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F. Executive Order 13563: Improving Regulation and Regulatory Review

The Department of State has considered this rule in light of Executive Order 13563 and affirms that this regulation is consistent with the guidance therein.

G. Executive Orders 12372 and 13132: Federalism

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. The rule will not have federalism implications warranting the application of Executive Orders No. 12372 and No. 13132.
H. Executive Order 12988: Civil Justice Reform

The Department has reviewed the rule in light of sections 3(a) and 3(b)(2) of Executive Order No. 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden. I. Paperwork Reduction Act

This rule does not impose information collection requirements under the provisions of the Paperwork Reduction Act, 44 U.S.C., Chapter 35.
List of Subjects in 22 CFR Part 42

Immigration, Passports and visas. Accordingly, for the reasons set forth in the preamble, 22 CFR part 42 is amended as follows:

**PART 42—VISAS: DOCUMENTATION OF IMMIGRANTS UNDER THE**  **IMMIGRATION AND NATIONALITY ACT, AS AMENDED** 

■ 1. The authority citation for part 42 continues to read as follows:

Authority: 8 U.S.C. 1104 and 1182; Pub. L. 105–277; Pub. L. 108–449; 112 Stat. 2681– 795 through 2681–801; The Convention on Protection of Children and Co-operation in Respect of Intercountry Adoption (done at the Hague, May 29, 1993), S. Treaty Doc. 105–51 (1998), 1870 U.N.T.S. 167 (reg. No. 31922 (1993)); The Intercountry Adoption Act of 2000, 42 U.S.C. 14901–14954. Pub. L.

106–279.

■ 2. Section 42.52 is amended by revising paragraph (c)(1) to read as follows:

**§ 42.52 Post records of visa applications.**

* * * * *

(c) * * * (1) A record that an alien is entitled to an immigrant visa classification shall be made whenever the consular officer is satisfied—or receives evidence—that the alien is within the criteria set forth in paragraph (b) of this section.

* * * * *

Dated: April 11, 2013. Janice L. Jacobs, Assistant Secretary for Consular Affairs, Department of State.

[FR Doc. 2013–12453 Filed 5–23–13; 8:45 am]

**BILLING CODE 4710–06–P**

**DEPARTMENT OF DEFENSE**

**Office of the Secretary**

**32 CFR Part 165**

**[Docket ID: DOD–2009–OS–0030]**

**RIN 0790–AI45**

**Recoupment of Nonrecurring Costs (NCs) on Sales of U.S. Items** 

**AGENCY :**  Office of the Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD.

**ACTION :**  Final rule.

**SUMMARY :**  This rule updates policy, responsibilities, and procedures for calculating and assessing NC recoupment charges on sales of items developed for or by the Department of Defense to non-U.S. Government customers. All costs related to the sale of the items are fully reimbursable by the non-U.S. Government.

**DATES :**  Effective Date: This rule is effective June 24, 2013.

**FOR FURTHER INFORMATION CONTACT :**  Claire Nelson, 703–602–0250.

**SUPPLEMENTARY INFORMATION :**  Executive Summary I. Purpose of the Regulatory Action

This rule updates policy, responsibilities, and procedures to conform with sections 2761(e)(1)(B), 2761 (e)(2), and 2767(b) of Title22, United States Code (U.S.C.) (also known as ‘‘sections 21(e)(1)(B), 21(e)(2), and 27(b) of the Arms Export Control Act, as amended’’) for calculating and assessing NC recoupment charges on sales of items developed for or by the Department of Defense to non-U.S. Government customers. II. Summary of the Major Provisions of the Regulatory Action In Question

This rule provides guidance for reviewing NC waiver requests; clarifies when NC calculations are used; clarifies the types of DoD agreements covered; and provides additional waiver authorities. III. Costs and Benefits

All costs related to the sale of theitems are fully reimbursable by the nonU.S. Government customers. The Department of Defense does not incur cost nor receive profit for the items sold. The non-U.S. Government customers benefit from the sale of the items from the Department of Defense. The NC amount collected in 2010 and 2011 was $4.8 and $9.6 million, respectively. On average it is roughly $7.2 million annually.

Public Comments

The Department of Defense published a proposed rule on November 4, 2011 (76 FR 68376–68378). No comments were received on the proposed rule.

The Department has made a few additional changes in the final rule. Reference citations were updated. Definitions were updated or added for clarification. This final rule provides guidance for reviewing NC waiver requests; clarifies when NC calculations are used; clarifies the types of DoD agreements covered; and provides additional waiver authorities.
Regulatory Procedures Executive Order 12866, ‘‘Regulatory Planning and Review’’ and Executive Order 13563 ‘‘Improving Regulation and Regulatory Review’’

It has been certified that 32 CFR part 165 does not:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy; a section of the economy; productivity; competition; jobs; the environment; public health or safety; or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in these Executive Orders.

Section 202, Public Law 104–4, ‘‘Unfunded Mandates Reform Act’’

It has been certified that 32 CFR part 165 does not contain a Federal mandate that may result in expenditure by State, local and tribal governments, in aggregate, or by the private sector, of $100 million or more in any one year.


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1 Available at http://www.acq.osd.mil/dpap/dars/ dfarspgi/current/index.html

. Public Law 96–354, ‘‘Regulatory Flexibility Act’’ (5 U.S.C. 601)

It has been certified that 32 CFR part 165 is not subject to the Regulatory Flexibility Act (5 U.S.C. 601) because it would not if promulgated, have a significant economic impact on a substantial number of small entities. Public Law 96–511, ‘‘Paperwork Reduction Act’’ (44 U.S.C. Chapter 35)

It has been certified that 32 CFR part 165 does not impose reporting or recordkeeping requirements under the Paperwork Reduction Act of 1995.

Executive Order 13132, ‘‘Federalism’’

It has been certified that 32 CFR part 165 does not have federalism implications, as set forth in Executive Order 13132. This rule does not have substantial direct effects on:

(1) The States; (2) The relationship between the National Government and the States; or

(3) The distribution of power and responsibilities among the various levels of Government.
List of Subjects in 32 CFR Part 165

Armed forces, Arms and munitions, Government contracts.

Accordingly 32 CFR Part 165 is revised to read as follows:

**PART 165—RECOUPMENT OF NONRECURRING COSTS (NCs) ON**  **SALES OF U.S. ITEMS**

Sec. 165.1 Purpose. 165.2 Applicability. 165.3 Definitions. 165.4 Policy. 165.5 Responsibilities. 165.6 Procedures. 165.7 Waivers (including reductions).

Authority: 22 U.S.C. 2761(e)(1)(B); 22 U.S.C. 2761 (e)(2); and 22 U.S.C. 2767(b)

**§ 165.1 Purpose.**

This part updates policy, responsibilities, and procedures to conform with 22 U.S.C. 2761(e)(1)(B), 2761 (e)(2), and 2767(b) (also known as ‘‘sections 21(e)(1)(B), 21(e)(2), and 27(b) of the Arms Export Control Act, as amended’’) for calculating and assessing NC recoupment charges on sales of items developed for or by the Department of Defense to non-U.S. Government customers.

**§ 165.2 Applicability.**

(a) This part applies to the Office of the Secretary of Defense, the Military Departments, the Office of the Chairman of the Joint Chiefs of Staff and the Joint Staff, the Combatant Commands, the Office of the Inspector General of the Department of Defense, the Defense Agencies, the DoD Field Activities, and all other organizational entities within the Department of Defense (hereafter referred to collectively as the ‘‘DoD Components’’).

(b) This part does not apply to sales of excess property when accountability has been transferred to property disposal activities and the property is sold in open competition to the highest bidder.

**§ 165.3 Definitions.**

The following definitions apply to this part.

Blanket waiver. An NC recoupment charge waiver that is not related to a particular sale; for example, waivers for all sales to a country or all sales of a weapon system.

Cooperative projects. Defined in 22 U.S.C. 2767(b).

Cost pool. The total cost to be distributed across the specific number of units, normally the number of units produced plus those planned to be produced. The nonrecurring research, development, test, and evaluation cost pool comprises the costs described in the definition for nonrecurring research, development, test and evaluation costs in this section. The nonrecurring production cost pool comprises costs described in the definition for nonrecurring production costs.

Foreign military sale. A sale by the U.S. Government (U.S.G.) of defense items or defense services to a foreign government or international organization pursuant to 22 U.S.C. Chapter 39.

Major defense equipment. Any item of significant military equipment on the United States Munitions List having a nonrecurring research, development, test, and evaluation cost of more than 50 million dollars or a total production cost of more than 200 million dollars. The determination of whether an item meets the major defense equipment dollar threshold for research, development, test, and evaluation shall be based on DoD obligations recorded to the date the equipment is offered for sale. Production costs shall include costs incurred by the Department of Defense. Production costs for the foreign military sales program and known direct commercial sales production are excluded.

Model. A basic alpha-numeric designation in a weapon system series (e.g., a ship hull series, an equipment or system series, an airframe series, or a vehicle series). For example, the AN/ TPQ–36(V)2 and the (AN/TPQ–36(V)10 are different models in the same radar system series. Nonrecurring production costs. Those one-time costs incurred in support of previous production of the model specified and those costs specifically incurred in support of the total projected production run. Those NCs include DoD expenditures for preproduction engineering; special tooling; special test equipment; production engineering; product improvement; destructive testing; and pilot model production, testing, and evaluation. That includes costs of any engineering change proposals initiated before the date of calculations of the NC recoupment charge. Nonrecurring production costs do not include DoD expenditures for machine tools, capital equipment, or facilities for which contractor rental payments are made or waived in accordance with the Defense Federal Acquisition Regulation Supplement. 1

Nonrecurring research, development, test and evaluation costs. Those costs funded by a research, development, test, and evaluation appropriation to develop or improve the product or technology under consideration either through contract or in-house DoD effort. This includes costs of any engineering change proposal started before the date of calculation of the NC recoupment charges as well as projections of such costs, to the extent additional effort applicable to the sale model or technology is necessary or planned. It does not include costs funded by either procurement or operation and maintenance appropriations.

Pro rata recovery of NCs. Equal distribution (proration) of a pool of NCs to a specific number of units that benefit from the investment so that a DoD Component shall collect from a customer a fair (pro rata) share of the investment in the product being sold. The production quantity base used to determine the pro rata calculation of major defense equipment includes total production.

Significant change in NCs recoupment charge. (1) A significant change in an NC recoupment charge occurs when:

(i) A new calculation shows a change of 30 percent of the current system NC charge.

(ii) The NC unit charge increases or decreases by 50,000 dollars or more, or

(iii) Where the potential for a 5 million dollar change in recoupment exists.

(2) The total collections may be estimated based on the projected sales quantities. A significant change occurs


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2 Available at http://www.dtic.mil/whs/directives/ corres/pdf/510565p.pdf

. 3 Available at http://www.dsca.osd.mil/samm/

.
4 Available at http://www.defenselink.mil/ comptroller/fmr/

. when potential collections increase or decrease by 5 million dollars.

Special research, development, test, and evaluation and nonrecurring production costs. Costs incurred under a foreign military sale at the request of, or for the benefit of, a foreign customer to develop a special feature or unique or joint requirement. Those costs must be paid by the customer as they are incurred.

**§ 165.4 Policy.**

It is DoD policy that: (a) The NC recoupment charge shall be imposed for sales of major defense equipment only as required by an Act of Congress. The USD(P), through the Defense Security Cooperation Agency, may grant a waiver to recoupment charges in accordance with in accordance with this part and DoD Directive 5105.65.’’ 2

(b) The NC charges shall be based on the amount of the Department of Defense nonrecurring investment in an item.

**§ 165.5 Responsibilities.**

(a) Under Secretary of Defense (Comptroller)/Chief Financial Officer (USD(C)/CFO)) shall provide necessary financial management guidance to the Department of Defense regarding the recoupment of NC.

(b) The Under Secretary of Defense for Acquisition, Technology, and Logistics shall take appropriate action to ensure the Defense Federal Acquisition Regulation Supplement remains in accordance with this part.

(c) The USD(P) shall: (1) Monitor the application of this part.

(2) Review and approve NC recoupment charges.

(3) Review and approve NC recoupment charge waiver requests received from foreign countries and international organizations for foreign military sales.

(4) Oversee publication of a listing of items developed for or by the Department of Defense to which NC recoupment charges are applicable.

(5) Use the guidance in § 165.7 of this part to review NC waiver requests.

(d) The Secretaries of the Military Departments and the Directors of the Defense Agencies shall:

(1) Determine the DoD nonrecurring investment in items developed for or by the Department of Defense and perform required pro rata calculations in accordance with this part and financial management guidance from USD(C)/ CFO when a military equipment asset type is considered a candidate for sale.

(2) Validate and provide recommended charges to the USD(P). Retain supporting documentation until the item has been eliminated from the NC recoupment charge listing.

(3) Review approved NC recoupment charges on a biennial basis to determine if there has been a change in factors or assumptions used to compute a NC recoupment charge and, if there is a significant change in a NC recoupment charge, recommend the change to USD(P) for review, approval, and publication in DSCA 5105.38–M, ‘‘Security Assistance Management Manual (SAMM).’’ 3

(4) Collect charges on foreign military sales, in accordance with DoD 7000.14– R. 4

(5) Deposit collections to accounts as prescribed by the USD(C)/CFO.

(6) Request guidance from the USD(P), within 90 days after determining that an issue concerning an NC recoupment charge cannot be resolved.

**§ 165.6 Procedures.**

(a) The NC recoupment charge to be reimbursed shall be a pro rata recovery of NCs for the applicable major defense equipment (MDE). Recovery of NC recoupment charges shall cease upon the recovery of total DoD nonrecurring investment costs. Such charges shall be based on a cost pool as defined in § 165.3. For an MDE system that includes more than one component, a ‘‘building block’’ approach (i.e., the sum of NC recoupment charges for individual components) shall be used to determine the NC recoupment charge for the sale of the entire system.

(b) The NC recoupment charge shall not apply when a waiver has been approved by USD(P), in accordance with § 165.7, or when sales are financed with USG funds made available on a non-repayable basis. Approved revised NC recoupment charges shall not be applied retroactively to accepted foreign military sales agreements.

(c) When MDE is sold at a reduced price due to age or condition, the equipment’s NC recoupment charge shall be reduced by the same percentage reduction.

(d) The full amount of costs for ‘‘special’’ research, development, test, and evaluation and nonrecurring production costs incurred for the benefit of particular customers shall be paid by those customers. However, when a subsequent purchaser requests the same specialized features that resulted from the added ‘‘special’’ research, development, test, and evaluation and nonrecurring production costs, a pro rata share of those costs may be paid by the subsequent purchaser and transferred to the original customer if those special NCs exceed 50 million dollars. The pro rata share may be a unit charge determined by the DoD Component as a result of distribution of the total costs divided by the total production. Unless otherwise authorized by USD(P), special research, development, test, and evaluation and nonrecurring production costs will not be collected after 10 years have passed since the date the original FMS customer accepted the FMS Letter of Offer and Acceptance (LOA) that included the special NC charges. The USG shall not be charged any NC recoupment charges if it adopts the features for its own use or provides equipment with such features under a U.S. grant aid or similar program.

(e) Cooperative DoD agreements, to include co-production, co-development and cooperative development agreements, shall use the policy in this part to determine the allocation basis for recouping the participant investment costs from third-party purchasers. Each respective DoD agreement shall bind all parties to the agreement to comply with the policies in this part regarding third party sales and for the distribution of recouped funds among the parties.

**§ 165.7 Waivers (including reductions).**

(a) Title 22, U.S.C. 2761(e)(1)(B) requires the recoupment of a proportionate amount of NCs of MDE from foreign military sales customers.

(b) Pursuant to 22 U.S.C. 2761(e)(2)(A), a waiver or reduction in the NC for a specific sale may be made if the sale will significantly advance U.S. Government interests in:

(1) Standardization with the North Atlantic Treaty Organization.

(2) Standardization with Australia, Israel, Japan, New Zealand, or the Republic of Korea in furtherance of mutual defense treaties with one or more of those countries.

(3) Foreign procurement in the United States under a co-production agreement.

(c) In accordance with 22 U.S.C. 2761(e)(2)(B), a waiver may be made if:

(1) Imposition of an NC recoupment charge likely would result in the loss of the sale; or,

(2) The sale is for an MDE also being procured for the Military Services, and will result in DoD unit cost savings that substantially offset the revenue foregone by waiving the recoupment charge because the total quantity of purchased


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equipment caused a reduction in the unit cost.

(d) In accordance with 22 U.S.C. 2761(e)(2)(C), any increase in a NC charge previously approved as appropriate may be waived for a particular sale if the increase results from a correction of an estimate of the production quantity base that was used for calculating the charge.

(e) Requests for waivers should originate with the foreign government and shall provide information on the extent of standardization to be derived as a result of the waiver.

(1) Blanket waiver requests should not be submitted and shall not be considered.

(2) A waiver request shall not be considered for a sale that was accepted without an NC recoupment charge waiver, unless the acceptance was conditional on consideration of the waiver request.

(3) Requests for waivers shall be processed expeditiously, and approved or disapproved by USD(P) within 60 days of receipt. A waiver in whole or in part of the recoupment charge or a denial of the request shall be provided in writing.

Dated: May 21, 2013. Patricia L. Toppings, OSD Federal Register, Liaison Officer, Department of Defense.

[FR Doc. 2013–12411 Filed 5–23–13; 8:45 am]

**BILLING CODE 5001–06–P**

**DEPARTMENT OF HOMELAND SECURITY** 

**Coast Guard**

**33 CFR Parts 100 and 165**

**[Docket Number USCG–2012–1036]**

**RIN 1625–AA00; 1625–AA08**

**Safety Zones and Special Local Regulations; Recurring Marine Events**  **in Captain of the Port Long Island Sound Zone** 

**AGENCY :**  Coast Guard, DHS.

**ACTION :**  Final rule.

**SUMMARY :**  The Coast Guard is adding, deleting, and modifying safety zones and special local regulations and adding language to clarify time frames and notification requirements for annual marine events in the Sector Long Island Sound Captain of the Port (COTP) Zone. When these regulated areas are activated and subject to enforcement, this rule will restrict vessels from portions of water areas during these recurring events. The safety zones and special local regulations will facilitate public notification of events and provide protective measures for the maritime public and event participants from the hazards associated with these recurring

events.

**DATES :**  This rule is effective June 24,

2013.

**ADDRESSES :**  Documents mentioned in this preamble are part of docket USCG– 2012–1036. To view documents mentioned in this preamble as being available in the docket, go to http:// www.regulations.gov, type the docket number in the ‘‘SEARCH’’ box and click ‘‘SEARCH.’’ Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12–140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

**FOR FURTHER INFORMATION CONTACT :**  If you have questions on this rule, call or email Petty Officer Scott Baumgartner, Waterways Management Division at Coast Guard Sector Long Island Sound, telephone 203–468–4559, email scott.a.baumgartner@uscg.mil. If you have questions on viewing or submitting material to the docket, call Barbara Hairston, Program Manager, Docket Operations, telephone (202) 366–9826.

**SUPPLEMENTARY INFORMATION :**  Table of Acronyms
COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information

The Coast Guard promulgated safety zones and special local regulations for most of the events in the past and received no public comments. The most recently promulgated rulemaking was on April 4, 2013 when the Coast Guard published a notice of proposed rulemaking (NPRM) entitled ‘‘Safety Zones & Special Local Regulation; Recurring Marine Events in Captain of the Port Long Island Sound Zone’’ in the Federal Register (78 FR 20277).

Prior to the NPRM being published in the Federal Register (78 FR 20277), the Coast Guard promulgated a similar rulemaking on April 4, 2012 when it published an NPRM entitled ‘‘Special Local Regulation and Safety Zones; Marine Events in Captain of the Port Sector Long Island Sound Zone’’ in the Federal Register (77 FR 20324). That NPRM was followed by a final rule published on July 5, 2012, entitled, ‘‘Special Local Regulation and Safety Zones; Marine Events in Captain of the Port Sector Long Island Sound Zone’’ in the Federal Register (77 FR 39633).

For all of the proposed rulemakings listed in this section no public comments were received. There were no requests received for a public meeting and due to the fact that no significant issues were identified the Coast Guard determined that no public meetings were needed. B. Basis and Purpose

The legal basis for this rule is 33 U.S.C. 1231, 1233; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05–1, 6.04–1, 6.04–6 and 160.5; Public Law 107–295, 116 Stat. 2064; and Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to define regulatory safety zones.

This regulation carries out four related actions: (1) Establish new marine event regulated areas, (2) remove old safety zones that are no longer needed, (3) modify and update some existing regulated areas and (4) clarify event time frames and notification requirements for marine events. This will account for new events, remove events that are no longer held, and to account for modifications to several of the recurring marine events that have occurred since last year.
C. Discussion of Comments, Changes and the Final Rule

No comments were received and no changes have been made to the final rule.
D. Regulatory Analyses

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders. 1. Regulatory Planning and Review

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

We expect the economic impact of this rule to be minimal. Although this regulation may have some impact on the