tested income meaning of paragraph (e)(8) of this and a GILTI allocation ratio of 0.75. member for the U.S. shareholder section); and the taxable year of all Additionally, the P consolidated group’s inclusion year, to persons is the calendar year. consolidated tested loss is $300x (the (ii) The consolidated tested income of (1) Example 1: Calculation of net CFC aggregate of USS1’s aggregate tested loss, the consolidated group of which the tested income within a consolidated group which is equal to its pro rata share member is a member for the U.S. when all CFCs are wholly owned by a (determined under § 1.951A–1(d)(4)) of shareholder inclusion year. member—(i) Facts. USS1 owns all of the CFC1’s tested loss ($100x); USS2’s aggregate (11) GILTI inclusion amount. With single class of stock of CFC1. USS2 owns all tested loss, which is equal to its pro rata respect to a member, the term GILTI of the single class of stock of each of CFC2 share (determined under § 1.951A–1(d)(4)) of CFC3’s tested loss ($100x); and USS3’s inclusion amount has the meaning and CFC3. USS3 owns all of the single class of stock of CFC4. In Year 1, CFC1 has tested aggregate tested loss, which is equal to its pro provided in paragraph (b) of this rata share (determined under § 1.951A– section. loss of $100x, CFC2 has tested income of $200x, CFC3 has tested loss of $200x, and 1(d)(4)) of CFC3’s tested loss ($100x)). As a (12) Net CFC tested income. With CFC4 has tested income of $600x. None of result, under paragraph (e)(12) of this section, respect to a member, the term net CFC CFC1, CFC2, CFC3, or CFC4 has qualified as in paragraph (f)(1)(ii)(C) of this section tested income means the excess (if any) business asset investment in Year 1. (paragraph (C) of the analysis in Example 1), the net CFC tested income of USS1, USS2, of— (ii) Analysis—(A) Consolidated tested ¥ (i) The member’s aggregate tested income and GILTI allocation ratio. USS1 has and USS3 are $0 ($0 $0), $125x ($200x¥$75x), and $375x ($600x¥$225x), income, over no aggregate tested income; USS2’s aggregate tested income is $200x, its pro rata share respectively. (ii) The member’s allocable share of (3) Example 3: Calculation of GILTI (determined under § 1.951A–1(d)(2)) of the consolidated tested loss. inclusion amount—(i) Facts. The facts are the CFC2’s tested income; and USS3’s aggregate (13) Net deemed tangible income same as in paragraph (f)(1)(i) of this section tested income is $600x, its pro rata share return. With respect to a member, the (the facts in Example 1), except that CFC2 (determined under § 1.951A–1(d)(2)) of and CFC4 have qualified business asset term net deemed tangible income return CFC4’s tested income. Therefore, under investment of $500x and $2,000x, means the excess (if any) of the paragraph (e)(6) of this section, the P respectively, for Year 1. In Year 1, CFC1 and member’s deemed tangible income consolidated group’s consolidated tested CFC4 each have tested interest expense income is $800x ($200x + $600x). As a result, return over the member’s allocable share (within the meaning of § 1.951A–4(b)(1)) of of the consolidated specified interest the GILTI allocation ratios of USS1, USS2, $25x, and none of CFC1, CFC2, CFC3, and expense. and USS3 are 0 ($0/$800x), 0.25 ($200x/ CFC4 have tested interest income (within the (14) through (16) [Reserved] $800x), and 0.75 ($600x/$800x), respectively. meaning of § 1.951A–4(b)(2)). CFC1’s tested (17) Qualified business asset (B) Consolidated tested loss. Under loss of $100x and CFC4’s tested income of investment. The term qualified business paragraph (e)(7) of this section, the P $600x take into account the tested interest consolidated group’s consolidated tested loss asset investment has the meaning expense. is $300x ($100x + $200x), the sum of USS1’s (ii) Analysis—(A) GILTI allocation ratio. As provided in § 1.951A–3(b). aggregate tested loss, which is equal to its pro (18) Tested income. The term tested in paragraph (f)(1)(ii)(A) of this section rata share (determined under § 1.951A– (paragraph (A) of the analysis in Example 1), income has the meaning provided in 1(d)(4)) of CFC1’s tested loss ($100x), and the GILTI allocation ratios of USS1, USS2, § 1.951A–2(b)(1). USS2’s aggregate tested loss, which is equal and USS3 are 0 ($0/$800x), 0.25 ($200x/ (19) Tested income CFC. The term to its pro rata share (determined under $800x), and 0.75 ($600x/$800x), respectively. tested income CFC has the meaning § 1.951A–1(d)(4)) of CFC3’s tested loss (B) Consolidated QBAI. Under paragraph provided in § 1.951A–2(b)(1). ($200x). Under paragraph (e)(3)(iii) of this (e)(4) of this section, the P consolidated (20) Tested interest expense. The term section, a member’s allocable share of the group’s consolidated QBAI is $2,500x ($500x tested interest expense has the meaning consolidated tested loss is the product of the + $2,000x), the aggregate of USS2’s pro rata consolidated tested loss of the member’s share (determined under § 1.951A–1(d)(3)) of provided in § 1.951A–4(b)(1). consolidated group and the member’s GILTI (21) Tested interest income. The term the qualified business asset investment of allocation ratio. Therefore, the allocable CFC2 and USS3’s pro rata share (determined tested interest income has the meaning shares of the consolidated tested loss of under § 1.951A–1(d)(3)) of the qualified × provided in § 1.951A–4(b)(2). USS1, USS2, and USS3 are $0 (0 $300x), business asset investment of CFC4. Under × × (22) Tested loss. The term tested loss $75x (0.25 $300x), and $225x (0.75 paragraph (e)(3)(i) of this section, a member’s has the meaning provided in § 1.951A– $300x), respectively. allocable share of consolidated QBAI is the 2(b)(2). (C) Calculation of net CFC tested income. product of the consolidated QBAI of the (23) Tested loss CFC. The term tested Under paragraph (e)(12) of this section, a member’s consolidated group and the loss CFC has the meaning provided in member’s net CFC tested income is the member’s GILTI allocation ratio. Therefore, § 1.951A–2(b)(2). excess (if any) of the member’s aggregate the allocable shares of the consolidated QBAI tested income over the member’s allocable of each of USS1, USS2, and USS3 are $0 (0 (24) United States shareholder. The share of the consolidated tested loss. As a × × term United States shareholder has the $2,500x), $625x (0.25 $2,500x), and result, the net CFC tested income of USS1, $1,875x (0.75 × $2,500x), respectively. meaning provided in § 1.951A–1(f)(6). USS2, and USS3 are $0 ($0¥$0), $125x (C) Consolidated specified interest (25) U.S. shareholder inclusion year. ($200x¥$75x), and $375x ($600x¥$225x), expense—(1) Pro rata share of tested interest The term U.S. shareholder inclusion respectively. expense. USS1’s pro rata share (determined year has the meaning provided in (2) Example 2: Calculation of net CFC under § 1.951A–1(d)(5)) of the tested interest § 1.951A–1(f)(7). tested income within a consolidated group expense of CFC1 is $25x, the amount by (f) Examples. The following examples when ownership of a tested loss CFC is split which the tested interest expense increases illustrate the rules of this section. For between members—(i) Facts. The facts are the USS1’s pro rata share of CFC1’s tested loss purposes of the examples in this same as in paragraph (f)(1)(i) of this section (from $75x to $100x) for Year 1. USS3’s pro (the facts in Example 1), except that USS2 section, unless otherwise stated: P is the rata share (determined under § 1.951A– and USS3 each own 50% of the single class 1(d)(5)) of the tested interest expense of CFC4 common parent of the P consolidated of stock of CFC3. is also $25x, the amount by which the tested group; P owns all of the single class of (ii) Analysis. As in paragraph (f)(1)(ii)(A) of interest expense decreases USS3’s pro rata stock of subsidiaries USS1, USS2, and this section (paragraph (A) of the analysis in share of CFC4’s tested income (from $625x to USS3, all of whom are members of the Example 1), USS1 has no aggregate tested $600x).

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(2) Consolidated specified interest expense. rules of this section to all taxable years furnish the information prescribed on Under paragraph (e)(5) of this section, the P described in § 1.951A–7 and with Form 8992 within the time prescribed consolidated group’s consolidated specified respect to all members. by paragraph (b) of this section, the interest expense is $50x, the excess of the (2) [Reserved] penalties imposed by section 6038(b) sum of each member’s pro rata share of the ■ and (c) apply. tested interest expense of each controlled Par. 11. Section 1.6038–2 is amended foreign corporation ($50x, $25x from USS1 + by revising the section heading, the (2) Increase in penalty. If a failure $25x from USS3), over the sum of each introductory text of paragraph (a), and described in paragraph (c)(1) of this member’s pro rata share of tested interest paragraph (m) to read as follows: section continues for more than 90 days income ($0). Under paragraph (e)(3)(ii) of this after the date on which the Director of section, a member’s allocable share of § 1.6038–2 Information returns required of Field Operations, Area Director, or consolidated specified interest expense is the United States persons with respect to Director of Compliance Campus product of the consolidated specified interest annual accounting periods of certain Operations mails notice of such failure expense of the member’s consolidated group foreign corporations. to the person required to file Form 8992, and the member’s GILTI allocation ratio. (a) Requirement of return. Every U.S. such person shall pay a penalty of Therefore, the allocable shares of person shall make a separate annual $10,000, in addition to the penalty consolidated specified interest expense of × information return with respect to each imposed by section 6038(b)(1), for each USS1, USS2, and USS3 are $0 (0 $50x), annual accounting period (described in $12.50x (0.25 × $50x), and $37.50x (0.75 × 30-day period (or a fraction of) during $50x), respectively. paragraph (e) of this section) of each which such failure continues after such (D) Calculation of deemed tangible income foreign corporation which that person 90-day period has expired. The return. Under paragraph (e)(9) of this section, controls (as defined in paragraph (b) of additional penalty imposed by section a member’s deemed tangible income return this section) at any time during such 6038(b)(2) and this paragraph (c)(2) means 10 percent of the member’s allocable annual accounting period. shall be limited to a maximum of share of the consolidated QBAI. As a result, * * * * * $50,000 for each failure. the deemed tangible income returns of USS1, (m) Applicability dates—(1) In (3) Reasonable cause—(i) For USS2, and USS3 are $0 (0.1 × $0), $62.50x × × general. This section applies to taxable purposes of section 6038(b) and (c) and (0.1 $625x), and $187.50x (0.1 $1,875x), this section, the time prescribed for respectively. years of foreign corporations beginning (E) Calculation of net deemed tangible on or after October 3, 2018. See 26 CFR furnishing information under paragraph income return. Under paragraph (e)(13) of 1.6038–2 (revised as of April 1, 2018) (b) of this section, and the beginning of this section, a member’s net deemed tangible for rules applicable to taxable years of the 90-day period after mailing of notice income return means the excess (if any) of a foreign corporations beginning before by the director under paragraph (c)(2) of member’s deemed tangible income return such date. this section, shall be treated as being not over the member’s allocable share of the (2) [Reserved] earlier than the last day on which consolidated specified interest expense. As a ■ reasonable cause existed for failure to result, the net deemed tangible income Par. 12. Section 1.6038–5 is added to read as follows: furnish the information. returns of USS1, USS2, and USS3 are $0 (ii) To show that reasonable cause ($0¥$0), $50x ($62.50x¥$12.50x), and ¥ § 1.6038–5 Information returns required of existed for failure to furnish information $150x ($187.50x $37.50x), respectively. certain United States persons to report as required by section 6038 and this (F) Calculation of GILTI inclusion amount. amounts determined with respect to certain Under paragraph (b) of this section, a section, the person required to report foreign corporations for global intangible such information must make an member’s GILTI inclusion amount for a U.S. low-taxed income (GILTI) purposes. shareholder inclusion year is the excess (if affirmative showing of all facts alleged any) of the member’s net CFC tested income (a) Requirement of return. Except as as reasonable cause for such failure in for the U.S. shareholder inclusion year, over provided in paragraph (d) of this a written statement containing a the shareholder’s net deemed tangible section, each United States person who declaration that it is made under the income return for the U.S. shareholder is a United States shareholder (as penalties of perjury. The statement must inclusion year. As described in paragraph defined in section 951(b)) of any be filed with the director where the (f)(1)(ii)(C) of this section (paragraph (C) of controlled foreign corporation (as return is required to be filed. The the analysis in Example 1), the net CFC defined in section 957) must make an director shall determine whether the tested income of USS1, USS2, and USS3 are annual return on Form 8992, ‘‘U.S. $0, $125x, and $375x, respectively. As failure to furnish information was due described in paragraph (f)(3)(ii)(E) of this Shareholder Calculation of Global to reasonable cause, and if so, the period section (paragraph (E) of the analysis in this Intangible Low-Taxed Income (GILTI),’’ of time for which such reasonable cause example), the net deemed tangible income (or successor form) for each U.S. existed. In the case of a return that has returns of USS1, USS2, and USS3 are $0, shareholder inclusion year (as defined been filed as required by this section $50x, and $150x, respectively. As a result, in § 1.951A–1(f)(7)) setting forth the except for an omission of, or error with under paragraph (b) of this section, the GILTI information with respect to each such respect to, some of the information inclusion amounts of USS1, USS2, and USS3 controlled foreign corporation, in such ¥ ¥ required, if the person who filed the are $0 ($0 $0), $75x ($125x $50x), and form and manner, as Form 8992 (or return establishes to the satisfaction of $225x ($375x¥$150x), respectively. successor form) prescribes. the director that the person has (g) Applicability date—(1) In general. (b) Time and manner for filing. substantially complied with this Except as otherwise provided in this Returns on Form 8992 (or successor section, then the omission or error shall paragraph (g), this section applies to form) required under paragraph (a) of not constitute a failure under this taxable years of United States this section for a taxable year must be section. shareholders for which the due date filed with the United States person’s (d) Exception from filing requirement. (without extensions) of the consolidated income tax return on or before the due Any United States person that does not return is after June 21, 2019. However, date (taking into account extensions) for own, within the meaning of section a consolidated group may apply the filing that person’s income tax return. 958(a), stock of a controlled foreign rules of this section in their entirety to (c) Failure to furnish information—(1) corporation in which the United States all taxable years of its members that are Penalties. If any person required to file person is a United States shareholder for described in § 1.951A–7. In such a case, Form 8992 (or successor form) under a taxable year is not required to file the consolidated group must apply the section 6038 and this section fails to Form 8992. For this purpose, whether a

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U.S. person owns, within the meaning foreign corporations beginning on or of section 958(a), stock of a controlled after October 3, 2018. foreign corporation is determined under Kirsten Wielobob, § 1.951A–1(e). Deputy Commissioner for Services and (e) Applicability date. This section Enforcement. applies to taxable years of controlled Approved: June 6, 2019. David J. Kautter, Assistant Secretary of the Treasury (Tax Policy). [FR Doc. 2019–12437 Filed 6–14–19; 4:15 pm] BILLING CODE 4830–01–P

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Reader Aids Federal Register Vol. 84, No. 120 Friday, June 21, 2019

CUSTOMER SERVICE AND INFORMATION CFR PARTS AFFECTED DURING JUNE

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. 278...... 27743 Presidential Documents 2 CFR 340...... 26514 3187...... 27703 Executive orders and proclamations 741–6000 372...... 26514 The United States Government Manual 741–6000 3 CFR 8 CFR Other Services Proclamations: 235...... 27704 Electronic and on-line services (voice) 741–6020 9897...... 26313 9898...... 26315 Privacy Act Compilation 741–6050 9 CFR 9899...... 26317 9900...... 26319 79...... 28202 ELECTRONIC RESEARCH 9901...... 26321 Proposed Rules: 9902...... 26323 166...... 28774 World Wide Web 9903...... 26737 9904...... 27501 10 CFR Full text of the daily Federal Register, CFR and other publications 9905...... 27699 is located at: www.govinfo.gov. 170...... 25679 9906...... 28709 171...... 25679 Federal Register information and research tools, including Public Executive Orders: Proposed Rules: Inspection List and electronic text are located at: 11888 (Amended by Ch. I ...... 28775 www.federalregister.gov. Proc. 9902) ...... 26323 50...... 27209 13874...... 27899 E-mail 171...... 26774 13875...... 28711 431...... 28239 FEDREGTOC (Daily Federal Register Table of Contents Electronic Administrative Orders: Mailing List) is an open e-mail service that provides subscribers Memorandums: 12 CFR with a digital form of the Federal Register Table of Contents. The Memorandum of May 50...... 25975 digital form of the Federal Register Table of Contents includes 24, 2019 ...... 27695 52...... 29039 HTML and PDF links to the full text of each document. Memorandum of May 208...... 29039 To join or leave, go to https://public.govdelivery.com/accounts/ 24, 2019 ...... 27697 249...... 25975 USGPOOFR/subscriber/new, enter your email address, then Notices: 268...... 27027 follow the instructions to join, leave, or manage your Notice of June 13, 304...... 29039 subscription. 2019 ...... 27905 329...... 25975 Notice of June 18, 1041...... 27907 PENS (Public Law Electronic Notification Service) is an e-mail 2019 ...... 28715 1248...... 28202 service that notifies subscribers of recently enacted laws. Presidential Proposed Rules: Determinations: To subscribe, go to http://listserv.gsa.gov/archives/publaws-l.html 261...... 27976 and select Join or leave the list (or change settings); then follow Presidential the instructions. Determination 2019– 13 CFR 13 ...... 27701 FEDREGTOC and PENS are mailing lists only. We cannot Proposed Rules: respond to specific inquiries. 5 CFR 115...... 25496 Reference questions. Send questions and comments about the 894...... 26543 120...... 29092 134...... 29092 Federal Register system to: [email protected] Proposed Rules: The Federal Register staff cannot interpret specific documents or 532...... 26767 14 CFR regulations. 1650...... 26769 1651...... 26769 21...... 27707 25 ...... 25978, 26739, 26741 FEDERAL REGISTER PAGES AND DATE, JUNE 6 CFR 39 ...... 25982, 25984, 26331, Proposed Rules: 26334, 26546, 26548, 26556, 25493–25678...... 3 31...... 25495 26743, 27193, 27503, 27506, 25679–25974...... 4 27508, 27511, 27930, 27932, 25975–26330...... 5 7 CFR 28202, 28717, 28719, 28722 26331–26542...... 6 271...... 29029 71 ...... 25679, 26341, 26342, 26543–26738...... 7 272...... 29029 26343, 26558, 26746, 27935, 26739–27026...... 10 273...... 29029 27937 27027–27192...... 11 760...... 28171 97...... 26748, 26749 27193–27502...... 12 1423...... 29030 Proposed Rules: 27503–27702...... 13 1430...... 28171 25...... 26593 1493...... 28185 39 ...... 26023, 26025, 26027, 27703–27906...... 14 1728...... 28186 26373, 26598, 26601, 26775, 27907–28170...... 17 1755...... 28186 26778, 26781, 27042, 27990, 28171–28428...... 18 3434...... 26544 28429, 28431, 29102, 29105, 28429–28714...... 19 3550...... 29034 29108 28715–29028...... 20 3555...... 29034 71 ...... 25497, 26376, 26377, 29029–29370...... 21 Proposed Rules: 27044, 28434, 28436, 28438, 271...... 27743 28439, 28440

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121...... 25499 510...... 27714 37 CFR Proposed Rules: 86...... 27846 135...... 25499 515...... 25992 Proposed Rules: 535...... 27714 201...... 29135 92...... 27846 15 CFR 536...... 27714 147...... 27846 705...... 26751 539...... 27714 38 CFR 155...... 27846 740...... 25986 541...... 27714 4...... 28227 156...... 27846 746...... 25986 542...... 27714 17...... 25998, 26278 801...... 27197 544...... 27714 46 CFR 546...... 27714 39 CFR 16 CFR 10...... 26580 547...... 27714 20...... 26345 11...... 26580 1112...... 28205 548...... 27714 15...... 26580 1238...... 28205 549...... 27714 40 CFR 560...... 27714 52 ...... 26019, 26347, 26349, 17 CFR 47 CFR 561...... 27714 27039, 27202, 28745 1...... 26363, 28751 240...... 27708 566...... 27714 80...... 26980 2...... 25685 576...... 27714 180 ...... 26352, 27966, 28235, 18 CFR 5...... 25685 583...... 27714 28747 15...... 25685 401...... 27035 584...... 27714 271...... 26359 27...... 26363 420...... 27035 588...... 27714 300...... 26576 54...... 27973 592...... 27714 355...... 27533 20 CFR 64...... 25692, 26364 594...... 27714 Proposed Rules: 200...... 28725 595...... 27714 73...... 28751 52 ...... 26030, 26031, 26041, 74...... 27734, 28751 597...... 27714 26047, 26049, 26053, 26057, 21 CFR 598...... 27714 76...... 28761 26379, 26804, 26806, 27046, 90...... 29083 101...... 28726 27049, 27053, 27055, 27212, Proposed Rules: 117...... 29054 32 CFR 27559, 27566, 27996, 28132, 1 ...... 25514, 26234, 26634, 507...... 29054 28776 171...... 27201 27998 1100...... 27200 62...... 29138 242a...... 29062 2...... 25514, 27998 1140...... 27200 63...... 25904 242b...... 29062 25...... 25514 1143...... 27200 70...... 27055 27...... 25514, 27998 1301...... 28212 81...... 26627, 27566 33 CFR 54...... 27570 1305...... 28212 180...... 26630 64...... 26379, 28264 1308 ...... 27938, 27943, 28212 100 ...... 25680, 26565, 27036, 239...... 26632 76...... 28784 Proposed Rules: 27719, 28216, 28728 271...... 27057 96...... 26634 15...... 29112 117 ...... 26764, 27036, 28730, 300 ...... 25509, 25725, 28259 16...... 27543 29063, 29065 721...... 27061 1107...... 27543 147...... 27036 48 CFR 165 ...... 25993, 25995, 26567, 42 CFR Ch. 1...... 27494, 27497 22 CFR 26569, 26571, 26572, 26574, 22...... 27968 15...... 27494 42...... 25989 27036, 27039, 27531, 27720, 32...... 27968 6106...... 29085 27956, 27958, 27959, 27960, 60...... 27969 Proposed Rules: 25 CFR 27962, 27964, 28219, 28221, 412...... 26360 App. D...... 27745 Proposed Rules: 28223, 28225, 28732, 28734, 422...... 26578 App. J ...... 27745 30...... 26785 28736, 28738, 28741, 28743, 423...... 25610, 26578 Ch. 7 ...... 29140 29066, 29067, 29069, 29070, 438...... 26578 701...... 27745 26 CFR 29072, 29073, 29076, 29078, 460...... 25610 1 ...... 26559, 27513, 27947, 29080 498...... 26578 49 CFR 28214, 28398, 28888, 29114 Proposed Rules: Proposed Rules: 541...... 27205 54...... 28888 100...... 27743 Ch. IV...... 27070 Proposed Rules: Proposed Rules: 117...... 27994 412...... 28263 270...... 27215 1 ...... 26605, 28426, 28668, 165 ...... 25506, 25721, 25723, 413...... 28263 271...... 27215 29288 27210, 29133 423...... 28450 571...... 29145 438...... 27846 1152...... 26387 27 CFR 34 CFR 440...... 27846 Proposed Rules: 460...... 27846 Ch. II ...... 25682 50 CFR 9...... 28442 225...... 25996 482...... 27069 17...... 26393 Proposed Rules: 485...... 27069 29 CFR 20...... 28769 Ch. III ...... 26623 495...... 28264 21...... 28769 2510...... 28888 600...... 27404 44 CFR 300...... 25493 2520...... 27952 602...... 27404 622...... 26022, 27974 2590...... 28888 603...... 27404 64...... 27970 635...... 25707, 29088 4022...... 27713 654...... 27404 206...... 25685 648...... 26766, 27741 4044...... 27713 668...... 27404 45 CFR 660...... 25708 674...... 27404 30 CFR 88...... 26580 665...... 26394 Proposed Rules: 144...... 28888 679 ...... 25494, 28237, 29091 36 CFR 913...... 26802 146...... 28888 Proposed Rules: 7...... 29081 147...... 28888 622...... 27576 31 CFR Proposed Rules: 155...... 28888 648...... 26634 501...... 27714, 29055 220...... 27544 2105...... 27721 660...... 27072

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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 June 14, 2019 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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