[Federal Register Volume 80, Number 250 (Wednesday, December 30, 2015)]
[Proposed Rules]
[Pages 81501-81503]
[FR Doc No: 2015-32681]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Part 173

[Docket Number PHMSA-2009-0303 (HM-213D)]
RIN 2137-AE53

Hazardous Materials: Safety Requirements for External Product
Piping on Cargo Tanks Transporting Flammable Liquids

AGENCY: Pipeline and Hazardous Materials Safety Administration (PHMSA),
DOT.

ACTION: Withdrawal of notice of proposed rulemaking.

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SUMMARY: PHMSA is withdrawing the notice proposing to stop the
transportation of flammable liquid material in unprotected external
product piping on DOT specification cargo tank motor vehicles as
mandated by the ``Fixing America's Surface Transportation Act'' or the
``FAST Act''. Although PHMSA is withdrawing its rulemaking proposal,
the agency will continue to consider methods to improve the safety of
transporting flammable liquid by cargo tank motor vehicle. PHMSA will
also continue to analyze current incident data and improve the
collection of future incident data to assist in making an informed
decision on methods to address this issue further, if warranted.

DATES: The notice of proposed rulemaking published January 27, 2011 (76
FR 4847) is withdrawn as of December 30, 2015.

FOR FURTHER INFORMATION CONTACT: Dirk Der Kinderen, Office of Hazardous
Materials Standards, Pipeline and Hazardous Materials Safety
Administration, telephone<PHONE_NUMBER>; or Leonard Majors, Office of
Hazardous Materials Technology, Pipeline and Hazardous Materials Safety
Administration, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
I. What action is PHMSA taking?
II. What did PHMSA propose and why?
III. Why is PHMSA taking this action?
IV. Background on Development of the Rulemaking
    A. Regulatory Assessment
    B. Government Accountability Office (GAO) Report and the Moving
Ahead for Progress in the 21st Century Act (MAP-21)
    C. Post-GAO Report Analysis
    D. Commenter Concerns
    1. Incident Analysis
    2. Cost and Benefit Estimation
    E. Findings
V. Conclusion

I. What action is PHMSA taking?

    PHMSA is withdrawing notice of proposed rulemaking (NPRM)
``Hazardous Materials: Safety Requirements for External Product Piping
on Cargo Tanks Transporting Flammable Liquids'' (HM-213D) published
January 27, 2011 (76 FR 4847) under Docket No. PHMSA-2009-0303. This
rulemaking proposed to stop flammable liquids from being transported in
unprotected product piping (generally referred to as the ``wetlines'')
on the cargo tank of existing and newly manufactured DOT specification
cargo tank motor vehicles.

II. What did PHMSA propose and why?

    PHMSA proposed to stop the transportation of flammable liquids in
unprotected external product piping on DOT specification cargo tank
motor vehicles (CTMVs) unless the piping was protected from accident or
bottom damages or the piping was designed or emptied in a way to remove
the hazard of containing flammable liquid. PHMSA proposed this change
because exposed piping containing flammable liquid can contribute to
the severity of accidents involving a CTMV and an automobile, and
because we currently do not require external piping containing
flammable liquid to be protected like other hazardous material. Except
for flammable liquid, Sec.  173.33(e) of the Hazardous Materials
Regulations (HMR: Parts 171-180) does not allow the transport of liquid
hazardous material in piping of a DOT specification cargo tank motor
vehicle unless it is equipped with accident damage or bottom damage
protection devices.\1\ PHMSA also issued this proposed requirement to
fully address the National Transportation Safety Board (NTSB) Safety
Recommendation H-98-27. This recommendation reads:
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    \1\ The HMR currently prohibits liquid hazardous materials in
Divisions 5.1 (oxidizer), 5.2 (organic peroxide), 6.1 (toxic), and
Class 8 (corrosive to skin only) to remain in wetlines after loading
or unloading. Due to complications associated with the loading
practices and economics of transporting Class 3 flammable liquids,
the provision does not apply to flammable liquids.

    Prohibit the carrying of hazardous materials in external piping
of cargo tanks, such as loading lines that may be vulnerable to
failure in an accident.

III. Why is PHMSA withdrawing the rulemaking?

    PHMSA is withdrawing the rulemaking in accordance with a
congressional mandate. On December 4, 2015, President Obama signed into
law the Fixing America's Surface Transportation Act, or ``FAST
Act''.\2\ The Act outlines legislation to improve the Nation's surface
transportation infrastructure, including roads, bridges, transit
systems, and the rail transportation network. Among its many provisions
is a mandate for PHMSA to withdraw this rulemaking no later than thirty
days from the date of enactment of the FAST Act (see section 7206 of
the Fast Act).
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    \2\ See Public Law 114-94, 129; Stat. 1312, December 4, 2015.
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IV. Background on Development of this Rulemaking

    Although PHMSA is congressionally mandated to withdraw this
rulemaking, below we discuss past and recent actions in development of
this rulemaking.

A. Regulatory Assessment

    PHMSA developed the assessment to evaluate regulatory action using
data from hazardous materials incident reports over a 12.25-year time
period (January 1999 to March 2011). PHMSA used a manual purging system
\3\ as the workable option to address the safety hazard of flammable
liquid in unprotected wetlines. Under previous rulemaking efforts,
PHMSA identified several technologies and design considerations that
could allow operators of CTMVs to address this safety hazard and asked
for public input on the practicality of using these options to protect
against or prevent the safety hazard.\4\ PHMSA's conclusions regarding
the practicality of alternatives remain valid. PHMSA believes a manual
purging system is the only workable option based on our understanding
of currently available and implemented technologies for addressing this
safety hazard.
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    \3\ The manual purging system is a pneumatic system consisting
of tubes, check valves, and a control box installed on a CTMV that
uses compressed air to clear the wetlines by forcing the liquid
material out of the piping and into the cargo tank body.
    \4\ On December 30, 2004, the agency published an NPRM (69 FR
78375) that discussed a number of possible alternative actions.
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    In developing an analysis of the benefits of the rulemaking, PHMSA
considered avoided injuries, property damage, traffic delays,
evacuations, emergency response, and environmental damage; in
developing an analysis of the costs, we considered the installation,
maintenance, and associated impacts of a equipping a CTMV with a manual
purging system. PHMSA evaluated various implementation timelines
ranging from a 5-year period to a 20-year period as the alternative
actions. The

best-case scenario benefit-cost ratio (BCR) was estimated to be 0.78,
based on a 20-year period (which would result in a de facto
applicability to new construction only, based on PHMSA's assumption of
a 20-year useful service life for a CTMV), and a 7 percent discount
rate.\5\ The assessment used the DOT's Value of Statistical Life (VSL)
of $6.1 million at the time, which now has been revised to $9.2
million. Based on PHMSA's additional review of data following the
publication of the NPRM and the outcome of the Government
Accountability Office (GAO) audit (discussed below), the number of
fatal incidents was reduced from four to three. These two changes were
not accounted for in the assessment, but the net effect on the BCR is
minor because the increase in benefits from the revised VSL is similar
in magnitude to the decrease in benefits associated with the decrease
in fatal incidents.
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    \5\ A BCR is an indicator of the relative benefits of a project
to its cost. A BCR of 1.0 indicates the benefits equal the cost.
Thus, for the best-case scenario the BCR of 0.78 indicates that the
estimated costs of complying with the rulemaking are greater than
the estimated safety benefits.
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B. Government Accountability Office (GAO) Report and the Moving Ahead
for Progress in the 21st Century Act (MAP-21) \6\
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    \6\ See Public Law 112-141, 126; Stat. 405, July 6, 2012.
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    The MAP-21, enacted in July 2012, temporarily stopped PHMSA from
issuing a final rule and required the GAO to examine the risks of, and
alternatives to, transporting flammable liquids in wetlines. The GAO
examined PHMSA's process for identifying wetlines incidents among its
reported hazardous materials incidents, analyzed how useful PHMSA's
incident data from January 1999 through March 2011 are for identifying
such incidents, and examined whether the data accurately captured
information about the incidents' consequences.
    In its final report, the GAO concluded that because PHMSA does not
specifically provide an option to indicate a wetlines incident on its
incident reporting form, it is difficult to identify the number of
wetlines incidents from PHMSA's incident data.\7\ Additionally, due to
inaccuracy of the damages associated with incidents, GAO believes the
magnitude of the risks wetlines pose to safety is also unclear. It also
noted that, although PHMSA has made changes to improve the quality of
its incident data, the concerns that GAO identified call into question
the usefulness of PHMSA's data for evaluating the benefits of avoiding
these incidents--particularly the extent to which a wetlines rule would
prevent fatalities. Finally, the GAO stated that PHMSA's economic
analysis used to support the NPRM does not account for these
limitations and therefore, the analysis does not adequately convey the
uncertainty of PHMSA's calculated benefit of the rule. Moreover, GAO
concluded that PHMSA's analysis has not adequately addressed the market
uncertainty with regard to the technology used as the basis for
addressing the safety hazard. See the GAO report for the complete
discussion of the GAO audit and summary of conclusions and
recommendations.
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    \7\ CARGO TANK TRUCKS: Improved Incident Data and Regulatory
Analysis Would Better Inform Decisions about Safety Risks, Report to
Congressional Committees, GAO-13-721, September 2013, http://www.gao.gov/assets/660/657755.pdf.
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C. Post-GAO Report Analysis

    Following the GAO report, PHMSA examined the regulatory assessment,
taking into account the GAO findings as well as industry comments to
help make a determination on whether to withdraw the rulemaking. This
analysis also took into account the updated VSL. The analysis
considered five scenarios for calculating the estimated societal
benefits and four scenarios for the estimated costs. This additional
analysis served as a sensitivity analysis of the regulatory assessment
for the NPRM. The different scenarios for estimated benefits were based
on:
     The incident analysis data used in the regulatory
assessment--i.e., ``incident data'';
     the incident data, including only those incidents
involving a fire;
     the incident data plus the Yonkers, NY fatal incident
data;
     the incident data, adjusted to account for the GAO
recommendations; and
     the incident data, adjusted to account for the GAO
recommendations plus the Yonkers, NY fatal incident data.
    PHMSA calculated a range of potential BCR outcomes, based on the
five scenarios for estimated benefits and the two scenarios for
estimated average costs. It is reasonable to assume that the BCR lies
somewhere between the highest and lowest BCR outcomes from this
analysis. Under the low average cost estimate, in four of the five
estimated benefit scenarios the BCR at a 7 percent discount rate was
not net beneficial. The BCRs ranged from 0.77 to 1.1 for the low
average cost scenario. In comparison, under the high average cost
estimate, in all five estimated benefit scenarios the BCR at a 7
percent discount rate was not net beneficial. The BCRs ranged from 0.47
to 0.67 for the high average cost scenario.

D. Commenter Concerns

    In general, most commenters to the NPRM opposed the proposed ban
and indicated that they do not believe wetlines containing flammable
liquid are a safety risk, citing PHMSA's own statistics that the
frequency of wetlines incidents is low and the frequency of incidents
that lead to injury or death is extremely low. They also expressed
concerns regarding PHMSA's incident analyses, regulatory assessment,
implementation of the rule, and safety impacts of the rule. The
remaining commenters either supported the rulemaking on the basis of
improved safety for the public or offered suggestions to strengthen or
make clearer PHMSA's efforts to address the safety hazard. The
opposition comments mainly address PHMSA's incident analysis and
development of the costs and benefits of the regulatory assessment.
PHMSA summarizes these concerns in greater detail below. This summary
of comments is for the benefit of the reader for understanding of
stakeholder information presented during the notice and comment portion
of this rulemaking. The complete body of comments both in opposition to
and support of the rule is available for review at the docket to the
rulemaking (www.regulations.gov).
1. Incident Analysis
    Commenters questioned whether all incidents and their associated
data used in PHMSA's preliminary analyses should be included in the
assessment with respect to: (1) The criteria used to decide whether an
incident qualified as a wetlines incident; (2) whether deaths,
injuries, or any other costs were actually the result of the material
contained in the wetlines; and (3) relevance of proposed requirements.
For example, they asserted that any incident involving the release of
more than fifty gallons \8\ without a fire resulting from a wetlines
release should be excluded based on the assumption that a spill of more
than fifty gallons indicates that there was a breach of the cargo tank
itself (e.g., tank shell rupture, damage to an internal valve) such
that any action to comply with the proposed performance standard--like
purging the wetlines--would not have prevented the larger release of
material. Additionally,

they argued that data indicating damages not directly linked to
wetlines damage or release should not be included. For example, costs
associated with damage to the CTMV from a motor vehicle collision
should not be included in the total for purposes of the analysis.
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    \8\ A basic assumption used in wetlines incident determination
is that depending on the number of cargo tank compartments and the
size of the product piping, wetlines can contain up to 50 gallons of
product.
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    PHMSA agrees that only those costs associated with damages to the
wetline and release of material from the wetlines should be counted.
Unfortunately, under the current format of incident report information
it is difficult to parse out the costs of wetlines-related damages from
the total body of damages where damages occur beyond those associated
with wetlines, unless some assumptions are made. For instance, in the
case of an incident involving a fire, PHMSA assumed the fire was
started and was propagated by the wetlines release.
    Upon consideration of the comments, PHMSA conducted further review
of the 172 incidents that were initially determined to be wetlines
incidents in our preliminary analyses. Prior to this review, PHMSA
became aware that some of the data in our original set of incidents was
not accurate and likely led to the critical comments. This data had
since been corrected and a revised list of incidents was placed in the
docket (8/12/2011; PHMSA-2009-0303-0048). PHMSA also reviewed
additional CTMV incidents that occurred from January 1, 2009 to March
31, 2011 to capture more recent data. This review resulted in a final
determination of 132 wetlines incidents. A total of 59 incidents where
removed after a review of the original 172 incidents, and 19 incidents
were added after a review of more recent data.
2. Benefit and Cost Estimation
    Manual Purging System. Most commenters took issue with PHMSA's
estimation of the costs of installing a manual purging system.\9\ In
general, they believe PHMSA underestimated the total cost presented
through incorrect assumptions and inclusion of cost factors that do not
reflect real-world applications. Commenters indicated that PHMSA
underestimated the true costs of a manual purging system by, for
example, not incorporating a markup cost. Commenters provide a range of
cost estimates from $4,000 to $10,000. Some also think the regulatory
assessment should have been developed using a mix of costs of the
manual system and the more expensive automated purging system.
Commenters suggest this because they believe that owners will invest in
the automated system out of concern that drivers will forget to operate
the manual system and because an automated system will provide the
added benefit of discovery of a faulty emergency valve and would
continue to purge the lines during transportation if such a faulty
valve were present. Details of this pricing can be found in the
regulatory assessment and other documents submitted to the docket for
this rulemaking. PHMSA's post-GAO analysis took into consideration the
cost of the automated system.
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    \9\ PHMSA used a per-unit price of $2,300 based on the
advertised price of the one manufacturer of purging systems
currently designing and installing such systems.
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    Operational delays. Many commenters argued that PHMSA has not
accounted for delay costs to the shipper or carrier due to operation of
a purging system at the loading rack of a terminal facility. The delay
would be caused by the driver of the CTMV waiting anywhere from three
to six minutes for the system to complete the purging process prior to
moving the CTMV. Commenters based this on their understanding that the
regulations would not allow the vehicle to move until it is essentially
empty--only a residue remains in the piping. Completion of the purging
process would be an indicator that it is empty.
    Weight penalty. PHMSA estimated that a manual purging system is
expected to add about 48 pounds to a CTMV. To the extent that a shipper
or carrier operates at Federal or State gross weight limits, the
shipper or carrier would have to ship less product because of this
additional weight. Commenters disagreed with the estimate that only 25%
of vehicle trips are at the maximum allowable weight and therefore
affected by the additional weight of a purging system. Informal surveys
of carriers by the American Trucking Association and the National Tank
Truck Carriers found that as much as 80% of trips are at the maximum
allowable weight. Again, PHMSA's post-GAO analysis accounted for this.
    Yonkers, NY Incident. Commenters believe the Yonkers, NY incident
that led to NTSB Safety Recommendation (H-98-27) should not be included
in the regulatory assessment for several reasons, including:
    (1) The belief that the fire in the incident was not caused by a
wetlines release because the original NTSB accident report concluded
that the fire was fed by fuel from the cargo tank compartments,
implying a breach of the cargo tank;
    (2) the incident predates the incident analysis period; and
    (3) the uncertainty that such an event will ever occur again--no
data supports the PHMSA assumption that this is a 20-year event.

E. Findings

    Although a safety hazard exists, the regulatory assessment and
further analysis indicate that prohibiting the transportation of
flammable liquids in wetlines is unlikely to be cost beneficial.
Additionally, the GAO report has pointed out a number of uncertainties
with the data collection and analysis that would have a direct impact
on PHMSA's ability to fully characterize the degree of risk that
wetlines containing flammable liquids pose to the safety of
transportation.

V. Conclusion

    PHMSA is withdrawing this rulemaking in accordance with the FAST
Act. PHMSA, however, will continue to examine this issue, particularly
by monitoring flammable liquid wetlines incidents, in consideration of
any future actions. Likely future actions include non-regulatory
initiatives to improve the safety of transporting flammable liquid in
unprotected external product piping on CTMVs.

    Issued in Washington, DC, on December 22, 2015, under authority
delegated in 49 CFR Part 1.97.
William S. Schoonover,
Deputy Associate Administrator.
[FR Doc. 2015-32681 Filed 12-29-15; 8:45 am]
 BILLING CODE 4910-60-P


[Federal Register Volume 79, Number 208 (Tuesday, October 28, 2014)]
[Notices]
[Pages 64237-64240]
[FR Doc No: 2014-25550]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IA-3957/803-00221]

Ares Real Estate Management Holdings, LLC; Notice of Application

October 22, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an exemptive order under Section 206A
of the Investment Advisers Act of 1940 (the ``Advisers Act'') and Rule
206(4)-5(e).

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Applicant: Ares Real Estate Management Holdings, LLC (formerly known as
AREA Management Holdings, LLC) (``Applicant'').
Relevant Advisers Act Sections: Exemption requested under section 206A
of the Advisers Act and rule 206(4)-5(e) from rule 206(4)-5(a)(1) under
the Advisers Act.

Summary of Application:  Applicant requests that the Commission issue
an order under section 206A of the Advisers Act and rule 206(4)-5(e)
exempting it from rule 206(4)-5(a)(1) under the Advisers Act to permit
Applicant to receive compensation for investment advisory services
provided to a government entity within the two-year period following a
contribution by a covered associate of Applicant to an official of the
government entity.

Filing Dates:  The application was filed on December 23, 2013, and
amended and restated applications were filed on April 28, 2014, and
July 15, 2014.
Hearing or Notification of Hearing: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving Applicant with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on November 17, 2014, and should be accompanied by proof of
service on Applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Pursuant to rule 0-5 under the Advisers Act,
hearing requests should state the nature of the writer's interest, any
facts bearing upon the desirability of a hearing on the matter, the
reason for the request, and the issues contested. Persons may request
notification of a hearing by writing to the Commission's Secretary.

ADDRESSES:  Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090. Applicant, Ares Real Estate Management
Holdings, LLC, c/o Michael Weiner, 2000 Avenue of the Stars, Los
Angeles, CA 90067.

FOR FURTHER INFORMATION CONTACT: Brian McLaughlin Johnson, Senior
Counsel, or Melissa R. Harke, Branch Chief, at<PHONE_NUMBER> (Division
of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site either at http://www.sec.gov/rules/iareleases.shtml or by searching for the file number, or for an
applicant using the Company name box, at http://www.sec.gov/search/search.htm, or by calling<PHONE_NUMBER>.

Applicant's Representations

    1. Applicant is a limited liability company organized in Delaware
and registered with the Commission as an investment adviser under the
Advisers

Act.\1\ Applicant serves as investment adviser to several real estate-
focused private investment funds (the ``Funds'') in which one of the
investors is a Colorado public pension plan (the ``Client''). The
investment decisions for the Client are overseen by a board of trustees
composed of eleven members, three of whom are appointed by the Governor
of Colorado.
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    \1\ In May of 2013, Applicant entered into an agreement with
Ares Management LLC (``Ares'') pursuant to which Ares agreed to
acquire 100% ownership of the Applicant (the ``Acquisition''). The
Acquisition closed in July 2013. After the Acquisition closed,
Applicant became an indirect wholly-owned subsidiary of Ares and
Applicant's name was changed from ``AREA Management Holdings, LLC''
to ``Ares Real Estate Management Holdings, LLC.''
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    2. On or about February 11, 2013, Lee Neibart, a senior management
executive and senior partner of the Applicant (the ``Contributor''),
made a contribution of $1,100 (the ``Contribution'') to the campaign of
John Hickenlooper, the Governor of Colorado (the ``Official'').
Applicant represents that the amount of the Contribution, profile of
the candidate, and characteristics of the campaign fall generally
within the pattern of the Contributor's other political donations.
    3. Applicant represents that the Contributor has confirmed that he
has not, at any time, had any contact with the Official regarding the
Client's investment activities with the Applicant, or otherwise met or
spoken with or otherwise communicated with the Official.
    4. Applicant represents that the Client's relationship with the
applicant pre-dates the Contribution and that no investments were made
by the Client in the Funds after the Contribution. The Client made its
first investment in the Funds in 1996, and made its most recent
investment in the Funds in 2007, almost six years before the
Contribution was made and three years before the Official was first
elected as Governor. Applicant represents that all of the Funds in
which the Client is an investor are commingled closed-end funds (i.e.,
funds with multiple institutional investors) and, accordingly, the
Funds' investors, including the Client, do not have the ability to
withdraw or redeem capital. Applicant represents that the investors'
investment capital is committed at the time of subscription and
effectively locked-in for the duration of a Fund's term to maturity.
Applicant represents that each of the Funds in which the Client is an
investor is ``fully drawn'' and in varying stages of liquidation.
Applicant represents, based on these considerations, that the Client
has not had any investment decisions to consider with respect to the
Funds since the Client's last investment commitment in 2007.
    5. Applicant represents that, based on Applicant's general
knowledge and representations from the Client subsequent to 2007,
Applicant generally understood that the Client did not have investment
capital available for additional investments in either the Funds or any
new real estate-focused investments managed by Applicant. Applicant
represents that, as a result, neither the Applicant nor the Contributor
has engaged in any investment solicitation of the Client since the
Client's last investment commitment in 2007. Applicant further
represents that, at the time of the Contribution, the Contributor did
not plan to solicit the Client (or any other government entity for
which the Official is an ``official'' as defined in rule 206(4)-5) for
any other investments, and the Applicant did not have any intention to
solicit the Client (or any other government entity for which the
Official is an ``official'' as defined in rule 206(4)-5) for any other
investments.
    6. Applicant represents that the Contributor's role with the Client
was limited to making substantive presentations to the Client's
representatives regarding the investment strategies of the Funds and
that the Contributor had no contact with any representative of the
Client outside of those presentations, and no contact with any member
of the Client's board.
    7. Applicant represents that at no time did the Applicant or any
employees of the Applicant other than the Contributor have any
knowledge of the Contribution prior to its discovery by Ares's
Compliance Department in July 2013. Applicant represents that the
Contribution was discovered by Ares' Compliance Department through the
Contributor's voluntary disclosure in response to a political
contribution questionnaire, and that the Contributor obtained a full
refund of the Contribution within one week after the Contribution was
discovered. Applicant represents that it established an escrow account
for the benefit of the Client and deposited an amount equal to the sum
of all fees paid to the Applicant with respect to the Client's
investments in the Funds since the date of the Contribution. Applicant
represents that additional fees with respect to the Client's
investments in the Funds accruing in favor of the Applicant will
continue to be deposited in the escrow account until it is determined
whether exemptive relief will be granted to the Applicant, which
amounts will be immediately returned to the Client should an exemptive
order not be granted.
    8. Applicant represents that at all relevant times it had
compliance procedures requiring pre-clearance and reporting of all of
its employees' proposed political contributions and that these
procedures have been more restrictive than is required under rule
206(4)-5. Applicant represents that all contributions to state and
local office incumbents and candidates are subject to pre-clearance and
that there are no exceptions for de minimis contributions. Applicant
represents that its employees are reminded periodically during the year
of these procedures and that all employees are required to certify
their compliance on a periodic basis; a request for a contribution like
the Contribution would have been rejected under the procedures.
Applicant represents that the Contributor was aware of (and otherwise
in compliance with) the procedures but, because neither the Applicant
nor the Contributor had solicited any investments in the Funds from the
Client or the State of Colorado since 2007, the Contributor failed to
appreciate that the Contribution was subject to the procedures.
    9. After learning of the contribution, Applicant represents that it
has taken steps designed to limit the Contributor's contact with
representatives of the Client. Applicant represents that the
Contributor was informed that he could not solicit new investment
commitments from the Client and that his communications with the Client
with respect to the Funds should be limited to responding to inquiries
from the Client's representatives and consultants with respect to the
status of the Funds' investment portfolios. Applicant represents that
the Contributor has been directed to maintain a log of such
interactions in accordance with the retention requirements set forth in
rule 204-2(e).

Applicant's Legal Analysis

    1. Rule 206(4)-5(a)(1) under the Advisers Act prohibits a
registered investment adviser from providing investment advisory
services for compensation to a government entity within two years after
a contribution to an official of the government entity is made by the
investment adviser or any covered associate of the investment adviser.
The Client is a ``government entity,'' as defined in rule 206(4)-
5(f)(5), the Contributor is a ``covered associate'' as defined in rule
206(4)-5(f)(2), and the Official is an ``official'' as defined in rule
206(4)-5(f)(6). Rule 206(4)-5(c)

provides that when a government entity invests in a covered investment
pool, the investment adviser to that covered investment pool is treated
as providing advisory services directly to the government entity. The
Funds are ``covered investment pools,'' as defined in rule 206(4)-
5(f)(3)(ii).
    2. Section 206A of the Advisers Act grants the Commission the
authority to ``conditionally or unconditionally exempt any person or
transaction . . . from any provision or provisions of [the Advisers
Act] or of any rule or regulation thereunder, if and to the extent that
such exemption is necessary or appropriate in the public interest and
consistent with the protection of investors and the purposes fairly
intended by the policy and provisions of [the Advisers Act].''
    3. Rule 206(4)-5(e) provides that the Commission may exempt an
investment adviser from the prohibition under Rule 206(4)-5(a)(1) upon
consideration of the factors listed below, among others:
    (1) Whether the exemption is necessary or appropriate in the public
interest and consistent with the protection of investors and the
purposes fairly intended by the policy and provisions of the Advisers
Act;
    (2) Whether the investment adviser: (i) Before the contribution
resulting in the prohibition was made, adopted and implemented policies
and procedures reasonably designed to prevent violations of the rule;
and (ii) prior to or at the time the contribution which resulted in
such prohibition was made, had no actual knowledge of the contribution;
and (iii) after learning of the contribution: (A) Has taken all
available steps to cause the contributor involved in making the
contribution which resulted in such prohibition to obtain a return of
the contribution; and (B) has taken such other remedial or preventive
measures as may be appropriate under the circumstances;
    (3) Whether, at the time of the contribution, the contributor was a
covered associate or otherwise an employee of the investment adviser,
or was seeking such employment;
    (4) The timing and amount of the contribution which resulted in the
prohibition;
    (5) The nature of the election (e.g., federal, state or local); and
    (6) The contributor's apparent intent or motive in making the
contribution which resulted in the prohibition, as evidenced by the
facts and circumstances surrounding such contribution.
    4. Applicant requests an order pursuant to section 206A and rule
206(4)-5(e), exempting it from the two-year prohibition on compensation
imposed by rule 206(4)-5(a)(1) with respect to investment advisory
services provided to the Client within the two-year period following
the Contribution.
    5. Applicant submits that the exemption is necessary and
appropriate in the public interest and consistent with the protection
of investors and the purposes fairly intended by the policy and
provisions of the Act. Applicant further submits that the other factors
set forth in rule 206(4)-5(e) similarly weigh in favor of granting an
exemption to the Applicant to avoid consequences disproportionate to
the violation.
    6. Applicant states that the Client first determined to invest in
the Funds advised by the Applicant over fifteen years before the
Contribution was made, and established and maintains its relationships
with the Applicant on an arms'-length basis free from any improper
influence as a result of the Contribution. In support of this argument,
Applicant states that the most recent investment commitment in the
Funds was made by the Client in 2007; due to the locked-in nature of
the Client's investment capital in the Funds and the fact that the
Funds are fully funded, the Client had no current investment decision
to consider at the time of the Contribution and no new or additional
investment commitments, nor any withdrawals, could have been made by
the Client after the Contribution. Applicant also states that neither
Applicant nor the Contributor engaged in any investment solicitation of
the Client since the Client's last investment commitment to the
Applicant in 2007 and that, at the time of the Contribution, the
Contributor did not plan to solicit the Client (or any other government
entity for which the Official is an ``official'' as defined in rule
206(4)-5) for any other investments, and the Applicant did not have any
intent to solicit the Client (or any other government entity for which
the Official is an ``official'' as defined in rule 206(4)-5) for any
other investments.
    7. Applicant states that at all relevant times it had policies
which were fully compliant with, and more rigorous than, rule 206(4)-
5's requirements at the time of the Contribution. Applicant further
states that at no time did Applicant or any employees of Applicant,
other than the Contributor, have any knowledge that the Contribution
had been made prior to its discovery by Ares' Compliance Department in
July 2013. After learning of the Contribution, Applicant and the
Contributor took all available steps to obtain a return of the
Contribution, which was returned within one week of discovery, and the
Applicant set up an escrow account in which all fees charged to the
Client's capital accounts in the Funds since the date of the
Contribution were, and will continue to be, deposited by Applicant in
the escrow account for immediate return to the Client should an
exemptive order not be granted.
    8. Applicant states that the Contributor's apparent intent in
making the Contribution was not to influence the selection or retention
of the Applicant. Applicant states that the Contributor has a long
history of making permissible contributions to candidates that share
the general political views of the Official. The amount of the
Contribution, profile of the candidate, and characteristics of the
campaign fall generally within the pattern of the Contributor's other
political donations. Applicant further states, as discussed above, that
the Contributor has confirmed that he has not, at any time, had any
contact with the Official regarding the Client's investment activities
with the Applicant, or otherwise met or spoken with or otherwise
communicated with the Official, and that the Contributor's role with
the Client was limited to making substantive presentations to the
Client's representatives regarding the investment strategies of the
Funds and that the Contributor had no contact with any representative
of the (or its board) outside of making those presentations. Following
the Contribution, Applicant took steps designed to further limit and
document any such contact during the duration of the two-year time out
on compensation.

Applicant's Conditions

    Applicant agrees that any order of the Commission granting the
requested relief will be subject to the following conditions:
    1. The Contributor will be prohibited from discussing any business
of the Applicant with any ``government entity'' client for which the
Official is an ``official,'' each as defined in rule 206(4)-5(f), until
February 11, 2015.
    2. Notwithstanding Condition 1, the Contributor is permitted to
respond to inquiries from the Client regarding the Funds. The Applicant
will maintain a log of such interactions, which will be maintained and
preserved in an easily accessible place for a period of not less than
five years, the first two years in an appropriate office of the
Applicant, and be available for inspection by the staff of the
Commission.
    3. The Contributor will receive a written notification of these
conditions and will provide a quarterly

certification of compliance until February 11, 2015. Copies of the
certifications will be maintained and preserved in an easily accessible
place for a period of not less than five years, the first two years in
an appropriate office of the Applicant, and be available for inspection
by the staff of the Commission.
    4. The Applicant will conduct testing reasonably designed to
prevent violations of the conditions of this Order and maintain records
regarding such testing, which will be maintained and preserved in an
easily accessible place for a period of not less than five years, the
first two years in an appropriate office of the Applicant, and be
available for inspection by the staff of the Commission.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25550 Filed 10-27-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 81, Number 80 (Tuesday, April 26, 2016)]
[Rules and Regulations]
[Pages 24498-24500]
[FR Doc No: 2016-09601]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

48 CFR Parts 1535 and 1552

[EPA-HQ-OARM-2016-0046; FRL 9941-86-OARM]

Environmental Protection Agency Acquisition Regulation;
Institutional Oversight of Life Sciences Dual Use Research of Concern

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

-----------------------------------------------------------------------

SUMMARY: The Environmental Protection Agency (EPA) is issuing a direct
final rule to amend the EPA Acquisition Regulation (EPAAR) to include a
new solicitation provision and contract clause to implement the United
States Government Policy for Institutional Oversight of Life Sciences
Dual Use Research of Concern (iDURC Policy). This direct final rule
requires certain domestic institutions that receive contract funding
from EPA to conduct or sponsor life sciences research and institutions
outside of the United States that receive contract funding from EPA to
conduct or sponsor research with the agents or toxins listed in the
iDURC Policy, to review and communicate their research responsibly in
accordance with the iDURC Policy.

DATES: This rule is effective on June 27, 2016 without further notice,
unless EPA receives adverse comment by May 26, 2016. If EPA receives
adverse comment, we will publish a timely withdrawal in the Federal
Register informing the public that the rule will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OARM-2016-0046; FRL 9941-86-OARM at http://www.regulations.gov. Follow
the online instructions for submitting comments. Once submitted,
comments cannot be edited or removed from 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, 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: Holly Hubbell, Policy, Training, and
Oversight Division (3802R), Environmental Protection Agency, 1200
Pennsylvania Ave. NW., Washington, DC 20460; telephone number: 202-564-
1091; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. Direct Final Rule

    EPA is publishing this rule without a prior proposed rule because
we view this as a noncontroversial action and anticipate no adverse
comment as this final rule amends the EPAAR to add a new solicitation
provision and contract clause for iDURC Policy compliance. The iDURC
policy was already published in the Federal Register for comment on
September 25, 2014. If EPA receives adverse comment, we will publish a
timely withdrawal in the Federal Register informing the public that the
rule will not take effect. Any parties interested in commenting must do
so at this time.

II. Applicability

    The EPA is promulgating a solicitation provision and contract
clause to implement the iDURC Policy. The solicitation provision and
contract clause notify institutions of the need to comply, and to
ensure that institutions subject to the iDURC Policy represent that
they shall comply with the iDURC Policy prior to or upon contract
award. Institutions within the United States that receive funding from
EPA to conduct or sponsor life sciences research are subject to the
iDURC Policy if they conduct or sponsor research involving any of the
agents or toxins listed in the iDURC Policy, regardless of the funding
source. Institutions outside of the United States are subject to the
iDURC Policy if they receive funding from EPA to conduct or sponsor
research with any agents or toxins listed in the iDURC Policy.
Institutions that are subject to the iDURC Policy have a number of
responsibilities--at a minimum, they are advised to train laboratory
personnel involved in such projects and maintain records of that
training, establish an institutional review process to assess the
research for its potential to meet the definition of dual use research
of concern, and if it meets the definition, ensure the research is
conducted and communicated responsibly.

III. Submitting Comments

    A. Do not submit CBI to EPA through the Web site http://www.regulations.gov or by email. 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.
    B. Tips for Preparing Your Comments. When submitting comments, see
the commenting tips at: http://www2.epa.gov/dockets/commenting-epa-dockets and 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.
    C. Make sure to submit your comments by the comment period deadline
identified.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory 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 review under the EO 12866 and 13563 (76 FR
3821, January 21, 2011).

B. Paperwork Reduction Act

    The information collection activities in this rule have been
submitted for approval to the Office of Management and Budget (OMB)
under the PRA. The Information Collection Request (ICR) document that
the EPA prepared has been assigned EPA ICR number 2530.01. You can find
a copy of the ICR in the docket for this rule, and it is briefly
summarized here. The information collection requirements are not
enforceable until OMB approves them.
    The iDURC Policy instructs institutions subject to the Policy train
individuals within their institution that are conducting research
involving any of the agents or toxins identified in the Policy.
Additionally, institutions are to maintain records of that training.
EPA is submitting an information collection request for these
recordkeeping requirements. EPA may collect the training records to
ensure EPA is in compliance with the Policy, and that institutions
receiving EPA funding are appropriately complying as well. EPA does not
expect any issues of confidentiality to be relevant to this information
collection.
    Respondents/affected entities: Private Industry; Federal Government
(in the form of government-owned/contractor-operated laboratories).
    Respondent's obligation to respond: Mandatory (48 CFR Chapter 15,
Part 52 and Part 35).
    Estimated number of respondents: 12 to 24.
    Frequency of response: Only once, or as necessary.
    Total estimated burden: 36 to 64 hours per year.
    Total estimated cost: $1,440 to $4,320.
    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.

C. Regulatory Flexibility Act (RFA), as Amended by the Small Business
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et.
seq.

    This action is not subject to the RFA. The RFA applies only to
rules subject to notice and comment rulemaking requirements under the
Administrative Procedure Act (APA), 5 U.S.C. 553, or any other statute.
This rule pertains to contracts, which the APA expressly exempts from
notice and comment rulemaking requirements under 5 U.S.C. 553(a)(2).

D. Unfunded Mandates Reform Act

    This action does not contain any unfunded mandates as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any State,
local or tribal governments or the private sector.

E. Executive Order 13132: Federalism

    This action 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.

F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments

    This action does not have tribal implications, as specified in
Executive Order 13175. No substantial compliance costs are expected.
There will be no impact on the relationship between the federal
government and Indian tribes, or on the distribution of power and
responsibilities between the federal government and Indian tribes.
Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental
Health and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not concern an environmental
health risk or safety risk.

H. Executive Order 13211: Actions That Significantly Affect Energy
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211 (66 FR 28335
(May 22, 2001), because it is not a significant regulatory action under
Executive Order 12866.

I. National Technology Transfer and Advancement Act of 1995 (NTTAA)

    This action does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations

    EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment in the general public.

K. Congressional Review Act

    This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).

List of Subjects

48 CFR Part 1535

    Environmental protection, Dual use research, Institutional
oversight, Life sciences, Research and development.

48 CFR Part 1552

    Environmental protection, Dual use research, Institutional
oversight, Life sciences, Research and development.

    Dated: April 19, 2016.
John R. Bashista,
Director, Office of Acquisition Management.

    For the reasons stated in the preamble, 48 CFR parts 1535 and 1552
are amended as set forth below:

PART 1535--RESEARCH AND DEVELOMENT CONTRACTING

0
1. The authority citation for part 1535 continues to read as follows:

    Authority:  Sec. 205(c), 63 Stat. 390, as amended, 40 U.S.C.
486(c).

0
2. Amend section 1535.007 by adding paragraph (c) to read as follows:

1535.007  Solicitations.

* * * * *
    (c) Contracting officers shall insert 48 CFR 1552.235-81--``Notice
of Institutional Oversight of Life Sciences Dual Use Research of
Concern-Representation'' when notified in the Advance Procurement Plan
(APP) or by an EPA funding/requesting office, in accordance with the
Institutional Oversight of Life Sciences Dual Use Research of Concern
(iDURC) EPA Order 1000.19--``Policy and Procedures for Managing Dual
Use Research of Concern,'' in solicitations that will result in a
contract under which EPA funding will be used by the recipient to
conduct or sponsor ``life sciences research''.

0
3. Amend section 1535.007-70 by adding paragraph (h) to read as
follows:

1535.007-70  Contract clauses.

* * * * *
    (h) Contracting officers shall insert 48 CFR 1552.235-82--
``Institutional

Oversight of Life Sciences Dual Use Research of Concern'' into all
solicitations containing 48 CFR 1552.235-81 and in existing contracts
that are bilaterally modified at the request of an EPA funding/
requesting office in accordance with EPA Order 1000.19.

PART 1552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
4. The authority citation for part 1552 continues to read as follows:

    Authority:  5 U.S.C. 301 as amended, 40 U.S.C. 486(c); and 41
U.S.C. 418b.

0
5. Add section 1552.235-81 to read as follows:

1552.235-81  Institutional oversight of life Sciences dual use research
of concern--representation.

    As prescribed in 1535.007(c), insert the following solicitation
provision:

Institutional Oversight of Life Sciences Dual Use Research of Concern--
Representation (JUNE 2016)

    (a) Definitions. As used in this provision--
    Institution means any government agency (Federal, State, tribal,
or local), academic institution, corporation, company, partnership,
society, association, firm, sole proprietorship, or other legal
entity conducting research.
    Life Sciences research means a systematic investigation designed
to develop or contribute to generalizable knowledge involving living
organisms (e.g., microbes, human beings, animals, and plants) and
their products, including all disciplines and methodologies of
biology such as aerobiology, agricultural science, plant science,
animal science, bioinformatics, genomics, proteomics, microbiology,
synthetic biology, virology, molecular biology, environmental
science, public health, modeling, engineering of living systems, and
all applications of the biological sciences. The term is meant to
encompass the diverse approaches to understanding life at the level
of ecosystems, populations, organisms, organs, tissues, cells, and
molecules. Life sciences research does not include routine product
testing, quality control, mapping, collection of general-purpose
statistics, routine monitoring and evaluation of an operational
program, observational studies, and the training of scientific and
technical personnel.
    (b) Representation. By submission of its offer or quotation, the
Offeror represents that if it is:
    (1) An institution within the United States that conducts or
sponsors life sciences research that involves one or more of the
agents or toxins listed in section 6.2.1 of the ``United States
Government Policy for Institutional Oversight of Life Sciences Dual
Use Research of Concern'' (iDURC Policy), even if the research is
not supported by United States Government funds; or
    (2) An institution outside of the United States that receives
funds to conduct or sponsor research that involves one or more of
the agents or toxins listed in section 6.2.1 of the iDURC Policy;
then the Offeror will comply with the iDURC Policy.
    (c) Resources. Information about dual use research in the life
sciences, as well as specific details on the iDURC Policy can be
found on the U.S. Department of Health and Human Services Dual Use
Research of Concern page: http://www.phe.gov/s3/dualuse/Pages/default.aspx.

    (End of Provision)

0
6. Add 1552.235-82 to read as follows:

1552.235-82  Institutional oversight of life sciences dual use research
of concern.

    As prescribed in 1535.007-70(h), insert the following contract
clause:

Institutional Oversight Of Life Sciences Dual Use Research Of Concern
(JUNE 2016)

    (a) Definitions. As used in this clause--
    Institution means any government agency (Federal, State, tribal,
or local), academic institution, corporation, company, partnership,
society, association, firm, sole proprietorship, or other legal
entity conducting research.
    Life Sciences research means a systematic investigation designed
to develop or contribute to generalizable knowledge involving living
organisms (e.g., microbes, human beings, animals, and plants) and
their products, including all disciplines and methodologies of
biology such as aerobiology, agricultural science, plant science,
animal science, bioinformatics, genomics, proteomics, microbiology,
synthetic biology, virology, molecular biology, environmental
science, public health, modeling, engineering of living systems, and
all applications of the biological sciences. The term is meant to
encompass the diverse approaches to understanding life at the level
of ecosystems, populations, organisms, organs, tissues, cells, and
molecules. Life sciences research does not include routine product
testing, quality control, mapping, collection of general-purpose
statistics, routine monitoring and evaluation of an operational
program, observational studies, and the training of scientific and
technical personnel.
    (b) Compliance. The Contractor agrees that it shall comply with
the ``United States Government Policy for Institutional Oversight of
Life Sciences Dual Use Research of Concern'' (iDURC Policy) during
the period of performance of this contract, including all option
periods or other extensions, if the Contractor:
    (1) Is an institution within the United States that conducts or
sponsors, or begins to conduct or sponsor life sciences research
that involves one or more of the agents or toxins listed in Section
6.2.1 of the iDURC Policy, even if the research is not supported by
United States Government funds; or
    (2) Is an institution outside the United States that receives
funds through this contract to conduct or sponsor research that
involves one or more of the agents or toxins listed in Section 6.2.1
of the iDURC Policy.
    (c) Resources. Information about dual use research in the life
sciences as well as specific details on the iDURC Policy can be
found on the U.S. Department of Health and Human Services Dual Use
Research of Concern page: http://www.phe.gov/s3/dualuse/Pages/default.aspx.

    (End of clause)

[FR Doc. 2016-09601 Filed 4-25-16; 8:45 am]
 BILLING CODE 6560-50-P


			  UNITED STATES OF AMERICA

		        DEPARTMENT OF TRANSPORTATION

			  OFFICE OF THE SECRETARY

			          WASHINGTON, D.C.

Issued by the Department of Transportation on April 25, 2003

NOTICE OF ACTION TAKEN -- DOCKET OST 2001-8735

________________________________________________________________________
________________________________________________________

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Applicant:  SKYSERVICE AIRLINES INC./LIGNES AERIENNES SKYSERVICE INC.

Date Filed:  March 10, 2003

Relief requested:  Exemption from 49 USC section 41301 to permit the
applicant to conduct scheduled, combination services between any point
or points in Canada and any point or points in the United States.

If renewal, date and citation of last action:  March 13, 2002, in this
Docket.

Applicant representative:  Don H. Hainbach,<PHONE_NUMBER>      DOT
analyst:  Allen F. Brown,<PHONE_NUMBER>

Responsive pleadings:  None.

	DISPOSITION

Action:  Approved
                                             Action date:  April 25,
2003

Effective dates of authority granted:  April 25, 2003, through April 25,
2004

Basis for approval (bilateral agreement/reciprocity):  United
States-Canada Air Transport Agreement

Except to the extent exempted/waived, this authority is subject to the
terms, conditions, and limitations indicated:  Standard exemption
conditions.

Special conditions/Remarks:

Action taken by:   Paul L. Gretch, Director, Office of International
Aviation

________________________________________________________________________
______________________________________________________

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) the applicant was qualified to perform its proposed
operations; (3) grant of the authority was consistent with the public
interest; and (4) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted/deferred/dismissed, we denied all requests in
the referenced Docket.  We may amend, modify, or revoke the authority
granted in this Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/reports_aviation.asp


[Federal Register Volume 76, Number 121 (Thursday, June 23, 2011)]
[Notices]
[Page 36914]
[FR Doc No: 2011-15715]

-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. EL11-42-000]

Astoria Generating Company, L.P., NRG Power Marketing LLC, Arthur
Kill Power LLC, Astoria Gas Turbine Power LLC, Dunkirk Power LLC,
Huntley Power LLC, Oswego Harbor Power LLC, TC Ravenswood, LLC, v. New
York Independent System Operator, Inc.

Notice of Revised Comment Dates

    On June 3, 2011, Astoria Generating Company, NRG Power Marketing
LLC, Arthur Kill Power LLC, Astoria Gas Turbine Power LLC, Dunkirk
Power LLC, Huntley Power LLC, Oswego Harbor Power LLC and TC
Ravenswood, LLC (Complainants) filed a complaint against the New York
Independent System Operator (NYISO) in the captioned docket
(Complaint). Notice of the Complaint was issued June 7, 2011, providing
for a Comment Date of June 23, 2011, for that filing. On June 15, 2011,
Complainants filed an amendment to the Complaint and a request for a
shortened comment period to and including June 23, 2011, in the
captioned docket (Amended Complaint). On June 16, 2011, NYISO filed a
preliminary answer to the Complaint proposing June 30, 2011, as the
Comment Date applicable to both the Complaint and the Amended
Complaint, stating that Counsel for the Complainants supports the June
30, 2011 date. NYISO also states that Counsel for Consolidated Edison
Company of New York, Inc. has no objection to the Comment Date of June
30, 2011 for both filings. Notice of the Amended Complaint was issued
June 17, 2011, providing for a Comment Date of July 5, 2011, for that
filing.
    Upon consideration of NYISO's request for a revised Comment Date in
its June 16, 2011 preliminary answer, notice is hereby given that the
Comment Dates applicable to the Complaint and the Amended Complaint are
revised to June 30, 2011.
    Any person desiring to intervene or to protest the Complaint and
Amended Complaint filing must file in accordance with Rules 211 and 214
of the Commission's Rules of Practice and Procedure (18 CFR 385.211,
385.214). Protests will be considered by the Commission in determining
the appropriate action to be taken, but will not serve to make
protestants parties to the proceeding. Any person wishing to become a
party must file a notice of intervention or motion to intervene, as
appropriate. The Respondent's answer and all interventions, or protests
must be filed on or before the Comment Date. The Respondent's answer,
motions to intervene, and protests must be served on the Complainants.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper using the ``eFiling'' link at http://www.ferc.gov. Persons unable to file electronically should submit an
original and 14 copies of the protest or intervention to the Federal
Energy Regulatory Commission, 888 First Street, NE., Washington, DC
20426.
    These filings are accessible on-line at http://www.ferc.gov, using
the ``eLibrary'' link and is available for review in the Commission's
Public Reference Room in Washington, DC. There is an ``eSubscription''
link on the Web site that enables subscribers to receive e-mail
notification when a document is added to a subscribed docket(s). For
assistance with any FERC Online service, please e-mail
<EMAIL_ADDRESS>or call<PHONE_NUMBER> (toll free). For
TTY, call<PHONE_NUMBER>.
    Comment Date: 5 p.m. Eastern Time on June 30, 2011.

    Dated: June 17, 2011.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2011-15715 Filed 6-22-11; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 78, Number 118 (Wednesday, June 19, 2013)]
[Notices]
[Pages 36800-36801]
[FR Doc No: 2013-14536]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69755; File No. SR-NASDAQ-2013-070]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change for the Permanent Approval of a Pilot
Program To Permit NASDAQ Options Market To Accept Inbound Options
Orders From NASDAQ OMX BX, Inc.

June 13, 2013.

I. Introduction

    On April 24, 2013, The NASDAQ Stock Market LLC (``Exchange'' or
``NASDAQ'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change requesting permanent approval of the Exchange's
pilot program that permits the NASDAQ Options Market (``NOM'') to
accept inbound options orders routed by Nasdaq Options Services LLC
(``NOS'') from NASDAQ OMX BX, Inc. (``BX''). The proposed rule change
was published for comment in the Federal Register on May 8, 2013.\3\
The Commission received no comment letters regarding the proposed rule
change. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 69499 (May 2, 2013),
78 FR 26820 (``Notice'').
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II. Background

    NASDAQ Rule 2160(a) prohibits the Exchange or any entity with which
it is affiliated from, directly or indirectly, acquiring or maintaining
an ownership interest in, or engaging in a business venture with, an
Exchange member or an affiliate of an Exchange member in the absence of
an effective filing under Section 19(b) of the Act.\4\ NOS is a broker-
dealer that is a member of the Exchange, and currently provides to
members of BX optional routing services to other markets.\5\ NOS is
owned by NASDAQ OMX Group, Inc. (``NASDAQ OMX''), which also owns three
registered securities exchanges--the Exchange, BX, and PHLX.\6\ Thus,
NOS is an affiliate of these exchanges.\7\ Absent an effective filing,
NASDAQ Rule 2160(a) would prohibit NOS from being a member of the
Exchange. The Commission initially approved NOS's affiliation with
NASDAQ in connection with the establishment of NOM,\8\ and NOS performs
certain limited activities for the Exchange.\9\
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    \4\ 15 U.S.C. 78s(b). NASDAQ Rule 2160 also prohibits a NASDAQ
member from being or becoming an affiliate of NASDAQ, or an
affiliate of an entity affiliated with NASDAQ, in the absence of an
effective filing under Section 19(b). See NASDAQ Rule 2160(a)(2).
    \5\ NOS operates as a facility of BX that provides outbound
routing from BX to other market centers, subject to certain
conditions. See BX Options Rules, Chapter VI, Sec. 11 (Order
Routing). See also Securities Exchange Act Release No. 67256 (June
26, 2012), 77 FR 39277 (July 2, 2012) (SR-BX-2012-030).
    \6\ See Securities Exchange Act Release No. 58324 (August 7,
2008), 73 FR 46936 (August 12, 2008) (SR-BSE-2008-02; SR-BSE-2008-
23; SR-BSE-2008-25; SR-BSECC-2008-01) (order approving NASDAQ OMX's
acquisition of BX); Securities Exchange Act Release No. 58179 (July
17, 2008), 73 FR 42874 (July 23, 2008) (SR-Phlx-2008-31) (order
approving NASDAQ OMX's acquisition of PHLX).
    \7\ See id. See also 78 FR at 26820.
    \8\ See Securities Exchange Act Release No. 57478 (March 12,
2008), 73 FR 14521, 14532-14533 (March 18, 2008) (SR-NASDAQ-2007-004
and SR-NASDAQ-2007-080).
    \9\ See, e.g., NASDAQ Options Rule Chapter VI, Section 11(e)
(governing order routing on NOM); and Securities Exchange Act
Release No. 61668 (March 5, 2010), 75 FR 12323 (March 15, 2010) (SR-
NASDAQ-2010-028) (relating to the routing of orders by NOS from NOM
to PHLX).
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    On May 15, 2012, the Exchange filed a proposed rule change for NOM
to accept inbound options orders routed by NOS from BX on a one year
pilot basis in connection with the establishment of a new options
market by BX.\10\ On April 24, 2013, the Exchange filed the instant
proposal to allow NOM to accept such orders routed inbound by NOS from
BX on a permanent basis subject to certain limitations and
conditions.\11\
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    \10\ See Securities Exchange Act Release No. 67027 (May 18,
2012), 77 FR 31057 (May 24, 2012) (SR-NASDAQ-2012-061).
    \11\ See Notice, 78 FR 26820.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\12\ Specifically, the Commission finds that the proposed rule
change is consistent with Section 6(b)(1) of the Act,\13\ which
requires, among other things, that a national securities exchange be so
organized and have the capacity to carry out the purposes of the Act,
and to comply and enforce compliance by its members and persons
associated with its members, with the provisions of the Act, the rules
and regulation thereunder, and the rules of the Exchange. Further, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act,\14\ which requires, among other things,
that the rules of a national securities exchange be designed to prevent
fraudulent and manipulative acts and practices; to promote just and
equitable principles of trade; to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, and processing
information with respect to, and facilitating transactions in
securities; to remove impediments to and perfect the mechanism of a
free and open market and a national market system; and, in general, to
protect investors and the public interest. Section 6(b)(5) also
requires that the rules of an exchange not be designed to permit unfair
discrimination among customers, issuers, brokers, or dealers.
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    \12\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
    \13\ 15 U.S.C. 78f(b)(1).
    \14\ 15 U.S.C. 78f(b)(5).
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    Recognizing that the Commission has previously expressed concern
regarding the potential for conflicts of interest in instances where a
member firm is affiliated with an exchange to which it is routing
orders, the Exchange proposed the following limitations and conditions
to NOS's affiliation with the Exchange to permit the Exchange to accept
inbound options orders that NOS routes in its capacity as a facility of
BX on a pilot basis.\15\ The Exchange has proposed to permit NASDAQ to
accept inbound orders that NOS routes in its capacity as a facility of
BX on a permanent basis, subject to the same limitations and conditions
of this pilot: \16\
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    \15\ See Securities Exchange Act Release No. 67295 (June 28,
2012), 77 FR 39758 (July 5, 2012) (SR-NASDAQ-2012-061).
    \16\ See Notice, 78 FR at 26820-26821.
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     First, the Exchange and the Financial Industry Regulatory
Authority (``FINRA'') will maintain a Regulatory Contract, as well as
an agreement pursuant to Rule 17d-2 under the Act (``17d-2
Agreement'').\17\ Pursuant to the Regulatory Contract and the 17d-2
Agreement, FINRA will be allocated regulatory responsibilities to
review NOS's compliance with certain NASDAQ rules.\18\ Pursuant to the

Regulatory Contract, however, the Exchange retains ultimate
responsibility for enforcing its rules with respect to NOS.
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    \17\ 17 CFR 240.17d-2.
    \18\ NOS is also subject to independent oversight by FINRA, its
designated examining authority, for compliance with financial
responsibility requirements.
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     Second, FINRA will monitor NOS for compliance with
NASDAQ's trading rules, and will collect and maintain certain related
information.\19\
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    \19\ Pursuant to the Regulatory Contract, both FINRA and the
Exchange will collect and maintain all alerts, complaints,
investigations and enforcement actions in which NOS (in its capacity
as a facility of BX routing orders to NOM) is identified as a
participant that has potentially violated applicable Commission or
Exchange rules. The exchange and FINRA will retain these records in
an easily accessible manner in order to facilitate any potential
review conducted by the Commission's Office of Compliance
Inspections and Examinations. See Notice, 78 FR at 26820 n.12.
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     Third, FINRA will provide a report to the Exchange's chief
regulatory officer (``CRO''), on a quarterly basis, that: (i)
quantifies all alerts (of which the Exchange or FINRA is aware) that
identify NOS as a participant that has potentially violated Commission
or Exchange rules, and (ii) lists all investigations that identify NOS
as a participant that has potentially violated Commission or NASDAQ
rules.
     Fourth, the Exchange has in place NASDAQ Rule 2160(c),
which requires NASDAQ OMX, as the holding company owning both the
Exchange and NOS, to establish and maintain procedures and internal
controls reasonably designed to ensure that NOS does not develop or
implement changes to its system, based on non-public information
obtained regarding planned changes to the Exchange's systems as a
result of its affiliation with the Exchange, until such information is
available generally to similarly situated Exchange members, in
connection with the provision of inbound order routing to the Exchange.
    The Exchange stated that it has met all the above-listed
conditions. By meeting such conditions, the Exchange believes that it
has set up mechanisms that protect the independence of the Exchange's
regulatory responsibility with respect to NOS, and has demonstrated
that NOS cannot use any information advantage it may have because of
its affiliation with the Exchange.\20\ In the past, the Commission has
expressed concern that the affiliation of an exchange with one of its
members raises potential conflicts of interest, and the potential for
unfair competitive advantage.\21\ Although the Commission continues to
be concerned about potential unfair competition and conflicts of
interest between an exchange's self-regulatory obligations and its
commercial interest when the exchange is affiliated with one of its
members, for the reasons discussed below, the Commission believes that
it is consistent with the Act to permit NOS, in its capacity as a
facility of BX, to route orders inbound to NOM on a permanent basis
instead of a pilot basis, subject to the limitations and conditions
described above.\22\
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    \20\ See Notice, 78 FR at 26821.
    \21\ See, e.g., Securities Exchange Act Release Nos. 54170 (July
18, 2006), 71 FR 42149 (July 25, 2006) (SR-NASDAQ-2006-006) (order
approving NASDAQ's proposal to adopt NASDAQ Rule 2140, restricting
affiliations between NASDAQ and its members); 53382 (February 27,
2006), 71 FR 11251 (March 6, 2006) (SR-NYSE-2005-77) (order
approving the combination of the New York Stock Exchange, Inc. and
Archipelago Holdings, Inc.); 58673 (September 29, 2008), 73 FR 57707
(October 3, 2008) (SR-Amex-2008-62 and SR-NYSE-2008-60) (order
approving the combination of NYSE Euronext and the American Stock
Exchange LLC); 59135 (December 22, 2008), 73 FR 79954 (December 30,
2008) (SR-ISE-2009-85) (order approving the purchase by ISE Holdings
of an ownership interest in Direct Edge Holdings LLC); 59281
(January 22, 2009), 74 FR 5014 (January 28, 2009) (SR-NYSE-2008-120)
(order approving a joint venture between NYSE and BIDS Holdings
L.P.); 58375 (August 18, 2008), 73 FR 49498 (August 21, 2008) (File
No. 10-182) (order granting the exchange registration of BATS
Exchange, Inc.); 61698 (March 12, 2010), 75 FR 13151 (March 18,
2010) (File Nos. 10-194 and 10-196) (order granting the exchange
registration of EDGX Exchange, Inc. and EDGA Exchange, Inc.); and
62716 (August 13, 2010), 75 FR 51295 (August 19, 2010) (File No. 10-
198) (order granting the exchange registration of BATS-Y Exchange,
Inc.).
    \22\ The Commission notes that these limitations and conditions
are consistent with those previously approved by the Commission for
other exchanges. See, e.g., Securities Exchange Act Release Nos.
69233 (March 25, 2013), 78 FR 19352 (March 29, 2013) (SR-NASDAQ-
2013-028); 69232 (March 25, 2013), 78 FR 19342 (March 29, 2013) (SR-
BX-2013-013); 69229 (March 25, 2013), 78 FR 19337 (March 29, 2013)
(SR-Phlx-2013-15); 67256 (June 26, 2012) 77 FR 39277 (July 2, 2012)
(SR-BX-2012-030); and 64090 (March 17, 2011), 76 FR 16462 (March 23,
2011) (SR-BX-2011-007).
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    The Exchange has proposed four ongoing conditions applicable to
NOS's routing activities, which are enumerated above. The Commission
believes that these conditions will mitigate its concerns about
potential conflicts of interest and unfair competitive advantage. In
particular, the Commission believes that FINRA's oversight of NOS,\23\
combined with FINRA's monitoring of NOS's compliance with the
Exchange's rules and quarterly reporting to the Exchange, will help to
protect the independence of the Exchange's regulatory responsibilities
with respect to NOS. The Commission also believes that the Exchange's
Rule 2160(c) is designed to ensure that NOS cannot use any information
advantage it may have because of its affiliation with the Exchange.
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    \23\ This oversight will be accomplished through the 17d-2
Agreement between FINRA and the Exchange and the Regulatory
Contract. See Notice, 78 FR at 26820 n.10 and accompanying text.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\24\ that the proposed rule change (SR-NASDAQ-2013-070) be, and
hereby is, approved.
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    \24\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-14536 Filed 6-18-13; 8:45 am]
BILLING CODE 8011-01-P