Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Rules and Regulations 4791 

List of Subjects in 21 CFR Part 870 

Medical devices. 

Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

authority delegated to the Commissioner 

of Food and Drugs, 21 CFR part 870 is 

amended as follows: 

PART 870—CARDIOVASCULAR 

DEVICES 

■ 1. The authority citation for 21 CFR 

part 870 continues to read as follows: 

Authority: 21 U.S.C. 351, 360, 360c, 360e, 

360j, 371. 

■ 2. Section 870.5310 is amended by 

revising the section heading and 

paragraphs (a) and (c) to read as follows: 

§ 870.5310 Automated external defibrillator 

system. 

(a) Identification. An automated 

external defibrillator (AED) system 

consists of an AED and those 

accessories necessary for the AED to 

detect and interpret an 

electrocardiogram and deliver an 

electrical shock (e.g., battery, pad 

electrode, adapter, and hardware key for 

pediatric use). An AED system analyzes 

the patient’s electrocardiogram, 

interprets the cardiac rhythm, and 

automatically delivers an electrical 

shock (fully automated AED), or advises 

the user to deliver the shock (semiautomated or shock advisory AED) to 

treat ventricular fibrillation or pulseless 

ventricular tachycardia. 

* * * * * 

(c) Date PMA or notice of completion 

of PDP is required. A PMA will be 

required to be submitted to the Food 

and Drug Administration by April 29, 

2015, for any AED that was in 

commercial distribution before May 28, 

1976, or that has, by April 29, 2015, 

been found to be substantially 

equivalent to any AED that was in 

commercial distribution before May 28, 

1976. A PMA will be required to be 

submitted to the Food and Drug 

Administration by April 29, 2015, for 

any AED accessory described in 

paragraph (a) that was in commercial 

distribution before May 28, 1976, or that 

has, by April 29, 2015, been found to be 

substantially equivalent to any AED 

accessory described in paragraph (a) 

that was in commercial distribution 

before May 28, 1976. Any other AED 

and AED accessory described in 

paragraph (a), shall have an approved 

PMA or declared completed PDP in 

effect before being placed in commercial 

distribution. 

Dated: January 23, 2015. 

Leslie Kux, 

Associate Commissioner for Policy. 

[FR Doc. 2015–01619 Filed 1–28–15; 8:45 am] 

BILLING CODE 4164–01–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

26 CFR Part 1 

[TD 9709] 

RIN 1545–BK64 

Application for Recognition as a 

501(c)(29) Organization 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Final regulations and removal of 

temporary regulations. 

SUMMARY: This document contains final 

regulations authorizing the IRS to 

prescribe the procedures by which 

certain entities may apply to the IRS for 

recognition of exemption from Federal 

income tax. These regulations affect 

qualified nonprofit health insurance 

issuers participating in the Consumer 

Operated and Oriented Plan program 

established by the Centers for Medicare 

and Medicaid Services that seek 

exemption from federal income tax 

under the Internal Revenue Code. 

DATES: Effective date: These regulations 

are effective on January 29, 2015. 

Applicability date: For date of 

applicability, see § 1.501(c)(29)–1(c). 

FOR FURTHER INFORMATION CONTACT: 

Martin Scha ̈ffer, (202) 317–5800 (not a 

toll-free number). 

SUPPLEMENTARY INFORMATION: 

Background 

Section 501(c)(29) of the Internal 

Revenue Code (Code) provides 

requirements for tax exemption under 

section 501(a) for qualified nonprofit 

health insurance issuers (QNHIIs). 

Section 501(c)(29) was added to the 

Code by section 1322(h)(1) of the Patient 

Protection and Affordable Care Act, 

Public Law 111–148 (March 23, 2010) 

(Affordable Care Act). 

Section 1322 of the Affordable Care 

Act directs the Centers for Medicare and 

Medicaid Services (CMS) to establish 

the Consumer Operated and Oriented 

Plan (CO–OP) program. The purpose of 

the CO–OP program is to foster the 

creation of member-governed QNHIIs 

that will operate with a strong consumer 

focus and offer qualified health plans in 

the individual and small group markets. 

CMS provides loans and repayable 

grants (collectively, loans) to 

organizations applying to become 

QNHIIs to help cover start-up costs and 

meet any solvency requirements in 

States in which the organization is 

licensed to issue qualified health plans. 

For each loan, CMS issues a Notice of 

Award and Loan Agreement to the 

QNHII. The appropriate officer of the 

QNHII or of the QNHII’s board of 

directors must sign and return the loan 

agreement to CMS. On December 13, 

2011, CMS issued final regulations 

implementing the CO–OP program at 76 

FR 77392. 

The CMS final regulations define a 

QNHII as an entity that, within specified 

time frames, satisfies or can reasonably 

be expected to satisfy the standards in 

section 1322(c) of the Affordable Care 

Act and in the CMS final regulations. 

The entity will constitute a QNHII until 

such time as CMS determines the entity 

does not satisfy or cannot reasonably be 

expected to satisfy these standards. 

Section 1322(c) of the Affordable Care 

Act imposes a number of requirements, 

including that a QNHII be organized as 

a nonprofit member corporation under 

State law and that substantially all its 

activities consist of the issuance of 

qualified health plans in the individual 

and small group markets in each State 

in which it is licensed to issue such 

plans. 

Section 501(c)(29)(A) of the Code 

provides that a QNHII (within the 

meaning of section 1322(c) of the 

Affordable Care Act) which has received 

a loan or grant under the CO–OP 

program may be recognized as exempt 

from taxation under section 501(a), but 

only for periods for which the 

organization is in compliance with the 

requirements of section 1322 of the 

Affordable Care Act and any loan or 

grant agreement with the Secretary of 

Health and Human Services. Section 

501(c)(29)(B) provides that a QNHII will 

not qualify for tax-exemption unless it 

meets four additional requirements. 

First, the QNHII must give notice to the 

Secretary of the Treasury, in such 

manner as the Secretary may by 

regulations prescribe, that it is applying 

for recognition of exemption as an 

organization described in section 

501(c)(29). Second, no part of the 

QNHII’s net earnings may inure to the 

benefit of any private shareholder or 

individual, except to the extent 

permitted by section 1322(c)(4) of the 

Affordable Care Act (which requires that 

any profits be used to lower premiums, 

to improve benefits, or for other 

programs intended to improve the 

quality of health care delivered to the 

organization’s members). Third, no 

substantial part of the QNHII’s activities 


tkelley on DSK3SPTVN1PROD with RULES
4792 Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Rules and Regulations 

may consist of carrying on propaganda, 

or otherwise attempting, to influence 

legislation. Finally, the QNHII may not 

participate in or intervene in (including 

the publishing or distributing of 

statements) any political campaign on 

behalf of (or in opposition to) any 

candidate for public office. As required 

by section 1322(b)(2)(C)(iii) of the 

Affordable Care Act, CMS must notify 

the IRS of any determination of a failure 

to comply with the CO–OP program 

standards, including any loan 

agreement, that may affect a QNHII’s 

tax-exempt status under section 

501(c)(29) of the Code. 

Section 6033 requires a QNHII to file 

an annual information return. Section 

6033(m), added to the Code by section 

1322(h)(2) of the Affordable Care Act, 

further requires a QNHII to provide 

additional information on the amount of 

reserves required by each state in which 

the QNHII is licensed to issue qualified 

health plans and the amount of reserves 

on hand. These requirements are met by 

filing a Form 990 for each tax year in 

which the QNHII claims tax-exempt 

status, including tax years prior to 

receipt of a determination letter from 

the IRS recognizing its tax-exempt 

status. See Notice 2011–23, § 8, 2011–13 

IRB 588, as well as Instructions for Form 

990–EZ, ‘‘Short Form Return of 

Organization Exempt from Income Tax.’’ 

On February 7, 2012, temporary 

regulations (TD 9574) authorizing the 

IRS to prescribe the procedures by 

which certain entities may apply to the 

IRS for recognition of exemption from 

Federal income tax were published in 

the Federal Register (77 FR 6005). On 

the same date, and under the authority 

of the temporary regulations, the IRS 

issued Rev. Proc. 2012–11, 2012–7 IRB 

368, providing instructions on how an 

organization should apply for 

recognition of exemption as an 

organization described in section 

501(c)(29). The IRS intends to reissue 

Rev. Proc. 2012–11 (with a 2015 

designation) under the authority of the 

final regulations. 

A notice of proposed rulemaking 

(REG–135071–11) cross-referencing the 

temporary regulations was also 

published in the Federal Register on 

February 7, 2012 (77 FR 6027). No 

public hearing was requested or held. 

Two comments responding to the notice 

of proposed rulemaking were received 

and are available at 

www.regulations.gov (Docket Number 

IRS–2012–0007). After consideration of 

the two comments, the proposed 

regulations are adopted without 

revision, and the corresponding 

temporary regulations are removed. 

Summary of Comments and 

Explanation of Provisions 

Section 501(c)(29)(B)(i) of the Code 

provides that a QNHII which has 

received a loan through the CO–OP 

program established under the 

Affordable Care Act by the Centers for 

Medicare and Medicaid Services may be 

recognized as exempt from taxation 

under section 501(a) only if, among 

other things, the QNHII gives notice to 

the IRS, in such manner as the Secretary 

may by regulations prescribe, that it is 

applying for recognition as an 

organization described in section 

501(c)(29). These final regulations 

provide that the Commissioner has the 

authority to prescribe the application 

procedures that a QNHII seeking such 

recognition must follow. These final 

regulations expressly authorize the 

Commissioner to recognize a QNHII as 

exempt effective as of a date prior to the 

date of its application, provided that the 

application is submitted in the manner 

and within the time prescribed by the 

Commissioner and that the QNHII’s 

prior purposes and activities were 

consistent with the requirements for 

exempt status under section 501(c)(29). 

Neither of the comments received 

addressed the proposed rule authorizing 

the IRS to prescribe the procedures by 

which certain entities may apply for 

recognition of exemption from Federal 

income tax as organizations described in 

section 501(c)(29). One commenter 

suggested that the final rule clarify that 

the failure of a QNHII to meet the 

requirements of state insurance laws 

may be grounds for the denial or 

revocation of the entity’s tax-exempt 

status. In addition, the commenter 

suggested that the application for a 

section 501(c)(29) determination letter, 

as described in Rev. Proc. 2012–11, 

should include an affirmation by the 

entity seeking an exemption that it 

meets all applicable state requirements 

for a qualified health insurer, including 

solvency and licensing standards. 

The final regulations do not 

incorporate these suggestions. Section 

501(c)(29)(A) provides for recognition of 

a QNHII that has received a loan or 

grant under the CO–OP program for 

periods for which the organization is in 

compliance with the requirements of the 

Affordable Care Act and of any CO–OP 

program loan or grant. An entity that 

CMS has determined qualifies as a 

QNHII remains a QNHII until CMS 

determines that it does not satisfy or 

cannot reasonably be expected to satisfy 

the standards in section 1322(c) of the 

Affordable Care Act and the CMS final 

regulations. CMS must notify the IRS if 

a QNHII fails to comply with the CO– 

OP program standards, including any 

loan agreement. If CMS determines that 

an organization no longer qualifies as a 

QNHII, it will lose its tax-exempt status 

under section 501(c)(29) of the Code. 

Because the commenter’s suggestions 

relate to an organization’s qualification 

as a QNHII, rather than to the 

requirements for a QNHII to be 

recognized as tax-exempt, these 

suggestions were not adopted. 

Another commenter recommended 

that the final rule make it clear that all 

state and federal laws and regulations 

that currently apply to 501(c) 

organizations—including those related 

to transparency, reporting, and the 

treatment of assets upon dissolution— 

apply also to organizations recognized 

under section 501(c)(29), noting 

particularly the requirement to file a 

Form 990, ‘‘Return of Organization 

Exempt From Income Tax,’’ and related 

documents on an annual basis. The 

commenter further recommended that 

the final rule specifically address 

aspects of the Affordable Care Act that 

are not within the jurisdiction of the 

Treasury Department. 

The final regulations do not 

incorporate these suggestions. With 

respect to the Code, different 

requirements apply to different types of 

organizations described in section 

501(c). Section 501(c)(29)(B) sets forth 

the conditions that a QNHII must satisfy 

for exemption from Federal income tax. 

Section 6033 and the regulations 

thereunder generally requires all 

organizations exempt from taxation 

under section 501(a), including QNHIIs 

exempt under section 501(c)(29), to file 

Form 990, unless an organization 

qualifies for an exception from the filing 

requirement. With respect to section 

1322 of Affordable Care Act, CMS 

issued final regulations in December 

2011 implementing the CO–OP program 

and providing the basic standards that 

an organization must meet to be a 

QNHII and participate in the program. 

Those requirements are outside the 

jurisdiction of the Treasury Department. 

For these reasons no additional 

regulatory guidance is needed. 

Special Analyses 

It has been determined that this 

Treasury decision is not a significant 

regulatory action as defined in 

Executive Order 12866, as 

supplemented by Executive Order 

13563. Therefore, a regulatory 

assessment is not required. It has been 

determined, also, that section 553(b) of 

the Administrative Procedure Act (5 

U.S.C. chapter 5) does not apply, and 

because no collection of information is 

imposed on small entities, the 


tkelley on DSK3SPTVN1PROD with RULES
Federal Register / Vol. 80, No. 19 / Thursday, January 29, 2015 / Rules and Regulations 4793 

provisions of the Regulatory Flexibility 

Act (5 U.S.C. chapter 6) do not apply. 

Pursuant to section 7805(f) of the Code, 

the NPRM preceding this regulation was 

submitted to the Chief Counsel for 

Advocacy of the Small Business 

Administration for comment on its 

impact on small business. 

Drafting Information 

The principal author of these 

regulations is Martin Scha ̈ffer of the 

Office of Division Counsel/Associate 

Chief Counsel (Tax Exempt and 

Government Entities), although other 

persons in the IRS and the Treasury 

Department participated in their 

development. 

List of Subjects in 26 CFR Part 1 

Income taxes, Reporting and 

recordkeeping requirements. 

Amendments to the Regulations 

Accordingly, 26 CFR part 1 is 

amended as follows: 

PART 1—INCOME TAXES 

■ Paragraph 1. The authority citation 

for part 1 is amended by adding an entry 

in numerical order to read in part as 

follows: 

Authority: 26 U.S.C. 7805 * * * 

Section 1.501(c)(29)–1 also issued under 26 

U.S.C. 501(c)(29)(B)(i). * * * 

■ Par. 2. Section 1.501(c)(29)–1 is added 

to read as follows: 

§ 1.501(c)(29)–1 CO–OP Health Insurance 

Issuers. 

(a) Organizations must notify the 

Commissioner that they are applying for 

recognition of section 501(c)(29) status. 

An organization will not be treated as 

described in section 501(c)(29) unless 

the organization has given notice to the 

Commissioner that it is applying for 

recognition as an organization described 

in section 501(c)(29) in the manner 

prescribed by the Commissioner in 

published guidance. 

(b) Effective date of recognition of 

section 501(c)(29) status. An 

organization may be recognized as an 

organization described in section 

501(c)(29) as of a date prior to the date 

of the notice required by paragraph (a) 

of this section if the notice is given in 

the manner and within the time 

prescribed by the Commissioner and the 

organization’s purposes and activities 

prior to giving such notice were 

consistent with the requirements for 

exempt status under section 501(c)(29). 

However, an organization may not be 

recognized as an organization described 

in section 501(c)(29) before the later of 

its formation or March 23, 2010. 

(c) Effective/applicability date. 

Paragraphs (a) and (b) of this section are 

applicable beginning February 7, 2012. 

§ 1.501(c)(29)–1T [Removed] 

■ Par. 3. Section 1.501(c)(29)–1T is 

removed. 

John Dalrymple, 

Deputy Commissioner for Services and 

Enforcement. 

Approved: January 22, 2015. 

Mark J. Mazur, 

Assistant Secretary of the Treasury. 

[FR Doc. 2015–01677 Filed 1–26–15; 4:15 pm] 

BILLING CODE 4830–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R08–OAR–2014–0713; FRL–9919–42– 

Region 8] 

Approval and Promulgation of Air 

Quality Implementation Plans; 

Montana; Revisions to Administrative 

Rules of Montana—Prevention of 

Significant Deterioration 

AGENCY: Environmental Protection 

Agency. 

ACTION: Final rule. 

SUMMARY: The Environmental Protection 

Agency (EPA) is taking final action to 

approve State Implementation Plan 

(SIP) revisions submitted by the State of 

Montana on June 4, 2013. This 

submission revises the Administrative 

Rules of Montana that pertain to the 

issuance of Montana air quality permits. 

The June 4, 2013 revisions contain 

amended and renumbered rules that, 

among other things, address the proper 

treatment of air pollutants under the 

State’s prevention of significant 

deterioration (PSD) program. In this 

rulemaking, we are taking final action 

on all of the June 4, 2013 submittal, 

with the exception of one small portion. 

This action is being taken under section 

110 of the Clean Air Act (CAA). 

DATES: This final rule is effective March 

2, 2015. 

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. EPA–R08–OAR–2014–0713. All 

documents in the docket are listed in 

the www.regulations.gov index. 

Although listed in the index, some 

information is not publicly available, 

e.g., CBI or other information whose 

disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, will be publicly 

available only in hard copy. Publicly 

available docket materials are available 

either electronically in 

www.regulations.gov or in hard copy at 

the Air Program, Environmental 

Protection Agency (EPA), Region 8, 

1595 Wynkoop Street, Denver, Colorado 

80202–1129. EPA requests you contact 

the individual listed in the FOR FURTHER

INFORMATION CONTACT section to view 

the hard copy of the docket. You may 

view the hard copy of the docket 

Monday through Friday, 8:00 a.m. to 

4:00 p.m., excluding federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Kevin Leone, Air Program, Mailcode 

8P–AR, Environmental Protection 

Agency, Region 8, 1595 Wynkoop 

Street, Denver, Colorado 80202–1129, 

(303) 312–6227, or leone.kevin@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. What are the changes that EPA is taking 

final action to approve? 

III. Response to Comments 

IV. What action is EPA taking today? 

V. Statutory and Executive Orders Review 

Definitions 

For the purpose of this document, we 

are giving meaning to certain words or 

initials as follows: 

(i) The words or initials Act or CAA 

mean or refer to the Clean Air Act, 

unless the context indicates otherwise. 

(ii) The initials ARM mean or refer to 

the Administrative Rules of Montana. 

(iii) The words EPA, we, us or our 

mean or refer to the United States 

Environmental Protection Agency. 

(iv) The initials FIP mean or refer to 

Federal Implementation Plan. 

(v) The initials MDEQ mean or refer 

to the Montana Department of 

Environmental Quality. 

(vi) The initials NOX mean or refer to 

nitrogen oxides. 

(vii) The initials NSR mean or refer to 

New Source Review. 

(viii) The initials PM2.5 mean or refer 

to particulate matter equal to or less 

than 2.5 microns in diameter. 

(ix) The initials PSD mean or refer to 

Prevention of Significant Deterioration. 

(x) The initials SIP mean or refer to 

State Implementation Plan. 

(xi) The words State or Montana 

mean the State of Montana, unless the 

context indicates otherwise. 

I. Background 

EPA is taking final action to approve 

(with one exception) the revisions to 

Title 17, Chapter 8, subchapter 8 of the 

Administrative Rules of Montana (ARM) 

submitted by the State on June 4, 2013, 

that relate to the State’s PSD program. 

The revisions to the State PSD SIP were 

adopted by the Montana Department of 


tkelley on DSK3SPTVN1PROD with RULES