[Federal Register Volume 80, Number 243 (Friday, December 18, 2015)]
[Notices]
[Pages 79112-79113]
[FR Doc No: 2015-31789]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76639; File No. SR-FINRA-2015-033]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Approving a Proposed Rule Change To Amend FINRA
Rule 0150 To Apply FINRA Rule 2121 and its Supplementary Material .01
and .02 to Transactions in Exempted Securities That Are Government
Securities

December 14, 2015.

I. Introduction

    On September 17, 2015, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to FINRA Rule 0150, Application
of Rules to Exempted Securities Except Municipal Securities, so that
FINRA Rule 2121 and its Supplementary Material .01 and .02, which
govern mark-ups and commissions, will apply to transactions in exempted
securities that are government securities. The proposed amendment was
published for comment in the Federal Register on October 6, 2015.\3\ On
November 19, 2015, FINRA granted the Commission an extension of time,
until January 4, 2016 to act on the proposal.\4\ No comments were
received in response to the proposal. This order approves the rule
change as proposed.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Notice of Filing of a Proposed Rule Change to Amend
FINRA Rule 0150 to Apply FINRA Rule 2121 and its Supplementary
Material .01 and .02 to Transactions in Exempted Securities That Are
Government Securities; Exchange Act Release No. 76059 (September 30,
2015), 80 FR 60416 (October 6, 2015) (``Notice'').
    \4\ See Letter from Andrew Madar, Associate General Counsel,
FINRA Regulatory Policy and Oversight, to Katherine England,
Assistant Director, Division of Trading and Markets, Securities and
Exchange Commission, dated November 19, 2015.
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II. Description of the Proposed Rule Change

A. Background

    As stated in the Notice, FINRA is proposing to amend FINRA Rule
0150, which governs the application of FINRA rules and the rules of the
National Association of Securities Dealers (``NASD'') \5\ that apply to
transactions in, and business activities relating to, exempted
securities, except municipal securities, conducted by members and
associated persons.\6\ Current FINRA Rule 0150(c) specifically
enumerates these provisions and does not include reference to FINRA
Rule 2121, Supplementary Material .01, and Supplementary Material .02,
which govern mark-ups and commissions (``mark-up rule'').\7\ The
proposed amendment would incorporate the mark-up rule into FINRA Rule
0150 and extend its application to transactions in, and business
activities relating to, exempted securities that are government
securities, as defined in Section 3(a)(42) of the Exchange Act.\8\
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    \5\ The current FINRA rulebook consists of: (1) FINRA Rules; (2)
NASD Rules; and (3) rules incorporated from NYSE (``Incorporated
NYSE Rules'') (together, the NASD Rules and Incorporated NYSE Rules
are referred to as the ``Transitional Rulebook''). While the NASD
Rules generally apply to all FINRA members, the Incorporated NYSE
Rules apply only to those members of FINRA that are also members of
the NYSE (``Dual Members''). The FINRA Rules apply to all FINRA
members, unless such rules have a more limited application by their
terms. For more information about the rulebook consolidation
process, see FINRA Information Notice, March 12, 2008 (Rulebook
Consolidation Process), available at https://www.finra.org/sites/default/files/NoticeDocument/p038121.pdf.
    \6\ The terms exempted securities, municipal securities, and
government securities as used in this order are defined in Sections
3(a)(12), 3(a)(29), and 3(a)(42) of the Act, respectively.
    \7\ NASD Rule 2440, IM-2440-1, and IM-2440-2 were recently moved
to the FINRA rules without any substantive changes, becoming FINRA
Rule 2121, Supplementary Material .01, and Supplementary Material
.02, respectively. See Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change to Adopt FINRA Rule 2121 (Fair Prices and
Commissions), Supplementary Material .01 (Mark-Up Policy) and
Supplementary Material .02 (Additional Mark-Up Policy For
Transactions in Debt Securities, Except Municipal Securities) in the
Consolidated FINRA Rulebook; Exchange Act Release No. 72208 (May 21,
2014), 79 FR 30675 (May 28, 2014).
    \8\ This includes U.S. Treasury securities, as defined in FINRA
Rule 6710(p). See Notice at 60417, note 12.
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    In the Notice, FINRA described the historical reasons for not
applying certain NASD rules, including the mark-up rule, to exempted
securities (except municipal securities). Prior to 1993, there were
statutory limitations on the NASD's ability to apply sales practice
rules, including the mark-up rules, to transactions in exempted
securities. The Government Securities Act Amendments of 1993 (``GSAA'')
\9\ eliminated the limitations on the authority of registered
securities associations over transactions by a registered broker or
dealer in an exempted security.\10\ Following the

GSAA, NASD proposed to apply certain NASD rules to exempted securities
other than to municipal securities but did not propose to apply the
mark-up rule then in effect to such securities.\11\ FINRA stated in the
Notice that the NASD believed at the time that actions for conduct
generally encompassed by the NASD mark-up rule in the government
securities market could be brought under NASD Rule 2110 (Standards of
Commercial Honor and Principles of Trade).\12\
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    \9\ Government Securities Act Amendments of 1993, Pub. L. 103-
202, Sec.  106(b)(1), 107 Stat. 2344 (1993).
    \10\ Specifically Section 15A(f) of the Act imposed limitations
on the authority of registered securities associations over
transactions by a registered broker or dealer in an exempted
security. This provision was eliminated as part of the GSAA. For
more information on the background of Section 15A(f), see Notice at
60417, note 5.
    \11\ NASD Rule 2440 and IM-2440-1. See Notice at 60417. The NASD
stated at the time that it intended to review the specific
application of these rules to the government securities market and
that it was developing an interpretation of the mark-up rule with
respect to exempted securities and other debt securities.
    \12\ See Notice at 60417, note 9. FINRA also described in the
Notice how NASD adopted NASD Rule 0116 (now FINRA Rule 0150) in
2001, setting forth the NASD rules that would apply to transactions
in exempted securities, except municipal securities and how the SEC
approved IM-2440-2, which set forth a mark-up policy for
transactions in debt securities, except municipal securities. See
id., notes 10-11.
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B. Purpose

    FINRA believes that the proposal to extend FINRA Rule 0150 to apply
the mark-up rule to transactions in government securities is consistent
with both the GSAA and with the prior application by NASD of certain of
its rules, following the GSAA, to exempted securities other than
municipal securities.\13\
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    \13\ See id. at 60417.
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    FINRA also believes that there would be regulatory benefits from
amending FINRA Rule 0150 to apply the mark-up rule to transactions in
government securities. In the Notice, FINRA notes that it must use the
general provisions of FINRA Rule 2010 if FINRA staff wants to bring a
case alleging excessive mark-ups, mark-downs, or commissions in
transactions in exempted securities other than municipal securities,
such as agency debt securities or U.S. Treasury securities.\14\ FINRA
believes that the proposed amendment would provide it an additional
``specific cause of action under which conduct involving government
securities could be regulated'' and ``would clearly signal to members
that conduct relating to mark-ups and commissions in the market for
government securities directly implicates the mark-up rule.'' \15\
FINRA also noted that the mark-up rule provides ``specific criteria by
which members should assess debt mark-ups and mark-downs.'' FINRA
believes that amending Rule 0150 to apply these standards to
transactions in government securities would provide both members and
its staff with ``clearer standards by which to measure the propriety of
mark-ups, mark-downs, and commissions'' in transactions involving
government securities.\16\
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    \14\ See id. at 60418.
    \15\ Id.
    \16\ Id.
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    FINRA also believes that the proposed amendment would only have a
minimal impact on its members because FINRA Rule 2010 already applies
to these transactions.\17\ In addition, FINRA noted in the Notice that
while the proposal would extend the more specific requirements of the
mark-up rule to transactions in government securities, the provisions
are already applicable to corporate debt securities.\18\ Therefore,
FINRA members that currently engage in transactions in corporate debt
will be familiar with its application.\19\
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    \17\ Id.
    \18\ Id.
    \19\ Id. FINRA also noted that it believes most firms apply
substantially similar standards to all transactions in fixed income
securities. Furthermore, FINRA does not believe that the proposed
amendments would impact the reporting or surveillance of
transactions in government securities because it already requires
its members to report transactions in many government securities
(i.e., agency debentures and agency asset backed securities) to its
Trade Reporting and Compliance Engine (``TRACE'') and it actively
surveils the markets in such securities. FINRA also noted that for
government securities that are not TRACE-eligible, such as U.S.
Treasury securities, any review of transactions pursuant to the
mark-up rule would not change. See Notice at 60418.
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III. Discussion and Commission Findings

    After carefully considering the proposed rule, 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 association.\20\ In particular, the Commission
finds that the proposed rule change is consistent with Section
15A(b)(6) of the Act, which requires, among other things, that FINRA's
rules be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, and, in
general, to protect investors and the public interest.\21\ The
Commission notes that no comments were received in response to the
proposal.\22\
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    \20\ In approving the proposed rule change, the Commission has
also considered the rule change's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \21\ 15 U.S.C. 78o-3(b)(6).
    \22\ In 2013, FINRA sought comment on proposed rule changes
that, among other things, would have amended Rule 0150 to apply the
mark-up rule to certain government securities. No comments were
received on that aspect of the proposal. See Notice at 60419, note
18 for more information.
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    As discussed above, the proposed rule change would expand the
applicability of the mark-up rule to exempted securities that are
government securities. The Commission notes that government securities
can be subject to excessive mark-ups and agrees that making more
explicit FINRA's authority over excessive and improper mark-ups, mark-
downs, or commissions relating to government securities will benefit
investors in government securities. While the Commission acknowledges
that FINRA Rule 2010 already applies to transactions in government
securities and instances of improper or excessive mark-ups, mark-downs,
and commissions, the Commission believes that expanding FINRA Rule 0150
to include the mark-up rule will give FINRA an important enforcement
tool with which to pursue instances of excessive mark-ups, mark-downs,
and commissions. The Commission also agrees with FINRA's belief that
applying the mark-up rule to these securities will provide members with
additional clarity when conducting transactions in government
securities.
    Pursuant to Section 19(b)(5) of the Act,\23\ the Commission
consulted with and considered the views of the Department of the
Treasury (``Treasury'') in determining to approve the proposed rule
change.\24\ Treasury did not object to FINRA's proposal that the mark-
up rule be applied to government securities.\25\
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    \23\ 15 U.S.C. 78s(b)(5).
    \24\ Section 19(b)(5) of the Act states generally that the
Commission shall consult with and consider the views of the
Secretary of the Treasury prior to approving a proposed rule filed
by a registered securities association that primarily concerns
conduct related to transactions in government securities. See also
Notice at 60418, note 15.
    \25\ Telephone conversation between Treasury staff and Lourdes
Gonzalez, Assistant Chief Counsel; Alicia Goldin, Senior Special
Counsel; and Stephen Benham, Special Counsel, Division of Trading
and Markets, Commission, on November 16, 2015.
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IV. Conclusion

    IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-FINRA-2015-033), be, and
hereby is, approved.
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    \26\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-31789 Filed 12-17-15; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: August 30, 2010 (Volume 75, Number 167)]
[Rules and Regulations]
[Page 52861-52865]
[DOCID:fr30au10-5]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

44 CFR Part 64

[Docket ID FEMA-2010-0003; Internal Agency Docket No. FEMA-8145]

Suspension of Community Eligibility

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Final rule.

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SUMMARY: This rule identifies communities, where the sale of flood
insurance has been authorized under the National Flood Insurance
Program (NFIP), that are scheduled for suspension on the effective
dates listed within this rule because of noncompliance with the
floodplain management requirements of the program. If the Federal
Emergency Management Agency (FEMA) receives documentation that the
community has adopted the required floodplain management measures prior
to the effective suspension date given in this rule, the suspension
will not occur and a notice of this will be provided by

publication in the Federal Register on a subsequent date.

DATES: Effective Dates: The effective date of each community's
scheduled suspension is the third date (``Susp.'') listed in the third
column of the following tables.

FOR FURTHER INFORMATION CONTACT: If you want to determine whether a
particular community was suspended on the suspension date or for
further information, contact David Stearrett, Mitigation Directorate,
Federal Emergency Management Agency, 500 C Street, SW., Washington, DC
20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: The NFIP enables property owners to purchase
flood insurance which is generally not otherwise available. In return,
communities agree to adopt and administer local floodplain management
aimed at protecting lives and new construction from future flooding.
Section 1315 of the National Flood Insurance Act of 1968, as amended,
42 U.S.C. 4022, prohibits flood insurance coverage as authorized under
the NFIP, 42 U.S.C. 4001 et seq.; unless an appropriate public body
adopts adequate floodplain management measures with effective
enforcement measures. The communities listed in this document no longer
meet that statutory requirement for compliance with program
regulations, 44 CFR part 59. Accordingly, the communities will be
suspended on the effective date in the third column. As of that date,
flood insurance will no longer be available in the community. However,
some of these communities may adopt and submit the required
documentation of legally enforceable floodplain management measures
after this rule is published but prior to the actual suspension date.
These communities will not be suspended and will continue their
eligibility for the sale of insurance. A notice withdrawing the
suspension of the communities will be published in the Federal
Register.
    In addition, FEMA has identified the Special Flood Hazard Areas
(SFHAs) in these communities by publishing a Flood Insurance Rate Map
(FIRM). The date of the FIRM, if one has been published, is indicated
in the fourth column of the table. No direct Federal financial
assistance (except assistance pursuant to the Robert T. Stafford
Disaster Relief and Emergency Assistance Act not in connection with a
flood) may legally be provided for construction or acquisition of
buildings in identified SFHAs for communities not participating in the
NFIP and identified for more than a year, on FEMA's initial flood
insurance map of the community as having flood-prone areas (section
202(a) of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4106(a),
as amended). This prohibition against certain types of Federal
assistance becomes effective for the communities listed on the date
shown in the last column. The Administrator finds that notice and
public comment under 5 U.S.C. 553(b) are impracticable and unnecessary
because communities listed in this final rule have been adequately
notified.
    Each community receives 6-month, 90-day, and 30-day notification
letters addressed to the Chief Executive Officer stating that the
community will be suspended unless the required floodplain management
measures are met prior to the effective suspension date. Since these
notifications were made, this final rule may take effect within less
than 30 days.
    National Environmental Policy Act. This rule is categorically
excluded from the requirements of 44 CFR part 10, Environmental
Considerations. No environmental impact assessment has been prepared.
    Regulatory Flexibility Act. The Administrator has determined that
this rule is exempt from the requirements of the Regulatory Flexibility
Act because the National Flood Insurance Act of 1968, as amended, 42
U.S.C. 4022, prohibits flood insurance coverage unless an appropriate
public body adopts adequate floodplain management measures with
effective enforcement measures. The communities listed no longer comply
with the statutory requirements, and after the effective date, flood
insurance will no longer be available in the communities unless
remedial action takes place.
    Regulatory Classification. This final rule is not a significant
regulatory action under the criteria of section 3(f) of Executive Order
12866 of September 17, 1993, Regulatory Planning and Review, 58 FR
51735.
    Executive Order 13132, Federalism. This rule involves no policies
that have federalism implications under Executive Order 13132.
    Executive Order 12988, Civil Justice Reform. This rule meets the
applicable standards of Executive Order 12988.
    Paperwork Reduction Act. This rule does not involve any collection
of information for purposes of the Paperwork Reduction Act, 44 U.S.C.
3501 et seq.

List of Subjects in 44 CFR Part 64

    Flood insurance, Floodplains.

0
Accordingly, 44 CFR part 64 is amended as follows:

PART 64--[AMENDED]

0
1. The authority citation for part 64 continues to read as follows:

    Authority:  42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of
1978, 3 CFR, 1978 Comp.; p. 329; E.O. 12127, 44 FR 19367, 3 CFR,
1979 Comp.; p. 376.

Sec.  64.6  [Amended]

0
2. The tables published under the authority of Sec.  64.6 are amended
as follows:

----------------------------------------------------------------------------------------------------------------
                                                 Effective date
                                                 authorization/
                                   Community    cancellation of    Current effective map   Date certain Federal
       State and location             No.        sale of flood             date            assistance no longer
                                                  insurance in                              available in SFHAs
                                                   community
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           Region II

New York:
    Barker, Village of, Niagara        360498  April 10, 1975,    Sept. 17, 2010........  Sept. 17, 2010.
     County.                                    Emerg; May 1,
                                                1984, Reg;
                                                September 17,
                                                2010, Susp.
    Cambria, Town of, Niagara          360499  July 7, 1975,      ......do..............   Do.
     County.                                    Emerg; September
                                                30, 1983, Reg;
                                                September 17,
                                                2010, Susp.
    Hartland, Town of, Niagara         360500  May 1, 1975,       ......do..............   Do.
     County.                                    Emerg; October
                                                7, 1983, Reg;
                                                September 17,
                                                2010, Susp.
    Lewiston, Town of, Niagara         360502  March 27, 1974,    ......do..............   Do.
     County.                                    Emerg; June 18,
                                                1980, Reg;
                                                September 17,
                                                2010, Susp.
    Lockport, City of, Niagara         360503  December 17,       ......do..............   Do.
     County.                                    1973, Emerg;
                                                February 4,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.

    Lockport, Town of, Niagara         361013  December 17,       ......do..............   Do.
     County.                                    1973, Emerg;
                                                September 2,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.
    Middleport, Village of,            360505  April 8, 1975,     ......do..............   Do.
     Niagara County.                            Emerg; August 1,
                                                1983, Reg;
                                                September 17,
                                                2010, Susp.
    North Tonawanda, City of,          360508  May 14, 1975,      ......do..............   Do.
     Niagara County.                            Emerg; January
                                                6, 1982, Reg;
                                                September 17,
                                                2010, Susp.
    Pendleton, Town of, Niagara        360509  April 12, 1974,    ......do..............   Do.
     County.                                    Emerg; January
                                                6, 1982, Reg;
                                                September 17,
                                                2010, Susp.
    Porter, Town of, Niagara           360510  July 17, 1974,     ......do..............   Do.
     County.                                    Emerg; August
                                                15, 1983, Reg;
                                                September 17,
                                                2010, Susp.
    Royalton, Town of, Niagara         360511  November 29,       ......do..............   Do.
     County.                                    1974, Emerg;
                                                July 6, 1979,
                                                Reg; September
                                                17, 2010, Susp.
    Wheatfield, Town of,               360513  July 5, 1973,      ......do..............   Do.
     Niagara County.                            Emerg; July 16,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.
    Youngstown, Village of,            360515  March 30, 1973,    ......do..............   Do.
     Niagara County.                            Emerg; June 4,
                                                1980, Reg;
                                                September 17,
                                                2010, Susp.

           Region III

Virginia:
    Clifton, Town of, Fairfax          510186  December 5, 1973,  ......do..............   Do.
     County.                                    Emerg; May 2,
                                                1977, Reg;
                                                September 17,
                                                2010, Susp.
    Fairfax County,                    515525  June 19, 1970,     ......do..............   Do.
     Unincorporated Areas.                      Emerg; January
                                                7, 1972, Reg;
                                                September 17,
                                                2010, Susp.
    Gloucester County,                 510071  March 25, 1974,    ......do..............   Do.
     Unincorporated Areas.                      Emerg; August 4,
                                                1987, Reg;
                                                September 17,
                                                2010, Susp.
    Herndon, Town of, Fairfax          510052  May 21, 1973,      ......do..............   Do.
     County.                                    Emerg; August 1,
                                                1979, Reg;
                                                September 17,
                                                2010, Susp.
    Irvington, Town of,                510221  August 18, 1975,   ......do..............   Do.
     Lancaster County.                          Emerg; August 4,
                                                1987, Reg;
                                                September 17,
                                                2010, Susp.
    Lancaster County,                  510084  November 27,       ......do..............   Do.
     Unincorporated Areas.                      1973, Emerg;
                                                March 4, 1988,
                                                Reg; September
                                                17, 2010, Susp.
    Northumberland County,             510107  October 9, 1973,   ......do..............   Do.
     Unincorporated Areas.                      Emerg; July 4,
                                                1989, Reg;
                                                September 17,
                                                2010, Susp.
    Vienna, Town of, Fairfax           510053  August 8, 1974,    ......do..............   Do.
     County.                                    Emerg; February
                                                3, 1982, Reg;
                                                September 17,
                                                2010, Susp.
    White Stone, Town of,              510235  August 18, 1975,   ......do..............   Do.
     Lancaster County.                          Emerg; September
                                                24, 1984, Reg;
                                                September 17,
                                                2010, Susp.

           Region IV

Alabama:
    Aliceville, City of,               010180  February 8, 1974,  ......do..............   Do.
     Pickens County.                            Emerg; July 17,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
    Ethelsville, Town of,              010281  December 21,       ......do..............   Do.
     Pickens County.                            1978, Emerg;
                                                March 18, 1985,
                                                Reg; September
                                                17, 2010, Susp.
    Gordo, Town of, Pickens            010220  August 6, 1974,    ......do..............   Do.
     County.                                    Emerg; August
                                                15, 1978, Reg;
                                                September 17,
                                                2010, Susp.
    Pickens County,                    010283  May 25, 1976,      ......do..............   Do.
     Unincorporated Areas.                      Emerg; June 4,
                                                1990, Reg;
                                                September 17,
                                                2010, Susp.
    Pickensville, Town of,             010423  N/A, Emerg; June   ......do..............   Do.
     Pickens County.                            6, 1996, Reg;
                                                September 17,
                                                2010, Susp.
    Reform, Town of, Pickens           010221  July 31, 1974,     ......do..............   Do.
     County.                                    Emerg; July 3,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
Georgia:
    Comer, City of, Madison            130211  May 12, 1975,      ......do..............   Do.
     County.                                    Emerg; June 1,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
    Morganton, City of, Fannin         130449  November 17,       ......do..............   Do.
     County.                                    1976, Emerg;
                                                April 2, 1986,
                                                Reg; September
                                                17, 2010, Susp.
    Mountain City, Town of,            130252  January 30, 1980,  ......do..............   Do.
     Rabun County.                              Emerg; July 9,
                                                1982, Reg;
                                                September 17,
                                                2010, Susp.
    Randolph County,                   130553  May 16, 1997,      ......do..............   Do.
     Unincorporated Areas.                      Emerg; September
                                                17, 2010, Reg;
                                                September 17,
                                                2010, Susp.
Kentucky:
    Hustonville, City of,              210144  August 26, 1975,   ......do..............   Do.
     Lincoln County.                            Emerg; September
                                                27, 1985, Reg;
                                                September 17,
                                                2010, Susp.
    Stanford, City of, Lincoln         210145  February 26,       ......do..............   Do.
     County.                                    1975, Emerg;
                                                September 27,
                                                1985, Reg;
                                                September 17,
                                                2010, Susp.
Mississippi:
    Alcorn County,                     280267  N/A, Emerg;        ......do..............   Do.
     Unincorporated Areas.                      February 27,
                                                1992, Reg;
                                                September 17,
                                                2010, Susp.
    Coffeeville, Town of,              280186  April 8, 1975,     ......do..............   Do.
     Yalobusha County.                          Emerg; September
                                                4, 1986, Reg;
                                                September 17,
                                                2010, Susp.

    Corinth, City of, Alcorn           280002  July 26, 1974,     ......do..............   Do.
     County.                                    Emerg; March 16,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.
    Duck Hill, Town of,                280118  June 23, 1975,     ......do..............   Do.
     Montgomery County.                         Emerg; April 2,
                                                1986, Reg;
                                                September 17,
                                                2010, Susp.
    Louisville, City of,               280185  February 11,       ......do..............   Do.
     Winston County.                            1974, Emerg;
                                                June 15, 1978,
                                                Reg; September
                                                17, 2010, Susp.
    Montgomery County,                 280212  April 11, 1974,    ......do..............   Do.
     Unincorporated Areas.                      Emerg; September
                                                1, 1987, Reg;
                                                September 17,
                                                2010, Susp.
    Rienzi, Town of, Alcorn            280322  October 30, 2006,  ......do..............   Do.
     County.                                    Emerg; September
                                                17, 2010, Reg;
                                                September 17,
                                                2010, Susp.
    Water Valley, City of,             280187  December 5, 1974,  ......do..............   Do.
     Yalobusha County.                          Emerg; September
                                                27, 1985, Reg;
                                                September 17,
                                                2010, Susp.
    Winona, City of, Montgomery        280119  February 18,       ......do..............   Do.
     County.                                    1975, Emerg;
                                                July 2, 1987,
                                                Reg; September
                                                17, 2010, Susp.
    Winston County,                    280308  December 21,       ......do..............   Do.
     Unincorporated Areas.                      1978, Emerg;
                                                August 19, 1985,
                                                Reg; September
                                                17, 2010, Susp.
Tennessee:
    Ashland City, Town of,             470027  March 10, 1975,    ......do..............   Do.
     Cheatham County.                           Emerg; April 1,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.
    Cheatham County,                   470026  September 27,      ......do..............   Do.
     Unincorporated Areas.                      1974, Emerg; May
                                                19, 1981, Reg;
                                                September 17,
                                                2010, Susp.
    Decatur, Town of, Meigs            470134  March 27, 1975,    ......do..............   Do.
     County.                                    Emerg; June 3,
                                                1986, Reg;
                                                September 17,
                                                2010, Susp.
    Kingston Springs, Town of,         470289  June 11, 1984,     ......do..............   Do.
     Cheatham County.                           Emerg; June 11,
                                                1984, Reg;
                                                September 17,
                                                2010, Susp.
    Pegram, Town of, Cheatham          470291  April 9, 1987,     ......do..............   Do.
     County.                                    Emerg; April 9,
                                                1987, Reg;
                                                September 17,
                                                2010, Susp.

            Region V

Illinois:
    Bonnie, Village of,                170306  September 10,      ......do..............   Do.
     Jefferson County.                          1975, Emerg;
                                                August 19, 1985,
                                                Reg; September
                                                17, 2010, Susp.
    East Dubuque, City of, Jo          170752  June 25, 1975,     ......do..............   Do.
     Daviess County.                            Emerg; October
                                                18, 1983, Reg;
                                                September 17,
                                                2010, Susp.
    Galena, City of, Jo Daviess        175168  August 27, 1971,   ......do..............   Do.
     County.                                    Emerg; July 20,
                                                1973, Reg;
                                                September 17,
                                                2010, Susp.
    Hanover, Village of, Jo            170755  July 21, 1975,     ......do..............   Do.
     Daviess County.                            Emerg; May 4,
                                                1989, Reg;
                                                September 17,
                                                2010, Susp.
    Ina, Village of, Jefferson         170307  March 2, 1976,     ......do..............   Do.
     County.                                    Emerg; May 25,
                                                1984, Reg;
                                                September 17,
                                                2010, Susp.
    Jefferson County,                  170305  October 31, 2000,  ......do..............   Do.
     Unincorporated Areas.                      Emerg; September
                                                17, 2010, Reg;
                                                September 17,
                                                2010, Susp.
    Jo Daviess County,                 170902  April 19, 1979,    ......do..............   Do.
     Unincorporated Areas.                      Emerg; January
                                                18, 1984, Reg;
                                                September 17,
                                                2010, Susp.
    Mount Vernon, City of,             170308  September 30,      ......do..............   Do.
     Jefferson County.                          1974, Emerg;
                                                February 15,
                                                1984, Reg;
                                                September 17,
                                                2010, Susp.
    Peoria Heights, Village of,        170537  October 13, 1972,  ......do..............   Do.
     Peoria, Tazewell, and                      Emerg; November
     Woodford Counties.                         1, 1979, Reg;
                                                September 17,
                                                2010, Susp.
    Roanoke, Village of,               170727  June 17, 1975,     ......do..............   Do.
     Woodford County.                           Emerg; September
                                                4, 1987, Reg;
                                                September 17,
                                                2010, Susp.
    Spring Bay, Village of,            170887  August 26, 1977,   ......do..............   Do.
     Woodford County.                           Emerg; June 4,
                                                1980, Reg;
                                                September 17,
                                                2010, Susp.
    Washburn, Village of,              170728  January 27, 1975,  ......do..............   Do.
     Marshall and Woodford                      Emerg; July 2,
     Counties.                                  1987, Reg;
                                                September 17,
                                                2010, Susp.
    Woodford County,                   170730  September 7,       ......do..............   Do.
     Unincorporated Areas.                      1973, Emerg;
                                                February 1,
                                                1984, Reg;
                                                September 17,
                                                2010, Susp.
Michigan:
    Bangor, Township of, Bay           260019  March 30, 1973,    ......do..............   Do.
     County.                                    Emerg; July 2,
                                                1979, Reg;
                                                September 17,
                                                2010, Susp.
    Bay City, City of, Bay             260020  March 30, 1973,    ......do..............   Do.
     County.                                    Emerg; September
                                                1, 1978, Reg;
                                                September 17,
                                                2010, Susp.
    Essexville, City of, Bay           260021  March 30, 1973,    ......do..............   Do.
     County.                                    Emerg; September
                                                1, 1978, Reg;
                                                September 17,
                                                2010, Susp.
    Fraser, Township of, Bay           260657  November 13,       ......do..............   Do.
     County.                                    1981, Emerg;
                                                November 13,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.
    Hampton, Township of, Bay          260023  March 30, 1973,    ......do..............   Do.
     County.                                    Emerg; August 1,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
    Kawkawlin, Township of, Bay        260658  January 29, 1979,  ......do..............   Do.
     County.                                    Emerg; February
                                                1, 1979, Reg;
                                                September 17,
                                                2010, Susp.
    Monitor, Township of, Bay          260358  July 21, 1982,     ......do..............   Do.
     County.                                    Emerg; August
                                                19, 1985, Reg;
                                                September 17,
                                                2010, Susp.

    Pinconning, City of, Bay           260607  March 17, 1975,    ......do..............   Do.
     County.                                    Emerg; August 3,
                                                1981, Reg;
                                                September 17,
                                                2010, Susp.
    Pinconning, Township of,           260025  March 30, 1973,    ......do..............   Do.
     Bay County.                                Emerg; September
                                                1, 1978, Reg;
                                                September 17,
                                                2010, Susp.

           Region VII

Missouri:
    Bolivar, City of, Polk             290299  July 24, 1975,     ......do..............   Do.
     County.                                    Emerg; June 15,
                                                1988, Reg;
                                                September 17,
                                                2010, Susp.
    Marshfield, City of,               290685  June 13, 1975,     ......do..............   Do.
     Webster County.                            Emerg; September
                                                10, 1984, Reg;
                                                September 17,
                                                2010, Susp.
    Seymour, City of, Webster          290933  N/A, Emerg;        ......do..............   Do.
     County.                                    February 11,
                                                2005, Reg;
                                                September 17,
                                                2010, Susp.
    Webster County,                    290848  N/A, Emerg; April  ......do..............   Do.
     Unincorporated Areas.                      14, 2003, Reg;
                                                September 17,
                                                2010, Susp.

            Region X

Oregon:
    Astoria, City of, Clatsop          410028  October 16, 1974,  ......do..............   Do.
     County.                                    Emerg; August 1,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
    Cannon Beach, City of,             410029  March 6, 1974,     ......do..............   Do.
     Clatsop County.                            Emerg; September
                                                1, 1978, Reg;
                                                September 17,
                                                2010, Susp.
    Clatsop County,                    410027  February 7, 1974,  ......do..............   Do.
     Unincorporated Areas.                      Emerg; July 3,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
    Gearhart, City of, Clatsop         410030  April 11, 1974,    ......do..............   Do.
     County.                                    Emerg; May 15,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
    Seaside, City of, Clatsop          410032  March 25, 1974,    ......do..............   Do.
     County.                                    Emerg; September
                                                5, 1979, Reg;
                                                September 17,
                                                2010, Susp.
    Warrenton, City of, Clatsop        410033  July 16, 1975,     ......do..............   Do.
     County.                                    Emerg; May 15,
                                                1978, Reg;
                                                September 17,
                                                2010, Susp.
----------------------------------------------------------------------------------------------------------------
* do = Ditto.
Code for reading third column: Emerg.--Emergency; Reg.--Regular; Susp.--Suspension.

    Dated: August 19, 2010.
Sandra K. Knight,
Deputy Federal Insurance and Mitigation Administrator, Mitigation.
[FR Doc. 2010-21594 Filed 8-27-10; 8:45 am]
BILLING CODE 9110-12-P


[Federal Register Volume 84, Number 156 (Tuesday, August 13, 2019)]
[Notices]
[Pages 40038-40039]
[FR Doc No: 2019-17250]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. IC19-34-000]

Commission Information Collection Activities (FERC-725J) Comment
Request; Extension

AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of information collection and request for comments.

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

SUMMARY: In compliance with the requirements of the Paperwork Reduction
Act of 1995 (PRA), the Federal Energy Regulatory Commission (Commission
or FERC) is soliciting public comment on the currently approved
information collection, FERC-725J (Definition of the Bulk Electric
System) which will be submitted to the Office of Management and Budget
(OMB) for a review of the information collection requirements.

DATES: Comments on the collection of information are due October 15,
2019.

ADDRESSES: You may submit comments (identified by Docket No. IC19-34-
000) by either of the following methods:
     eFiling at Commission's Website: http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery/Courier: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE,
Washington, DC 20426.
    Instructions: All submissions must be formatted and filed in
accordance with submission guidelines at: http://www.ferc.gov/help/submission-guide.asp. For user assistance, contact FERC Online Support
by email at<EMAIL_ADDRESS>or by phone at:<PHONE_NUMBER>
(toll-free), or<PHONE_NUMBER> for TTY.
    Docket: Users interested in receiving automatic notification of
activity in this docket or in viewing/downloading comments and
issuances in this docket may do so at http://www.ferc.gov/docs-filing/docs-filing.asp.

FOR FURTHER INFORMATION CONTACT: Ellen Brown may be reached by email

at<EMAIL_ADDRESS>telephone at<PHONE_NUMBER>, and fax at
(202) 273-0873.

SUPPLEMENTARY INFORMATION:
    Title: FERC-725J (Definition of the Bulk Electric System).
    OMB Control No.: 1902-0259.
    Type of Request: Three-year extension of the FERC-725J with no
changes to the current reporting requirements.
    Abstract: On December 20, 2012, the Commission issued Order No.
773, a Final Rule approving NERC's modifications to the definition of
bulk electric system and the Rules of Procedure exception process to be
effective July 1, 2013. On April 18, 2013, in Order No. 773-A, the
Commission largely affirmed its findings in Order No. 773. In Order
Nos. 773 and 773-A, the Commission directed NERC to modify the
definition of bulk electric system in two respects: (1) Modify the
local network exclusion (exclusion E3) to remove the 100 kV minimum
operating voltage to allow systems that include one or more looped
configurations connected below 100 kV to be eligible for the local
network exclusion; and (2) modify the exclusions to ensure that
generator interconnection facilities at or above 100 kV connected to
bulk electric system generators identified in inclusion I2 are not
excluded from the bulk electric system.\1\
---------------------------------------------------------------------------

    \1\ Revisions to Electric Reliability Organization Definition of
Bulk Electric System and Rules of Procedure, Order No. 773, 141 FERC
61,236 (2012); order on reh'g, Order No. 773-A, 143 FERC 61,053
(2013); order on reh'g and clarification, 144 FERC 61,174 (2013);
aff'd sub nom., People of the State of New York and the Pub. Serv.
Comm'n of New York v. FERC, No. 13-2316 (2d. Cir. 2015). On June 13,
2013, the Commission granted NERC's request for extension of time
and extended the effective date for the revised definition of bulk
electric system and the Rules of Procedure exception process to July
1, 2014. Revisions to Electric Reliability Organization Definition
of Bulk Electric System and Rules of Procedure, 143 FERC 61,231, at
P 13 (2013). On March 20, 2014, the Commission approved NERC's
revisions to the definition of bulk electric system and determined
the revisions either adequately address the Commission's Order Nos.
773 and 773-A directives or provide an equally effective and
efficient approach. See order approving revised definition, 146 FERC
] 61,199 (2014).
---------------------------------------------------------------------------

    Type of Respondents: Generator owners, distribution providers,
other NERC-registered entities.
    Estimate of Annual Burden.\2\ The Commission estimates the annual
public reporting burden and cost \3\ for the information collection as:
---------------------------------------------------------------------------

    \2\ Burden is defined as the total time, effort, or financial
resources expended by persons to generate, maintain, retain, or
disclose or provide information to or for a federal agency. See 5
CFR 1320 for additional information on the definition of information
collection burden.
    \3\ The estimated hourly cost (salary plus benefits) is based on
the figures for May 2018 posted by the Bureau of Labor Statistics
for the Utilities sector (available at http://www.bls.gov/oes/current/naics2_22.htm) and updated March 2019 for benefits
information (at http://www.bls.gov/news.release/ecec.nr0.htm). The
hourly estimates for salary plus benefits are:
    --Legal (code 23-0000), $142.86
    --File Clerks (code 43-4071), $34.50
    --Electrical Engineer (code 17-2071), $68.17
    The average hourly burden cost for this collection is $81.84
[($142.86 + $34.50 + $68.17) / 3 = $81.84] and is rounded to $82.00
an hour.

                                                   FERC-725J (Definition of the Bulk Electric System)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Annual number
                                  Number of     of responses    Total number    Average burden (hrs.) &     Total annual burden hours &      Cost per
                                 respondents   per respondent   of responses     cost ($) per response         total annual cost ($)      respondent ($)
                                          (1)             (2)     (1) * (2) =  (4)......................  (3) * (4) = (5)...............       (5) / (1)
                                                                          (3)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Generator Owners,                          20               1              20  94 hrs.; $7,708..........  1,880 hrs.; $154,160..........          $7,708
 Distribution Providers, and
 Transmission Owners
 (Exception Request).
All Registered Entities                   186               1             186  350 hrs.; $28,700........  65,100 hrs.; $5,338,200.......          28,700
 (Implementation Plans and
 Compliance).
Local Distribution                          1               1               1  92 hrs.; $7,544..........  92 hrs.; $7,544...............           7,544
 Determinations.
                              --------------------------------------------------------------------------------------------------------------------------
    Total....................  ..............  ..............             207  .........................  67,072 hrs.; $5,499,904.......  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comments: Comments are invited on: (1) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (2) the accuracy of the agency's estimates of the burden and
cost of the collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility and clarity of the information collection; and (4) ways to
minimize the burden of the collection of information on those who are
to respond, including the use of automated collection techniques or
other forms of information technology.

    Dated: August 7, 2019.
Kimberly D. Bose,
Secretary.
[FR Doc. 2019-17250 Filed 8-12-19; 8:45 am]
 BILLING CODE 6717-01-P


consultation and funding requirements of E.O. 13132 do not apply.

J. Executive Order 13211

    This proposed rule is not a ``significant energy action'' under
Executive Order 13211, ``Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR
28355; May 22, 2001). It is not likely to have a significant adverse
effect on supply, distribution, or energy use. Further, the Office of
Information and Regulatory Affairs has not designated this proposed
rule as a significant energy action.

K. Privacy Act Statement

    Anyone may search the electronic form of all comments received for
any of our dockets. You may review DOT's complete Privacy Act
Statement, published on April 11, 2000 (65 FR 19476), at http://www.dot.gov/privacy.

L. Regulation Identifier Number (RIN)

    A regulation identifier number (RIN) is assigned to each regulatory
action listed in the Unified Agenda of Federal Regulations. The
Regulatory Information Service Center publishes the Unified Agenda in
April and October of each year. The RIN contained in the heading of
this document can be used to cross-reference this action with the
Unified Agenda.

List of Subjects

49 CFR Part 191

    Class location change reporting, pipeline reporting requirements.

49 CFR Part 192

    Class location change, integrity management, pipeline safety.

    In consideration of the foregoing, PHMSA is proposing to revise 49
CFR parts 191 and 192 as follows:

PART 191--TRANSPORTATION OF NATURAL AND OTHER GAS BY PIPELINE;
ANNUAL, INCIDENT, AND OTHER REPORTING

0
1. The authority citation for part 191 continues to read as follows:

    Authority: 30 U.S.C. 185(w)(3), 49 U.S.C. 5121, 60101 et. seq.,
and 49 CFR 1.97.

0
2. Amend Sec.  191.22 by adding paragraph (c)(2)(vi) to read as
follows:

Sec.  191.22  National Registry of Operators.

* * * * *
    (c) * * *
    (2) * * *
    (vi) A change in the classification of a pipeline segment from a
Class 1 to a Class 3 location where the operator chooses to confirm or
revise the maximum allowable operating pressure (MAOP) in accordance
with Sec.  192.611(a)(4) of this chapter. The notification must include
the following information about the Class 1 to Class 3 location
segment: State, county, pipeline name or number, pipe diameter, MAOP,
wall thickness, pipe grade/strength, seam type, Class 1 to Class 3
location change date, segment length, pipeline location by both GIS
coordinates and pipeline system survey stations or mile posts for the
starting and ending points of the Class 1 to Class 3 location segment,
and the date of the Class 1 to Class 3 location change.
* * * * *

PART 192--TRANSPORTATION OF NATURAL AND OTHER GAS BY PIPELINE:
MINIMUM FEDERAL SAFETY STANDARDS

0
3. The authority citation for part 192 is revised to read as follows:

    Authority: 30 U.S.C. 185(w)(3), 49 U.S.C. 5121, 60101 et. seq.,
and 49 CFR 1.97.

0
4. Amend Sec.  192.3 by adding the definitions of ``Class 1 to Class 3
location segment'', ``In-line inspection segment'', and ``Predicted
failure pressure'' in alphabetical order to read as follows:

Sec.  192.3  Definitions.

* * * * *
    Class 1 to Class 3 location segment means a pipeline segment where:
    (1) The segment has changed from a Class 1 to a Class 3 location;
and
    (2) The operator is confirming or revising the maximum allowable
operating pressure per Sec.  192.611(a)(4). At the operator's
discretion, the endpoints of the Class 1 to Class 3 location segment
may extend further than the beginning and endpoints of the Class 3
location involved.
* * * * *
    In-line inspection segment means all pipe within a Class 1 to Class
3 location segment and all pipe adjacent to the Class 1 to Class 3
location segment between the nearest upstream in-line inspection
launcher and the nearest downstream in-line inspection receiver.
* * * * *
    Predicted failure pressure means the calculated pipeline anomaly
failure pressure, based on the use of an appropriate engineering
evaluation method for the type of anomaly being assessed, that does not
have an included safety factor. Different anomaly types (e.g., dent,
crack, or metal loss) will require different engineering assessment or
analysis methods to determine the predicted failure pressure.
* * * * *
0
5. Amend Sec.  192.7 by revising paragraphs (b)(12) and (c)(6) to read
as follows:

Sec.  192.7  What documents are incorporated by reference partly or
wholly in this part?

* * * * *
    (b) * * *
    (12) API STANDARD 1163, ``In-Line Inspection Systems
Qualification,'' Second edition, April 2013, Reaffirmed August 2018,
(API STD 1163), IBR approved for Sec. Sec.  192.493, 192.618(b)(4), and
(b)(4)(iii).
* * * * *
    (c) * * *
    (6) ASME/ANSI B31.8S-2004, ``Supplement to B31.8 on Managing System
Integrity of Gas Pipelines,'' 2004, (ASME/ANSI B31.8S-2004), IBR
approved for Sec. Sec.  192.618; 192.903 note to Potential impact
radius; 192.907 introductory text, (b); 192.911 introductory text, (i),
(k), (l), (m); 192.913(a), (b), (c); 192.917 (a), (b), (c), (d), (e);
192.921(a); 192.923(b); 192.925(b); 192.927(b), (c); 192.929(b);
192.933(c), (d); 192.935 (a), (b); 192.937(c); 192.939(a); and
192.945(a).
0
6. Amend Sec.  192.611 by adding paragraph (a)(4) and revising
paragraph (d) to read as follows:

Sec.  192.611  Change in class location: Confirmation or revision of
maximum allowable operating pressure.

    (a) * * *
    (4) A Class 1 to Class 3 location segment may have its maximum
allowable operating pressure confirmed or revised in accordance with
Sec.  192.618.
* * * * *
    (d) Confirmation or revision of the maximum allowable operating
pressure that is required as a result of a study under Sec.  192.609
must be completed within 24 months of the change in class location.
Pressure reduction under paragraph (a)(1) or (2) of this section within
the 24-month period does not preclude establishing a maximum allowable
operating pressure under paragraph (a)(3) of this section or
implementing an integrity assessment program that meets paragraph
(a)(4) of this section at a later date. The activities required in
paragraphs (a)(3) or (4) of this section must be implemented prior to
any future increases of maximum

allowable operating pressure to meet paragraphs (a)(1) or (2) of this
section.
0
7. Add Sec.  192.618 to read as follows:

Sec.  192.618  Class 1 to Class 3 location segment requirements.

    A Class 1 to Class 3 location segment must meet the following
requirements:
    (a) Program requirements for a Class 1 to Class 3 location segment.
For segments that change from a Class 1 to a Class 3 location, the
maximum allowable operating pressure (MAOP) must be confirmed or
revised by designating the segment involved as a high consequence area,
as defined in Sec.  192.903, and including it in an integrity
management program in accordance with subpart O of this part, if the
following criteria are met:
    (1) Timing of Class 1 to Class 3 location change. The Class 1 to
Class 3 location segment change must have occurred after [INSERT
EFFECTIVE DATE OF FINAL RULE]. An operator must conduct a class
location study on the in-line inspection segment at least once each
calendar year, with intervals not to exceed 15 months, in accordance
with Sec.  192.609. An operator must maintain its in-line inspection
segment change in class location study records in accordance with
paragraph (h) of this section.
    (2) In-line inspection. The in-line inspection segment must be
assessed using instrumented in-line inspection tools that meet the
requirements of paragraph (b)(1) of this section.
    (3) Hoop stress of Class 1 to Class 3 location segment. The hoop
stress corresponding to the MAOP of the Class 1 to Class 3 location
segment must not exceed 72 percent of SMYS in Class 3 locations.
    (4) Pipe attributes for review. Pipeline segments with any of the
following attributes cannot be a Class 1 to Class 3 location segment:
    (i) Bare pipe;
    (ii) Pipe with wrinkle bends;
    (iii) Pipe that does not have traceable, verifiable, and complete
pipe material records for diameter, wall thickness, grade, seam type,
yield strength, and tensile strength;
    (iv) Pipe that is uprated in accordance with subpart K (unless the
segment passes a subpart J pressure test for a minimum of 8 hours at a
minimum pressure of 1.39 times MAOP within 24 months after the Class 1
to Class 3 location segment change and prior to uprating or increasing
the current MAOP);
    (v) Pipe that has not been pressure tested in accordance with
subpart J for 8 hours at a minimum test pressure of 1.25 times MAOP
(unless the segment passes a subpart J pressure test for a minimum of 8
hours at a minimum pressure of 1.25 times MAOP within 24 months after
the Class 1 to Class 3 location segment change);
    (vi) Pipe with direct current (DC), low frequency electric
resistance welded (LF-ERW), electric flash welded (EFW), or lap-welded
seams, or pipe with a longitudinal joint factor below 1.0; or
    (vii) Pipe with cracking in the pipe body, seam, or girth welds in
or within 5 miles of the Class 1 to Class 3 location segment that is
over 20 percent of the pipe wall thickness, has a predicted failure
pressure less than 100 percent of SMYS, has a predicted failure
pressure less than 1.50 times MAOP, has experienced a leak or a rupture
due to pipe cracking, or for which analysis in accordance with
paragraph (e) of this section indicates the pipe could fail in brittle
mode.
    (viii) Poor pipe external coating that requires a minimum negative
cathodic polarization voltage shift of 100 millivolts or linear anodes
along the Class 1 to Class 3 location segment to maintain cathodic
protection in accordance with Sec.  192.463, or a Class 1 to Class 3
location segment with tape wraps or shrink sleeves.
    (ix) Pipe that transports gas whose composition quality is not
suitable for sale to gas distribution customers, including, but not
limited to, pipe with free-flowing water or hydrocarbons, water vapor
content exceeding acceptable limits for gas distribution customer
delivery, hydrogen sulfide (H2S) greater than one grain per
100 cubic feet, or carbon dioxide (CO2) greater than 3
percent by volume.
    (x) Pipelines operating in accordance with Sec.  192.619(c) or (d).
    (xi) A Class 1 to Class 3 location segment, in-line inspection
segment, or portion of it that has been previously denied by the
special permit process in Sec.  190.341.
    (b) Pipeline integrity assessments. In addition to the requirements
specified in subpart O of this part, pipeline integrity assessments for
the in-line inspection segment, including the Class 1 to Class 3
location segment, must meet the following:
    (1) Assessment method. Operators must perform pipeline assessments
using the following in-line inspection tools or alternative methods as
applicable for the pipeline integrity threats being assessed:
    (i) In-line inspection with a high-resolution magnetic flux leakage
(HR-MFL) tool or an equivalent internal inspection device;
    (ii) In-line inspection with a high-resolution deformation tool
(HR-Deformation), with sensors and extension arms outside the tool
cups, or an equivalent internal inspection device;
    (iii) In-line inspection with an electromagnetic acoustic
transducer (EMAT) tool or an equivalent internal inspection device;
    (iv) In-line inspection with an inertial measurement unit (IMU)
tool or an equivalent internal inspection device;
    (v) An operator may use alternative methods, such as pressure
testing or other technology (excluding direct assessment), upon
submitting a notification to PHMSA 90 days prior to using the
alternative method, in accordance with Sec.  192.18.
    (vi) If an operator chooses not to conduct the in-line inspection
as required in paragraphs (iii) or (iv) on a pipeline segment with a
history of pipe body or weld cracking or pipe movement, then the
operator must notify PHMSA in accordance with Sec.  192.18.
    (2) Initial assessment. Within 24 months of the Class 1 to Class 3
location segment change, an operator must identify and document each
integrity threat to which the pipeline segment is susceptible and
conduct initial pipeline integrity assessments of the entire in-line
inspection segment for each threat in accordance with Sec. Sec.
192.917, 192.921, and paragraph (b)(1) of this section.
    (3) Reassessments. The operator must conduct periodic reassessments
in accordance with Sec.  192.937 and paragraph (b)(1) of this section
at least once every 7 calendar years, with intervals not to exceed 90
months, as specified in Sec.  192.939(a).
    (4) In-line Inspection Validation. Operators must validate the
results of all in-line inspections, for each type in-line inspection
tool run conducted in accordance with this section, to Level 3
standards in accordance with API Standard 1163 (incorporated by
reference, see Sec.  192.7).
    (i) An operator must analyze and account for uncertainties in
reported results (e.g., tool tolerance, detection threshold,
probability of detection, probability of identification, sizing
accuracy, conservative anomaly interaction criteria, location accuracy,
anomaly findings, and unity chart plots or equivalent for determining
uncertainties and verifying actual tool performance) when identifying
and characterizing anomalies.
    (ii) For each threat type assessed by ILI tool type, an operator
must validate the in-line inspection tool tolerance for each in-line
inspection tool run using a minimum of 4 anomaly validations or 100
percent of anomalies, whichever is

less, either from new excavations or from past excavations in the in-
line inspection segment, with documented anomaly dimensions (width,
depth, length, and location) or other known pipe features that are
appropriate for the in-line inspection tool.
    (iii) For pipeline areas of metal loss where in-line inspection
tool data for anomaly size and characterization are used in the
determination of the predicted anomaly failure pressure, an operator
must use Section 6.2.3, Table 1--Characterizing Metal Loss
Probabilities of Detection--Depth Detection Threshold, in accordance
with API Standard 1163 (incorporated by reference, see Sec.  192.7).
Using the qualifiers and limitation criteria in Section 6.2.3, Table 1
of API Standard 1163 or technically proven criteria appropriate for the
location, size, and type of the anomaly, an operator must evaluate the
anomaly based on whether it is an extended metal loss, pit, or groove.
    (iv) An operator may use alternative methods for in-line inspection
tool verification, such as calibration joints near the upstream and
downstream ILI tool launchers and receivers, upon submitting a
notification to PHMSA 90 days prior to using the alternative method, in
accordance with Sec.  192.18.
    (5) Discovery of condition. Discovery of a condition occurs when an
operator has adequate information about a condition to determine that
the condition presents a potential threat to the integrity of the
pipeline. A condition that presents a potential threat includes, but is
not limited to, those conditions that require remediation or monitoring
listed under Sec.  192.933 and paragraphs (c), (d), and (e) of this
section. An operator must promptly, but no later than 180 days after
conducting a pipeline integrity assessment, obtain sufficient
information about a condition to make such a determination of an
integrity threat that requires remediation.
    (c) Remediation schedule (In-line inspection segment). In addition
to the requirements specified in subpart O of this part, remediation
for the in-line inspection segment, including the Class 1 to Class 3
location segment, must meet the following:
    (1) Immediate repair conditions. An operator must repair the
following conditions immediately upon discovery:
    (i) Metal loss anomalies where the calculation of the remaining
strength of the pipe shows a predicted failure pressure determined in
accordance with Sec.  192.712(b) less than or equal to 1.1 times the
MAOP at the location of the anomaly.
    (ii) Metal loss greater than 80 percent of nominal wall, regardless
of dimensions.
    (iii) Metal loss preferentially affecting a detected longitudinal
seam and where the predicted failure pressure determined in accordance
with Sec.  192.712(d) is less than or equal to 1.25 times the MAOP.
    (iv) A dent located between the 8 o'clock and 4 o'clock positions
(upper \2/3\ of the pipe) that has metal loss, cracking, or a stress
riser, unless a technically proven engineering analysis conducted in
accordance with Sec.  192.712(c) demonstrates that critical strain
levels will not be exceeded before the next engineering analysis or
assessment is conducted.
    (v) A crack or crack-like anomaly meeting any of the following
criteria:
    (A) Crack depth plus any metal loss is greater than 50 percent of
pipe wall thickness;
    (B) Crack depth plus any metal loss is greater than the inspection
tool's maximum measurable depth; or
    (C) The crack or crack-like anomaly has a predicted failure
pressure, determined in accordance with Sec.  192.712(d), that is less
than 1.25 times the MAOP.
    (vi) An indication or anomaly that, in the judgment of the person
designated by the operator to evaluate the assessment results, requires
immediate action.
    (2) One-year conditions. An operator must repair the following
conditions within 1 year of discovery:
    (i) A smooth dent located between the 8 o'clock and 4 o'clock
positions (upper \2/3\ of the pipe) with a depth greater than 6 percent
of the pipeline diameter (greater than 0.50 inches in depth for a
pipeline diameter less than Nominal Pipe Size (NPS) 12), unless an
engineering analysis conducted in accordance with Sec.  192.712(c)
demonstrates that critical strain levels will not be exceeded before
the next engineering analysis or assessment is conducted.
    (ii) A dent with a depth greater than 2 percent of the pipeline
diameter (0.250 inches in depth for a pipeline diameter less than NPS
12) that affects pipe curvature at a girth weld or at a longitudinal or
helical (spiral) seam weld, unless an engineering analysis conducted in
accordance with Sec.  192.712(c) demonstrates that critical strain
levels will not be exceeded before the next engineering analysis or
assessment is conducted.
    (iii) A dent located between the 4 o'clock and 8 o'clock positions
(lower \1/3\ of the pipe) that has metal loss, cracking, or a stress
riser, unless an engineering analysis conducted in accordance with
Sec.  192.712(c) demonstrates that critical strain levels will not be
exceeded before the next engineering analysis or assessment is
conducted.
    (iv) Metal loss anomalies where a calculation of the remaining
strength of the pipe shows a predicted failure pressure, determined in
accordance with Sec.  192.712(b), at the location of the anomaly less
than or equal to 1.39 times the MAOP for Class 2 locations, and 1.50
times the MAOP for Class 3 and 4 locations. For metal loss anomalies in
Class 1 locations outside the Class 1 to Class 3 location segment with
a predicted failure pressure greater than 1.1 times MAOP, an operator
must follow the remediation schedule specified in ASME/ANSI B31.8S
(incorporated by reference, see Sec.  192.7), section 7, figure 4. For
Class 1 pipe within the Class 1 to Class 3 location segment, a metal
loss anomaly with a predicted failure pressure of less than or equal to
1.39 times the MAOP.
    (v) Metal loss that is located at a crossing of another pipeline,
is in an area with widespread circumferential corrosion, or could
affect a girth weld, with a predicted failure pressure determined in
accordance with Sec.  192.712(b) less than 1.39 times the MAOP for
Class 1 locations or where Class 2 locations contain Class 1 pipe, or
1.50 times the MAOP for all other Class 2 locations and all Class 3 and
Class 4 locations. For Class 1 pipe within the Class 1 to Class 3
location segment, metal loss with a predicted failure pressure of less
than or equal to 1.39 times the MAOP.
    (vi) Metal loss preferentially affecting a detected longitudinal
seam and where the predicted failure pressure determined in accordance
with Sec.  192.712(d) is less than 1.39 times the MAOP for Class 1
locations or where Class 2 locations contain Class 1 pipe, or 1.50
times the MAOP for all other Class 2 locations and all Class 3 and
Class 4 locations. For Class 1 pipe within the Class 1 to Class 3
location segment, metal loss with a predicted failure pressure of less
than or equal to 1.39 times the MAOP.
    (vii) A crack or crack-like anomaly that has a predicted failure
pressure determined in accordance with Sec.  192.712(d) that is less
than or equal to 1.39 times the MAOP for Class 1 locations or where
Class 2 locations contain Class 1 pipe, or 1.50 times the MAOP for all
other Class 2 locations and all Class 3 and Class 4 locations. For
Class 1 pipe within the Class 1 to Class 3 location segment, a crack or
crack-like anomaly with a predicted

failure pressure of less than or equal to 1.39 times the MAOP.
    (3) Remediation schedule (Class 1 to Class 3 location segment). In
addition to the requirements in paragraph (e) of this section,
remediation for the Class 1 to Class 3 location segment must meet the
following:
    (i) One-year condition. An operator must repair the following
conditions within 1 year of discovery:
    (A) Pipe wall thickness loss greater than 40 percent.
    (B) A crack with depth greater than 40 percent of the pipe wall
thickness.
    (ii) [Reserved].
    (4) Two-year condition for crack repairs (in-line inspection
segment). An operator must repair the following condition within 2
years of discovery:
    (i) A crack or crack-like anomaly that has a predicted failure
pressure determined in accordance with Sec.  192.712(d) that is greater
than or equal to 1.39 times MAOP, and the crack depth is greater than
or equal to 40 percent of the pipe wall thickness.
    (ii) [Reserved].
    (5) Monitored condition. An operator does not have to schedule the
following conditions for remediation but must record and monitor the
conditions during subsequent risk assessments and integrity assessments
for any change that may require remediation. Monitored conditions are
the least severe and will not require examination and evaluation until
the next scheduled integrity assessment interval, provided an analysis
shows they are not expected to grow to dimensions meeting a 1-year
condition prior to the next scheduled assessment. Monitored conditions
are:
    (i) A dent with a depth greater than 6 percent of the pipeline
diameter (greater than 0.50 inches in depth for a pipeline diameter
less than NPS 12) located between the 4 o'clock position and the 8
o'clock position (bottom \1/3\ of the pipe);
    (ii) A dent located between the 8 o'clock and 4 o'clock positions
(upper \2/3\ of the pipe) with a depth greater than 6 percent of the
pipeline diameter (greater than 0.50 inches in depth for a pipeline
diameter less than NPS 12), and an engineering analysis conducted in
accordance with Sec.  192.712(c) demonstrate that critical strain
levels on the dent will not be exceeded;
    (iii) A dent with a depth greater than 2 percent of the pipeline
diameter (0.250 inches in depth for a pipeline diameter less than NPS
12) that affects pipe curvature at a girth weld or longitudinal or
helical (spiral) seam weld, and an engineering analysis conducted in
accordance with Sec.  192.712(c) demonstrates that critical strain
levels on the dent and girth or seam weld will not be exceeded;
    (iv) A dent that has metal loss, cracking, or a stress riser, and
an engineering analysis conducted in accordance with Sec.  192.712(c)
demonstrates that critical strain levels will not be exceeded;
    (v) Metal loss preferentially affecting a detected longitudinal
seam and where the predicted failure pressure determined in accordance
with Sec.  192.712(d) is greater than 1.39 times the MAOP for Class 1
locations or where Class 2 locations contain Class 1 pipe, or 1.50
times the MAOP for all other Class 2 locations and all Class 3 and
Class 4 locations. For Class 1 pipe within the Class 1 to Class 3
location segment, metal loss with a predicted failure pressure of less
than or equal to 1.39 times the MAOP; and
    (vi) A crack or crack-like anomaly for which the predicted failure
pressure, determined in accordance with Sec.  192.712(d), is greater
than 1.39 times the MAOP for Class 1 locations or where Class 2
locations contain Class 1 pipe, or 1.50 times the MAOP for all other
Class 2 locations and all Class 3 and Class 4 locations. For Class 1
pipe within the Class 1 to Class 3 location segment, a crack or crack-
like anomaly with a predicted failure pressure greater than 1.39 times
the MAOP.
    (d) Special requirements for crack anomalies. If cracks are
discovered in the Class 1 to Class 3 location segment that meet the
criteria in paragraph (a)(4)(vii) of this section, the operator must
implement the requirements in Sec.  192.611(a)(1), (2), or (3) within 2
years. Until the pipe is replaced, operators must remediate cracks as
specified in paragraph (c) of this section.
    (e) Pipe and weld cracking inspections. Except for pipe coated with
fusion-bonded or liquid-applied epoxy coatings and excavations
performed in accordance with Sec.  192.614(c), an operator must inspect
any pipe in the in-line inspection segment, including the Class 1 to
Class 3 location segment, that is uncovered for any reason to evaluate
the pipe for cracking where the coating is removed. An operator must
use non-destructive examination methods and procedures appropriate for
the type of non-destructive examination method, and for the type of
pipe and integrity threat conditions in the ditch. If an operator finds
any cracking, the operator must conduct an analysis in accordance with
Sec.  192.712 and remediate anomalies in accordance with paragraphs (c)
and (d) of this section.
    (f) Additional preventive and mitigative measures. For a Class 1 to
Class 3 location segment, an operator must conduct the following
operations and maintenance actions and surveys within 2 years of the
Class 1 to Class 3 location segment change, evaluate the findings, and
remediate as follows:
    (1) Close interval surveys with an ``on and off'' current at a
maximum 5-foot spacing. An operator must evaluate in accordance with
Sec.  192.463 and remediate the unprotected pipe segments within 1 year
of the survey. Operators must conduct close interval surveys on
reassessment intervals of at least once every 7 calendar years, with
intervals not to exceed 90 months.
    (2) At least 1 cathodic protection pipe-to-soil test station must
be located within the Class 1 to Class 3 location segment with a
maximum spacing of \1/2\ mile between test stations. In cases where
obstructions or restricted areas prevent test station placement, the
test station must be placed in the closest practical location. Annual
monitoring of the cathodic protection pipe-to-soil test stations must
meet Sec. Sec.  192.463 and 192.465 for the Class 1 to Class 3 location
segment.
    (3) Install and maintain line-of-sight markers visible on the
pipeline right-of-way, except in agricultural areas or large water
crossings, such as lakes, where line-of-sight markers are not
practical. An operator must replace line-of-sight markers as necessary
and within 30 days after identifying a missing line-of-sight marker.
    (4) Interference surveys to address induced alternating current
(AC) from parallel electric transmission lines, and other interference
issues, such as direct current (DC), that may affect the Class 1 to
Class 3 location segment. If an interference survey finds the
interference current is greater than or equal to 100 amps per meter
squared, impedes the safe operation of a pipeline, or may cause a
condition that would adversely impact the environment or public safety,
an operator must correct these instances within 15 months of the
interference survey.
    (5) Depth of cover must conform with Sec.  192.327 for a Class 1 to
Class 3 location segment or be remediated by adding markers at
locations that do not meet the requirements of Sec.  192.327 for a
Class 1 location, lowering the pipe, adding cover, or installing safety
barriers. Where the depth of cover is less than 24 inches in areas of
non-consolidated rock, the operator must either lower the pipe or add
cover over the Class 1 to Class 3 location segment.
    (6) Right-of-way patrols in accordance with paragraphs (a) and (c)
of Sec.  192.705 at least once per month, with intervals not to exceed
45 days for Class 1 to Class 3 location segments.

    (7) Leakage surveys at intervals not exceeding 4\1/2\ months, but
at least four times each calendar year for Class 1 to Class 3 location
segments.
    (8) For shorted casings in Class 1 to Class 3 location segments,
operators must clear the metallic short no later than 1 year after the
short is identified. For an electrolytic casing short, operators must
remove the electrolyte from the casing/pipe annular space no later than
1 year after the short is identified.
    (g) Remote-control or automatic shutoff valves. Mainline valves on
both sides of Class 1 to Class 3 location segments, and isolation
valves on any crossover or lateral pipe designed to isolate a leak or
rupture in a Class 1 to Class 3 location segment, must be operational
remote-controlled or automatic shutoff valves with pressure sensors on
each side of the mainline valves. The maximum distance between such
mainline valves must not exceed 20 miles.
    (1) Valves installed in accordance with this paragraph must be
closed as soon as practicable after a rupture is identified, but not to
exceed 30 minutes.
    (2) Valves installed in accordance with this paragraph must be
operational at all times, controlled by a SCADA system, and monitored
in accordance with Sec.  192.631.
    (3) Valves installed in accordance with this paragraph must be
maintained in accordance with Sec. Sec.  192.631(c)(2) and (c)(3), and
192.745.
    (4) Automatic shutoff valves installed in accordance with this
paragraph must be set so that, based on operating conditions and
minimum and maximum flow model gradients, they will fully close within
a maximum of 30 minutes following rupture identification. Automatic
shutoff valve set-points must not be less than those required to
actuate the valve before a downstream remote-control valve actuates.
The automatic shutoff valve procedure and results for determining
shutoff times must be reviewed for accuracy at least once each calendar
year, with intervals not to exceed 15 months.
    (h) Documentation. In addition to the documentation requirements
specified in Sec.  192.947, each operator must maintain records of all
actions implemented to comply with paragraph (e) of this section for
the life of the pipeline, including but not limited to subpart J
pressure test records in accordance with Sec.  192.517; and records of
any pipeline assessments, surveys, remediations, maintenance, analyses,
and other implemented actions.
    (i) Notifications to PHMSA of integrity assessment program for
class 1 to class 3 location segment changes. Each operator of a gas
transmission pipeline that uses the integrity assessment program option
for managing a Class 1 to Class 3 location segment change must notify
PHMSA electronically in accordance with Sec.  191.22(c)(2).
0
8. Amend Sec.  192.712 by revising the section heading and adding
paragraph (c) to read as follows:

Sec.  192.712  Analysis of predicted failure pressure and critical
strain level.

* * * * *
    (c) Dents. To evaluate dents and other mechanical damage that could
result in a stress riser, an operator must perform an engineering
critical assessment, as follows:
    (1) Evaluate potential threats for the pipe segment in the vicinity
of the anomaly or defect including movement, external loading,
cracking, and corrosion;
    (2) Review high-resolution magnetic flux leakage (HR-MFL) and high-
resolution deformation inline inspection data for damage in the dent
area and any associated weld region;
    (3) Perform pipeline curvature-based strain analysis using recent
HR-Deformation inspection data;
    (4) Compare the dent profile between the most recent and previous
in-line inspections to identify significant changes in dent depth and
shape;
    (5) Identify and quantify all significant loads acting on the dent;
    (6) Evaluate the strain level associated with the anomaly or defect
and any nearby welds using Finite Element Analysis, or another
technology in accordance with paragraph (c)(8) of this section;
    (7) The analyses performed in accordance with this section must
account for material property uncertainties and model inaccuracies and
tolerances;
    (8) Dents with geometric strain levels that exceed the critical
strain must be remediated in accordance with Sec.  192.713 or Sec.
192.933, as applicable;
    (9) Using operational pressure data, a valid fatigue life
prediction model, and assuming a reassessment safety factor of 2,
estimate the fatigue life of the dent by Finite Element Analysis or
other analytical technique in accordance with this section;
    (10) An operator using other technologies or techniques to comply
with paragraph (c) of this section must submit advance notification to
PHMSA in accordance with Sec.  192.18.
0
9. In Sec.  192.903, amend the definition of high consequence area by
revising paragraphs (1) and (2) to read as follows:

Sec.  192.903  What definitions apply to this subpart?

* * * * *
    High consequence area means an area established by one of the
methods described in paragraphs (1) or (2) as follows:
    (1) An area defined as--
    (i) A Class 3 location under Sec.  192.5; or
    (ii) A Class 4 location under Sec.  192.5; or
    (iii) Any area in a Class 1 or Class 2 location where the potential
impact radius is greater than 660 feet (200 meters), and the area
within a potential impact circle contains 20 or more buildings intended
for human occupancy; or
    (iv) Any area in a Class 1 or Class 2 location where the potential
impact circle contains an identified site; or
    (v) Any Class 1 to Class 3 location segment designated as a high
consequence area in accordance with Sec.  192.618(a).
    (2) The area within a potential impact circle containing--
    (i) 20 or more buildings intended for human occupancy, unless the
exception in paragraph (4) applies; or
    (ii) An identified site; or
    (iii) Any Class 1 to Class 3 location segment designated as a high
consequence area in accordance with Sec.  192.618(a).
* * * * *

    Issued in Washington, DC, on September 3, 2020, under authority
delegated in 49 CFR 1.97.
Alan K. Mayberry,
Associate Administrator for Pipeline Safety.
[FR Doc. 2020-19872 Filed 10-13-20; 8:45 am]
BILLING CODE 4910-60-P