        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 680
        [Docket No. 080129098-8101-01]
        RIN 0648-AW45
        Fisheries of the Exclusive Economic Zone Off Alaska; Bering Sea and Aleutian Islands Crab Rationalization Program

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:

          NMFS proposes regulations implementing Amendment 26 to the Fishery Management Plan for Bering Sea/Aleutian Islands King and Tanner Crabs (FMP). These proposed regulations would amend the Bering Sea/Aleutian Islands Crab Rationalization Program. Amendment 26 would amend the FMP to exempt permanently quota share issued to crew members, and the annual harvest privileges derived from that quota share, from requirements for delivery to specific processors, delivery within specific geographic regions, and participation in an arbitration system to resolve price disputes. This action is intended to promote the goals and objectives of the Magnuson-Stevens Fishery Conservation and Management Act, the FMP, and other applicable law.

          DATES:
          Comments must be received no later than May 15, 2008.

          ADDRESSES:
          Send comments to Sue Salveson, Assistant Regional Administrator, Sustainable Fisheries Division, Alaska Region, NMFS, Attn: Ellen Sebastian. You may submit comments, identified by RIN 0648-AW45, by any one of the following methods:

          • Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal website at http://www.regulations.gov.
          • Mail: P. O. Box 21668, Juneau, AK 99802.
          • Fax: (907) 586-7557.
          • Hand delivery to the Federal Building: 709 West 9th Street, Room 420A, Juneau, AK.

          All comments received are a part of the public record and will generally be posted to http://www.regulations.gov without change. All personal identifying information (e.g., name, address) voluntarily submitted by the commenter may be publicly accessible. Do not submit confidential business information or otherwise sensitive or protected information.
          NMFS will accept anonymous comments. Attachments to electronic comments will be accepted in Microsoft Word, Excel, WordPerfect, or Adobe portable document file (pdf) formats only.

          Copies of Amendment 26, the Regulatory Impact Review (RIR)/Initial Regulatory Flexibility Analysis (IRFA) prepared for this action, and the Environmental Impact Statement (EIS) prepared for the Crab Rationalization Program may be obtained from the NMFS Alaska Region at the address above or from the Alaska Region website at http://www.fakr.noaa.gov/sustainablefisheries.htm.

          FOR FURTHER INFORMATION CONTACT:
          Glenn Merrill, 907-586-7228, glenn.merrill@noaa.gov.

        SUPPLEMENTARY INFORMATION:
        The king and Tanner crab fisheries in the exclusive economic zone of the Bering Sea and Aleutian Islands (BSAI) are managed under the FMP. The FMP was prepared by the North Pacific Fishery Management Council (Council) under the Magnuson-Stevens Fishery Conservation and Management Act as amended by the Consolidated Appropriations Act of 2004 (Public Law 108-199, section 801). Amendments 18 and 19 to the FMP implemented the BSAI Crab Rationalization Program (Program). Regulations implementing Amendments 18 and 19 were published on March 2, 2005 (70 FR 10174) and are located at 50 CFR part 680.
        Crab Rationalization Program Overview
        Under the Program, NMFS issued four types of quota share (QS) to persons based on their qualifying harvest histories in the BSAI crab fisheries during a specific period of time defined under the Program. The first two types of QS were issued to holders of license limitation program (LLP) licenses endorsed for a crab fishery. Catcher/processor LLP license holders were issued catcher/processor vessel owner (CPO) QS based on the catch history of catcher processors using an LLP license, and catcher vessel LLP license holders were issued catcher vessel owner (CVO) QS based on the catch history of catcher vessels using an LLP license. Under the Program, 97 percent of the QS was initially issued as CVO and CPO QS. The remaining 3 percent of the QS was initially issued to vessel captains and crew as “C shares,” based on their harvest histories as crew members onboard crab fishing vessels. Captains and crew onboard catcher/processor vessels were issued catcher/processor crew (CPC) QS; and captains and crew onboard catcher vessels were issued catcher vessel crew (CVC) QS.
        Each year, the QS issued to a person yields an amount of individual fishing quota (IFQ), which is a permit that provides an exclusive harvest privilege for a specific amount of raw crab pounds, in a specific crab fishery, in a given season. The size of each annual IFQ allocation is based on the amount of QS held by a person in relation to the total QS pool in a crab fishery. As an example, a person holding QS equal to one percent of the QS pool in a crab fishery would receive IFQ to harvest 1 percent of the annual total allowable catch (TAC) in that crab fishery. NMFS can issue the resulting IFQ to the QS holder directly, or to a crab harvesting cooperative comprised of multiple QS holders. Crab harvesting cooperatives have been used extensively by QS holders to allow them to receive a larger IFQ pool and coordinate deliveries and price negotiations among numerous vessels. Most QS holders, including CVC and CPC QS holders, have joined cooperatives in the first two years of the Program, and are likely to continue to do so because of the economic and administrative benefits of consolidating their IFQ.
        The IFQ derived from CPO and CPC QS may be harvested and processed at sea and is not required to be delivered to a specific onshore processor or stationary floating crab processor, or within a specific geographic region. However, the IFQ derived from CVO QS is subject to (1) delivery requirements to a specific onshore processor or stationary floating crab processor, (2) delivery within specific geographic regions, also known as regionalization, and (3) requirements to participate in an arbitration system. The IFQ derived from CVC QS must be delivered to onshore or stationary floating crab processors, but is currently exempt from delivery requirements to specific processors, regionalization requirements, and requirements to participate in the arbitration system. However, under the existing regulations, CVC QS and the resulting IFQ will be subject to the same delivery, regionalization, and arbitration system requirements as CVO QS/IFQ after June 30, 2008.

        When the Program was adopted in 2004, the Council recommended regularly scheduled reviews of the Program 18 months, three years, and five years after its implementation to assess specific issues. Beginning in February 2007, Council staff began preparation of the 18-month review. Among other issues examined during this review, Council staff provided a summary of the key issues and concerns relevant to applying delivery, regionalization, and arbitration system requirements to CVC QS/IFQ holders. Members of the public noted that applying these requirements to CVC QS/IFQ holders after June 30, 2008, would limit their ability to address logistical complications, not provide flexibility for CVC IFQ holders to deliver to alternative markets if desired, substantially increase the costs of operation, and not provide substantial additional stability to processors and communities. Based on these concerns, in April 2007, the Council tasked staff to prepare an analysis that would review the implications of permanently exempting CVC QS/IFQ from delivery, regionalization, and arbitration system requirements. The Council deliberated over the issue at subsequent meetings, and in December 2007, recommended permanently exempting CVC QS/IFQ from all three of these Program requirements.
        Effects of the Proposed Action
        The following sections describe the Council's rationale for delaying the application of delivery, regionalization, and the arbitration system requirements to CVC QS/IFQ until June 30, 2008, the effect of applying those requirements to CVC QS/IFQ after June 30, 2008, and the rationale provided by the Council for recommending a permanent exemption for CVC QS/IFQ from these requirements.

          Processor delivery requirements. Existing processor delivery regulations recognize the historic participation of processors and communities dependent on crab processing in the BSAI crab fisheries by requiring that a portion of the annual TAC be delivered to specific onshore or stationary floating crab processors. A detailed description of the rationale for linking harvesters and processors in this manner is described in detail in the EIS prepared for the Program and the RIR/IRFA prepared for this proposed action (see ADDRESSES).
        After considering a range of alternatives, the Council recommended and NMFS implemented regulations that require 90 percent of the IFQ derived from CVO and CVC QS be delivered to onshore processors. This requirement ensures a linkage between harvesters who historically delivered onshore and specific processors. The Program established this linkage by issuing processor quota shares (PQS) to processors with historic participation in crab processing during a specific period. PQS yields individual processor quota (IPQ) on an annual basis that represents a privilege to receive a certain amount of crab harvested. Currently, 90 percent of the IFQ derived from CVO QS holders is issued as Class A IFQ. NMFS issues one pound of IPQ for each pound of Class A IFQ, creating a one-to-one correspondence between Class A IFQ and IPQ. The remaining 10 percent of the annual CVO IFQ are issued as Class B IFQ, which may be delivered to any processor and are not required to be delivered to a processor with unused IPQ.
        The Council also recommended that because CVC QS was generated based on deliveries to onshore or stationary floating crab processors, it also should be issued as 90 percent Class A IFQ and 10 percent Class B IFQ. In addition to the Class A and B IFQ issuance requirements for CVC IFQ, the Council recommended and the Program implements limits on the ability of CVC QS holders to transfer, or lease, their CVC IFQ to other persons. This limitation was intended to ensure that CVC QS holders who received their QS by participating as captains and crew on crab vessels continued to be active participants onboard vessels in order to receive the benefits of their CVC IFQ. The Council recognized that logistical complications and confusion likely would arise early in the Program as a result of the interaction of the requirement that limits the ability to lease CVC IFQ and the requirement that 90 percent of that CVC IFQ would be issued as Class A IFQ and would be subject to processor delivery. The Council recognized that these complications could be exacerbated with the anticipated fleet contraction occurring under the Program.
        To facilitate CVC QS/IFQ holders and reduce the complex process of matching of Class A IFQ to specific processors with IPQ, the Program exempted CVC IFQ from issuance as Class A/B IFQ and the prohibitions on CVC IFQ leasing for the first three crab fishing years. The Council indicated that this three year period, which expires on June 30, 2008 (see 50 CFR 680.41(e) and 50 CFR 680.42(b)(6) and (c)(5)) should provide CVC QS/IFQ holders time to adapt to the Program before phasing in these additional restrictions. Further, the Council recommended that the appropriateness of applying Class A and B IFQ restrictions should be reviewed 18 months after the implementation of the Program. The Council anticipated that applying these restrictions to CVC QS may not be necessary to achieve the goals of providing additional stability to the processing sector and communities, and could impose additional costs and complexity on CVC QS/IFQ holders. The Council recognized that the effect on processor and community stability could be minimal given the small allocation of CVC QS (i.e., not greater than three percent of the total QS pool in any fishery) and that only 90 percent of the resulting CVC IFQ would be subject to issuance as Class A IFQ and be subject to delivery to specific processors holding IPQ.

        The RIR/IRFA prepared for this proposed action by Council and NMFS staff indicates that the application of Class A IFQ delivery requirements to CVC IFQ would logistically complicate use of those shares (see ADDRESSES). In the first two years of the Program, many harvesters have asserted that logistical demands in the crab fisheries are greatly increased when coordinating landings of Class A IFQ under the delivery and regional landing requirements. Specifically, individual CVC IFQ holders who are not participating in a crab harvesting cooperative would be forced to compete for delivery with holders of CVO IFQ shares to specific processors holding IPQ. CVO IFQ holders are likely to be in a much better negotiating position with respect to processors because of their relatively large share holdings (i.e., vessel owner shares are allocated 97 percent of the QS pool). Given the relatively large number of CVC IFQ holders compared to CVO IFQ holders, this would require extensive efforts and create additional complications to coordinate the time critical linkages with a processor's IPQ before fishing begins. Public testimony received during the Council's deliberations noted these concerns and asserted that the potential advantages to processors and communities by establishing these delivery requirements were outweighed by the additional costs that CVC QS/IFQ holders would incur. Public testimony from processors and communities with processing facilities did not dispute this assertion and supported permanently exempting CVC QS from the requirements that it be issued as Class A and B IFQ.
        Permanently extending the exemption of the Class A/B IFQ delivery requirements to CVC QS/IFQ holders would not be anticipated to have adverse effects on other participants given the limited number of these shares relative to CVO, CPO, and CPC QS/IFQ. Adding the Class A IFQ to CVC IFQ, which is less than three percent of the total annual IFQ issued, would not have an appreciable effect on processor stability or substantially benefit specific communities with processing facilities. This is further supported by the fact that CVC QS/IFQ has been exempt from the Class A IFQ delivery requirement for the first three years of the Program and no negative effects were indicated in the RIR/IRFA. Public testimony provided during Council review of this issue did not indicate that there would be negative effects on processors or communities as a result of a permanent exemption from Class A/B designation for CVC IFQ.

        Additionally, based on a review of recent harvest patterns provided in the draft RIR/IRFA, it appears as though CVC IFQ delivery patterns are similar to those of Class A IFQ. These patterns could change in the future so that CVC IFQ would be more likely to be delivered independently of Class A IFQ to other markets; however, given the relatively small percentage of the total landings that are assigned to CVC IFQ onboard a vessel, it is unlikely to expect delivery patterns for CVC IFQ to differ from the delivery patterns currently observed. Furthermore, even if the delivery patterns of CVC IFQ did change in the future, it is not clear that a shift in such a relatively small amount of IFQ would have an appreciable effect on overall processor operations or deliveries to specific communities.

          Regionalization. In addition to processor share landing requirements, Class A IFQ and IPQ are subject to regional landing requirements. Those shares must be landed and processed in specified geographic regions. Those regions are described in the EIS prepared for the Program and the RIR/IRFA prepared for this action (see ADDRESSES). The Class A IFQ regional delivery requirements vary depending on the specific crab fishery but generally ensure that a portion of the catch is delivered within areas that have communities that are active in crab processing. For most crab fisheries, there are two regions. One region is typically considered the more remote region. The requirement to land within the more remote region provides some assurance that the small number of processors and communities historically active within that region will continue to receive catch that could otherwise be diverted to the less remote region thereby disadvantaging the more remote region relative to those other processors or communities.
        If CVC IFQ were subject to a Class A/B IFQ designation, then 90 percent of the CVC IFQ would be defined as Class A IFQ and therefore subject to regionalization. Because the Program exempted CVC IFQ from a Class A/B IFQ designation through June 30, 2008, to reduce the initial complexities of matching shares and for the other reasons mentioned in the previous section, CVC IFQ also was exempted from regionalization.

        If CVC QS/IFQ were subject to the Class A/B IFQ designation, the Class A CVC IFQ would be subject to regionalization, and a greater proportion of the catch would have to be landed in specific geographic regions. The amount of additional pounds that would be subject to regionalization and landed within each region would vary. The net effect of regionalizing CVC IFQ is that less than three percent of the total IFQ issued in a crab fishery would be subject to regionalization. This is because three percent of the IFQ may be issued as CVC or CPC IFQ. A portion of the three percent of the IFQ issued as CVC and CPC IFQ in a crab fishery would be comprised of CVC IFQ. The relative amount of CPC and CVC IFQ issued varies among the crab fisheries and is described in the RIR/IRFA prepared for this proposed action (see ADDRESSES). Only 90 percent of the IFQ issued as CVC IFQ would be issued as Class A IFQ that is subject to regionalization.

        It is difficult to predict whether applying regional delivery requirements to CVC IFQ would have an impact on existing delivery patterns within a given region for a specific crab fishery. Based on data in the RIR/IRFA from the first two years of the Program, CVC IFQ has had delivery patterns very similar to CVO Class A IFQ for a variety of reasons. These include economic inefficiencies when establishing markets for CVC IFQ separate from CVO Class A IFQ given the relatively small amounts of CVC IFQ, the need to use CVC IFQ to accommodate unique situations such as icing conditions and the loss of a floating processor during the early part of the C. opilio fishery in 2006, and the operational inefficiencies that can result when attempting to make deliveries of CVC IFQ distinct from CVO IFQ.
        Given the high level of crab cooperative membership among all QS holders (including CVC QS holders), it is likely that most CVC QS holders will continue to cooperate with CVO QS holders and pool their IFQ in a cooperative. This coordinated management makes it likely that CVC IFQ assigned to a cooperative would be delivered in coordination with CVO Class A IFQ assigned to a cooperative. It is possible that permanently exempting CVC IFQ from regionalization could encourage cooperatives to combine their CVC IFQ with CVO Class B IFQ for delivery to markets outside of the region designated for the CVO Class A IFQ. However, it is not possible to predict whether such a shift in delivery patterns will occur. Given the fact that CVC IFQ is currently exempt from regionalization, and CVC IFQ is delivered in conjunction with CVO Class A IFQ currently, it is not clear if a continuing exemption from regionalization requirements would have any noticeable effect on the overall delivery of CVC IFQ within a given region. However, permanently exempting CVC IFQ from regionalization requirements could provide opportunities to CVC IFQ holders to use additional markets that would be foreclosed if those shares are subject to regionalization.

          Arbitration System. To aid participants in resolving price and delivery disputes that may arise among Class A IFQ and IPQ holders, the Council developed an arbitration system. Regulations require that Class A IFQ and IPQ holders join private arbitration organizations. These arbitration organizations, in turn, must enter into contracts that define the procedure for resolving price disputes. The arbitration system serves several functions to resolve price and delivery disputes including establishing a mechanism for the orderly matching of Class A IFQ with IPQ, developing a market report and non-binding price formula to inform price negotiations, and providing a binding arbitration procedure to resolve impasses in negotiations. A more complete description of the arbitration system is provided in the RIR/IRFA prepared for this action and the EIS prepared for the Program (see ADDRESSES).
        Since the arbitration system applies only to Class A IFQ, the existing exemption of CVC IFQ from Class A/B IFQ designation effectively exempts CVC IFQ from the arbitration system. If the Class A/B IFQ designation is applied to CVC QS, then participation in the arbitration system would be mandatory for CVC QS/IFQ holders. Participation in the arbitration system costs money and can require involvement in complex negotiations should disputes need to be resolved through binding arbitration.
        Arbitration organization fees are borne by its members. Currently, the arbitration organization for harvesters charges each member $500. Whether a discounted rate would be offered to CVC QS/IFQ holders because of their relatively small share holdings is not known and would need to be determined by the arbitration organization. It is possible that costs could decline over time as the administrative aspects of the arbitration system become more established. Other general costs for the arbitration system, including hiring arbitrators and preparing the market report and non-binding price formula, are split evenly between the harvesting and the processing sectors. Based on experience from the first two years of the Program, it is likely that administrative costs of the arbitration program will remain less than one-half cent per pound of delivered product in the future.

        In addition to the administrative aspects of the arbitration system, CVC QS/IFQ holders may also have costs related to their participation in a binding arbitration proceeding. These costs can be incurred either individually or through collective action with other Class A IFQ holders who are in a cooperative with the CVC QS holder. Individual participation by CVC QS holders who are not members of a cooperative would be costly and likely would be ineffective because of the administrative complexity and substantive challenges of participation in a binding arbitration. Collective participation allows the pooling of resources and information, thereby reducing the individual burden of participation in a binding arbitration. Many fishermen believe that professional representation is necessary to guide negotiations due to the complexity of the system and the expense of gathering market information needed for effective negotiation. Harvester cooperatives have coordinated binding arbitration negotiations through an inter-cooperative agreement, the Inter-Cooperative Exchange, which has helped distribute these costs. Whether CVC QS holders would be charged for participation in the Inter-Cooperative Exchange at the same level as holders of CVO or CPO QS, or at a discounted rate, is not known, and would be at the discretion of the harvesters participating in the binding arbitration.
        At a minimum, applying arbitration system requirements to CVC QS/IFQ holders would increase their costs of operation. Depending on the relative size of their quota holdings, these additional costs could represent a substantial portion of the value derived from their quota. In the extreme, these additional costs could outweigh the value derived from the quota and make it unprofitable to participate in the fishery. It is not possible to predict the number of persons who might be in such a position due to the potential variability in arbitration costs, exvessel values, and quota share holdings applicable to each person.

          Summary. The Council recommended, and this proposed rule would implement, a permanent exemption to delivery, regionalization, and arbitration system requirements for CVC QS/IFQ holders. As described in greater detail in the previous section and the RIR/IRFA prepared for this action, this proposed rule would permanently extend the existing exemption to avoid the additional costs and complexity that will result to CVC QS/IFQ holders and the very limited benefits that may accrue to some processors and communities if the delivery, regionalization, and arbitration system requirements were applied to CVC QS/IFQ.
        NMFS is proposing to modify the Program regulations to remove all instances that either require or refer to CVC IFQ being redesignated as Class A/B IFQ after June 30, 2008. These references occur in regulatory text at 50 CFR 680.2, 680.20, 680.21, 680.40, and 680.42.
        Classification
        The Assistant Administrator for Fisheries, NOAA, has determined that this proposed rule is consistent with Amendment 26, the Magnuson-Stevens Fishery Conservation and Management Act, and other applicable laws, subject to further consideration after public comment.
        This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

        An IRFA was prepared that describes the impact this proposed rule would have on small entities. Copies of the RIR/IRFA prepared for this proposed rule are available from NMFS (see ADDRESSES). The RIR/IRFA prepared for this proposed rule incorporates by reference an extensive RIR/IRFA prepared for Amendments 18 and 19 to the FMP that detailed the impacts of the Program on small entities.
        The IRFA for this proposed action describes the action; describes in detail the reasons why this action is being proposed; describes the objectives and legal basis for the proposed rule; describes and estimates the number of small entities to which the proposed rule would apply; describes any projected reporting, record keeping, or other compliance requirements of the proposed rule; identifies any overlapping, duplicative, or conflicting Federal rules; and describes any significant alternatives to the proposed rule that accomplish the stated objectives of the Magnuson-Stevens Act and any other applicable statutes, and that would minimize any significant adverse economic impact of the proposed rule on small entities.

        The description of the proposed action, its purpose, and its legal basis are described in the preamble and are not repeated here. All of the directly regulated entities under this proposed rule are individuals. Only individuals can hold CVC QS/IFQ, and only regulations applicable to CVC QS/IFQ would be modified by this action. The IRFA estimates that currently 219 individuals hold CVC QS/IFQ and would be directly regulated by the proposed action. The IRFA notes that estimates of the number of small CVC QS/IFQ holders under the Program are complicated by limited share holder information, but, conservatively, the IRFA estimates that all of the individuals would be considered small entities. The standard used by the U.S. Small Business Administration to define a small entity involved in fish harvesting is described in the IRFA (see ADDRESSES).
        The proposed rule would not change or require additional existing reporting, recordkeeping, and other compliance requirements. The analysis uncovered no Federal rules that would conflict with, overlap, or be duplicated by the alternatives under consideration.
        All of the directly regulated individuals would be expected to benefit from this action relative to the status quo alternative because it would relieve these individuals from requirements that would increase their costs of operation. Among the two alternatives considered, status quo and the proposed action, the proposed action would be the alternative that would minimize adverse economic impacts on the individuals that are directly regulated. Only one alternative to the status quo was deemed appropriate because the proposed action is to permanently extend the exemption from delivery, regionalization, and arbitration system requirements for CVC QS/IFQ holders. Additionally, there is no information available to indicate that exempting CVC QS/IFQ holders from delivery, regionalization, and arbitration system requirements for a longer fixed period of time (e.g., until June 30, 2011, or June 30, 2014) would have any different effects on the benefits or costs for communities, processors, or CVC QS/IFQ holders that would not occur under the status quo or the permanent exemption alternative. Because the net effect of such an alternative would not differ from the two alternatives under consideration other than to change the date when the delivery, regionalization, and arbitration system requirements would apply, such an approach was briefly considered but not analyzed as a distinct alternative. As described in the preamble to this proposed action, it is not possible to exempt CVC QS/IFQ holders from only one of the three requirements because delivery, regionalization, and arbitration system requirements are integrated and no additional alternatives were needed to analyze the proposed action that would exempt CVC QS/IFQ holders from only one or two of the requirements.

        Although the alternatives under consideration in this action would have distributional and efficiency impacts for individual participants, such as reducing some operational costs for CVC QS/IFQ holders, in no case are these impacts in the aggregate expected to be substantial. Although neither of the alternatives has substantial negative impacts on small entities, preferred Alternative 2 minimizes the potential negative impacts that could arise under Alternative 1, the status quo alternative. Differences in efficiency that could arise are likely to affect most participants in a minor way having an overall insubstantial impact. As a consequence, neither alternative is expected to have any significant economic or socioeconomic impacts. Nevertheless, Alternative 2 is preferable because it reduces costs of operations for small entities to a limited degree.

          List of Subjects in 50 CFR Part 680
          Alaska, Fisheries.

          Dated: March 26, 2008.
          Samuel D. Rauch III
          Deputy Assistant Administrator for Regulatory Programs, National Marine Fisheries Service.

        For the reasons set out in the preamble, 50 CFR part 680 is proposed to be amended as follows:

          PART 680—SHELLFISH FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

        1. The authority citation for 50 CFR part 680 is revised to read as follows:

          Authority:
          16 U.S.C. 1862; Pub. L. 109-241; Pub. L. 109-479.

        2. In § 680.2, the definitions of “Arbitration IFQ”, and “Arbitration QS” are revised to read as follows:

          § 680.2
          Definitions.

            Arbitration IFQ means:
          (1) Class A catcher vessel owner (CVO) IFQ held by a person who is not a holder of PQS or IPQ and who is not affiliated with any holder of PQS or IPQ, and
          (2) IFQ held by an FCMA cooperative.

            Arbitration QS means CVO QS held by a person who is not a holder of PQS or IPQ and is not affiliated with any holder of PQS or IPQ.

        3. In § 680.20, paragraphs (a)(1), (b)(1)(i), the introductory text to paragraph (c), and paragraph (e)(7) are revised to read as follows:

          § 680.20
          Arbitration System.
          (a) * * *
          (1) Arbitration System. All CVO QS, Arbitration IFQ, Class A IFQ holders, PQS and IPQ holders must enter the contracts as prescribed in this section that establish the Arbitration System. Certain parts of the Arbitration System are voluntary for some parties, as specified in this section. All contract provisions will be enforced by parties to those contracts.

          (b) * * *
          (1) * * *
          (i) Holders of CVO QS,

          (c) Preseason requirements for joining an Arbitration Organization. All holders of CVO QS, PQS, Arbitration IFQ, Class A IFQ affiliated with a PQS or IPQ holder, and IPQ must join and maintain a membership in an Arbitration Organization as specified in paragraph (d) of this section. All holders of QS, PQS, IFQ, or IPQ identified in the preceding sentence must join an Arbitration Organization at the following times:

          (e) * * *
          (7) IFQ and IPQ Issuance and Selection of the Market Analyst, Formula Arbitrator, and Contract Arbitrator(s). NMFS will not issue CVO IFQ and IPQ for a crab QS fishery until Arbitration Organizations establish by mutual agreement contracts with a Market Analyst, Formula Arbitrator, and Contract Arbitrators for that fishery and notify NMFS.

        4. In § 680.21, paragraph (a)(1)(iii)(B) is revised to read as follows:

          § 680.21
          Crab harvesting cooperatives.

          (a) * * *
          (1) * * *
          (iii) * * *
          (B) Upon joining a crab harvesting cooperative for a CR fishery, NMFS will convert all of a QS holder's QS holdings for that CR fishery to crab harvesting cooperative IFQ.

        5. In § 680.40, paragraphs (b)(1)(ii), (b)(2)(i)(B), (b)(2)(ii)(C), (c)(2)(v)(J), (c)(4) introductory text, (h)(2)(i), (h)(2)(ii), and (h)(6)(ii) are revised to read as follows:

          § 680.40
          Quota Share (QS), Processor QS (PQS), Individual Fishing Quota (IFQ), and Individual Processor Quota (IPQ) issuance.

          (b) * * *
          (1) * * *
          (ii) Catcher Vessel Crew (CVC) QS shall be initially issued to qualified persons defined in paragraph (b)(3) of this section based on legal landings of unprocessed crab.

          (2) * * *
          (i) * * *
          (B) South QS if the legal landings that gave rise to the QS for a crab QS fishery were not landed in the North Region, and all CVO QS allocated to the WAI crab QS fishery; or

          (ii) * * *
          (C) CVC QS;

          (c) * * *
          (2) * * *
          (v) * * *
          (J) The percentage calculated in paragraph (c)(2)(v)(I) of this section may be adjusted according to the provisions at paragraphs (c)(3) and (c)(4) of this section. The amount calculated in paragraph (c)(2)(v)(H) of this section is multiplied by the percentage for each region. These regional QS designations do not apply to CVC QS.

          (4) Regional designation of Western Aleutian Islands golden king crab. Fifty percent of the CVO QS that is issued in the WAG crab QS fishery will be initially issued with a West regional designation. The West regional designation applies to QS for delivery west of 174° W. longitude. The remaining 50 percent of the CVO QS initially issued for this fishery is not subject to regional designation (Undesignated QS). A person (p) who would receive QS based on the legal landings in only one region will receive QS with only that regional designation. A person who would receive QS with more than one regional designation for that crab QS fishery would have his or her QS holdings regionally adjusted on a pro rata basis as follows:

          (h) * * *
          (2) * * *
          (i) QS shall yield Class A or Class B IFQ if:
          (A) Initially assigned to the CVO QS sector; or
          (B) Transferred to the CVO QS sector from the CPO QS sector.
          (ii) The Class A/B IFQ TAC is the portion of the TAC assigned as Class A/B IFQ under paragraphs (h)(2)(i)(A) and (B) of this section.

          (6) * * *
          (ii) CVC IFQ is not subject to regional designation.

        6. In § 680.42, paragraph (b)(6) is revised to read as follows:

          § 680.42
          Limitations on use of QS, PQS, IFQ, and IPQ.

          (b) * * *
          (6) Any person harvesting crab under a Class B IFQ, CPO IFQ, CVC IFQ, or CPC IFQ permit may deliver that crab to any RCR.

      [FR Doc. E8-6584 Filed 3-28-08; 8:45 am]
      BILLING CODE 3510-22-S


        FEDERAL COMMUNICATIONS COMMISSION
        47 CFR Part 73
        [DA 01-18, MM Docket No. 01-2, RM-10036]
        Television Broadcast Service; New Iberia, LA

          AGENCY:
          Federal Communications Commission.

          ACTION:
          Proposed rule.

          SUMMARY:
          The Commission requests comments on a petition filed by Iberia Communications, L.L.C., an applicant for vacant NTSC TV channel 36 at New Iberia, Louisiana, requesting the substitution of channel 53 for channel 36 at New Iberia. Channel 53 can be allotted to New Iberia consistent with Sections 73.623(c) of the Commission's Rules with a minus offset at coordinates (30-12-48 N. and 91-45-58 W.). We will not accept competing expressions of interest in the use of television channel 53- at New Iberia pursuant to the Commission's guidelines stated in Public Notice released on November 22, 1999, DA 99-2505.

          DATES:
          Comments must be filed on or before March 2, 2001, and reply comments on or before March 19, 2001.

          ADDRESSES:
          Federal Communications Commission, 445 12th Street, SW., Room TW-A325, Washington, DC 20554. In addition to filing comments with the FCC, interested parties should serve the petitioner, or its counsel or consultant, as follows: Howard M. Weiss, Anne Goodwin Crump, Fletcher, Heald & Hildreth, PLC, 1300 North 17th Street, Eleventh Floor, Arlington, Virginia 22209 (Counsel for Iberia Communications, LLC).

          FOR FURTHER INFORMATION CONTACT:
          Pam Blumenthal, Mass Media Bureau, (202) 418-1600.

        SUPPLEMENTARY INFORMATION:
        This is a synopsis of the Commission's Notice of Proposed Rule Making, MM Docket No. 01-2, adopted January 8, 2001, and released January 9, 2001. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC Reference Center 445 12th Street, SW., Washington, DC. The complete text of this decision may also be purchased from the Commission's copy contractor, International Transcription Services, Inc., (202) 857-3800, 1231 20th Street, NW., Washington, DC 20036.
        Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

        Members of the public should note that from the time a Notice of Proposed Rule Making is issued until the matter is no longer subject to Commission consideration or court review, all ex parte contacts are prohibited in Commission proceedings, such as this one, which involve channel allotments. See 47 CFR 1.1204(b) for rules governing permissible ex parte contacts.
        For information regarding proper filing procedures for comments, see 47 CFR 1.415 and 1.420.

          List of Subjects in 47 CFR Part 73
          Television broadcasting.

        For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 73 as follows:

          PART 73—TELEVISION BROADCAST SERVICES
          1. The authority citation for part 73 continues to read as follows:

            Authority:
            47 U.S.C. 154, 303, 334, and 336.

            § 73.606
            [Amended]
            2. Section 73.602(b), the Table of Television Allotments under Louisiana is amended by removing TV Channel 36- and adding TV Channel 53- at New Iberia.

            Federal Communications Commission.
            Barbara A. Kreisman,
            Chief, Video Services Division, Mass Media Bureau.

      [FR Doc. 01-900 Filed 1-10-01; 8:45 am]
      BILLING CODE 6712-01-P


        DEPARTMENT OF DEFENSE
        GENERAL SERVICES ADMINISTRATION
        NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
        48 CFR Parts 19, 28, 32, 52, and 53
        [FAR Case 2017-003; [Docket No. FAR-2017-0003, Sequence No. 1]
        RIN 9000-AN39
        Federal Acquisition Regulation: Individual Sureties

          AGENCY:
          Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

          ACTION:
          Proposed rule.

          SUMMARY:
          DoD, GSA and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to implement a section of the National Defense Authorization Act for Fiscal Year 2016 to change the kinds of assets that individual sureties must pledge as security for their individual surety bonds.

          DATES:
          Interested parties should submit comments to the Regulatory Secretariat Division at one of the addresses shown below on or before April 13, 2020 to be considered in the formulation of a final rule.

          ADDRESSES:
          Submit comments in response to FAR Case 2017-003 by any of the following methods:
          • Regulations.gov: http://www.regulations.gov.Submit comments via the Federal eRulemaking portal by entering “FAR Case 2017-003” under the heading “Enter Keyword or ID” and selecting “Search.” Select the link “Comment Now” that corresponds with “FAR Case 2017-003.” Follow the instructions provided on the screen. Please include your name, company name (if any), and “FAR Case 2017-003” on your attached document.
          • Mail: General Services Administration, Regulatory-Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd floor, Washington, DC 20405.

            Instructions: Please submit comments only and cite “FAR case 2017-003” in all correspondence related to this case. All comments received will be posted without change to http://www.regulations.gov, including any personal and/or business confidential information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).

          FOR FURTHER INFORMATION CONTACT:

          Ms. Zenaida Delgado, Procurement Analyst, at 202-969-7207 or zenaida.delgado@gsa.gov for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat Division at 202-501-4755. Please cite “FAR Case 2017-003”.

        SUPPLEMENTARY INFORMATION:

        I. Background
        DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to require that a pledge of assets given by an individual surety consist only of eligible obligations. This FAR change will implement section 874 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2016 (Pub. L. 114-92), codified at 31 U.S.C. 9310, Individual Sureties.
        The revisions modify existing coverage regarding the use of individual sureties in support of a Government bonding requirement. FAR subpart 28.2 requires agencies to obtain adequate security for bonds when bonds are used with a contract. A corporate or individual surety is an acceptable form of security for a bond. Corporate sureties are vetted by the Department of the Treasury to ensure they are sufficiently capitalized and are listed on Department of the Treasury's Listing of Approved Sureties (Treasury Department Circular 570). Individual sureties are not listed on Treasury Department Circular 570; currently contracting officers determine if an individual surety is acceptable.
        This FAR rule revises the types of acceptable assets an individual surety may pledge and requires the Department of the Treasury, Bureau of the Fiscal Service to review those assets to ensure they meet established eligibility requirements.

        Under 31 U.S.C. 9310, when Federal law permits acceptance of a surety bond from a surety not subject to 31 U.S.C. 9305 and 9306 (i.e., an individual surety that is not a corporate surety), the individual surety must pledge assets that are eligible obligations. Eligible obligations are public debt obligations of the United States Government. The requirements of 31 U.S.C. 9310 are intended to strengthen the assets pledged by individual sureties, thereby mitigating risk to the Government.
        II. Discussion and Analysis
        This rule proposes to amend FAR part 28, and its associated clause at 52.228-11, and adds a new provision at 52.228-XX. The changes contained in the proposed rule are as follows:
        1. A new section title is added at FAR 28.203, Individual sureties.
        2. Existing section 28.203 is redesignated as 28.203-1, and revised as described below.

        3. FAR 28.203-1(a). The language requiring contracting officers to determine the acceptability of individuals proposed as sureties is revised, and moved to FAR 28.203-1(c). The process oriented language at FAR 28.203-1(c), while not specifically required by section 874 of the NDAA for FY 2016, is necessary for its implementation under the FAR, and aligns well with the Department of the Treasury guidance and instructions. In addition, language is added to require that assets pledged by an individual surety meet eligibility requirements established by the Department of the Treasury, Bureau of the Fiscal Service. The revised text refers to the Department of the Treasury list of acceptable assets, available at https://www.treasurydirect.gov/instit/statreg/collateral/2018Final225 ListofAcceptable Collateral.pdf.

        4. FAR 28.203-1(b). The paragraph is revised, and broken out into four subparagraphs.
        • 28.203-1(b)(1). The three types of bonds are specifically cited within the text: Bid bond (Standard Form 24), performance bond (Standard Form 25), and payment bond (Standard Form 25A). Though this addition is not related to section 874 of the NDAA for FY 2016 requirements, stating the three types of bonds enables the reader to quickly see the three bond types without having to look elsewhere.

        • 28.203-1(b)(2). The existing text referring to the unencumbered value of the asset exclusive of all outstanding pledges for other bond obligations, is changed as follows: “The net adjusted value of unencumbered assets is their market value minus the margin.” This change clarifies the intent and context of the valuation requirement. The phrase “market value minus the margin” is added to clarify that pledged assets are subject to a percentage reduction (“margin”) from the market value to account for a risk premium. The new text refers to the Department of the Treasury margin tables, which can be viewed by accessing an added hyperlink at www.treasurydirect.gov. In addition, the text in this section is clarified to state that the net adjusted value of the pledged assets, when combined, must equal or exceed the penal amount (i.e., face value) of each bond. Though not specifically required by section 874 of the NDAA, this change aligns with the Department of the Treasury guidance and instructions.
        • 28.203-1(b)(3). The name of the Standard Form 28, Affidavit of Individual Surety, is added. This is an administrative change made to meet FAR drafting conventions.
        • 28.203-1(b)(4). The phrase “or contractor” is added to clarify when bonds are submitted postaward. The phrase “net adjusted value” of the assets is added to clarify what is to equal or exceed the penal amount of the bond.

        5. New FAR 28.203-1(c) is added to clarify that the pledge of assets by an individual surety shall be submitted to the contracting officer, who will then notify the Department of the Treasury of the existence of the individual surety, the assets to be pledged, and the amount necessary to cover the individual surety bond, i.e., the required amount to be collateralized. If after 3 business days the contracting officer has not received a response from Treasury, the contracting officer may seek assistance from the Director, Bank Policy and Oversight, at 202-504-3502. This section also requires contracting officers to determine whether the individual surety bond is acceptable as to the amount necessary to cover the individual surety bond, based on the asset eligibility and valuation assessment from the Department of the Treasury. The contracting officer will then notify both the offeror or contractor and the individual surety of this determination. These process steps are integral to effective implementation of section 874 requirements in the FAR.
        6. New FAR 28.203-1(d) is added to require the contracting officer to request the Department of the Treasury operations support team set up the individual surety asset collateral account for each contract. The requirements for contracting officers to contact the Department of the Treasury about individual sureties are additional responsibilities for contracting officers; however, the Department of the Treasury officials will be providing collateral eligibility and valuation assessment.
        7. Current FAR 28.203 paragraphs (e) and (f) are deleted; paragraphs (c) and (d) are redesignated (e) and (f) under the now redesignated FAR section 28.203-1. The now redesignated paragraph 28.203-1(e) changes the text from “competency review” to “Certificate of Competency.” The now redesignated paragraph 28.203-1(f) allows the contracting officer to permit the contractor to substitute an acceptable surety when Treasury could not assess the asset eligibility and valuation within a reasonable time.
        8. Current sections 28.203-1, 28.203-2 and 28.203-3 are deleted; sections 28.203-4 through 28.203-7 are redesignated 28.203-2 through 28.203-5.
        9. FAR 28.203-2, Acceptability of Assets, is deleted as the acceptability of assets is governed under the Department of the Treasury regulations and instructions.
        10. FAR 28.203-3, Acceptance of Real Property, is deleted as real property is no longer an acceptable form of collateral. As stated previously, this FAR change will implement section 874 of the NDAA for FY 2016 (Pub L. 114-82), which adds 31 U.S.C. 9310, Individual Sureties. 31 U.S.C. 9310 limits the security required for an individual surety bond to eligible obligations, which are described under 31 U.S.C. 9303. Eligible obligations consist of acceptable collateral or eligible collateral. Real Property is not an eligible obligation under 31 U.S.C 9301.
        11. The now redesignated FAR section 28.203-2 adds the phrase “including a revised SF 28” to clarify that the form must be used when substituting assets. It also adds the phrase “Following the requirements set forth in 28.203-1” to make it clear that any substitution of assets is subject to the same requirements as on the assets originally pledged.
        12. The now redesignated FAR section 28.203-3 deletes the reference to the Optional Form 90, Release of Lien on Real Property, as real property is not considered an eligible obligation under 31 U.S.C. 9301. At paragraph (a)(1), cross-references are added for the convenience of the reader.
        13. The now redesignated FAR section 28.203-4 added at paragraph (a) the prescription for the new provision at 52.228-XX, and modified at paragraph (b) the prescription for the existing clause at 52.228-11 to add the title of the clause.
        14. At FAR 28.204(b), the word “lien” is deleted and replaced with “security” to clarify the meaning of the transaction.
        15. A new FAR provision at 52.228-XX is created to distinguish instructions to offerors from instructions to a contractor, by relocating the “offeror” language from the existing FAR clause at 52.228-11. The provision addresses the offeror requirements for using an individual surety for a bid guarantee consistent with the text in the now designated FAR 28.203-1.
        16. FAR clause 52.228-11 is modified to address contractor requirements for using an individual surety for a performance or payment bond consistent with the text in the now designated 28.203-1.
        17. Optional Form 90, Release of Lien on Real Property, is removed as real property is not considered an eligible obligation under 31 U.S.C. 9301. These changes are noted at FAR 28.106-1, the now designated 28.203-3, 53.228, and 53.300(a).
        18. Conforming and minor editorial changes were made elsewhere. Cross-references are revised at FAR 19.602-1, 28.102-2(e), 28.204(b), and 32.202-4(c).
        III. Applicability to Contracts at or Below the Simplified Acquisition Threshold (SAT) and for Commercial Items, Including Commercially Available Off-the-Shelf (COTS) Items
        DoD, GSA, and NASA do not intend to change the current policy on the use of bonds for the acquisition of commercial items, including COTS, found at FAR 28.103. FAR 28.103-1(a) states that “Generally, agencies shall not require performance and payment bonds for other than construction contracts. However, performance and payment bonds may be used as permitted in 28.103-2 and 28.103-3.”
        DoD, GSA, and NASA do intend to apply the requirements of this rule to solicitations for contracts valued at or below the SAT. FAR 28.102-1(b) gives an example of when a bond could be required for an acquisition under the SAT. As noted in FAR 28.102-1(b), 40 U.S.C. 3132 requires the contracting officer select two or more payment protections for construction contracts greater than $35,000, but not greater than $150,000, one of the possible protections being a payment bond. Individual sureties may provide security for a payment bond in this situation. DoD, GSA, and NASA intend to determine that it is not in the best interest of the Government to waive the applicability of section 874 below the SAT, because the new requirement will create greater certainty of payment for subcontractors. Applying the rule below the SAT will continue the FAR uniformity in the type of assets allowed to be pledged, whether the acquisition is above or below the SAT.
        IV. Expected Impact on the Public

        DoD, GSA, and NASA have preliminarily concluded that the proposed rule is regulatory because, as required by law, new requirements are imposed on individual sureties seeking to provide bonds to Federal Government contractors. However, DoD, GSA, and NASA also believe there may be some burden reduction associated with this rule. Because the Government has been unable to identify other than anecdotal data on the use of individual sureties, public input is sought before a final determination is made on whether the rule is regulatory and whether there is burden reduction.
        An individual surety must pledge public debt obligations of the United States Government. The individual surety no longer will be allowed to pledge real estate or assets such as stocks and bonds, as is currently permitted by the FAR. At least one surety company specializing in Federal small business contracting cautioned about the impact of reducing the availability of individual sureties, stating that the “individual surety is a tool to groom contractors back into corporate surety credit . . . it is the only method to keep small businesses that have credit issues . . . in business.” Testimony of the Barbour Group before the House Judiciary Subcommittee on Courts, Commercial, and Administrative Law, March 5, 2012.
        Information on the use of individual and corporate sureties by Federal contractors and subcontractors is currently not centrally collected, so the percentage of these entities availing themselves of individual sureties that would no longer be accepted under this new rule is unclear. However, there is reason to believe the impact is small, relative to the total amount of construction contract spending for which individual sureties could be used historically. Specifically, DoD, GSA, and NASA attempted to determine all of the awards that contained the FAR clause at 52.228-11, Pledges of Assets, with a total obligated amount of over $35,000. This clause, which would be amended by this rulemaking, has historically allowed pledges of assets from individual sureties. Only information from DoD was available to determine which contracts contained this particular FAR clause. This was thought to be a representative, if conservative, sample, as DoD contracts account for 63 percent of all Federal agencies' obligated dollars in FY 2017, and DoD has a higher proportion of construction contracts that would likely contain this requirement.
        Based on FY 2017 data contained in the Electronic Document Access (EDA) system (the DoD official contract file system), 8,603 DoD contracts contained the relevant FAR clause and a total obligated amount of over $35,000, with a total award magnitude of $12.8 billion (total dollars obligated on the 8,603 contracts). These awards account for 14 percent of the total number of FY 2017 DoD construction contract awards (8,603 ÷ 60,317 (according to data in the Federal Procurement Data System (FPDS))) and 66 percent of the total construction dollars obligated for FY 2017 by DoD ($12.8B÷$19.3B (according to data in FPDS)). These contracts were awarded to 318 unique other than small businesses (1,195 awards), and 1,672 unique small businesses (7,408 awards). However, the impact is even smaller considering that these contractors could be using corporate sureties, individual sureties, or pledging their own assets as acceptable forms of security. DoD, GSA, and NASA interviewed operational contracting officers at the largest procurement offices engaged in construction contracting—the Naval Facilities Engineering Command, and GSA's Public Building Service. Based on their responses, DoD, GSA, and NASA estimate that less than 0.1 percent of contractors, mostly small businesses, are using individual sureties to meet the required bonding under contracts. Accordingly, DoD, GSA, and NASA estimate about 9 (8,603 * 0.1 percent) FY 2017 DoD contract awards accounting for 0.015 percent (9 ÷ 60,317) of the total number of FY 2017 DoD construction contract awards and 0.066 percent ($12.8M ÷ $19.3B) of the total construction dollars obligated for FY17 by DoD, might be associated with individual sureties. Using data in FPDS and applying the same percentages to the 59,351 of FY 2017 other than DoD construction contract awards, and the $12 billion construction dollars obligated for FY17 by other than DoD, DoD, GSA, and NASA find that 9 (59,351 * 0.00015) construction contract awards and $7.9 million construction dollars ($12 B * 0.00066) obligated for FY 2017 by other than DoD might be associated with individual sureties. In summary, DOD, GSA, and NASA found that this proposed rule is likely to impact about 18 contract awards, and $20.7 million obligated dollars.
        To the extent that this proposed rule reduces the pool of individual sureties from which a small business contractor or subcontractor may obtain a bond, these entities have the option of seeking bond assistance through the Surety Bond Guarantee (SBG) Program operated by the U.S. Small Business Administration (SBA). Under the SBG Program, SBA guarantees the bid, performance or payment bonds issued by participating surety companies to small business contractors. The SBA guarantee covers a certain percentage of any loss that the surety may incur on the bond. The SBG Program is intended to assist small business contractors who are unable to obtain a bond on reasonable terms and conditions without the SBA guarantee. The SBA's guarantee, therefore, encourages the surety company to issue a bond that it would not otherwise provide for a small business. SBA may guarantee bonds for contracts that do not exceed $6.5 million, and up to $10 million if a Federal contracting officer certifies that such a guarantee is necessary (see 13 CFR part 115). Public input is being sought to help evaluate whether the reduction in business opportunities for providers of individual sureties is likely to be offset by an increase in opportunities for providers of corporate sureties.
        In addition, there are aspects of the rule that could reduce burden. For example, the new requirements will create greater certainty of payment for subcontractors, who are a key intended benefactor of the law and proposed rule. While DoD, GSA, and NASA lack data to quantify this benefit, this certainty should eliminate due diligence steps that Federal subcontractors have ostensibly been forced to take to ensure they will indeed be protected by a surety bond in the event of a prime contractor's default. As described in one law review article, this due diligence includes verifying with the designated financial institution that it is holding cash or cash equivalents in an escrow account in the name of the contracting agency for use in meeting the surety's promises. See Edward G. Gallagher & Mark H. McCallum, The Importance of Surety Bond Verification, 39 Public Contract Law Journal 269 at 283 (Winter 2010).
        It is also anticipated that the Federal Government may experience reduced burden under the new rule. Contracting officers will no longer have to research individual sureties and make case-by-case determinations of whether securities pledged by individual sureties are suitable and can instead refocus their attention on higher value acquisition planning and management activities that take better advantage of their training as acquisition specialists.

        Rates of default on individual and corporate sureties are currently unknown, but all other aspects of a construction contractor being equal, it is assumed that corporate sureties provide greater cost avoidance in the case of default by prime contractors to both subcontractors and the Government. These costs could include financial losses on Federal projects, loss of experienced subcontractors and workers when they are not paid, delays in a project's completion, litigation costs, and additional expenses related to contract administrative actions to secure resources needed to continue the construction project and make up for schedule delays. More information is needed to quantify these costs and the potential mitigating impacts of this rule.
        DoD, GSA, and NASA welcome public input to help more fully understand the impact of this regulation on affected parties. DoD, GSA, and NASA lack data on individual sureties, but believe based on interviews of contracting officials of major construction operations at the Naval Facilities Engineering Command, and GSA's Public Building Service, DoD, and GSA that individual sureties are used far less frequently than corporate sureties. In addition to input from any subject matter experts, DoD, GSA, and NASA invite input from affected parties, including the following:
        1. For subcontractors and suppliers on Federal construction and other projects that require prime contractors to obtain sureties—
        a. What positive or negative impacts do you anticipate the new rules will have on your work?
        b. To what extent might SBA's SBG Program provide an alternative option to individual sureties?
        c. Do you agree that subcontractors may see reduced burden because they will not need to take the same level of precaution to protect against fraud and abuse by individual sureties, when individual sureties are used? If not, why not?
        2. For individual sureties—
        a. What additional burden may be created for individual sureties who decide to convert their assets into the kind that qualify under the new legislation?
        b. What would be the impact, in terms of time, effort, and cost, for individual sureties to convert their assets into the kind that qualify under the new legislation?
        3. For prime contractors that currently rely on individual sureties—
        a. Do you anticipate greater difficulty obtaining necessary surety bonds? If so, why?
        b. Have you experienced challenges with individual sureties? If so, what was the nature of the challenges?
        c. Do you expect fees charged by individual sureties to be impacted under the new rule?
        d. To what extent might SBA's SBG Program provide an alternative option to individual sureties?
        DoD, GSA, and NASA have calculated the cost of regulatory familiarization with the new process, based on FPDS data for FY 2017, estimating that for the first year 5 entities will be subject to the new requirements, 1 hour per entity; and due to turnover and new entrants, 20 percent of that amount in subsequent years. The estimated public cost for familiarization, calculated in 2016 dollars at a 7 percent discount rate in perpetuity is as follows:

        Annualized—$40.75
        Present Value—$582.08
        V. Executive Orders 12866 and 13563
        Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is a significant regulatory action and therefore, this rule was subject to the review of the Office of Information and Regulatory Affairs under section 6(b) of E.O. 12866. This rule is not a major rule under 5 U.S.C. 804.
        VI. Executive Order 13771
        This rule is considered an E.O. 13771 regulatory action. Details on the expected impact on the public can be found in Section IV of this preamble.
        VII. Regulatory Flexibility Act

        DoD, GSA, and NASA do not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. However, an Initial Regulatory Flexibility Analysis (IRFA) has been performed and is summarized as follows:

          The rule proposes to amend the Federal Acquisition Regulation (FAR) to change the kinds of assets that individual sureties must pledge as security for their individual surety bonds.

          The objective of the FAR rule is to implement section 874 of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 (FY16)(Pub. L. 114-92), which adds 31 U.S.C. 9310, Individual sureties, which limits the security for an individual surety bond to eligible obligations, i.e., cash and/or Government obligations. This section was intended to strengthen coverage for individual sureties, thereby mitigating risk to the Government. The legal basis for this rule is 40 U.S.C. 121(c), 10 U.S.C. chapter 137, and 51 U.S.C. 20113.
          The proposed rule applies to all offerors and contractors who wish to use an individual surety as security for bonds required under a solicitation/contract for supplies or services (including construction). The number of solicitations and contracts requiring the submission of bid guarantees, performance, or payment bonds, correlate roughly to the number of contract awards containing FAR clause 52.228-11, Pledge of Assets. Based on FY 2017 data contained in EDA, 8,603 DoD contract awards, containing FAR clause 52.228-11 with an obligated amount of over $35,000, were made to 1,990 unique vendors; of these 1,672 were small business entities. These contractors could be using corporate sureties under 28.202, individual sureties under 28.203, or pledging the contractor's own assets under 28.204; this FAR case only covers individual sureties under 28.203. Therefore, based on contracting officers' experience in the field DoD, GSA, and NASA estimate that less than 0.1 percent of contractors are using individual sureties to meet the required bonding under contracts.
          The proposed rule does not include additional reporting or record keeping requirements. Although the proposed rule creates a new provision to distinguish instructions to offerors from instructions to a contractor by relocating the “offeror” language from the existing FAR clause at 52.228-11, Pledge of Assets, the net effect of projected reporting and recordkeeping is unchanged. The use of Standard Form 28, Affidavit of Individual Surety, an existing reporting requirement under 52.228-11, is covered under the Office of Management and Budget (OMB) Control No. 9000-0001. The SF 28 is revised as a result of this rule. However, this will have a negligible impact on offerors, contractors, and respondents.
          The effect on small business is that individual sureties will no longer be able to pledge real property, corporate stocks, corporate bonds, or irrevocable letters of credit. DoD, GSA, and NASA anticipate that some individual sureties may not want to transform their assets into the kind that qualify under the new legislation, and so there will be fewer individual sureties available to meet the needs of small business offerors/contractors. This may mean that some small businesses that have been using individual sureties will have their costs change, as they go to a different individual surety, or to a corporate surety.
          The rule does not duplicate, overlap, or conflict with any other Federal rules.
          There are no available alternatives to the proposed rule to accomplish the desired objective of the statute. DoD, GSA, and NASA do not expect this proposed rule to have a significant economic impact on a substantial number of small entities because this only applies to (1) offerors and contractors who are using an individual surety as security for bonds required under a solicitation/contract for supplies or services (including construction), and (2) individual sureties, a small number of whom may not want to transform their assets into the kind that qualify under the new legislation.

        The Regulatory Secretariat Division has submitted a copy of the IRFA to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat Division. DoD, GSA and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.
        DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule consistent with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2017-003) in correspondence.
        VIII. Paperwork Reduction Act
        The Paperwork Reduction Act (44 U.S.C. Chapter 35) does apply; however, the proposed changes to the FAR do not impose additional information collection requirements. This rule proposes to modify the Standard Form (SF) 28, which is used by all executive agencies to obtain information from individuals wishing to serve as sureties to Government bonds. However, the modification merely updates the language in the form to be consistent with the changes to the FAR text; it will have no impact on offerors or contractors. The modification of the SF 28 does not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 9000-0001, Standard Form 28, Affidavit of Individual Surety.

          List of Subjects in 48 CFR Parts 19, 28, 32, 52, and 53
          Government procurement.

          William F. Clark,
          Director, Office of Government-wide Acquisition Policy, Office of Acquisition Policy, Office of Government-wide Policy.

        Therefore, DoD, GSA, and NASA are proposing to amend 48 CFR parts 19, 28, 32, 52, and 53 as set forth below:
        1. The authority citation for 48 CFR parts 19, 28, 32, 52, and 53 continues to read as follows:

          Authority:
           40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 U.S.C. 20113.

          PART 19—SMALL BUSINESS PROGRAMS

            19.602-1
             [Amended]

        2. Amend section 19.602-1 by removing from paragraph (a) “and 28.203(c))” and adding “and 28.203-1(e))” in its place.

          PART 28—BONDS AND INSURANCE

            28.102-2
             [Amended]

        3. Amend section 28.102-2 by removing from paragraph (e) “of 28.203-5(c)” and adding “of 28.203-3(c)” in its place.
        4. Amend section 28.106-1 by removing paragraph (o); redesignating paragraph (p) as paragraph (o); and revising the new redesignated paragraph (o) to read as follows.

          28.106-1
           Bonds and bond related forms.

          (o) OF 91, Release of Personal Property from Escrow (see 28.203-3).

        5. Amend section 28.202 by—
        a. Revising paragraph (a)(1);
        b. Revising the first sentence of paragraph (a)(2);
        c. Removing from paragraph (a)(3) “Department of the Treasury regulations” and adding “Department of the Treasury (Treasury) regulations” in its place;
        d. Removing from paragraph (a)(4) “Standard Form 273”, “Standard Form 274” and “Standard Form 275” and adding “Standard Form (SF) 273”, “SF 274”, and “SF 275” in their places, respectively
        e. Revising the first sentence of paragraph (c); and
        f. Revising paragraph (d) to read as follows:

          28.202
           Acceptability of corporate sureties.
          (a)(1) Corporate sureties offered for bonds furnished with contracts performed in the United States or its outlying areas must appear on the list contained in the Department of the Treasury's Listing of Approved Sureties (Treasury Department Circular 570), “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies.”
          (2) The penal amount of the bond should not exceed the surety's underwriting limit stated in the Treasury Department Circular 570. * * *

          (c) Treasury issues supplements to Treasury Department Circular 570, notifying all Federal agencies of new approved corporate surety companies and the termination of the authority of any specific corporate surety to qualify as a surety on Federal bonds. * * *

          (d) Treasury Department Circular 570 may be obtained from the U.S. Department of the Treasury, Bureau of the Fiscal Service, Surety Bond Branch, 3201 Pennsy Drive, Building E, Landover, MD 20785. Or via the internet at https://www.fiscal.treasury.gov/fsreports/ref/suretyBnd/c570.htm.

        6. Revise the section 28.203 to read as follows:

          28.203
           Individual sureties.

          28.203-1
           Acceptability of individual sureties.
          (a) An individual surety is acceptable for all types of bonds except position schedule bonds.

          Assets pledged by an individual surety shall meet the eligibility requirements of Treasury's Bureau of the Fiscal Service. Per 31 U.S.C. 9310, individual sureties must pledge eligible obligations, which Treasury refers to as acceptable collateral or eligible collateral. A list of acceptable assets, entitled “Acceptable Collateral for 31 CFR PART 225,” is available at https://www.treasurydirect.gov/instit/statreg/collateral/2018Final225ListofAcceptableCollateral.pdf.

          (b)(1) An individual surety shall execute the bond (e.g., bid bond (SF 24), performance bond (SF 25), payment bond (SF 25A)).

          (2) The net adjusted value of unencumbered assets is their market value minus the margin. The margin tables are available at www.treasurydirect.gov. The net adjusted value of unencumbered assets pledged by the individual surety must equal or exceed the penal amount (i.e., face value) of each bond.
          (3) The individual surety shall execute the SF 28, Affidavit of Individual Surety, and provide a security interest. One individual surety is adequate support for a bond, provided the net adjusted value of unencumbered assets pledged by that individual surety equals or exceeds the amount of the bond.
          (4) An offeror or contractor may submit up to three individual sureties for each bond, in which case the net adjusted value of the pledged unencumbered assets, when combined, must equal or exceed the penal amount of the bond. Each individual surety is jointly and severally liable to the extent of the penal amount of the bond.

          (c) Using the information from the SF 28 submitted by the offeror or contractor, the contracting officer shall notify the Treasury's collateral operations support team by email at BMT@fiscal.treasury.gov or by phone at 888-568-7343, of the individual surety, the assets to be pledged, and the amount necessary to cover the individual surety bond, i.e., the required amount to be collateralized. If after 3 business days the contracting officer has not received a response from Treasury, the contracting officer may seek assistance from the Director, Bank Policy and Oversight, at 202-504-3502. Treasury will advise the contracting officer whether the assets are eligible to be pledged, consistent with 28.203-1(a), and of the valuation of the assets offered to be pledged, consistent with the valuation standards in 28.203-1(b)(2). The contracting officer shall determine whether the individual surety bond is acceptable as to the amount necessary to cover the individual surety bond based on the asset eligibility and valuation assessment from Treasury. The contracting officer shall notify both the offeror or contractor and the individual surety of this determination.
          (d) If the contracting officer determines the individual surety is acceptable, the contracting officer shall request the Treasury's collateral operations support team set up the necessary individual surety pledged asset collateral account.
          (e) If the contracting officer determines that no individual surety in support of a bid guarantee is acceptable, the offeror utilizing the individual surety shall be rejected as nonresponsible, except as provided in 28.101-4. A finding of nonresponsibility based on unacceptability of an individual surety, need not be referred to the Small Business Administration for a Certificate of Competency. (See 19.602-1(a) and 61 Comp. Gen. 456 (1982).)
          (f) If a contractor submits an unacceptable individual surety, or one that Treasury could not assess the asset eligibility and valuation within a reasonable time, then the contracting officer may permit the contractor to substitute an acceptable surety within a reasonable time.
          (g) Evidence of possible criminal or fraudulent activities by an individual surety shall be referred to the appropriate agency official in accordance with agency procedures.

          28.203-2
           Substitution of assets.
          An individual surety may request the Government to accept a substitute asset for that currently pledged by submitting a written request, including a revised SF 28, to the responsible contracting officer. Following the requirements set forth in 28.203-1, the contracting officer may agree to the substitution of assets upon determining, that the substitute assets to be pledged are adequate to protect the outstanding bond or guarantee obligations.

          28.203-3
           Release of security interest.
          (a) After consultation with legal counsel, the contracting officer shall release the security interest on the individual surety's assets using the Optional Form 91, Release of Personal Property from Escrow, or a similar release as soon as possible consistent with the conditions in subparagraphs (a) (1) and (2) of this section. A surety's assets pledged in support of a payment bond may be released to a subcontractor or supplier upon Government receipt of a Federal district court judgment, or a sworn statement by the subcontractor or supplier that the claim is correct along with a notarized authorization of the release by the surety stating that it approves of such release.
          (1) Contracts subject to the Bonds statute. See section 1.110 and paragraph (a) of section 28.102-1. The security interest shall be maintained for the later of (i) one year following final payment, (ii) until completion of any warranty period (applicable only to performance bonds), or (iii) pending resolution of all claims filed against the payment bond during the 1 year period following final payment.
          (2) Contracts subject to alternative payment protection. See paragraph (b)(1) of section 28.102-1. The security interest shall be maintained for the full contract performance period plus one year.
          (3) Other contracts not subject to the Bonds statute. The security interest shall be maintained for 90 days following final payment or until completion of any warranty period (applicable only to performance bonds), whichever is later.
          (b) Upon written request by the individual surety, the contracting officer may release the security interest on the individual surety's assets in support of a bid guarantee based upon evidence that the offer supported by the individual surety will not result in contract award.
          (c) Upon written request by the individual surety, the contracting officer may release a portion of the security interest on the individual surety's assets based upon substantial performance of the contractor's obligations under its performance bond. Release of the security interest in support of a payment bond must comply with the subparagraphs (a)(1) through (3) of this section. In making this determination, the contracting officer will give consideration as to whether the unreleased portion of the security is sufficient to cover the remaining contract obligations, including payments to subcontractors and other potential liabilities. The individual surety shall, as a condition of the partial release, furnish an affidavit agreeing that the release of such assets does not relieve the individual surety of its obligations under the bond(s).

          28.203-4
           Solicitation provision and contract clause.
          (a) Insert the provision at 52.228-XX, Individual Surety—Pledge of Assets (Bid Guarantee), in solicitations which require the submission of a bid guarantee.
          (b) Insert the clause at 52.228-11, Individual Surety—Pledge of Assets, in solicitations and contracts which require the submission of performance, or payment bonds.

          28.203-5
           Exclusion of individual sureties.
          (a) An individual may be excluded from acting as a surety on bonds submitted by offerors on procurement by the executive branch of the Federal Government, by the acquiring agency's head or designee utilizing the procedures in subpart 9.4. The exclusion shall be for the purpose of protecting the Government.
          (b) An individual may be excluded for any of the following causes:
          (1) Failure to fulfill the obligations under any bond.
          (2) Failure to disclose all bond obligations.
          (3) Misrepresentation of the value of available assets or outstanding liabilities.
          (4) Any false or misleading statement, signature or representation on a bond or affidavit of individual suretyship.
          (5) Any other cause affecting responsibility as a surety of such serious and compelling nature as may be determined to warrant exclusion.
          (c) An individual surety excluded pursuant to this section shall be entered as an exclusion in the System for Award Management (see 9.404).
          (d) Contracting officers shall not accept the bonds of individual sureties whose names appear in an active exclusion record in the System for Award Management (see 9.404), unless the acquiring agency's head or a designee states in writing the compelling reasons justifying acceptance.
          (e) An exclusion of an individual surety under this section will also preclude such party from acting as a contractor in accordance with subpart 9.4.

          28.204
           [Amended]
          7. Amend section 28.404 by removing from paragraph (b) “lien in 28.203-5(c)” and adding “security in 28.203-3(c)” in its place.

          28.204-1
           [Amended]

        8. Amend section 28.204-1 by removing from the first sentence of the text “dated July 1, 1978”.

          PART 32—CONTRACT FINANCING

            32.202-4
             [Amended]

        9. Amend section 32.202-4 by removing from paragraph (c) “28.203-2, 28.203-3, and” and adding “28.203 and” in its place.

          PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

        10. Add section 52.228-XX to read as follows:

          52.228-XX
           Individual Surety—Pledge of Assets (Bid Guarantee).
          As prescribed in 28.203-4(a), insert the following provision:

            Individual Surety—Pledge of Assets (Bid Guarantee) (Date)
            (a) Offerors shall obtain from each person acting as an individual surety on a bid guarantee—
            (1) A pledge of assets that meets the eligibility, valuation, and security requirements described in the Federal Acquisition Regulation (FAR) 28.203-1; and
            (2) Standard Form 28, Affidavit of Individual Surety.
            (b) The Offeror shall include with its offer the information required at paragraph (a) of this provision within the time frame specified in the provision at FAR 52.228-1, Bid Guarantee, or as otherwise established by the Contracting Officer.
            (c) The Contracting Officer may release the security interest on the individual surety's assets in support of a bid guarantee based upon evidence that the offer supported by the individual surety will not result in contract award.

          (End of provision)

        11. Revise section 52.228-11 and section heading to read as follows:

          52.228-11
           Individual Surety—Pledges of Assets.
          As prescribed in 28.203-4(b), insert the following clause:

            Individual Surety—Pledges of Assets (Date)
            (a) The Contractor shall obtain from each person acting as an individual surety on a performance bond or a payment bond—
            (1) A pledge of assets that meets the eligibility, valuation, and security requirements described in the Federal Acquisition Regulation (FAR) 28.203-1; and (2) Standard Form 28, Affidavit of Individual Surety.
            (b) The Contracting Officer may release a portion of the security interest on the individual surety's assets based upon substantial performance of the Contractor's obligations under its performance bond. The security interest in support of a performance bond shall be maintained—
            (1) Contracts for the construction, alteration, or repair of any public building or public work of the Federal Government exceeding $150,000 (40 U.S.C. 3131). Until completion of any warranty period, or for one year following final payment, whichever is later.
            (2) Contracts subject to alternative payment protection (see FAR 28.102-1(b)(1)). For the full contract performance period plus one year.
            (3) Other contracts not subject to the requirements of paragraph (b)(1) of this clause. Until completion of any warranty period, or for 90 days following final payment, whichever is later.
            (c) A surety's assets pledged in support of a payment bond may be released to a subcontractor or supplier upon Government receipt of a Federal district court judgment, or a sworn statement by the subcontractor or supplier that the claim is correct along with a notarized authorization of the release by the surety stating that it approves of such release. The security interest on the individual surety's assets in support of a payment bond shall be maintained—
            (1) Contracts for the construction, alteration, or repair of any public building or public work of the Federal Government exceeding $150,000 which require performance and payment bonds (40 U.S.C. 3131). For one year following final payment, or until resolution of all pending claims filed against the payment bond during the 1-year period following final payment, whichever is later.
            (2) Contracts subject to alternative payment protection (see FAR 28.102-1(b)(1)). For the full contract performance period plus one year.
            (3) Other contracts not subject to the requirements of paragraph (c)(1) of this clause. For 90 days following final payment.
            (d) The Contracting Officer may allow the Contractor to substitute an individual surety, for a performance or payment bond, after contract award. The Contractor shall comply with the requirements of paragraph (a) of this clause within the time frame established by the Contracting Officer.

          (End of clause)

          PART 53—FORMS

            53.228
             [Amended]

        12. Amend section 53.228 by—
        a. Removing from paragraph (e) “(Rev. 6/2003)” and “28.203(b).)” and adding ““(Rev. Date)” and “28.203-1(b)(3).)” in their places, respectively;
        b. Removing paragraph (o);
        c. Redesignating paragraph (p) as paragraph (o); and
        d. Removing from the newly redesignated paragraph (o) “(See 28.106-1(p) and 28.203-5(a).)” and adding “(See 28.106-1(o) and 28.203-3(a).)” in its place.

          53.300
           [Amended]

        13. Amend section 53.300 by removing from the table 53-1 in paragraph (a) “OF 90 Release of Lien on Real Property.”

      [FR Doc. 2020-02655 Filed 2-11-20; 8:45 am]
       BILLING CODE 6820-EP-P


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Parts 52 and 70
        [EPA-R07-OAR-2012-0749; FRL-9795-1]
        Approval and Promulgation of Implementation Plans and Operating Permits Program; State of Missouri

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:

          EPA is proposing to approve a revision to the State Implementation Plan (SIP) and Operating Permits Program to amend the definitions provisions of the rules. This SIP revision and revision to the Missouri operating permits program proposes to add the compounds propylene carbonate and dimethyl carbonate to the list of compounds which are excluded from the definition of Volatile Organic Compound (VOC) for consistency with the Federal definition of VOC. The SIP revision also proposes to correct two asbestos method subpart references. This revision also proposes approval of Missouri's request to amend the SIP to meet the 2008 fine particulate matter (PM2.5) National Ambient Air Quality Standards implementation requirements of the May 16, 2008, New Source Review (NSR) PM2.5 Rule. In this SIP revision, Missouri adopted rule revisions to establish the requirement for NSR permits to address directly emitted PM2.5 and precursor pollutants; and significant emission rates for direct PM2.5 and precursor pollutants (sulfur dioxide (SO2) and nitrogen dioxide (NOX)).

          DATES:
          Comments on this proposed action must be received in writing by May 2, 2013.

          ADDRESSES:

          Submit your comments, identified by Docket ID No. EPA-R07-OAR-2012-0749, by mail to: Craig Bernstein, Environmental Protection Agency, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219. Comments may also be submitted electronically or through hand delivery/courier by following the detailed instructions in the ADDRESSES section of the direct final rule located in the rules section of this Federal Register.

          FOR FURTHER INFORMATION CONTACT:
          Craig Bernstein at (913) 551-7688, or by email at bernstein.craig@epa.gov.

        SUPPLEMENTARY INFORMATION:
        In the final rules section of the Federal Register, EPA is approving the state's SIP revision as a direct final rule without prior proposal because the Agency views this as a noncontroversial revision amendment and anticipates no relevant adverse comments to this action. A detailed rationale for the approval is set forth in the direct final rule. If no relevant adverse comments are received in response to this action, no further activity is contemplated in relation to this action. If EPA receives relevant adverse comments, the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed action. EPA will not institute a second comment period on this action. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on part of this rule and if that part can be severed from the remainder of the rule, EPA may adopt as final those parts of the rule that are not the subject of an adverse comment. For additional information, see the direct final rule which is located in the rules section of this Federal Register.

          Dated: March 20, 2013.
          Karl Brooks,
          Regional Administrator, Region 7.

      [FR Doc. 2013-07403 Filed 4-1-13; 8:45 am]
      BILLING CODE 6560-50-P