        DEPARTMENT OF DEFENSE
        Defense Acquisition Regulations System
        48 CFR Parts 228, 231, and 252
        RIN 0750-AF72
        Defense Federal Acquisition Regulation Supplement; Ground and Flight Risk Clause (DFARS Case 2007-D009)

          AGENCY:
          Defense Acquisition Regulations System, Department of Defense (DoD).

          ACTION:
          Proposed rule with request for comments.

          SUMMARY:
          DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to revise and combine contract clauses addressing assumption of risk for loss under contracts involving the furnishing of aircraft to the Government. The proposed rule establishes requirements that apply consistently to all contract types.

          DATES:
          Comments on the proposed rule should be submitted in writing to the address shown below on or before February 5, 2008 to be considered in the formation of the final rule.

          ADDRESSES:
          You may submit comments, identified by DFARS Case 2007-D009, using any of the following methods:

            Federal eRulemaking Portal:
            http://www.regulations.gov. Follow the instructions for submitting comments.

            E-mail:
            dfars@osd.mil. Include DFARS Case 2007-D009 in the subject line of the message.

            Fax: 703-602-7887.

            Mail: Defense Acquisition Regulations System, Attn: Ms. Robin Schulze, OUSD (AT&L) DPAP (CPF), IMD 3D139, 3062 Defense Pentagon, Washington, DC 20301-3062.

            Hand Delivery/Courier: Defense Acquisition Regulations System, Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-3402.

          Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

          FOR FURTHER INFORMATION CONTACT:
          Ms. Robin Schulze, 703-602-0326.

        SUPPLEMENTARY INFORMATION
        A. Background
        The clauses at DFARS 252.228-7001, Ground and Flight Risk, and DFARS 252.228-7002, Aircraft Flight Risk, are presently used in contracts involving the furnishing of aircraft to the Government. The clause at 252.228-7001 is used in negotiated fixed-price contracts, and the clause at 252.228-7002 is used in cost-reimbursement contracts. This proposed rule revises and combines the two clauses into a single ground and flight risk clause, to establish requirements that apply consistently to all contract types. In addition, a new section is added at DFARS 231.205-19 to specifically reference the treatment of insurance costs under the new clause and the existing clause at DFARS 252.217-7012, Liability and Insurance.
        The proposed changes include—
        ○ Addition of a requirement for inclusion of the clause in all subcontracts;
        ○ Addition of a statement that the Government property clause is not applicable if the Government withdraws its self-insurance coverage;

        ○ Addition of a statement that commercial insurance costs or self-insurance charges that duplicate the Government's self-insurance are unallowable; and

        ○ Establishment of a share of loss for the contractor that is the lesser of $100,000 or 20 percent of the estimated contract cost or price. This is consistent with the contractor share of loss presently specified in the clause at 252.228-7002. The clause at 252.228-7001 presently prescribes a share of loss of $25,000 for the contractor.
        This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993.
        B. Regulatory Flexibility Act
        DoD has prepared an initial regulatory flexibility analysis consistent with 5 U.S.C. 603. A copy of the analysis may be obtained from the point of contact specified herein. The analysis is summarized as follows:
        The objective of the proposed rule is to clearly and consistently address the responsibilities of the Government and the contractor with regard to incidents that may occur under contracts involving the furnishing of aircraft to the Government. The proposed rule will apply to DoD contractors, and their subcontractors, under contracts for the acquisition, development, production, or servicing of aircraft. Excluded are contracts for activities strictly incidental to the normal operations of an aircraft; contracts awarded under FAR Part 12, Acquisition of Commercial Items; and contracts where a non-DoD customer does not assume risk for loss of or damage to the aircraft. The impact on small entities is unknown at this time. However, historically, most contractors engaged in this type of contract have been large business concerns.
        DoD invites comments from small businesses and other interested parties. DoD also will consider comments from small entities concerning the affected DFARS subparts in accordance with 5 U.S.C. 610. Such comments should be submitted separately and should cite DFARS Case 2007-D009.
        C. Paperwork Reduction Act

        The Paperwork Reduction Act does not apply, because the rule does not impose any information collection requirements that require the approval of the Office of Management and Budget under 44 U.S.C. 3501, et seq.

          List of Subjects in 48 CFR Parts 228, 231, and 252
          Government procurement.

          Michele P. Peterson,
          Editor, Defense Acquisition Regulations System.

        Therefore, DoD proposes to amend 48 CFR parts 228, 231, and 252 as follows:
        1. The authority citation for 48 CFR parts 228, 231, and 252 continues to read as follows:

          Authority:
          41 U.S.C. 421 and 48 CFR Chapter 1.

          PART 228—BONDS AND INSURANCE
          2. Section 228.370 is amended as follows:
          a. By revising paragraph (b);
          b. By removing paragraph (c); and
          c. By redesignating paragraphs (d) through (f) as paragraphs (c) through (e) respectively. The revised text reads as follows:

            228.370
            Additional clauses.

            (b)(1) Use the clause at 252.228-7001, Ground and Flight Risk, in solicitations and contracts for the acquisition, development, production, modification, maintenance, repair, or overhaul of aircraft, except those solicitations and contracts—
            (i) That are strictly for activities incidental to the normal operations of the aircraft (e.g., refueling operations, minor non-structural actions not requiring towing such as replacing aircraft tires due to wear and tear);
            (ii) That use FAR Part 12 procedures and are for the development or production of aircraft; or
            (iii) For which a non-DoD customer (including a foreign military sales customer) has not agreed to assume the risk for loss or destruction of, or damages to, the aircraft.
            (2) The clause at 252.228-7001 may be modified only as follows:
            (i) Include a modified definition of “aircraft” if the contract covers other than conventional types of winged aircraft, i.e., helicopters, vertical take-off or landing aircraft, lighter-than-air airships, unmanned aerial vehicles, or other nonconventional aircraft. The modified definition should describe a stage of manufacture comparable to the standard definition.
            (ii) Modify “in the open” to include “hush houses,” test hangars and comparable structures, and other designated areas.
            (iii) Expressly define the “contractor's premises” where the aircraft will be located during and for contract performance. These locations may include contract premises which are owned or leased by the contractor or subcontractor, or premises where the contractor or subcontractor is a permittee or licensee or has a right to use, including Government airfields.
            (iv) Revise paragraph (e)(3) of the clause to provide Government assumption of risk for transportation by conveyance on streets or highways when transportation is—
            (A) Limited to the vicinity of contractor premises; and
            (B) Incidental to work performed under the contract.
            (3) Follow the procedures at PGI 228.370(b) when using the clause at 252.228-7001.

          PART 231—CONTRACT COST PRINCIPLES AND PROCEDURES
          3. Section 231.205-19 is added to read as follows:

            231.205-19
            Insurance and indemnification.
            (e) In addition to the cost limitations in FAR 31.205-19(e), self-insurance and purchased insurance costs are subject to the requirements of the clauses at 252.217-7012, Liability and Insurance, and 252.228-7001, Ground and Flight Risk.

          PART 252—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
          4. Section 252.228-7001 is revised to read as follows:

            252.228-7001
            Ground and Flight Risk.
            As prescribed in 228.370(b), use the following clause:
            Ground and Flight Risk (XXX 2007)

              (a) Definitions. As used in this clause—
              (1) Aircraft, unless otherwise provided in the contract Schedule, means—
              (i) Aircraft to be delivered to the Government under this contract (either before or after Government acceptance), including complete aircraft and aircraft in the process of being manufactured, disassembled, or reassembled; provided that an engine, portion of a wing or a wing is attached to a fuselage of the aircraft;
              (ii) Aircraft, whether in a state of disassembly or reassembly, furnished by the Government to the Contractor under this contract, including all Government property installed, in the process of installation, or temporarily removed; provided that the aircraft and property are not covered by a separate bailment agreement;
              (iii) Aircraft furnished by the Contractor under this contract (either before or after Government acceptance); or
              (iv) Conventional winged aircraft, as well as helicopters, vertical take-off or landing aircraft, lighter-than-air airships, unmanned aerial vehicles, or other nonconventional aircraft specified in this contract.
              (2) Contractor's managerial personnel means the Contractor's directors, officers, and any of the Contractor's managers, superintendents, or other equivalent representatives who supervise or direct all or substantially all of the Contractor's—
              (i) Business;

              (ii) Operations at any one plant or separate location at which this contract is performed; or
              (iii) Operations at a separate and complete major industrial operation in connection with the performance of this contract.
              (3) Contractor's premises means those premises, including subcontractors' premises, designated in the Schedule or in writing by the Contracting Officer, and any other place the aircraft is moved for safeguarding.
              (4) Flight means any flight demonstration, flight test, taxi test, or other flight made in the performance of this contract, or for the purpose of safeguarding the aircraft, or previously approved in writing by the Contracting Officer.
              (i) For land-based aircraft, “flight” begins with the taxi roll from a flight line on the Contractor's premises and continues until the aircraft has completed the taxi roll in returning to a flight line on the Contractor's premises.
              (ii) For seaplanes, “flight” begins with the launching from a ramp on the Contractor's premises and continues until the aircraft has completed its landing run and is beached at a ramp on the Contractor's premises.
              (iii) For helicopters, “flight” begins upon engagement of the rotors for the purpose of take-off from the Contractor's premises and continues until the aircraft has returned to the ground on the Contractor's premises and the rotors are disengaged.
              (iv) For vertical take-off or landing aircraft, “flight” begins upon disengagement from any launching platform or device on the Contractor's premises and continues until the aircraft has been engaged to any launching platform or device on the Contractor's premises.
              (v) All aircraft off the Contractor's premises shall be considered to be in flight when on the ground or water for reasonable periods of time following emergency landings, landings made in performance of this contract, or landings approved in writing by the Contracting Officer.
              (5) Flight crew member means the pilot, the co-pilot, and, unless otherwise provided in the Schedule, the flight engineer, navigator, and bombardier-navigator when assigned to their respective crew positions for the purpose of conducting any flight on behalf of the Contractor. It also includes any pilot or operator of an unmanned aerial vehicle. If required, a defense systems operator may also be assigned as a flight crew member.
              (6) In the open means located wholly outside of buildings on the Contractor's premises or other places described in the Schedule as being “in the open.” Government-furnished aircraft shall be considered to be located “in the open” at all times while in the Contractor's possession, care, custody, or control.
              (7) Operation means operations and tests of the aircraft and its installed equipment, accessories, and power plants, while the aircraft is in the open or in motion. The term does not apply to aircraft on any production line or in flight.
              (b) Combined regulation/instruction. The Contractor shall be bound by the operating procedures contained in the combined regulation/instruction entitled “Contractor's Flight and Ground Operations” (Air Force Instruction 10-220, Army Regulation 95-20, NAVAIR Instruction 3710.1 (Series), Coast Guard Instruction M13020.3, and Defense Contract Management Agency Instruction 8210.1) in effect on the date of contract award.
              (c) Government as self-insurer. Subject to the conditions in paragraph (d) of this clause, the Government self-insures and assumes the risk of damage to, or loss or destruction of aircraft “in the open,” during “operation,” and in “flight,” except as may be specifically provided in the Schedule as an exception to this clause. The Contractor shall not be liable to the Government for such damage, loss, or destruction beyond the Contractor's share of loss amount under the Government's self-insurance.
              (d) Conditions for Government's self-insurance. The Government's assumption of risk for aircraft in the open shall continue unless the Contracting Officer finds that the Contractor has failed to comply with paragraph (b) of this clause, or that the aircraft is in the open under unreasonable conditions, and the Contractor fails to take prompt corrective action.
              (1) The Contracting Officer, when finding that the Contractor has failed to comply with paragraph (b) of this clause or that the aircraft is in the open under unreasonable conditions, shall notify the Contractor in writing and shall require the Contractor to make corrections within a reasonable time.
              (2) Upon receipt of the notice, the Contractor shall promptly correct the cited conditions, regardless of whether there is agreement that the conditions are unreasonable.
              (i) If the Contracting Officer later determines that the cited conditions were not unreasonable, an equitable adjustment shall be made in the contract price for any additional costs incurred in correcting the conditions.
              (ii) Any dispute as to the unreasonableness of the conditions or the equitable adjustment shall be considered a dispute under the Disputes clause of this contract.
              (3) If the Contracting Officer finds that the Contractor failed to act promptly to correct the cited conditions or failed to correct the conditions within a reasonable time, the Contracting Officer may terminate the Government's assumption of risk for any aircraft in the open under the cited conditions. The termination will be effective at 12:01 a.m. on the fifteenth day following the day the written notice is received by the Contractor.
              (i) If the Contracting Officer later determines that the Contractor acted promptly to correct the cited conditions or that the time taken by the Contractor was not unreasonable, an equitable adjustment shall be made in the contract price for any additional costs incurred as a result of termination of the Government's assumption of risk.
              (ii) Any dispute as to the timeliness of the Contractor's action or the equitable adjustment shall be considered a dispute under the Disputes clause of this contract.
              (4) If the Government terminates its assumption of risk pursuant to the terms of this clause—
              (i) The Contractor shall thereafter assume the entire risk for damage, loss, or destruction of the affected aircraft;
              (ii) Any costs incurred by the Contractor (including the costs of the Contractor's self-insurance, insurance premiums paid to insure the Contractor's assumption of risk, deductibles associated with such purchased insurance, etc.) to mitigate its assumption of risk are unallowable costs; and
              (iii) The Government Property clause of this contract is not applicable to the affected aircraft.
              (5) The Contractor shall promptly notify the Contracting Officer when unreasonable conditions have been corrected.
              (i) If, upon receipt of the Contractor's notice of the correction of the unreasonable conditions, the Government elects to again assume the risk of loss and relieve the Contractor of its liability for damage, loss, or destruction of the aircraft, the Contracting Officer will notify the Contractor of the Contracting Officer's decision to resume the Government's risk of loss. The Contractor shall be entitled to an equitable adjustment in the contract price for any insurance costs extending from the end of the third working day after the Government's receipt of the Contractor's notice of correction until the Contractor is notified that the Government will resume the risk of loss.
              (ii) If the Government does not again assume the risk of loss and the unreasonable conditions have been corrected, the Contractor shall be entitled to an equitable adjustment for insurance costs, if any, extending after the third working day after the Government's receipt of the Contractor's notice of correction.
              (6) The Government's termination of its assumption of risk of loss does not relieve the Contractor of its obligation to comply with all other provisions of this clause, including the combined regulation/instruction entitled “Contractor's Flight and Ground Operations.”
              (e) Exclusions from the Government's assumption of risk. The Government's assumption of risk shall not extend to damage, loss, or destruction of aircraft which—
              (1) Results from failure of the Contractor, due to willful misconduct or lack of good faith of any of the Contractor's managerial personnel, to maintain and administer a program for the protection and preservation of aircraft in the open and during operation in accordance with sound industrial practice, including oversight of such a program of a subcontractor;
              (2) Is sustained during flight if either the flight or the flight crew members have not been approved in advance of any flight in writing by the Government Flight Representative, who has been authorized in accordance with the combined regulation/instruction entitled “Contractor's Flight and Ground Operations”;

              (3) Occurs in the course of transportation by rail, or by conveyance on public streets, highways, or waterways, except for Government-furnished property;

              (4) Is covered by insurance;
              (5) Consists of wear and tear; deterioration (including rust and corrosion); freezing; or mechanical, structural, or electrical breakdown or failure, unless these are the result of other loss, damage or destruction covered by this clause. (This exclusion does not apply to Government-furnished property if damage consists of reasonable wear and tear or deterioration, or results from inherent vice, e.g., a known condition or design defect in the property); or
              (6) Is sustained while the aircraft is being worked on and is a direct result of the work unless such damage, loss, or destruction would be covered by insurance which would have been maintained by the Contractor, but for the Government's assumption of risk.
              (f) Contractor's share of loss and Contractor's deductible under the Government's self-insurance.

              (1) The Contractor assumes the risk of loss and shall be responsible for the Contractor's share of loss under the Government's self-insurance. That share is the lesser of—
              (i) The first $100,000 of loss or damage to aircraft in the open, during operation, or in flight resulting from each separate event, except for reasonable wear and tear and to the extent the loss or damage is caused by negligence of Government personnel; or
              (ii) Twenty percent of the estimated price or cost of this contract.
              (2) If the Government elects to require that the aircraft be replaced or restored by the Contractor to its condition immediately prior to the damage, the equitable adjustment in the price authorized by paragraph (j) of this clause shall not include the dollar amount of the risk assumed by the Contractor.
              (3) In the event the Government does not elect repair or replacement, the Contractor agrees to credit the contract price or pay the Government, as directed by the Contracting Officer, the lesser of—
              (i) $100,000;
              (ii) Twenty percent of the estimated price or cost of this contract; or
              (iii) The amount of the loss.
              (4) The costs incurred by the Contractor for its share of the loss and for insuring against that loss are unallowable costs, including but not limited to—
              (i) The Contractor's share of loss under the Government's self-insurance;
              (ii) The costs of the Contractor's self-insurance;
              (iii) The deductible for any Contractor-purchased insurance;
              (iv) Insurance premiums paid for Contractor-purchased insurance; and
              (v) Costs associated with determining, litigating, and defending against the Contractor's liability.
              (g) Subcontractor possession or control. The Contractor shall not be relieved from liability for damage, loss, or destruction of aircraft while such aircraft is in the possession or control of its subcontractors, except to the extent that the subcontract, with the written approval of the Contracting Officer, provides for relief from each liability. In the absence of approval, the subcontract shall contain provisions requiring the return of aircraft in as good condition as when received, except for reasonable wear and tear or for the utilization of the property in accordance with the provisions of this contract.
              (h) Contractor's exclusion of insurance costs. The Contractor warrants that the contract price does not and will not include, except as may be authorized in this clause, any charge or contingency reserve for insurance covering damage, loss, or destruction of aircraft while in the open, during operation, or in flight when the risk has been assumed by the Government, including the Contractor share of loss in this clause, even if the assumption may be terminated for aircraft in the open.
              (i) Procedures in the event of loss.

              (1) In the event of damage, loss, or destruction of aircraft in the open, during operation, or in flight, the Contractor shall take all reasonable steps to protect the aircraft from further damage, to separate damaged and undamaged aircraft, and to put all aircraft in the best possible order. Except in cases covered by paragraph (f)(2) of this clause, the Contractor shall furnish to the Contracting Officer a statement of—
              (i) The damaged, lost, or destroyed aircraft;
              (ii) The time and origin of the damage, loss, or destruction;
              (iii) All known interests in commingled property of which aircraft are a part; and
              (iv) The insurance, if any, covering the interest in commingled property.
              (2) The Contracting Officer will make an equitable adjustment for expenditures made by the Contractor in performing the obligations under this paragraph.
              (j) Loss prior to delivery.

              (1) If prior to delivery and acceptance by the Government, aircraft is damaged, lost, or destroyed and the Government assumed the risk, the Government shall either—
              (i) Require that the aircraft be replaced or restored by the Contractor to the condition immediately prior to the damage, in which event the Contracting Officer will make an equitable adjustment in the contract price and the time for contract performance; or
              (ii) Terminate this contract with respect to the aircraft. Notwithstanding the provisions in any other termination clause under this contract, in the event of termination, the Contractor shall be paid the contract price for the aircraft (or, if applicable, any work to be performed on the aircraft) less any amount the Contracting Officer determines—
              (A) It would have cost the Contractor to complete the aircraft (or any work to be performed on the aircraft) together with anticipated profit on uncompleted work; and
              (B) Would be the value of the damaged aircraft or any salvage retained by the Contractor.
              (2) The Contracting Officer shall prescribe the manner of disposition of the damaged, lost, or destroyed aircraft, or any parts of the aircraft. If any additional costs of such disposition are incurred by the Contractor, a further equitable adjustment will be made in the amount due the Contractor. Failure of the parties to agree upon termination costs or an equitable adjustment with respect to any aircraft shall be considered a dispute under the Disputes clause of this contract.
              (k) Reimbursement from a third party. In the event the Contractor is reimbursed or compensated by a third party for damage, loss, or destruction of aircraft and has also been compensated by the Government, the Contractor shall equitably reimburse the Government. The Contractor shall do nothing to prejudice the Government's right to recover against third parties for damage, loss, or destruction. Upon the request of the Contracting Officer or authorized representative, the Contractor shall at Government expense furnish to the Government all reasonable assistance and cooperation (including the prosecution of suit and the execution of instruments of assignment or subrogation) in obtaining recovery.
              (l) Subcontracts. The Contractor shall incorporate the requirements of this clause, including this paragraph (l), in all subcontracts.

            (End of clause)

            252.228-7002
            [Removed]
            5. Section 252.228-7002 is removed and reserved.

            252.228-7003
            [Amended]
            6. Section 252.228-7003 is amended in the introductory text by removing “228.370(d)” and adding in its place “228.370(c)”.

            252.228-7005
            [Amended]
            7. Section 252.228-7005 is amended in the introductory text by removing “228.370(e)” and adding in its place “228.370(d)”.

            252.228-7006
            [Amended]
            8. Section 252.228-7006 is amended in the introductory text by removing “228.370(f)” and adding in its place “228.370(e)”.

      [FR Doc. E7-23657 Filed 12-6-07; 8:45 am]
      BILLING CODE 5001-08-P


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 52
        [EPA-R10-OAR-2015-0067; FRL-9960-99-Region 10]

        Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area; Proposed Further Delay of Effective Date

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule; further delay of effective date.

          SUMMARY:

          In accordance with the Presidential directive as expressed in the memorandum of January 20, 2017, from the Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review,” and the Federal Register document published by the Environmental Protection Agency (EPA or Agency) on January 26, 2017, the EPA is proposing to further delay the effective date for Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area for up to 90 days.

          DATES:
          Written comments on the proposed rule must be received by April 6, 2017.

          ADDRESSES:

          Submit your comments, identified by Docket ID EPA-R10-OAR-2015-0067, online at www.regulations.gov. For comments submitted at www.regulations.gov, follow the online instructions for submitting comments. Once submitted, comments cannot be edited or removed from www.regulations.gov. The EPA may publish any comment received to its public docket. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. The EPA will generally not consider comments or comment contents located outside of the primary submission (i.e. on the web, cloud, or other file sharing system). For additional submission methods, please contact the person identified in the FOR FURTHER INFORMATION CONTACT section. For the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

          FOR FURTHER INFORMATION CONTACT:

          Jeff Hunt, Air Planning Unit, Office of Air and Waste (OAW-150), Environmental Protection Agency, Region 10, 1200 Sixth Ave, Suite 900, Seattle, WA 98101; telephone number: (206) 553-0256; email address: hunt.jeff@epa.gov.

        SUPPLEMENTARY INFORMATION:
        On January 26, 2017, the EPA published a document in the Federal Register entitled “Delay of Effective Date for 30 Final Regulations Published by the Environmental Protection Agency Between October 28, 2016 and January 17, 2017” (82 FR 8499). In that document, the EPA delayed the effective date of Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area to March 21, 2017, as requested in the memorandum of January 20, 2017, from the Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review” (January 20 Memo). That memo directed the heads of Executive Departments and Agencies to temporarily postpone for 60 days from the date of the January 20 Memo the effective dates of all regulations that had been published in the Federal Register but had not yet taken effect.

          The January 20 Memo also states: “Where appropriate and as permitted by applicable law, [agencies] should consider proposing for notice and comment a rule to delay the effective date for regulations beyond that 60-day period.” The EPA subsequently proposed (82 FR 11517) and then finalized (82 FR 14463) an action on March 21, 2017 to further delay the effective date for Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area until April 20, 2017. The EPA is proposing this additional delay of up to 90 days to give Agency officials the opportunity to decide whether they would like to conduct a substantive review of this rule. If Agency officials decide to conduct a substantive review of Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area, the EPA will take appropriate actions to conduct such a review, including, but not limited to, issuing a document in the Federal Register addressing any further delays of the effective date of Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area or extensions of compliances dates in the rule. If Agency officials decide not to conduct a substantive review of Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area, it will become effective no later than July 19, 2017.

        The EPA solicits comment only on its proposal to further delay the effective date and the length of the delay of Partial Approval and Partial Disapproval of Attainment Plan for the Idaho Portion of the Logan, Utah/Idaho PM2.5 Nonattainment Area. The EPA is not soliciting and will not consider comments on any other aspect of the rule itself.

          Dated: March 24, 2017.
          Michelle L. Pirzadeh,
          Acting Regional Administrator, Region 10.

      [FR Doc. 2017-06311 Filed 3-29-17; 8:45 am]
       BILLING CODE 6560-50-P


        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 622
        [Docket No. 190823-0017]
        RIN 0648-BI96
        Fisheries of the Caribbean, Gulf of Mexico, and South Atlantic; Shrimp Fishery of the Gulf of Mexico; Amendment 18

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

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:
          NMFS proposes regulations to implement Amendment 18 to the Fishery Management Plan (FMP) for the Shrimp Fishery of the Gulf of Mexico, U.S. Waters (Amendment 18), as prepared and submitted by the Gulf of Mexico (Gulf) Fishery Management Council (Council). This proposed rule would modify the target reduction goal for juvenile red snapper mortality in the Federal Gulf penaeid shrimp trawl fishery, and would modify the FMP framework procedures. The purposes of Amendment 18 are to promote economic stability, to achieve optimum yield in the Federal Gulf shrimp fishery by reducing effort constraints, and to equitably distribute the benefits from red snapper rebuilding, while continuing to protect, the Gulf red snapper stock.

          DATES:
          Written comments must be received on or before September 30, 2019.

          ADDRESSES:
          You may submit comments on the proposed rule, identified by “NOAA-NMFS-2019-0045,” by either of the following methods:
          • Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2019-0045, click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.
          • Mail: Submit written comments to Frank Helies, Southeast Regional Office, NMFS, 263 13th Avenue South, St. Petersburg, FL 33701.

            Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by NMFS. All comments received are a part of the public record and will generally be posted for public viewing on www.regulations.gov without change. All personal identifying information (e.g., name, address), confidential business information, or otherwise sensitive information submitted voluntarily by the sender will be publicly accessible. NMFS will accept anonymous comments (enter “N/A” in the required fields if you wish to remain anonymous).

          Electronic copies of Amendment 18, which includes a fishery impact statement, a Regulatory Flexibility Act (RFA) analysis, and a regulatory impact review, may be obtained from the Southeast Regional Office website at https://www.fisheries.noaa.gov/action/amendment-18-modifying-shrimp-effort-threshold.

          FOR FURTHER INFORMATION CONTACT:
          Frank Helies, telephone: 727-824-5305, or email: Frank.Helies@noaa.gov.

        SUPPLEMENTARY INFORMATION:

        The shrimp fishery in the Gulf is managed under the FMP. The FMP was prepared by the Council and implemented through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

        Background
        The 2005 Southeast Data, Assessment, and Review (SEDAR) 7 stock assessment for Gulf red snapper identified bycatch of red snapper by the Gulf shrimp fishery as a primary factor affecting the recovery of the stock (SEDAR 7 2005). The assessment indicated a need to reduce the red snapper bycatch mortality attributed to shrimp trawls by 74 percent, compared to levels of effort and mortality experienced during the baseline 2001-2003 period.

        To end overfishing of red snapper and rebuild the stock by 2032 in compliance with the rebuilding plan, the Council developed Amendment 14 to the FMP to cap shrimp fishing effort in statistical zones 10-21 in 10-30 fathom (18.29 m-54.86 m) depth zone of the western Gulf (i.e., the area monitored for juvenile red snapper bycatch). The reduction goal for juvenile red snapper mortality was linked to a reduction in shrimp fishing effort of 74 percent below fishing effort during the baseline 2001-2003 period. The final rule implementing this reduction published on January 29, 2008 (73 FR 5117). Consistent with Amendment 14, NMFS reduced the threshold level to 67 percent of the baseline in 2011. Amendment 14 also stated that the target reduction goal should decrease to 60 percent (i.e., shrimp effort could increase) by 2032 (the final year of the red snapper rebuilding plan). However, the framework procedure to implement this reduction was never established by the Council.
        The Gulf shrimp fishery has not exceeded the allowable threshold effort levels established in Amendment 14. Since the early 2000s, the Gulf shrimp fishery has experienced economic losses, primarily as a result of high fuel costs and reduced sales prices caused by competition with imported shrimp. These economic losses have resulted in the reduction in the number of vessels within the fishery, and consequently, a reduction in commercial effort, when compared to historical levels.
        Through Amendment 13 to the FMP, the Council took additional steps in 2006 to cap shrimp fishing effort in response to increased levels of bycatch of species including red snapper through establishment of the Federal commercial Gulf shrimp moratorium permit (71 FR 56039; September 26, 2006). The permit moratorium was later extended until October 26, 2026, by the final rule for Amendment 17A to the FMP (81 FR 47733; July 22, 2016) (50 CFR 622.50(b)).
        Gulf red snapper is no longer overfished or undergoing overfishing, and continues to rebuild, consistent with the rebuilding plan (SEDAR 52 2018). Also, as described in Amendment 18, recent research indicates that the effect of the shrimp fishery on red snapper mortality is less than previously determined. In response to a request by the Council, the NMFS Southeast Fisheries Science Center (SEFSC) conducted an analysis to determine if effort in the shrimp fishery could increase without affecting red snapper rebuilding. The SEFSC analyzed how increases in Gulf-wide shrimp effort may affect the red snapper rebuilding plan and catch level projections from the SEDAR 52 stock assessment. This analysis of Gulf-wide effort increases was used as a proxy for changes in effort in the specific area monitored for purposes of the threshold because the results from SEDAR 52 could not be broken out into specific depth areas in particular statistical zones. The analysis indicated that increasing shrimp effort to the level considered in Amendment 14 (60 percent below the baseline years of 2001-2003) is unlikely to affect the rebuilding timeline of red snapper and would have little impact on red snapper annual catch limits.
        Management Measures Contained in This Proposed Rule To Implement Amendment 18
        This proposed rule would implement measures to modify the target reduction goal for juvenile red snapper mortality in the Federal Gulf shrimp trawl fishery, and would modify the FMP framework procedures.
        Target Reduction Goal
        Although the Gulf red snapper stock is in a rebuilding plan until 2032, it is no longer overfished or undergoing overfishing (SEDAR 52 2018). While the red snapper stock acceptable biological catch (ABC) has consistently increased under the rebuilding plan, the target reduction goal of shrimp trawl bycatch mortality on red snapper has remained the same since 2011. The higher the target reduction of shrimp trawl bycatch mortality on red snapper, the more likely that the effort threshold would be exceeded, triggering a seasonal closure for the Gulf shrimp fishery. Although a shrimp closure has not been implemented to date as a result of effort reaching the threshold, shrimp effort has come within 2 percent of the 67-percent threshold in 2014, 2016, and 2017, indicating that a future commercial shrimp closure could occur.
        This proposed rule would implement a reduction for trawl bycatch mortality on red snapper to 60 percent below the baseline effort of the years 2001-2003. As noted previously, the analysis done by the SEFSC indicates that allowing shrimp effort to increase consistent with the lower threshold would not impact the red snapper rebuilding plan and would have only a small impact on red snapper catch levels. The projected reduction in the red snapper ABC in the short term (over the next 3 years) is no more than 100,000 lb (45,359 kg) per year and, in the long term, no more than 200,000 lb (90,719 kg) per year.
        FMP Framework Procedures
        Amendment 18 and this proposed rule would revise the FMP framework procedure to allow changes to the target reduction goal for juvenile red snapper mortality through the standard open framework documentation process. Amendment 18 and this proposed rule would also modify the FMP abbreviated documentation process to allow specification of an ABC recommended by the Council's Scientific and Statistical Committee based on results of a new stock assessment and using the Council's ABC control rule. The changes to the framework procedure in Amendment 18 would provide for consistency across all abbreviated framework procedures under the Council's jurisdiction and could facilitate faster management action, if necessary, for the Council by providing a more streamlined approach to modify any future effort reduction goals.
        Action in This Proposed Rule Not in Amendment 18

        This proposed rule would also replace the term “Letter of Authorization (LOA)” with “Gear Test Authorization (GTA)” in 50 CFR 622.53, Bycatch Reduction Device Requirements, paragraphs (a)(2)(i)(B) and (ii). This change was made in the Bycatch Reduction Device Testing Manual when it was revised in 2016 in order to avoid confusion because the acronym LOA is also used to refer to a Letter of Acknowledgment issued under 50 CFR 600.745(a) (81 FR 95056; December 27, 2016). The GTA is required when a person wants to test a new bycatch reduction device, and this change would make the terminology in the regulations consistent with the terminology in the manual.
        Classification

        Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with Amendment 18, the FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
        This proposed rule has been determined to be not significant for purposes of Executive Order 12866. This rule is expected to be an Executive Order 13771 deregulatory action. The potential cost savings from this rule is estimated to be $3.51 million in 2016 dollars, discounted at 7 percent in perpetuity.

        The Magnuson-Stevens Act provides the legal basis for this proposed rule. No duplicative, overlapping, or conflicting Federal rules have been identified. In addition, no new reporting and record-keeping requirements are introduced by this proposed rule. Accordingly, the Paperwork Reduction Act does not apply to this proposed rule. A description of this proposed rule, why it is being considered, and the purposes of this proposed rule are contained in the preamble and in the SUMMARY section of the preamble. The objectives of this proposed rule are to promote economic stability in the Federal Gulf shrimp fishery by reducing effort constraints and to equitably distribute the benefits from rebuilding, while continuing to protect the Gulf red snapper stock.
        The Chief Counsel for Regulation of the Department of Commerce has certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule, if adopted, will not have a significant economic impact on a substantial number of small entities. A description of the factual basis for this determination follows. Estimates in the factual basis are based on 2011-2014 data, which is the best data currently available, and all monetary estimates are in 2017 dollars, consistent with the estimates in Amendment 18.
        This proposed rule, if implemented, would reduce the target reduction goal for juvenile red snapper mortality in the Gulf shrimp fishery from 67 percent to 60 percent, which would allow vessels with Gulf shrimp moratorium permits to increase their annual effort (days fished) by a maximum of 5,797 days in the 10-30 fathom (18.29 m—54.86 m) depth zone of statistical areas 10 through 21. This proposed rule would also revise the FMP management measures framework procedure to allow changes to the target reduction goal for juvenile red snapper mortality through the abbreviated framework documentation process.

        This proposed rule is expected to directly regulate businesses that possess Federal Gulf shrimp moratorium permits and actively fish in the commercial Gulf shrimp fishing industry. From 2011 through 2014, the average number of vessels with valid Gulf shrimp moratorium permits per year was 1,572, though the number of vessels with permits declined each year during this time. As of February 11, 2019, the number of vessels with a valid or renewable Gulf shrimp moratorium permit was 1,417. From 2011 through 2014, the average number of vessels with valid permits that actively fished (i.e., had landings) in the Gulf shrimp fishery was 1,140.
        Because it is not currently feasible to accurately determine affiliations between businesses that possess Gulf shrimp moratorium permits, for purposes of this analysis, it is assumed each of these vessels is independently owned by a single business, which is likely an overestimate of the actual number of businesses directly regulated by this proposed rule. Thus, this proposed rule is estimated to directly regulate 1,140 businesses in the commercial Gulf shrimp fishing industry, or about 80 percent of the vessels currently possessing valid or renewable Gulf shrimp moratorium permits.
        For vessels with Gulf shrimp moratorium permits, annual gross revenue was about $396,800 on average from 2011 through 2014, of which approximately $357,000 came from commercial fishing operations. Net revenue for these vessels was about $45,600, while net revenue from commercial fishing operations was approximately $8,600. From 2011 through 2014, the greatest average annual gross revenue earned by a single vessel (business) was approximately $1.93 million.
        On December 29, 2015, NMFS issued a final rule establishing a small business size standard of $11 million in annual gross receipts (revenue) for all businesses primarily engaged in the commercial fishing industry (NAICS code 11411) for RFA compliance purposes only (80 FR 81194; December 29, 2015). In addition to this gross revenue standard, a business primarily involved in commercial fishing is classified as a small business if it is independently owned and operated, and is not dominant in its field of operations (including its affiliates).
        Based on the information above, all businesses directly regulated by this proposed rule are determined to be small businesses for the purpose of this analysis. Therefore, it is determined that this proposed rule will affect a substantial number of small businesses.
        Reducing the target reduction goal for juvenile red snapper mortality in the Gulf shrimp fishery from 67 percent to 60 percent would allow vessels with Gulf shrimp moratorium permits to increase their annual effort by, on average, a maximum of about 5.1 days per vessel in the 10-30 fathom (18.29 m-54.86 m) depth zone of statistical areas 10 through 21. Catch per unit of effort (CPUE) is estimated to be approximately 1,150 lb (522 kg) (tails). Thus, each vessel could increase its landings by about 5,840 lb (2,649 kg) per year on average. Average ex-vessel price per pound is estimated to be approximately $4.36. Thus, the maximum increase in average annual gross revenue per vessel would be about $25,470.
        Net operating revenue is the best available estimate of economic profit in this industry. Net operating revenue per vessel is estimated to be about $8,600 per year, or approximately 2.4 percent of their gross revenue from commercial fishing operations. Thus, annual net operating revenue per vessel could increase by about $610 on average, which would represent an increase of 7 percent in annual net operating revenue per vessel. Whether vessels actually increase their effort and thus increase landings, gross revenue, and net operating revenue by the maximum allowable amount will depend on future levels of abundance, CPUE, shrimp prices, and fuel prices, which cannot be predicted with a high level of certainty using current data and models.
        Modifying the FMP framework procedure to allow changes to the target reduction goal for juvenile red snapper mortality through the standard open framework documentation process and to allow specification of an ABC through the abbreviated process are administrative actions that do not alter any requirements that directly regulate federally permitted vessels in the commercial Gulf shrimp fishing industry. Therefore, this action is not expected to affect the profitability of any businesses that possess these permits.
        Based on the information above, a reduction in profits for the affected small entities is not expected as a result of this proposed rule. Thus, because there would not be a significant economic impact on a substantial number of small entities, an initial regulatory flexibility analysis is not required and none has been prepared.

          List of Subjects in 50 CFR Part 622
          Bycatch, Commercial, Fisheries, Fishing, Gear, Gulf, Red snapper, Shrimp.

          Dated: August 23, 2019.
          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 622 is proposed to be amended as follows:

          PART 622—FISHERIES OF THE CARIBBEAN, GULF OF MEXICO, AND SOUTH ATLANTIC

         1. The authority citation for part 622 continues to read as follows:

           Authority:
           16 U.S.C. 1801 et seq.

        2. In § 622.53, revise paragraphs (a)(2)(i)(B) and (a)(2)(ii) to read as follows:

          § 622.53
          Bycatch reduction device (BRD) requirements.
          (a) * * *
          (2) * * *
          (i) * * *
          (B) After reviewing the application, the RA will determine whether to issue a Gear Test Authorization (GTA) to conduct pre-certification trials upon the vessel specified in the application. If the RA authorizes pre-certification, the RA's GTA must be on board the vessel during any trip involving the BRD testing.
          (ii) Certification. A person who proposes a BRD for certification for use in the Gulf EEZ must submit an application to test such BRD, conduct the testing, and submit the results of the test in accordance with the “Bycatch Reduction Device Testing Manual.” The RA will issue a GTA to conduct certification trials upon the vessel specified in the application if the RA finds that: The operation plan submitted with the application meets the requirements of the “Bycatch Reduction Device Testing Manual”; the observer identified in the application is qualified; and the results of any pre-certification trials conducted have been reviewed and deemed to indicate a reasonable scientific basis for conducting certification testing. If an application for a GTA is denied, the RA will provide a letter of explanation to the applicant, together with relevant recommendations to address the deficiencies that resulted in the denial. To be certified for use in the fishery, the BRD candidate must successfully demonstrate a 30-percent reduction in total weight of finfish bycatch. In addition, the BRD candidate must satisfy the following conditions: There is at least a 50-percent probability the true reduction rate of the BRD candidate meets the bycatch reduction criterion and there is no more than a 10-percent probability the true reduction rate of the BRD candidate is more than 5 percentage points less than the bycatch reduction criterion. If a BRD meets both conditions, consistent with the “Bycatch Reduction Device Testing Manual,” NMFS, through appropriate rulemaking procedures, will add the BRD to the list of certified BRDs in paragraph (a)(3) of this section; and provide the specifications for the newly certified BRD, including any special conditions deemed appropriate based on the certification testing results.

        3. In § 622.55, revise paragraph (d)(1) to read as follows:

          § 622.55
          Closed areas.

          (d) * * *
          (1) Procedure for determining need for and extent of closures. Each year, in accordance with the applicable framework procedure established by the Gulf Shrimp FMP, the RA will, if necessary, establish a seasonal area closure for the shrimp fishery in all or a portion of the areas of the Gulf EEZ specified in paragraphs (d)(2) through (d)(4) of this section. The RA's determination of the need for such closure and its geographical scope and duration will be based on an annual assessment, by the Southeast Fisheries Science Center, of the shrimp effort and associated shrimp trawl bycatch mortality on red snapper in the 10-30 fathom area of statistical zones 10-21, compared to the 60-percent target reduction of shrimp trawl bycatch mortality on red snapper from the benchmark years of 2001-2003 established in the FMP (which corresponds in terms of annual shrimp effort to 27,328 days fished). The framework procedure provides for adjustment of this target reduction level, consistent with the red snapper stock rebuilding plan and the findings of subsequent stock assessments, via appropriate rulemaking. The assessment will use shrimp effort data for the most recent 12-month period available and will include a recommendation regarding the geographical scope and duration of the closure. The Southeast Fisheries Science Center's assessment will be provided to the RA on or about March 1 of each year. If the RA determines that a closure is necessary, the closure falls within the scope of the potential closures evaluated in the Gulf Shrimp FMP, and good cause exists to waive notice and comment, NMFS will implement the closure by publication of a final rule in the Federal Register. If such good cause waiver is not justified, NMFS will implement the closure via appropriate notice and comment rulemaking. NMFS intends that any closure implemented consistent with this paragraph (l) will begin on the same date and time as the Texas closure, as described in paragraph (a) of this section, unless circumstances dictate otherwise.

        4. In § 622.60, revise paragraphs (a) and (b) to read as follows:

          § 622.60
          Adjustment of management measures.

          (a) Gulf penaeid shrimp. For a species or species group: Reporting and monitoring requirements, permitting requirements, size limits, vessel trip limits, closed seasons or areas and reopenings, quotas (including a quota of zero), MSY (or proxy), OY, management parameters such as overfished and overfishing definitions, gear restrictions (ranging from regulation to complete prohibition), gear markings and identification, vessel markings and identification, acceptable biological catch (ABC) and ABC control rules, rebuilding plans, restrictions relative to conditions of harvested shrimp (maintaining shrimp in whole condition, use as bait), target effort and fishing mortality reduction levels, bycatch reduction criteria, BRD certification and decertification criteria, BRD testing protocol and certified BRD specifications, and target effort reduction for juvenile red snapper mortality.
          (b) Gulf royal red shrimp. Reporting and monitoring requirements, permitting requirements, size limits, vessel trip limits, closed seasons or areas and reopenings, annual catch limits (ACLs), annual catch targets (ACTs), quotas (including a quota of zero), accountability measures (AMs), MSY (or proxy), OY, management parameters such as overfished and overfishing definitions, gear restrictions (ranging from regulation to complete prohibition), gear markings and identification, vessel markings and identification, ABC and ABC control rules, rebuilding plans, and restrictions relative to conditions of harvested shrimp (maintaining shrimp in whole condition, use as bait), and target effort reduction for juvenile red snapper mortality.

      [FR Doc. 2019-18649 Filed 8-28-19; 8:45 am]
       BILLING CODE 3510-22-P


        DEPARTMENT OF HEALTH AND HUMAN SERVICES
        45 CFR Part 75
        RIN 0991-AC06
        Health and Human Services Grants Regulation

          AGENCY:
          Department of Health and Human Services; Office of the Assistant Secretary for Financial Resources, Division of Grants, Office of Grants Policy, Oversight, and Evaluation.

          ACTION:
          Notice of proposed rulemaking.

          SUMMARY:
          This notice of proposed rulemaking (NPRM) proposes changes to the Department of Health and Human Services' (HHS) adoption of the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Administrative Requirements”) published on December 19, 2014 (79 FR 75871) and the technical amendments published by HHS on January 20, 2016 (81 FR 3004). HHS codified the OMB language, with noted modifications as explained in the preamble to the December promulgation, in 45 CFR part 75. The HHS-specific modifications to the Uniform Administrative Requirements adopted prior regulatory language that was not in conflict with OMB's language, and provided additional guidance to the regulated community. Unlike all of the other modifications to the Uniform Administrative Requirements, these proposed changes, although based on existing law or HHS policy, were not previously codified in regulation. This NPRM seeks comments on these important proposed regulatory changes.

          DATES:
          To be assured consideration, comments must be received at the address provided below, no later than 5 p.m. on August 12, 2016.

          ADDRESSES:

          In commenting, please refer to file code 0991-AC06. Because of staff and resource limitations, comments must be submitted electronically to www.regulations.gov. Follow the “Submit a comment” instructions.

          FOR FURTHER INFORMATION CONTACT:
          Dr. Audrey Clarke at HHS at 202-720-1908.

        SUPPLEMENTARY INFORMATION:

          Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including personally identifiable or confidential business information that is included in a comment. We post all comments received before the end of the comment period on the following Web site as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that Web site to view the public comments.
        Background
        This NPRM proposes changes to the HHS's adoption of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards published on December 19, 2014 (79 FR 75871) and the technical amendments published by HHS on January 20, 2016 (81 FR 3004). HHS codified the OMB language, with noted modifications, in 45 CFR part 75. Unlike all of the other modifications to the Uniform Administrative Requirements, these proposed changes, although based on existing law or HHS policy, were not previously codified in regulation. This NPRM seeks comments for these important regulatory changes.

        In order to give full effect to other important government-wide initiatives, HHS is proposing further amendments at this time, which HHS intends to finalize as soon as possible. HHS proposes several additional changes to the codification of 2 CFR part 200 in 45 CFR part 75. First, HHS proposes to add language to 45 CFR 75.102, clarifying that the audit requirements and cost principles applicable to contracts and compacts awarded pursuant to the Indian Self Determination and Education Assistance Act (ISDEAA) are governed by subparts E and F including § 75.505 Sanctions, enforceable through § 75.371 Remedies for noncompliance, and that certain other sections and subparts of these regulations do not apply to ISDEAA contracts and compacts.
        Notably, the ISDEAA itself specifies that contracts and compacts awarded pursuant to the ISDEAA are subject to the Single Audit Act and OMB Circulars A-133, A-87, and A-122 and that ISDEAA contracts are not subject to federal grant and cooperative agreement requirements. 25 U.S.C. 450c(f), 458aaa-5(c). In order to clarify how the Uniform Administrative Requirements interact with the prior-enacted Federal statute, and to minimize confusion regarding applicability, HHS has determined that this clarification is required. This will additionally ensure that Indian tribes and tribal organizations are fully apprised of their rights and responsibilities. Although HHS considers this amendment to be a requirement of existing statute and regulation, HHS proposes this change with notice and an opportunity for comment to ensure that the regulated community is aware of this clarification.
        In addition, HHS proposes to add language to clarify the meaning of disallowed cost as used in 25 U.S.C. 450j-1(f) to reflect that the meaning must adhere to the audit requirements of 45 CFR part 75, subpart F. Because subpart F applies to ISDEAA contracts and compacts, and the ISDEAA contains a stringent time limitation on certain claims pursuant to the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507), HHS proposes to clarify that the scope of the time limitation applies only to cost disallowances arising under such Act, and not to other claims or disallowances identified through other audits or investigations. Without the addition of this clarifying language a different interpretation of the time limitation (which has been adopted in a few isolated judicial and administrative cases) would place additional administrative burdens on the Indian Health Service and entities holding ISDEAA contracts and compacts by compelling the government and the entities to perform burdensome and intrusive program compliance reviews in addition to the annual single audit required by the Single Audit Act. HHS believes the proposed language avoids imposing unreasonable burdens on the government and tribes and limits the need for yearly program compliance reviews.
        Second, HHS proposes two changes to 45 CFR 75.300. First, HHS is codifying a prohibition in the provision of services of discrimination on the basis of age, disability, sex, race, color, national origin, religion, sexual orientation, or gender identity. This provision codifies for all HHS service grants what is already applicable for all HHS service contracts, as required by the HHS Acquisition Regulation (HHSAR) 352.237-74. The HHSAR provision makes explicit HHS's non-discrimination policy when obligating appropriations for solicitations, contracts and orders that deliver service under HHS's programs directly to the public. In order to ensure that this same provision applies equally to grants, HHS proposes an addition to make this explicit in the grants context.
        This provision does not apply to funding under the Temporary Assistance for Needy Families Program (TANF) (title IV-A of the Social Security Act, 42, U.S.C. 601-619). The TANF statute, 42 U.S.C. 608(d), already identifies the nondiscrimination provisions that can be applied to TANF.

        In addition, HHS is codifying its implementation of the decisions in U.S. v. Windsor, 570 U.S. __(2013), 133 S.Ct. 2675 and Obergefell v. Hodges, 576 U.S. __(2015), 135 S.Ct. 2584. The HHS codification of its interpretation of these Supreme Court decisions ensures that same-sex spouses, marriages, and households are treated the same as opposite-sex spouses, marriages, and households in terms of determining beneficiary eligibility or participation in grant-related activities.
        Because these two codifications are being proposed for consistency with law and current HHS policy, HHS believes that they are non-controversial, but nonetheless requests public comment. Third, HHS is proposing to clarify the language currently codified in 45 CFR part 75 regarding the applicability to states of certain payment provisions. Because the current language applies the provisions of Treasury—State Cash Management Improvement Act agreements and default procedures codified at 31 CFR part 205 and TM 4A-2000, and such agreements may not contain specific provisions addressed by 45 CFR 75.305, HHS seeks to modify the language to ensure clarity. In doing so, to the extent that the governing provisions are silent as to the payment provisions described in the Uniform Administrative Requirements, there should be no effect on states, as they had been subject to these same provisions pursuant to 45 CFR 92.21. However, HHS proposes the clarification so that all states are aware of the necessity to, for example, expend refunds and rebates prior to drawing down additional grant funds.

        Fourth, HHS is proposing to amend 45 CFR 75.365, related to restrictions on public access to records, in order to implement the President's Executive Order 13,642 (May 9, 2013), and corresponding law. See, e.g., http://www.whitehouse.gov/the-press-office/2013/05/09/executive-order-making-open-and-machine-readable-new-default-government-, and Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act of 2014, Public Law 113-76, Div. H, Sec. 527. HHS proposes to codify permissive authority for HHS awarding agencies to require public access to manuscripts, publications, and data produced under an award, consistent with applicable law.
        Fifth, HHS is proposing to amend 45 CFR 75.414(c) to add a provision to restrict indirect cost rates for certain grants. It is long-standing HHS policy to restrict training grants to a maximum eight percent indirect cost rate. HHS proposes additionally to impose this same limitation on foreign organizations and foreign public entities, which typically do not negotiate indirect cost rates. In the proposed rule, American University, Beirut, and the World Health Organization are exempted specifically from the indirect cost rate limitation because they are eligible for negotiated facilities and administration (F&A) cost reimbursement. This restriction on indirect costs, as indicated by 45 CFR 75.101, flows down to subawards and subrecipients.

        Finally, HHS proposes a new selected item of cost for codification in the cost principles as 45 CFR 75.477, regarding shared responsibility payments. As HHS has already announced in policy for the Ryan White HIV/AIDS Program, any payments or assessments imposed on an individual or individuals pursuant to 26 U.S.C. 5000A(b) as a result of any failure to maintain minimum essential coverage as required by 26 U.S.C. 5000A(a), are not allowable costs under a grant. See HAB Policy Notice 13-04, at 2-3; http://hab.hrsa.gov/manageyourgrant/pinspals/pcn1304privateinsurance.pdf. Because this is a sound public policy requirement for all grants, not just the Ryan White HIV/AIDS Program grants, HHS proposes to codify this provision in the Uniform Administrative Requirements. Furthermore, HHS proposes to adopt the same stance with regard to payments for failure to offer health coverage to employees. Because the provision codified at 26 U.S.C. 4980H has not yet been enforced against any employers, HHS has not had the need previously to announce a stance on this issue. HHS does so now, and seeks comments from the public.

        Paperwork Reduction Act
        In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Ch. 3506; 5 CFR 1320 Appendix A.1), HHS reviewed this NPRM and determined that there are no new collections of information contained therein.
        Regulatory Flexibility Act
        The Regulatory Flexibility Act requires that an agency provide a final regulatory flexibility analysis or to certify that the rule will not have a significant economic impact on a substantial number of small entities. This NPRM aligns 45 CFR part 75 with various regulatory and statutory provisions, implements Supreme Court decisions, and codifies long-standing policies thus clarifying and enhancing the provisions in HHS's interim final guidance issued December 19, 2014, and amended on January 20, 2016. In order to ensure that the public receives the most value, it is essential that HHS grant programs function as effectively and efficiently as possible, and that there is a high level of accountability to prevent waste, fraud, and abuse. The proposed additions provide enhanced direction for the public and will not have a significant economic impact beyond HHS's current regulations.
        Executive Order 12866 Determination
        Pursuant to Executive Order 12866, HHS has designated this NPRM to be economically non-significant. This rule is not being treated as a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has not been reviewed by the Office of Management and Budget.
        Unfunded Mandates Reform Act of 1995 Determination
        Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates Act) (2 U.S.C. 1532) requires that covered agencies prepare a budgetary impact statement before promulgating a rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires covered agencies to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. HHS has determined that this NPRM will not result in expenditures by State, local, and tribal governments, or by the private sector, of $100 million or more in any one year. Accordingly, HHS has not prepared a budgetary impact statement or specifically addressed the regulatory alternatives considered.
        Executive Order 13132 Determination
        HHS has determined that this NPRM does not have any Federalism implications, as required by Executive Order 13132.

          Sylvia M. Burwell,
          Secretary, Department of Health and Human Services.

          List of Subjects in 45 CFR Part 75
          Accounting, Administrative practice and procedure, Cost principles, Grant programs, Grant programs—health, Grants administration, Hospitals, Indians, Nonprofit organizations reporting and recordkeeping requirements, and State and local governments.

        For the reasons set forth in the preamble, part 75 of title 45 of the Code of Federal Regulations is proposed to be amended as follows:
        1. The authority citation for 45 CFR part 75 continues to read as follows:

          Authority:
          5 U.S.C. 301.

        2. Amend § 75.101 by adding paragraph (f) to read as follows:

          § 75.101
          Applicability.

          (f) Section 75.300(c) does not apply to the Temporary Assistance for Needy Families Program (title IV-A of the Social Security Act, 42 U.S.C. 601-619).

        3. Amend § 75.102 by adding paragraph (e) to read as follows:

          § 75.102
          Exceptions.

          (e)(1) Indian tribes and tribal organizations carrying out a compact or contract under the ISDEAA must comply with Subpart E, Cost Principles, and Subpart F, Audit Requirements, including § 75.505 Sanctions, enforceable through § 75.371 Remedies for noncompliance. References to cost principles and audit requirements in the ISDEAA and its implementing regulations, including OMB Circulars A-87, A-122, and A-133 (which were superseded by 2 CFR 200), shall be deemed to be references to subparts E and F. Except for statutorily mandated grants added to a funding agreement in accordance with 42 CFR part 137, subpart F, certain sections of this part, applicable to grants and cooperative agreements, do not apply to ISDEAA contracts and compacts, including 45 CFR 75.111, 75.112, and 75.113 and subparts C and D.
          (2) Cost disallowances to which the limitation on remedies under 25 U.S.C. 450j-1(f) applies shall include only disallowed costs that are identified through a Single Agency Audit conducted pursuant to the Single Audit Act and subject to the requirements of subpart F, and shall not include claims or disallowances identified through other audits or investigations.

        4. Amend § 75.300 by adding paragraphs (c) and (d) to read as follows:

          § 75.300
          Statutory and national policy requirements.

          (c) It is a public policy requirement of HHS that no person otherwise eligible will be excluded from participation in, denied the benefits of, or subjected to discrimination in the administration of HHS programs and services based on non-merit factors such as age, disability, sex, race, color, national origin, religion, gender identity, or sexual orientation. Recipients must comply with this public policy requirement in the administration of programs supported by HHS awards.
          (d) In accordance with the Supreme Court decisions in United States v. Windsor and in Obergefell v. Hodges, all recipients must treat as valid the marriages of same-sex couples. This does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law as something other than a marriage.

        5. Revise § 75.305(a) to read as follows:

          § 75.305
          Payment.
          (a)(1) For states, payments are governed by Treasury-State CMIA agreements and default procedures codified at 31 CFR part 205 and TFM 4A-2000 Overall Disbursing Rules for All Federal Agencies.
          (2) To the extent that Treasury-State CMIA agreements and default procedures do not address expenditure of program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds, such funds must be expended before requesting additional cash payments.

        6. Revise § 75.365 to read as follows:

          § 75.365
          Restrictions on public access to records.

          Consistent with section 75.322 of this part, HHS awarding agencies may require recipients to permit public access to manuscripts, publications, and data produced under an award. However, no HHS awarding agency may place restrictions on the non-Federal entity that limit public access to the records of the non-Federal entity pertinent to a Federal award identified in sections 75.361 through 75.364, except for protected personally identifiable information (PII) or when the HHS awarding agency can demonstrate that such records will be kept confidential and would have been exempted from disclosure pursuant to the Freedom of Information Act (5 U.S.C. 552) or controlled unclassified information pursuant to Executive Order 13556 if the records had belonged to the HHS awarding agency. The Freedom of Information Act (5 U.S.C. 552) (FOIA) does not apply to those records that remain under a non-Federal entity's control except as required under § 75.322. Unless required by Federal, state, local, or tribal statute, non-Federal entities are not required to permit public access to their records identified in sections 75.361 through 75.364. The non-Federal entity's records provided to a Federal agency generally will be subject to FOIA and applicable exemptions.

        7. In § 75.414(c)(1) add paragraphs (c)(1)(i) through (iii):

          § 75.414
          Indirect (F&A) costs.

          (c)(1) * * *
          (i) indirect costs on training grants are limited to a fixed rate of eight percent of MTDC exclusive of tuition and related fees, direct expenditures for equipment, and subawards in excess of $25,000;
          (ii) indirect costs on grants awarded to foreign organizations and foreign public entities and performed fully outside of the territorial limits of the U.S. may be paid to support the costs of compliance with federal requirements at a fixed rate of eight percent of MTDC exclusive of tuition and related fees, direct expenditures for equipment, and subawards in excess of $25,000; and,
          (iii) negotiated indirect costs may be paid to the American University, Beirut, and the World Health Organization.

        8. Add § 75.477 to read as follows:

          § 75.477
          Shared responsibility payments.
          (a) Payments for failure to maintain minimum essential health coverage. Any payments or assessments imposed on an individual or individuals pursuant to 26 U.S.C. 5000A(b) as a result of any failure to maintain minimum essential coverage as required by 26 U.S.C. 5000A(a) are not allowable expenses under Federal awards from an HHS awarding agency.
          (b) Payments for failure to offer health coverage to employees. Any payments or assessments imposed on an employer pursuant to 26 U.S.C. 4980H as a result of the employer's failure to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan are not allowable expenses under Federal awards from an HHS awarding agency.

      [FR Doc. 2016-15014 Filed 7-12-16; 8:45 am]
       BILLING CODE 4150-24-P