        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Parts 80 and 86
        [EPA-HQ-OAR-2006-0363; FRL-8263-5]
        RIN 2060-AN66
        Amendment to Tier 2 Vehicle Emission Standards and Gasoline Sulfur Requirements: Partial Exemption for U.S. Pacific Island Territories

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed Rule.

          SUMMARY:

          EPA is proposing to exempt the three U.S. Pacific Island Territories—American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands (C.N.M.I.)—from the gasoline sulfur requirements that EPA promulgated in the Tier 2 motor vehicle rule. The Governor of American Samoa petitioned us for an exemption from the Tier 2 gasoline sulfur requirement because of the potential for gasoline shortages, the added cost, and the minimal air quality benefits the Tier 2 gasoline sulfur requirement would provide to American Samoa. Representatives of the Governors of Guam and C.N.M.I. have also requested an exemption referencing the petition submitted by American Samoa. The Far East market, primarily Singapore, supplies gasoline to the U.S. Pacific Island Territories. The Tier 2 sulfur standard effectively requires special gasoline shipments, which would increase the cost and could jeopardize the security of the gasoline supply to the Pacific Island Territories. The air quality in American Samoa, Guam, and C.N.M.I. is generally pristine, due to the wet climate, strong prevailing winds, and considerable distance from any pollution sources. We recognize that exempting the U.S. Pacific Island Territories from the gasoline sulfur standard will result in smaller emission reductions. However, Tier 2 vehicles using higher sulfur gasoline still emit 30% less hydrocarbons and 60% less NOX than Tier 1 vehicles and negative effects on the catalytic converter due to the higher sulfur levels are, in many cases, reversible. Additionally, these reduced benefits are acceptable due to the pristine air quality, the fact that gasoline quality will not change, and the cost and difficulty of consistently acquiring Tier 2 compliant gasoline. The Tier 2 motor vehicle rule also sets standards for vehicle emissions. Vehicles in use on the U.S. Pacific Island Territories will not be exempt from the Tier 2 vehicle emission standards. However, additional flexibility will be afforded due to the lack of low sulfur gasoline.

          DATES:
          Comments must be received on or before January 29, 2007. Request for a public hearing must be received by January 12, 2007. If we receive a request for a public hearing, we will publish information related to the timing and location of the hearing and the timing of a new deadline for public comments.

          ADDRESSES:
          Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2006-0363, by one of the following methods:
          • http://www.regulations.gov: Follow the on-line instructions for submitting comments.
          • Mail: Air Docket, Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW., Washington, DC, 20460, Attention Docket ID No. EPA-HQ-OAR-2006-0363. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 20503.

            Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2006-0363. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

            Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

          Note:

          The EPA Docket Center suffered damage due to flooding during the last week of June 2006. The Docket Center is continuing to operate. However, during the cleanup, there will be temporary changes to Docket Center telephone numbers, addresses, and hours of operation for people who wish to make hand deliveries or visit the Public Reading Room to view documents. Consult EPA's Federal Register notice at 71 FR 38147 (July 5, 2006) or the EPA Web site at http://www.epa.gov/epahome/dockets.htm for current information on docket operations, locations and telephone numbers. The Docket Center's mailing address for U.S. mail and the procedure for submitting comments to http://www.regulations.gov are not affected by the flooding and will remain the same.

          FOR FURTHER INFORMATION CONTACT:

          Sean Hillson, Office of Transportation and Air Quality, Transportation and Regional Programs Division, Mailcode AASMCG, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4789; fax number: (734) 214-4052; e-mail address: Hillson.Sean@epa.gov.

        SUPPLEMENTARY INFORMATION:
        In the “Rules and Regulations” section of today's Federal Register, we are making these revisions as a direct final rule without prior proposal because we view these revisions as noncontroversial and anticipate no adverse comment.
        We have explained our reasons for these revisions in the preamble to the direct final rule. For further information, please see the information provided in the preamble to the direct final rule. If we receive no adverse comment, we will not take further action on this proposed rule. If we receive adverse comment on the rule, or on one or more distinct actions in the rule, we will withdraw the direct final rule, or the portions of the rule receiving adverse comment. We will address all public comments in a subsequent final rule based on this proposed rule. We will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.
        The contents of this preamble are listed in the following outline:

          I. General Information
          II. Summary of Rule
          III. Statutory and Executive Order Reviews
          IV. Statutory Provisions and Legal Authority

        I. General Information
        A. Does this Action Apply to Me?

        This action will affect you if you produce new motor vehicles, alter individual imported motor vehicles to address U.S. regulation, or convert motor vehicles to use alternative fuels for use in the U.S. Pacific Island Territories—American Samoa, Guam, and Commonwealth of the Northern Mariana Islands (C.N.M.I.). It will also affect you if you produce, import, distribute, or sell gasoline fuel for use in the U.S. Pacific Island Territories. The following table gives some examples of entities that may have to follow the regulations. But because these are only examples, you should carefully examine the regulations in 40 CFR parts 80 and 86. If you have questions, call the person listed in the FOR FURTHER INFORMATION CONTACT section of this preamble.

            Examples of potentially regulated entities
            NAICS codes a

            SIC codes b

            Motor Vehicle Manufacturers
            336111
            3711

            336112

            336120

            Alternative Fuel Vehicle Converters
            336311
            3592

            336312
            3714

            422720
            5172

            454312
            5984

            811198
            7549

            541514
            8742

            541690
            8931

            Commercial Importers of Vehicles and Vehicle Components
            811112
            7533

            811198
            7549

            541514
            8742

            Petroleum Refiners
            324110
            2911

            Gasoline Marketers and Distributers
            422710
            5171

            422720
            5172

            Gasoline Carriers
            484220
            4212

            484230
            4213

            a North American Industry Classification System (NAICS).

            b Standard Industrial Classification (SIC).

        B. What Should I Consider as I Prepare My Comments for EPA?
        1. Submitting CBI

        Do not submit confidential business information to EPA through http://www.regulations.gov or e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.
        2. Tips for Preparing Your Comments
        When submitting comments, remember to:

        • Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).
        • Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
        • Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.
        • Describe any assumptions and provide any technical information and/or data that you used.
        • If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
        • Provide specific examples to illustrate your concerns, and suggest alternatives.
        • Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
        • Make sure to submit your comments by the comment period deadline identified.
        II. Summary of Rule
        This proposed rule would exempt American Samoa, Guam and the Commonwealth of the Northern Mariana Islands (C.N.M.I.) from the gasoline sulfur requirements that EPA promulgated in the Tier 2 motor vehicle rule. The proposed rule would not exempt American Samoa, Guam, and C.N.M.I. from the Tier 2 vehicle emission standards. However, we are providing additional flexibilities for Tier 2 vehicles considering low sulfur gasoline is unavailable in the territories. These flexibilities (1) allow additional preconditioning prior to conducting exhaust emission tests (to remove sulfur deposits on the catalyst and emission control system components) and (2) allow special OBD system considerations to account for higher levels of sulfur present in gasoline. Exempting these U.S. Pacific Island Territories from the gasoline sulfur standard and providing flexibilities to the vehicle regulations for Tier 2 vehicles located in the U.S. Pacific Island Territories would have minimal, if any, impact on air quality.

        For additional discussion of the proposed rule changes, see the direct final rule EPA has published in the “Rules and Regulations” section of today's Federal Register. This proposal incorporates by reference all the reasoning, explanation, and regulatory text from the direct final rule.
        III. Statutory and Executive Order Reviews
        A. Executive Order 12866: Regulatory Planning and Review
        This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to OMB review.
        B. Paperwork Reduction Act

        This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. This rule does not create new requirements. Its purpose is to relieve a burden imposed on the three Pacific Island Territories.
        Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information.
        An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.
        C. Regulatory Flexibility Act
        The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.
        For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
        After considering the economic impacts of today's rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This rule would exempt the three U.S. Pacific Island Territories—American Samoa, Guam and the Commonwealth of the Northern Mariana Islands—from the Tier 2 rule for gasoline sulfur requirements and extend existing related flexibilities to the vehicle emission standards for the three territories. It does not create new requirements. Its purpose is to relieve a burden imposed on the three U.S. Pacific Island Territories. We have therefore concluded that today's rule will relieve regulatory burden for all affected small entities.
        We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.
        D. Unfunded Mandates Reform Act

        Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub.L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives, and adopt the least costly, most cost-effective or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.
        Today's rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, or tribal governments or the private sector. This rule imposes no enforceable duty on any State, local or tribal governments or the private sector. It does not create new requirements. Its purpose is to relieve a burden imposed on the three Pacific Island Territories.
        E. Federalism
        Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
        This final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Thus, Executive Order 13132 does not apply to this rule. Although section 6 of Executive Order 13132 does not apply to this rule, EPA did consult with representatives of the U.S. Pacific Island Territories in developing this rule. A summary of the concerns was raised during that consultation and EPA's response to those concerns is provided in previous sections of this preamble.
        F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments
        Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This rule does not have tribal implications, as specified in Executive Order 13175. This rule would exempt the three Pacific Island Territories—American Samoa, Guam and the Commonwealth of the Northern Mariana Islands (C.N.M.I.)—from the Tier 2 rule for gasoline sulfur requirements and extend existing related flexibilities to the vehicle emission standards for the three territories. It applies only to the three U.S. Pacific Island Territories. Thus, Executive Order 13175 does not apply to this rule.
        G. Executive Order 13045: Protection of Children From Environmental Health and Safety Risks
        Executive Order 13045: “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.
        EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.
        H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution, or Use
        This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 (May 22, 2001)) because it is not a significant regulatory action under Executive Order 12866.
        I. National Technology Transfer and Advancement Act

        Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.
        This proposed rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.
        EPA welcomes comments on this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially-applicable voluntary consensus standards and to explain why such standards should be used in this regulation.
        IV. Statutory Provisions and Legal Authority

        Statutory authority for today's final rule is found in the Clean Air Act, 42 U.S.C. 7401 et seq., in particular, sections 325, 211 and 202 of the Act, 42 U.S.C. 7521. This rule is being promulgated under the administrative and procedural provisions of Clean Air Act section 307(d), 42 U.S.C. 7607(d).

          List of Subjects
          40 CFR Part 80
          Environmental protection, Administrative practice and procedure, Gasoline, Reporting and recordkeeping requirements.
          40 CFR Part 86
          Environmental protection, Administrative practice and procedure, Motor vehicle pollution.

          Dated: December 21, 2006.
          Stephen L. Johnson,
          Administrator.

      [FR Doc. E6-22309 Filed 12-27-06; 8:45 am]
      BILLING CODE 6560-50-P


        DEPARTMENT OF TRANSPORTATION
        Surface Transportation Board
        49 CFR Part 1241
        [Docket No. EP 706]
        Reporting Requirements for Positive Train Control Expenses and Investments

          AGENCY:
          Surface Transportation Board, DOT.

          ACTION:
          Notice of proposed rulemaking.

          SUMMARY:
          The Board proposes to amend its rules to require rail carriers that submit to the Board “R-1” reports that identify information on capital and operating expenditures for Positive Train Control (PTC) to break out those expenses so that they can be viewed both as component parts of and separately from other capital investments and expenses. PTC is an automated system designed to prevent train-to-train collisions and other accidents. Rail carriers with traffic routes that carry passengers and/or hazardous toxic-by-inhalation (TIH) or poisonous-by-inhalation (PIH) materials, as so designated under federal law, must implement PTC pursuant to federal legislation. We propose to adopt supplemental schedules to the R-1 to require financial disclosure with respect to PTC to help inform the Board and the public about the specific costs attributable to PTC implementation.

          DATES:
          Comments on this proposal are due by December 12, 2011. Replies are due by January 11, 2012.

          ADDRESSES:

          Comments may be submitted either via the Board's e-filing format or in the traditional paper format. Any person using e-filing should attach a document and otherwise comply with the instructions at the E-FILING link on the Board's Web site, at http://www.stb.dot.gov. Any person submitting a filing in the traditional paper format should send an original and 10 copies to: Surface Transportation Board, Attn: Docket No. EP 706, 395 E Street, SW., Washington, DC 20423-0001.

          Copies of written comments received by the Board will be posted to the Board's Web site at http://www.stb.dot.gov and will be available for viewing and self-copying in the Board's Public Docket Room, Suite 131, 395 E Street, SW., Washington, DC. Copies of the comments will also be available by contacting the Board's Chief Records Officer at (202) 245-0236 or 395 E Street, SW., Washington, DC. 20423-0001.

          FOR FURTHER INFORMATION CONTACT:
          Paul Aguiar, (202) 245-0323. Assistance for the hearing impaired is available through Federal Information Relay Service (FIRS) at 1-800-877-8339.

        SUPPLEMENTARY INFORMATION:
        As authorized by 49 U.S.C. 11145, the Board requires large (Class I) 1
           rail carriers to submit annual reports, known as R-1 reports. 49 CFR 1241.11.2
           The R-1 reports contain information about finances and operating statistics for each railroad. These reports “shall contain an account, in as much detail as the Board may require, of the affairs of the rail carrier * * *” 49 U.S.C. 11145(b)(1). Currently, PTC expenditures are incorporated into the R-1 report under the category of “capital investments and expenses”; however, PTC expenditures are not separately broken out.

            1 The Board designates 3 classes of freight railroads based upon their operating revenues, for 3 consecutive years, in 1991 dollars, using the following scale: Class I—$250 million or more; Class II—less than $250 million but more than $20 million; and Class III—$20 million or less. These operating revenue thresholds are adjusted annually for inflation. 49 CFR pt. 1201, 1-1. Adjusted for inflation, the revenue threshold for a Class I rail carrier using 2009 data is $378,774,016. Today, there are 7 Class I carriers.

            2 Information about the R-1 report, including the schedules discussed in this rulemaking, past R-1 reports, and a blank R-1 form, is available on the Board's Web site. STB Industry Data, http://www.stb.dot.gov/stb/industry/econ_reports.html.

        PTC is a system designed to prevent train-to-train collisions, over-speed derailments, incursions into established work zone limits, and the movement of a train through a switch left in the wrong position. 49 U.S.C. 20157(i)(3). PTC systems may include digital data link communications networks, positioning systems, on-board computers on locomotives, throttle-brake interfaces on locomotives, wayside interface units at switches and wayside detectors, and control center computers.3
           The Rail Safety Improvement Act of 2008 requires Class I rail carriers to implement PTC by December 31, 2015, on mainlines where intercity rail passenger transportation or commuter rail passenger transportation is regularly scheduled, and/or on mainlines over which TIH or PIH, as designated in 49 CFR 171.8, 173.115, and 173.132, are transported. 49 U.S.C. 20157(a)(1). In complying with the Rail Safety Improvement Act of 2008, rail carriers are expected to make expenditures related to installation, operation, and maintenance of PTC.

            3 The Federal Railroad Administration (FRA) provides more information online. Federal Railroad Administration, Positive Train Control (PTC), http://www.fra.dot.gov/pages/784.shtml (last visited Sept. 28, 2011).

        On October 13, 2010, the Union Pacific Railroad Company (UP), a Class I rail carrier, filed a petition requesting that the Board institute a rulemaking proceeding to adopt supplemental schedules that would require Class I carriers to separately identify PTC expenditures in annual R-1 reports to the Board. On November 2, 2010, the Canadian Pacific Railway Company replied in support of UP's petition and The Fertilizer Institute (TFI) replied in opposition. On November 24, 2010, the Norfolk Southern Railway Company (NSR) late-filed comments in support of UP's petition, and on January 18, 2011, PPG Industries, Inc. (PPG) late-filed comments in opposition. On January 21, 2011, UP responded to PPG's filing.
        In Reporting Requirements for Positive Train Control Expenses & Investments, EP 706 (STB served Feb. 10, 2011), the Board instituted a rulemaking proceeding in response to UP's petition. The Board also accepted the late-filed comments from NSR and PPG, as well as the reply to a reply filed by UP. However, in that decision, we made no determination about the merits of UP's specific proposal, and stated that we would address the arguments raised by the parties in their filings in a subsequent decision, i.e., this notice.

        TFI argues that UP's petition is unnecessary because a pending rulemaking already encompasses UP's request. In Class I Railroad & Financial Reporting—Transportation of Hazardous Materials, EP 681 (STB served Jan. 5, 2009), the Board requested comments on “whether and how it should improve its informational tools to better identify and attribute the costs” of transporting hazardous materials. TFI argues that this inquiry encompasses PTC, and that in its comments in that proceeding, the Association of American Railroads (AAR), of which UP is a member, specifically discussed PTC and suggested changes to the Board's accounting and reporting requirements, including some of the same schedules raised by UP in this docket.4

           TFI claims that gathering information on PTC expenses is premature, because we have not yet decided in Class I Railroad & Financial Reporting—Transportation of Hazardous Materials whether we will change our accounting practices and how the Board will use such information.

            4 TFI Reply 2.

        The Board recognizes that PTC expenses fall under the umbrella of the many issues in Class I Railroad & Financial Reporting—Transportation of Hazardous Materials. But nothing precludes the Board from extracting from that complex proceeding for more expeditious treatment the relatively straightforward issue of identifying PTC expenses while continuing to consider the remaining issues—including the regulatory uses to which PTC data may be put—separately.
        The reporting requirement proposed here—a PTC schedule separate from the R-1 filings currently required—should provide us with important information. PTC expenses and investments, especially in the installation stage, are projected to be high.5
           Class I rail carriers have indicated that they are already incurring PTC-related costs to meet the 2015 deadline for implementing the legislative mandate to install PTC.6
           Moreover, PTC costs carry the distinction of representing a relatively specific set of expenditures prompted directly by legislative mandate. Although we are not here proposing changes to our Uniform Rail Costing System, nor are we doing anything in this proceeding that would change how costs are currently assigned in rate and other proceedings,7
           we ought to be aware of these expenditures. This will help us to identify transportation industry changes that may require attention by the agency and to assist the Board in preparing financial and statistical summaries and abstracts to provide itself, Congress, other government agencies, the transportation industry, and the public with transportation data useful in making regulatory policy and business decisions.

            5 FRA estimates the total cost of PTC to the industry, including development, equipment, installation, and maintenance, over 20 years will be between $9.55 billion and $13.21 billion. Positive Train Control Systems, 75 FR 2,598, 2,684 (Jan. 15, 2010). That estimate may decrease, as FRA has proposed an amendment to its regulations that would likely save the railroad industry certain expenses related to PTC implementation. Positive Train Control Systems, 76 FR 52,918 (Aug. 24, 2011).

            6 See UP's Pet. 2; A Primer for PTC at CSX, http://www.csx.com/share/wwwcsx_mura/assets/File/About_CSX/Projects_and_Partnerships/PTC_101.pdf (last visited Sept. 28, 2011); Press Release, BNSF, BNSF Announces $3.5 Billion Capital Commitment Program, (Feb. 7, 2011).

            7 Having the costs broken out may encourage carriers to seek to recover specific PTC costs in individual cases, but they are already free to do that, and thus this rulemaking does not determine the outcome of disputes over PTC expenses in particular cases or in the broad proceeding in Class I Railroad & Financial Reporting—Transportation of Hazardous Materials.

          Confidentiality. UP argues that the supplemental schedules regarding specific expenditures on PTC and detailed information regarding TIH and PIH traffic should remain confidential. UP asserts that detailed cost data on PTC-specific investment and expenses is commercially sensitive, and UP is concerned that “line-specific” operating data is a security issue. Nonetheless, R-1 data is not “line-specific,” and the proposal here is to collect aggregated PTC expenditures figures. Therefore, UP's concerns about security appear unwarranted, as the operating data does not contain schedules of train movements or other data that could be used to compromise safety.

          Tracking Benefits. PPG opposes UP's petition for a rulemaking, but it argues that, if the Board moves forward with a rulemaking proceeding, the Board should broaden the scope of the proceeding to include a reporting requirement that tracks any benefits of PTC, including efficiencies on the lines that have PTC installed. PPG also asks the Board to gather data on any efficiency gains caused by PTC on lines that do not have PTC installed. In reply, UP states that it would not oppose a separate proceeding to address the benefits from PTC, but UP opposes broadening this proceeding to require the reporting of benefits from PTC because it will add complications and delay. UP argues the railroads are incurring real measurable costs to install PTC now, while calculating benefits from PTC, which will occur in the future, would be speculative and complex.
        PPG has not shown that its request is practical or warranted at this time. While carriers state that they are incurring costs now to meet the 2015 implementation deadline, any efficiencies that arise will occur after implementation. Moreover, identifying the costs associated with implementing PTC appears to be relatively straightforward, and UP has proposed a viable approach, described below, to supplement the R-1 reports and capture this data.8
           By contrast, it is not clear how, at this point, we would identify those productivity gains that may arise as a result of PTC investments, and PPG has not proposed a method of doing so.

            8 The carriers' R-1 forms are independently audited; the Board monitors these audits and can take action if a carrier is misreporting expenses as PTC related.

          Mechanics of the Change. Our proposed rule change would require a “PTC Supplement” to be filed along with the R-1 annual report (which would not change).9
           The supplement would provide for PTC versions of schedules 330 (road property and equipment improvements), 332 (depreciation base and rates—road property and equipment), 335 (accumulated depreciation), 352B (investment in railway property), and 410 (railway operating expenses) containing the dollar amounts that would reflect only the amounts attributable to PTC for the filing year. Also, the PTC Supplement would contain PTC versions of schedules 700 and 720, to report the aggregate mileage on which PTC is installed as of the date of filing, and schedule 710 to identify the number of locomotives equipped with PTC. Railroads would also report, by footnote in each supplement schedule, PTC-related expenditures for passenger-only service not otherwise captured in the individual schedules to allow the Board to understand fully the railroads' PTC expenditures.

            9 Appendix B features samples of the proposed PTC versions of the schedules.

        In addition to separating capital expenses and operating expenses incurred by the railroad for PTC, the respondent entity should include by footnote disclosure the value of funds from government transfers, including grants, subsidies, and other contributions or reimbursements, used or designated to purchase or create PTC assets or to offset PTC costs.10
           These amounts represent non-railroad monies used or designated for PTC and would provide for full disclosure of PTC costs. This disclosure would identify the nature and location of the project by FRA identification, if applicable. This additional information will help the Board to monitor the financing of PTC installation.

            10 See infra App. B, Table Footnote: PTC Grants.

        UP also requests that the Board include schedule 755 (information on carloads, car-miles, and train-miles) in the PTC Supplement. However, we believe a supplement to schedule 755 is unnecessary to monitor the implementation of PTC, because gathering such data would not aid us in tracking expenditures made for PTC. Nevertheless, interested parties may comment on whether any final rule the Board promulgates should require the reporting of such information. Any such comments should address whether collecting such information would assist the Board in monitoring PTC implementation and, if so, how it would do so.

          Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. §§ 601-604. In its notice of proposed rulemaking, the agency must either include an initial regulatory flexibility analysis, § 603(a), or certify that the proposed rule would not have a “significant impact on a substantial number of small entities,” § 605(b). The impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule. White Eagle Coop. Ass'n v. Conner, 553 F.3d 467, 480 (7th Cir. 2009).
        The proposed rule, if adopted, will not have a significant impact on a substantial number of small entities. The proposed rule would affect only entities that are required to file R-1 reports; these reports are only required to be submitted by Class I carriers. 49 CFR 1241.1. Class I carriers are all large railroads; 11
           accordingly, there will be no impact on small railroads (small entities).

            11 See supra note 2.

          Paperwork Reduction Act. Pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget (OMB) regulations at 5 CFR 1320.8(d)(3), the Board seeks comments regarding: (1) Whether this collection of information, as modified in the proposed rule and further described in Appendix A, is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board's burden estimates; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. Information pertinent to these issues is included in Appendix C. This proposed rule will be submitted to OMB for review as required under 44 U.S.C. 3507(d) and 5 CFR 1320.11.
        A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration, Washington, DC 20416.
        This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

          List of Subjects in 49 CFR Part 1241
          Railroads, Reporting and recordkeeping requirements.

          Decided: October 3, 2011.

          By the Board, Chairman Elliott, Vice Chairman Begeman, and Commissioner Mulvey. Commissioner Mulvey dissented with a separate expression.
          Jeffrey Herzig,
          Clearance Clerk.

        Commissioner Mulvey, dissenting:

        In EP 681, Class I Railroad Accounting & Financial Reporting—Transportation of Hazardous Materials, the Board is considering whether and how it should update its railroad reporting requirements and the Uniform Railroad Costing System to better capture the operating costs of transporting hazardous materials. By inclusion of the word “whether,” the Board made clear in Ex Parte 681 that it has not decided that it should allow hazardous materials transportation costs to be used in a prescribed way in Board proceedings.
        The questions under consideration in EP 681 are important ones. The resolution has the potential to impact the rates paid by shippers of hazardous materials and, therefore, must be examined carefully. To gain the broadest possible comments from stakeholders, the Board began its consideration with an Advance Notice of Proposed Rulemaking. Even though the record in that ANPR has been complete since February 2009, the Board has yet to propose a rule regarding the treatment of hazardous materials transportation costs in Board proceedings.
        In light of this history, today's decision to propose rules that would require PTC-related costs to be separately reported from other capital expenditures is premature. The Board should first decide how such costs may be used in Board proceedings. Indeed, should the Board ultimately determine that hazardous materials transportation costs can be attributed to particular movements, any determination regarding how the information can be used could very well inform how it should be reported.
        Moreover, we must decide the issues raised in EP 681 soon. The costs associated with PTC are no doubt growing as the railroad industry moves closer to the current statutory deadline for compliance. Should the Board implement a comprehensive approach to the costing issues associated with hazardous materials, we may be able to minimize the complexity and expenditures associated with litigating this issue in individual Board proceedings. I fear that the “cart before the horse” approach that the Board is initiating today could do the opposite.
        For the reasons set forth in the preamble, the Surface Transportation Board proposes to amend part 1241 of title 49, chapter X, subchapter C, of the Code of Federal Regulations as follows:

          PART 1241—ANNUAL, SPECIAL, OR PERIODIC REPORTS—CARRIERS SUBJECT TO PART I OF THE INTERSTATE COMMERCE ACT
          1. The authority citation for part 1241 continues to read as follows:

            Authority:
            49 U.S.C. 11145.

          2. Amend § 1241, by adding paragraph (b) to read as follows:

            § 1241.11
            Annual reports of class I railroads.

            (b) Expenditures and certain statistical information, as described below, for Positive Train Control (PTC) installation, maintenance, and operation shall be separately identified in a supplement to the Railroad Annual Report Form R-1 and submitted with the Railroad Annual Report Form R-1. This supplement shall identify PTC-related expenditures on road property and equipment improvements, depreciation of road property and equipment, accumulated depreciation, investment in railway property, and railway operating expenses. The supplement shall also identify the total mileage on which carriers install PTC and the number of locomotives equipped with PTC. The supplement will include PTC-related expenditures for passenger-only service not otherwise captured in the individual schedules. In addition to separating capital expenses and operating expenses incurred by the railroad for PTC, the respondent entity should include the value of funds received from government transfers to include grants, subsidies, and other contributions or reimbursements that the respondent entity used to purchase or create PTC assets or to offset PTC costs.

              Note:
              The following appendices will not appear in the Code of Federal Regulations.

            Appendix A

              Proposed PTC Versions of Schedules: 330, 332, 335, 352B, 410, 700, 710, and 720
              BILLING CODE 4915-01-P

                EP13OC11.003

                EP13OC11.004

                EP13OC11.005

                EP13OC11.006

                EP13OC11.007

                EP13OC11.008

                EP13OC11.009

                EP13OC11.010

                EP13OC11.011

                EP13OC11.012

                EP13OC11.013

                EP13OC11.014

                EP13OC11.015

                EP13OC11.016

            BILLING CODE 4915-01-C
            Appendix B

              The additional information below is included to assist those who may wish to submit comments pertinent to review under the Paperwork Reduction Act:
              Description of Collection

                Title: Class I Railroad Annual Report.

                OMB Control Number: 2140-0009.

                STB Form Number: R-1.

                Type of Review: Modification of approved collection.

                Respondents: Class I railroads.

                Number of Respondents: 7.

                Estimated Time per Response: The proposed rule change that affects the R-1 report will not change the time per response, but it will require minimal time to adjust the process for reporting. Based on the limited amount of information involved, we estimate that the entire R-1 collection should not take more than 800 hours annually per Class I railroad. This estimate includes time spent reviewing instructions; searching existing data sources; gathering and maintaining the data needed; completing and reviewing the collection of information; and converting the data from the carrier's individual accounting system to the Board's Uniform System of Accounts (USOA), which ensures that the information will be presented in a consistent format across all reporting railroads, see 49 U.S.C. 11141-43, 11161-64, 49 CFR 1200-1201.

                Frequency: Annually.

                Total Burden Hours (annually including all respondents): Up to 5,600 hours annually for the entire R-1 report.

                Total “Non-hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

                Needs and Uses: Annual R-1 reports are required to be filed by Class I railroads under 49 U.S.C. 11145. The reports show expenditures and operating statistics of the carriers. Expenditures include costs for right-of-way and structures, equipment, train and yard operations, and general and administrative expenses. Operating statistics include such items as car-miles, revenue-ton-miles, and gross ton-miles. The reports are used by the Board, other Federal agencies, and industry groups to monitor and assess railroad industry growth, financial stability, traffic, and operations, and to identify industry changes that may affect national transportation policy. The Board also uses this information to more effectively carry out other of its regulatory responsibilities, including: the regulation of maximum rail rates; acting on railroad requests for authority to engage in Board-regulated financial transactions such as mergers, acquisitions of control, and consolidations, see 49 U.S.C. 11323-11324; analyzing the information that the Board obtains through the annual railroad industry waybill sample, see 49 CFR part 1244; measuring off-branch costs in railroad abandonment proceedings, in accordance with 49 CFR 1152.32(n); developing the “rail cost adjustment factors,” in accordance with 49 U.S.C. 10708; and conducting investigations and rulemakings.
              The proposed identification of PTC information in the supplement to the R-1 reports will help the Board monitor the emergence of PTC in the rail industry. This notice does not propose that the Board use the identified PTC information for any additional purposes such as changing the Board's Uniform Rail Costing System or how costs are currently assigned in rate and other proceedings.

      [FR Doc. 2011-26310 Filed 10-12-11; 8:45 am]
      BILLING CODE 4915-01-P


        AGENCY FOR INTERNATIONAL DEVELOPMENT
        48 CFR Parts 722, 729, 731, and 752
        RIN 0412-AA78
        Various Administrative Changes and Clauses to the USAID Acquisition Regulation

          AGENCY:
          U.S. Agency for International Development.

          ACTION:
          Proposed rule.

          SUMMARY:
          The U.S. Agency for International Development (USAID) seeks public comment on a proposed rule that would revise the Agency for International Development Acquisition Regulation (AIDAR) to maintain consistency with Federal and Agency regulations and incorporate current and new USAID clauses into the regulation.

          DATES:
          Comments must be received no later than December 14, 2015.

          ADDRESSES:
          Address all comments concerning this notice to Marcelle J. Wijesinghe, Bureau for Management, Office of Acquisition and Assistance, Policy Division (M/OAA/P), Room 867J, SA-44, Washington, DC 20523-2052. Submit comments, identified by title of the action and Regulatory Information Number (RIN) by any of the following methods:
          1. Through the Federal eRulemaking Portal at http://www.regulations.gov by following the instructions for submitting comments.
          2. By Email: Submit electronic comments to both mwijesinghe@usaid.gov and lbond@usaid.gov. See SUPPLEMENTAL INFORMATION for file formats and other information about electronic filing.
          3. By Mail addressed to: USAID, Bureau for Management, Office of Acquisition & Assistance, Policy Division, Room 867J, SA-44, Washington, DC 20523-2052.

          FOR FURTHER INFORMATION CONTACT:
          Lyudmila Bond, Telephone: 202-567-4753 or Email: lbond@usaid.gov.

        SUPPLEMENTARY INFORMATION:

        A. Instructions
        All comments must be in writing and submitted through one of the methods specified in the Addresses section above. All submissions must include the title of the action and RIN for this rulemaking. Please include your name, title, organization, postal address, telephone number, and email address in the text of the message.
        Comments submitted by email must be included in the text of the email or attached as a PDF file. Please avoid using special characters and any form of encryption. Please note that USAID recommends sending all comments to the Federal eRulemaking Portal because security screening precautions have slowed the delivery and dependability of surface mail to USAID/Washington.

        Three days after receipt of a comment and until finalization of the action, all comments will be made available at http://www.regulations.gov for public review without change, including any personal information provided. We recommend you do not submit information that you consider Confidential Business Information (CBI) or any information that is otherwise protected from disclosure by statute.
        USAID will only address comments that explain why the rule would be inappropriate, ineffective or unacceptable without a change. Comments that are insubstantial or outside the scope of the rule will not be considered.
        B. Background
        USAID is seeking comments on the proposed rule as described below:
        • FAR subpart 22.8 prohibits federal contractors performing in the U.S. from discrimination with regard to race, color, religion, sex, national origin, disability, age, genetic information, or veteran status. As a matter of policy, the Agency encourages all USAID contractors performing and recruiting entirely outside the United States to apply these same standards of nondiscrimination in their workplace. The provision entitled “Nondiscrimination” contains language that encourages contractors performing and recruiting entirely outside the United States to establish comprehensive nondiscrimination polices for their workplaces. The provision was implemented on an interim basis in 2012 through Agency policy found in ADS 302 Mandatory Reference, Special Provisions for Acquisition and is hereby formally incorporated in the AIDAR without revision at 752.222-71. The Agency believes that the transfer of the clause from the internal Agency policy into the AIDAR will have no impact on contractors.

        • Section 579 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of FY 2003 (Pub. L. 108-7) and similar sections in subsequent acts require certain steps to prevent countries from imposing taxes [defined as Value Added Tax (VAT) or customs duties] on U.S. foreign assistance. If taxes or customs duties are imposed, the foreign government must reimburse the amount of such taxes and duties to the U.S. Government. The Act also requires certain reporting to Congress.
        The provision at 752.229-71 entitled “Reporting of Foreign Taxes”, implemented on an interim basis in 2007 through Agency policy found in ADS 302 Mandatory Reference, Special Provisions for Acquisition, specifies that the contractor must submit certain reports to the Contracting Officer's Representative, with copies to the relevant Embassy, the Mission, or the Bureau for Management, Office of the Chief Financial Officer, Cash Management and Payments Division. AIDAR part 729, subpart 729.4 and sections 729.204-70 and 752.229-70 are added to formally incorporate this requirement into the AIDAR. The Agency believes that the transfer of the clause from the internal Agency policy into the AIDAR will have no impact on contractors.
        • The Executive Order 13589 “Promoting Efficient Spending” dated November 9, 2011, directed agencies to reduce administrative costs by improving operations, increasing efficiency, and cutting unnecessary spending. To achieve savings, agencies were to improve efficiencies in various administrative areas, including conference expenditures. OMB memorandums M-11-35 “Eliminating Excess Conference Spending and Promoting Efficiency in Government” dated September 21, 2011, and M-12-12 “Promoting Efficient Spending to Support Agency Operations” dated May 11,2012, further instructed all agencies “to conduct a thorough review of the policies and controls associated with conference-related activities and expenses” and to “exercise discretion and judgment in ensuring that conference expenses are appropriate, necessary, and managed in a manner that minimizes expense to taxpayers”.
        To mitigate the risk of inappropriate spending, USAID revised Automated Directive System (ADS) 580 on agency internal policies and procedures pertaining to conferences funded by USAID and implemented a new clause entitled “Conference Planning and Required Approvals”, applicable to all contracts with an anticipated need for USAID-funded conferences. The clause requires contractors to obtain USAID approval prior to committing costs related to conferences funded in whole or in part with USAID funds when:
        (1) Twenty (20) or more USAID employees are expected to attend.
        (2) The net conference expense funded by USAID will exceed $100,000 (excluding salary of employees), regardless of the number of USAID participants.
        The clause was implemented on an interim basis in 2013 through Agency policy found at ADS 302 Mandatory Reference, Special Provisions for Acquisition and is hereby formally incorporated into the AIDAR without revision. The Agency believes that the transfer of the clause from the internal Agency policy into the AIDAR will have no impact on contractors.

        • In support of USAID's procurement reform and to expedite award modifications that affect multiple awards, the Bureau for Management, Office of Acquisition and Assistance (M/OAA) has created a separate online portal for Implementing Partner Notices (IPN) for acquisition awards. The IPN Portal, located at https://sites.google.com/site/usaidipnforacquisitions/, is the single point where USAID uploads proposed universal bilateral modifications for awards, which can be accessed electronically by registered contractors. The IPN Portal is also used to provide notices to USAID contractors who register with the IPN Portal. The AIDAR clause 752.7036, entitled “USAID Implementing Partner Notices (IPN) Portal for Acquisition”, directs contractors to register with the IPN Portal. Registered contractors will receive automatic email notifications when the IPN Portal is updated with proposed award modifications and/or notices. Partners may download and sign the proposed modification, and send it to the contracting officer for signature (execution) and distribution in accordance with the terms of the clause.
        Proposed bilateral modifications provided through the IPN Portal are not effective until the contractor and the contracting officer sign the modification. The requirement to register in the IPN portal applies to all contracts except for orders under indefinite delivery contracts issued pursuant to (48 CFR) FAR subpart 16.5; orders under Federal Supply (GSA) Schedules issued pursuant to (48 CFR) FAR subpart 8.4; and contracts and purchase orders awarded under the simplified acquisitions procedures of (48 CFR) FAR part 13. The clause was implemented on an interim basis in July 2014 through Agency policy found at ADS 302 Mandatory Reference, Special Provisions for Acquisition and is hereby formally incorporated into the AIDAR without revision. The Agency believes that the transfer of the clause from the internal agency policy into the AIDAR will have no impact on contractors.
        • Research indicates that persons with a history and proclivity to abusing children will often seek professional positions which could give them access to vulnerable individuals. Often they will seek employment within countries with social welfare, protection, and judicial systems too weak or underdeveloped to protect children and other vulnerable populations against abuse and exploitation. Many USAID missions and projects are located in countries with ineffective systems. To protect children involved in or coming into contact with USAID programs from abuse, exploitation or neglect, USAID has established Child Safeguarding Standards. These standards are designed to complement the USAID Counter Trafficking in Persons (C-TIP) Code of Conduct by expanding the range of actions prohibited by USAID under the C-TIP Code of Conduct to include abuse, exploitation, or neglect of children. The mandatory requirements established by these standards satisfy obligations established in the U.S. Government Action Plan on Children in Adversity and the provisions of Public Law 109-95—The Assistance for Orphans and other Vulnerable Children Act of 2005 (Pub. L. 109-95).
        The standards applicable to USAID contractors are implemented through a new clause at 752.7037, Child Safeguarding. The clause requires contractors to: (1) Ensure compliance with local child welfare and protection legislation or international standards; (2) prohibit all personnel from engaging in child abuse, exploitation, or neglect; (3) consider child safeguarding in project planning and implementation; (4) apply measures to reduce the risk of child abuse, exploitation, or neglect; (5) promote child-safe screening procedures for personnel; and (6) establish procedures to ensure that contractor personnel recognize child abuse, exploitation, or neglect, report and investigate allegations and take appropriate actions in response to such allegations.
        C. Regulatory Planning and Review
        This proposed rule has been determined to be “nonsignificant” under the Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993 and, therefore, is not subject to review. This proposed rule is not a major rule under 5 U.S.C. 804.
        D. Regulatory Flexibility Act

        The proposed rule does not establish a new collection of information as contemplated by the Paperwork Reduction Act nor will it have an impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,
          et seq. Therefore, an Initial Regulatory Flexibility Analysis has not been performed.

          List of Subjects in 48 CFR Parts 722, 729, 731, and 752
          Government procurement.

        For the reasons discussed in the preamble, USAID proposes to amend 48 CFR chapter 7 as set forth below:

          CHAPTER 7—AGENCY FOR INTERNATIONAL DEVELOPMENT

            SUBCHAPTER D—SOCIOECONOMIC PROGRAMS

              PART 722—APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITION

        1. The authority citation for 48 CFR part 722 continues to read as follows:

          Authority:
           Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3 CFR 1979 Comp., p. 435.

          Subpart 722.8—Equal Employment Opportunity

        2. Revise 722.810 to read as follows:

          722.810
           Solicitation provisions and contract clauses.
          (a) The contracting officer must insert the clause at 752.222-70, USAID Disability Policy in section I of all solicitations and resulting contracts.
          (b) The contracting officer must insert the clause at 752.222-71, Nondiscrimination in section I of all solicitations and resulting contracts.

          SUBCHAPTER E—GENERAL CONTRACTING REQUIREMENTS

        3. Add part 729 to subchapter E to read as follows.

          PART 729—TAXES

            Subpart 729.4—Contract Clauses

              729.402-70
              Foreign contracts.

                Authority:
                 Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3 CFR 1979 Comp., p. 435.

            Subpart 729.4—Contract Clauses

              729.402-70
              Foreign contracts.
              (a) Section 579 of the Foreign Operations, Export Financing, and Related Programs Appropriations Act of FY 2003 requires certain steps to prevent countries from imposing taxes [defined as Value Added Tax (VAT) or customs duties] on U.S. foreign assistance, or if imposed, requires the countries to reimburse the assessed taxes or duties. The Act also requires certain reporting to Congress. The Department of State has published guidance for implementing this section of the Act.
              (b) Contracting Officers (COs) must insert the clause at 752.229-71, Reporting of Foreign Taxes in section I of solicitations and resulting contracts that obligate or subobligate FY 2003 or later funds except for the following:
              (1) Contracts funded with Operating Expense, Public Law 480 funds, or trust funds; or
              (2) Contracts where there will be no commodity transactions in a foreign country over the amount of $500.

          PART 731—CONTRACT COST PRINCIPLES AND PROCEDURES

        4. The authority citation for 48 CFR part 731 continues to read as follows:

          Authority:
           Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3 CFR 1979 Comp., p. 435.

          Subpart 731.2—Contracts With Commercial Organizations

        5. Add 731.205-43 to read as follows.

          731.205-43
           Trade, business, technical and professional activity costs—USAID conference approval requirements.
          (a) The contractor must receive prior written approval from the contracting officer, or the contracting officer's representative (COR), if delegated in the Contracting Officer's Representative Designation Letter, for costs related to conferences funded in whole or in part with USAID funds when:
          (1) Twenty (20) or more USAID employees are expected to attend.
          (2) The net conference expense funded by USAID will exceed $100,000 (excluding salary of employees), regardless of the number of USAID participants.
          (b) Contracting officers must insert the clause at 752.231-72 in all USAID-funded solicitations and contracts anticipated to include a requirement for a USAID-funded conference. See (48 CFR) AIDAR 752.231-72 for the definition of a conference and specific requirements and procedures.

          SUBCHAPTER H—CLAUSES AND FORMS

            PART 752—SOLICITATION PROVISIONS AND CONTRACT CLAUSES

        6. The authority citation for 48 CFR part 752 continues to read as follows:

          Authority:
           Sec. 621, Pub. L. 87-195, 75 Stat. 445, (22 U.S.C. 2381) as amended; E.O. 12163, Sept. 29, 1979, 44 FR 56673; and 3 CFR 1979 Comp., p. 435.

        7. Add 752.222-71 to read as follows:

          752.222-71
           Nondiscrimination
          As prescribed in (48 CFR) AIDAR 722.810(b), insert the following clause in section I of all solicitations and resulting contracts.
          Nondiscrimination (June 2012)

            FAR Part 22 and the clauses prescribed in that part prohibit contractors performing in or recruiting from the U.S. from engaging in certain discriminatory practices. USAID is committed to achieving and maintaining a diverse and representative workforce and a workplace free of discrimination. Based on law, Executive Order, and Agency policy, USAID prohibits discrimination in its own workplace on the basis of race, color, religion, sex (including pregnancy and gender identity), national origin, disability, age, veteran's status, sexual orientation, genetic information, marital status, parental status, political affiliation, and any other conduct that does not adversely affect the performance of the employee. USAID does not tolerate any type of harassment, either sexual or nonsexual, of any employee or applicant for employment. Contractors are required to comply with the nondiscrimination requirements of the FAR.
            In addition, the Agency strongly encourages all its contractors (at all tiers) to develop and enforce comprehensive nondiscrimination policies for their workplaces that include protection on these expanded bases, subject to applicable law.

          (End of clause)

        8. Add 752.229-71 to read as follows:

          752.229-71
           Reporting of foreign taxes.
          As prescribed in (48 CFR) AIDAR 729.402-70, insert the following clause in section I of applicable solicitations and resulting contracts. The contracting officer must insert address and point of contact at the Embassy, Mission, or M/CFO/CMP as appropriate under section (d) of this clause.
          Reporting of Foreign Taxes (July 2007)

            (a) The contractor must annually submit a report by April 16 of the next year.
            (b) Contents of Report. The report must contain:
            (1) Contractor name.
            (2) Contact name with phone, fax number and email address.
            (3) Contract number(s).
            (4) Amount of foreign taxes assessed by a foreign government [each foreign government must be listed separately] on commodity purchase transactions valued at $500 or more financed with U.S. foreign assistance funds under this agreement during the prior U.S. fiscal year.

            (5) Only foreign taxes assessed by the foreign government in the country receiving U.S. assistance are to be reported. Foreign taxes by a third party foreign government are not to be reported. For example, if a contractor performing in Lesotho using foreign assistance funds should purchase commodities in South Africa, any taxes imposed by South Africa would not be reported in the report for Lesotho (or South Africa).
            (6) Any reimbursements received by the contractor during the period in paragraph (b)(4) of this clause regardless of when the foreign tax was assessed and any reimbursements on the taxes reported in paragraph (b)(4) of this clause received through March 31.
            (7) Report is required even if the contractor did not pay any taxes during the reporting period.
            (8) Cumulative reports may be provided if the contractor is implementing more than one program in a foreign country.
            (c) Definitions. For purposes of this clause:
            (1) Agreement includes USAID direct and country contracts, grants, cooperative agreements and interagency agreements.
            (2) Commodity means any material, article, supply, goods, or equipment.
            (3) Foreign government includes any foreign governmental entity.
            (4) Foreign taxes means value-added taxes and customs duties assessed by a foreign government on a commodity. It does not include foreign sales taxes.
            (d) Where. Submit the reports to: [CO must insert address and point of contact at the Embassy, Mission, or CFO/CMP as appropriate].
            (e) Subagreements. The contractor must include this reporting requirement in all applicable subcontracts and other subagreements.
            (f) For further information see http://2001-2009.state.gov/s/d/rm/c10443.htm.

          (End of clause)

        9. Add 752.231-72 to read as follows:

          752.231-72
          Conference planning and required approvals.
          As prescribed in (48 CFR) AIDAR 731.205-43, insert the following clause in section I of all solicitations and resulting contracts anticipated to include a requirement for a USAID-funded conference, as defined in the clause.
          Conference Planning and Required Approvals (AUG 2013)

            (a) Definitions:

              Conference means a seminar, meeting, retreat, symposium, workshop, training activity or other such event that requires temporary duty travel of USAID employees. For the purpose of this policy, an employee is defined as a U.S. direct hire; personal services contractor, including U.S. PSCs, Foreign Service National (FSN)/Cooperating Country National (CCN) and Third Country National (TCN); or a Federal employee detailed to USAID from another government agency.
            (b) The contractor must obtain USAID approval prior to committing costs related to conferences funded in whole or in part with USAID funds when:
            (1) Twenty (20) or more USAID employees are expected to attend.
            (2) The net conference expense funded by USAID will exceed $100,000 (excluding salary of employees), regardless of the number of USAID participants. Conferences approved at the time of award will be incorporated into the award. Any subsequent requests for approval of conferences must be submitted by the contractor to the USAID contracting officer representative (COR). The COR will obtain the required agency approvals and communicate such approvals to the contractor in writing.
            (c) The request for conference approval must include:
            (1) A brief summary of the proposed event;

            (2) A justification for the conference and alternatives considered, e.g., teleconferencing and videoconferencing;
            (3) The estimated budget by line item (e.g., travel and per diem, venue, facilitators, meals, equipment, printing, access fees, ground transportation);

            (4) A list of USAID employees attending and a justification for each; and the number of other USAID-funded participants (e.g., institutional contractors);
            (5) The venues considered (including government-owned facility), cost comparison, and justification for venue selected if it is not the lowest cost option;
            (6) If meals will be provided to local employees (a local employee would not be in travel status), a determination that the meals are a necessary expense for achieving Agency objectives; and
            (7) A certification that strict fiscal responsibility has been exercised in making decisions regarding conference expenditures, the proposed costs are comprehensive and represent the greatest cost advantage to the U.S. Government, and that the proposed conference representation has been limited to the minimum number of attendees necessary to support the Agency's mission.

          (End of clause)

        10. Add 752.7036 to read as follows:

          752.7036
          USAID Implementing Partner Notices (IPN) portal for acquisition.
          Insert the clause at 752.7036 in section I of all solicitations and resulting contracts, except for orders under indefinite delivery contracts issued pursuant to (48 CFR) FAR subpart 16.5; orders under Federal Supply (GSA) Schedules issued pursuant to (48 CFR) FAR subpart 8.4; and contracts and purchase orders awarded under the simplified acquisitions procedures of (48 CFR) FAR part 13.
          USAID Implementing Partner Notices (IPN) Portal for Acquisition (July 2014)

            (a) Definitions:

              Universal bilateral modification means a bilateral modification, as defined in FAR subpart 43.1, affecting all USAID awards or a class of awards, as specified in the Agency notification of such modification, that updates or incorporates new FAR or AIDAR clauses, other terms and conditions, or special requirements.

              USAID Implementing Partner Notices (IPN) Portal for Acquisition (IPN Portal) means the single point where USAID uploads universal bilateral modifications, which can be accessed electronically by registered USAID contractors. The IPN Portal is located at https://sites.google.com/site/ipnforacquisitions/.

              IPN Portal Administrator means the USAID official designated by the M/OAA Director, who has overall responsibility for managing the USAID Implementing Partner Notices Portal for Acquisition.
            (b) By submission of an offer and execution of a contract, the Offeror/Contractor acknowledges the requirement to:
            (1) Register with the IPN Portal if awarded a contract resulting from this solicitation, and
            (2) Receive universal bilateral modifications of this contract and general notices through the IPN Portal.
            (c) Procedure to register for notifications.
            Go to: https://sites.google.com/site/usaidipnforacquisitions/ and click the “Register” button at the top of the page. Contractor representatives must use their official organization email address when subscribing, not personal email addresses.
            (d) Processing of IPN portal modifications.

            (1) The contractor may access the IPN Portal at any time to review all IPN Portal modifications; however, the system will also notify the contractor by email when the USAID IPN Portal Administrator uploads a universal bilateral modification for contractor review and signature. Proposed IPN Portal modifications distributed through the IPN Portal are applicable to all awards, unless otherwise noted in the proposed modification.
            (2) Within 15 calendar days from receipt of the notification email from the IPN Portal, the contractor must do one of the following:
            (i) (A) Verify applicability of the proposed modification to their award(s) per the instructions provided with each modification;
            (B) Download the modification and incorporate the following information on the SF30 form: Contract number, organization name, and organization mailing address as it appears in the basic award;
            (C) Sign the hardcopy version; and
            (D) Send the signed modification (by email or hardcopy) to the CO for signature.

              Note:
              The contractor must not incorporate any other changes to the IPN Portal modification. Bilateral modifications provided through the IPN Portal are not effective until the both the contractor and the CO sign the modification;

            (ii) Notify the Contracting Officer in writing if the modification requires negotiation of additional changes to terms and conditions of the contract; or
            (iii) Notify the Contracting Officer that the contractor declines to sign the modification.
            (3) Within 30 calendar days of receipt of a signed modification from the contractor, the CO must provide the fully executed modification to the contractor or initiate discussions with the contractor.

          (End of clause)

        11. Add 752.7037 to read as follows:

          752.7037
          Child safeguarding standards.

          Insert the clause at 752.7037, Child Safeguarding Standards, in section I of all solicitations and contracts other than those for commercial items.
          Child Safeguarding Standards (Date)

            (a) Implementation of activities under this award may involve children, or personnel engaged in the implementation of the award may come into contact with children, which could raise the risk of child abuse, exploitation, or neglect within this award. The contractor agrees to abide by the following child safeguarding core principles:
            (1) Ensure compliance with host country and local child welfare and protection legislation or international standards, whichever gives greater protection, and with U.S. law where applicable;
            (2) Prohibit all personnel from engaging in child abuse, exploitation, or neglect;
            (3) Consider child safeguarding in project planning and implementation to determine potential risks to children that are associated with project activities and operations;
            (4) Apply measures to reduce the risk of child abuse, exploitation, or neglect, including, but not limited to, limiting unsupervised interactions with children; prohibiting exposure to pornography; and complying with applicable laws, regulations, or customs regarding the photographing, filming, or other image-generating activities of children;
            (5) Promote child-safe screening procedures for personnel, particularly personnel whose work brings them in direct contact with children; and
            (6) Have a procedure for ensuring that personnel and others recognize child abuse, exploitation, or neglect; mandating that personnel and others report allegations; investigating and managing allegations; and taking appropriate action in response to such allegations, including, but not limited to, dismissal of personnel.
            (b) The contractor must also include in the code of conduct for all personnel implementing USAID-funded activities, the child safeguarding principles in paragraphs (a)(1) through (6) of this clause.
            (c) The following definitions apply for purposes of this clause:
            (1) Child: A child or children are defined as persons who have not attained 18 years of age.
            (2) Child abuse, exploitation, or neglect: Constitutes any form of physical abuse; emotional ill-treatment; sexual abuse; neglect or insufficient supervision; trafficking; or commercial, transactional, labor, or other exploitation resulting in actual or potential harm to the child's health, well-being, survival, development, or dignity. It includes, but is not limited to: Any act or failure to act which results in death, serious physical or emotional harm to a child, or an act or failure to act which presents an imminent risk of serious harm to a child.
            (3) Emotional abuse or ill treatment: Constitutes injury to the psychological capacity or emotional stability of the child caused by acts, threats of acts, or coercive tactics. Emotional abuse may include, but is not limited to: Humiliation, control, isolation, withholding of information, or any other deliberate activity that makes the child feel diminished or embarrassed.
            (4) Exploitation: Constitutes the abuse of a child where some form of remuneration is involved or whereby the perpetrators benefit in some manner. Exploitation represents a form of coercion and violence that is detrimental to the child's physical or mental health, development, education, or well-being.
            (5) Neglect: Constitutes failure to provide for a child's basic needs within USAID-funded activities that are responsible for the care of a child in the absence of the child's parent or guardian.
            (6) Physical abuse: Constitutes acts or failures to act resulting in injury (not necessarily visible), unnecessary or unjustified pain or suffering without causing injury, harm or risk of harm to a child's health or welfare, or death. Such acts may include, but are not limited to: Punching, beating, kicking, biting, shaking, throwing, stabbing, choking, or hitting (regardless of object used), or burning. These acts are considered abuse regardless of whether they were intended to hurt the child.
            (7) Sexual abuse: Constitutes fondling a child's genitals, penetration, incest, rape, sodomy, indecent exposure, and exploitation through prostitution or the production of pornographic materials.
            (d) The contractor must insert this clause in all subcontracts under this award.

          (End of clause)

          Dated: August 25, 2015.
          Deborah Broderick,
          Acting Chief Acquisition Officer.

      [FR Doc. 2015-27977 Filed 11-10-15; 8:45 am]
       BILLING CODE 6116-01-P