[Federal Register Volume 81, Number 83 (Friday, April 29, 2016)]
[Rules and Regulations]
[Pages 25613-25618]
[FR Doc No: 2016-10027]

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DEPARTMENT OF TRANSPORTATION

Pipeline and Hazardous Materials Safety Administration

49 CFR Parts 171, 173, and 178

[Docket No. PHMSA-2015-0271 (HM-261)]
RIN 2137-AF15

Hazardous Materials: Incorporation by Reference Edition Update
for the American Society of Mechanical Engineers Boiler and Pressure
Vessel Code and Transportation Systems for Liquids and Slurries:
Pressure Piping Code

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

ACTION: Direct final rule.

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SUMMARY: This direct final rule incorporates by reference the most
recent editions of the ASME Boiler and Pressure Vessel Code. The
purpose of this update is to enable non-specification (nurse tank)
manufacturers and other DOT and UN specification packaging
manufacturers to utilize current technology, materials, and practices
to help maintain a high level of safety. PHMSA is replacing the ASME
referenced standard (1998 Edition) with the new, current ASME standard
(2015 Edition) for boiler and pressure vessels. PHMSA is also replacing
the ASME 1998 Edition referenced standard of ASME's Transportation
Systems for Liquids and Slurries: Pressure Piping to the current 2012
Edition.

DATES: Effective Date: This rule is effective June 28, 2016 without
further action, unless adverse comment is received by May 31, 2016. If
adverse comment or notice of intent to file an adverse comment is
received, PHMSA will publish a timely withdrawal of the rule in whole
or in part in the Federal Register before June 13, 2016.
    Incorporation by reference approval date: The incorporation by
reference of certain publications listed in this rule is approved by
the Director of the Federal Register as of [insert date 60 days after
publication in the Federal Register].

ADDRESSES: Comments should reference DOT Docket ID Number PHMSA-2015-
0271 and may be submitted by any of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov.
This Web site allows the public to enter comments on any Federal
Register notice issued by any agency. Follow the online instructions
for submitting comments.
     Fax: 1-202-493-2251
     Mail: Docket Management System; U.S. Department of
Transportation, Docket Operations, M-30, Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590-0001
     Hand Delivery: To U.S. Department of Transportation,
Docket Operations, M-30, Ground Floor, Room W12-140, 1200 New Jersey
Avenue SE., Washington, DC 20590-0001, between 9 a.m. and 5 p.m. ET,
Monday through Friday, except Federal holidays.
    Instructions: Include the agency name and docket number PHMSA-2015-
0271 or RIN 2137-AF15 for this rulemaking at the beginning of your
comment. Note that all comments received will be posted without change
to http://www.regulations.gov including any personal information
provided. If sent by mail, comments must be submitted in duplicate.
Persons wishing to receive confirmation of receipt of their comments
must include a self-addressed stamped postcard. This rule is unrelated
to PHMSA's Proposed Rule ``Hazardous Materials: Adoption of ASME Code
Section XII and the National Board Inspection Code'' (docket number
PHMSA-2010-0019; RIN 2137-AE37).
    Privacy Act: Anyone is able to search the electronic form of any
written communications and comments received into any of our dockets by
the name of the individual submitting the document (or signing the
document, if submitted on behalf of an association, business, labor
union, etc.), as described in the system of records notice (DOT/ALL-14
FDMS), which can be reviewed at www.dot.gov/privacy.
    Docket: You may view the public docket through the Internet at
http://www.regulations.gov or in person at the Docket Operations office
at the above address (See ADDRESSES).

FOR FURTHER INFORMATION CONTACT: Alex B. Mitchell, Office of Chief
Counsel, Pipeline and Hazardous Materials Safety Administration;
telephone<PHONE_NUMBER>; email<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Authority for This Rulemaking

    This direct final rule is published under authority of the Federal
Hazardous Materials Transportation Law under 49 U.S.C. 5101 et seq.
Section 5103(b) of Federal Hazmat Law authorizes the Secretary of
Transportation to prescribe regulations for the safe transportation,
including security, of hazardous materials in intrastate, interstate,
and foreign commerce. The National Technology Transfer and Advancement
Act of 1995 mandates that all federal agencies use technical standards
developed and adopted by voluntary consensus standards bodies. The
guidelines used by agencies to assess and report their conformity with
the requirements of the Act are detailed in Office of Budget and
Management (OMB) Circular No. A-119, entitled ``Federal Participation
in the Development and Use of Voluntary Consensus Standards and in
Conformity Assessment Activities.'' OMB Circular No. A-119 recognizes
that the vibrancy and effectiveness of the U.S. standards system in
enabling innovation depends on continued private sector leadership and
engagement.
    This rulemaking is a Direct Final Rule under PHMSA's rulemaking
authority outlined in 49 CFR 106.40 to incorporate by reference the
latest edition of a technical/industry standard. PHMSA has determined
that this direct final rule is not a ``significant regulatory action''
as defined in section 3(f) of Executive Order 12866, and is not
``significant'' as defined in DOT's Regulatory Policies and Procedures.
This rulemaking is exempt from the Office of Management and Budget
review in accordance with Executive Order 12866.

The Direct Final Rule Procedure

    PHMSA is issuing this direct final rule without prior notice and
prior public comment. The Administrative Procedure Act provides that an
agency may publish a final rule without prior notice and comment if the
agency for good cause finds that the notice and comment procedure is
unnecessary (49 U.S.C. 553(b)(B)). This rule will not make any
significant substantive changes to the Hazardous Materials Regulations.
Accordingly, PHMSA does not foresee adverse comments in response to
this rulemaking, and consequently a 30-day notice and comment period is
reasonable.
    The Regulatory Policies and Procedures of the Department of
Transportation (DOT), 44 FR 1134, February 26, 1979, provide that to
the maximum extent possible, operating administrations for the DOT
should provide an opportunity for public comment on regulations issued
without prior notice. Accordingly, PHMSA invites interested persons to
participate in this rulemaking by submitting written comments. The
agency also invites comments relating to the economic, environmental,
energy, or federalism impacts that might result from adopting this
final rule.
    This direct final rule will take effect as indicated above unless
PHMSA receives an adverse comment or notice of intent to file an
adverse comment within the comment period. An adverse comment explains
why a rule would be inappropriate or would be ineffective or
unacceptable without a change. It may challenge the rule's underlying
premise or approach. Under the direct final rule process, we do not
consider the following types of comments to be adverse:
    (1) A comment recommending another rule change, in addition to the
change in the direct final rule at issue, unless the commenter states
why the direct final rule would be ineffective without the change.
    (2) A frivolous or irrelevant comment.
    If we receive an adverse comment or notice of intent to file an
adverse comment, we will advise the public by publishing a document in
the Federal Register before the effective date of the final rule. This
document may withdraw the direct final rule in whole or in part.

If we withdraw the direct final rule because of an adverse comment, we
may incorporate the adverse comment into another direct final rule or
may publish a notice of proposed rulemaking.
    See the ``Additional Information'' section for information on how
to comment on this direct final rule and how PHMSA will handle comments
received. The ``Additional Information'' section also contains related
information about the docket, privacy, and the handling of proprietary
or confidential business information. There is also information on
obtaining copies of related rulemaking documents.

I. Background

    This direct final rule adopts the most recent edition of a
consensus technical standard, the American Society of Mechanical
Engineers (ASME) Boiler and Pressure Vessel Code (2015 Edition) and
ASME Code for Transportation Systems for Liquids and Slurries: Pressure
Piping, B31.4-2012. The Boiler and Pressure Vessel Code enables nurse
tank manufacturers and other DOT and UN specification packaging
manufacturers to use current technology, materials, and practices. The
incorporation of the most recent edition of the ASME Code improves
clarity, consistency, accuracy, reduces unnecessary burdens on the
regulated community, and will provide, at minimum, an equivalent level
of safety for non-specification (nurse tanks) and specification tanks
regulated under the Hazardous Materials Regulations (HMR). PHMSA is
replacing the 1998 Edition of ASME Boiler and Pressure Vessel Code
Sections with the following, current 2015 Edition of ASME Boiler and
Pressure Vessel Code Sections:

 Section II--Materials--Part A--Ferrous Materials
Specifications
 Section II--Materials--Part B--Nonferrous Material
Specifications
 Section V--Nondestructive Examination
 Section VIII--Rules for Construction of Pressure Vessels
Division 1
 Section IX--Welding, Brazing, and Fusing Qualifications

    PHMSA is also replacing the 1998 Edition of ASME B31.4-1998
Edition, Pipeline Transportation Systems for Liquid Hydrocarbons and
other Liquids with the following, current 2012 Edition of ASME B31.4-
2012, now titled Pipeline Transportation Systems for Liquids and
Slurries as it relates to 49 CFR 173.5a ``Oilfield service vehicles,
mechanical displacement meter provers, and roadway striping vehicles
exceptions.''
    For full access to these Sections, please see http://go.asme.org/PHMSA-ASME. PHMSA is aware that industry is already manufacturing nurse
tanks and other specification cargo tanks in accordance with various
ASME Editions between 1998 and 2015, and PHMSA is not aware of any
adverse safety issues, as long as tanks have been properly built in
accordance with ASME Editions. PHMSA recognizes the safety and validity
of these ASME Editions published after the 1998 Edition as related to
this rulemaking. This update will increase PHMSA's ability to ensure
compliance with the 2015 ASME Edition related to non-specification
(nurse tanks) and specification cargo tanks and with the 2012 ASME
edition related to mechanical displacement meter provers.
Standards Incorporated by Reference
    The National Technology Transfer and Advancement Act of 1995 (Pub.
L. 104-113) directs Federal agencies to use voluntary consensus
standards in lieu of government-written standards whenever possible.
Voluntary consensus standards are standards developed or adopted by
voluntary bodies that develop, establish, or coordinate technical
standards using agreed upon procedures.
    PHMSA's Office of Hazardous Materials Safety adopts 187 voluntary
consensus standards issued by 27 different technical organizations, and
the Office participates in numerous national voluntary consensus
standards committees. PHMSA adopts voluntary consensus standards
applicable to packaging design, construction, maintenance, inspection,
and repair when they are consistent with the safe transportation of
hazardous materials. PHMSA reviews and approves for incorporation by
reference updated versions based on this directive. When PHMSA believes
some aspect of a standard does not meet an adequate level of safety, it
will not incorporate the standard or the part of the standard that it
believes is contradictory with the directive.
    Parts 171 through 180 incorporate by reference all or parts of
standards and specifications developed and published by technical
organizations, as referenced in 49 CFR 171.7, including, but not
limited to, the American Petroleum Institute, American Society of
Mechanical Engineers, American Society for Testing and Materials,
Compressed Gas Association, International Organization for
Standardization, Organization for Economic Cooperation and Development,
and the United Nations. These organizations update and revise their
published standards periodically to reflect modern technology and best
technical practices. PHMSA has reviewed the revised voluntary consensus
standards being incorporated in this final rule.
New Edition of Standards
2015 Edition of the American Society of Mechanical Engineers Boiler and
Pressure Vessel Code
 Section II--Materials--Part A--Ferrous Materials
Specifications
 Section II--Materials--Part B--Nonferrous Material
Specifications

    Parts A and B of Section II are ``Service Sections'' to the other
Sections of the Boiler and Pressure Vessel Code, and they provide
material specifications for ferrous and nonferrous materials adequate
for safety in the field of pressure equipment. These specifications
contain requirements for chemical and mechanical properties, heat
treatment, manufacture, heat and product analyses, and methods of
testing.

 Section V--Nondestructive Examination

    Section V contains requirements and methods for nondestructive
examination, which are referenced and required by other Sections. It
also includes manufacturers' examination responsibilities, duties of
authorized inspectors and requirements for qualification of personnel,
inspection and examination.

 Section VIII--Rules for Construction of Pressure Vessels,
Division 1

    Section VIII, Division 1 provides requirements applicable to the
design, fabrication, inspection, testing, and certification of pressure
vessels operation at either internal or external pressures exceeding 15
psig. Division 1 also contains mandatory and non-mandatory appendices
detailing supplementary design criteria, nondestructive examination and
inspection acceptance standards.

 Section IX--Welding, Brazing, and Fusing Qualifications

    Section IX contains rules relating to the qualification of welding,
brazing, and fusing procedures as required by other Sections for
component manufacture. It also covers rules relating to the
qualification and requalification of welders, brazers, and welding,
brazing and fusing machine operators in order that they may perform
welding, brazing, or plastic fusing as required by other Sections in
the manufacture of components.
    The above editions of currently referenced standards are being

incorporated by reference in 49 CFR 171.7, 173.315, and 178.338-3.
These new Editions refine and clarify existing material in the standard
and generally do not introduce new topics.
2012 Edition of the American Society of Mechanical Engineers Pipeline
Transportation Systems for Liquids and Slurries, ASME B31.4-2012
 This Edition covers piping and transporting liquids between
production facilities, tank farms, natural gas processing plants,
refineries, pump stations, ammonia plants, terminals (marine, rail, and
truck), and other delivery and receiving points.
    The above standard is being incorporated by reference in 49 CFR
173.5a. This Edition refines and clarifies existing material in the
standard and generally does not introduce new topics as related to
mechanical displacement meter provers. PHMSA is not seeking or
accepting comments on the unrelated, Proposed Rule entitled ``Hazardous
Materials: Adoption of ASME Code Section XII and the National Board
Inspection Code'' (docket number PHMSA-2010-0019; RIN 2137-AE58). This
rulemaking also has no impact on or relation to the Pipeline Safety
Regulations at 49 Code of Federal Regulations Part 190-199.
Incorporation By Reference Discussion Under 1 CFR Part 51
    The 2015 Edition of the American Society of Mechanical Engineers
Boiler and Pressure Vessel Code and the 2012 Edition of the American
Society of Mechanical Engineers Pipeline Transportation Systems for
Liquids and Slurries are freely accessible to the public for the full
30 day comment period online at http://go.asme.org/PHMSA-ASME. In
addition, all Sections of the 2015 Edition of the Boiler and Pressure
Vessel Code are available for purchase directly from ASME online at
https://www.asme.org/shop/standards#des=BPVC and the 2012 Edition of
the American Society of Mechanical Engineers Pipeline Transportation
Systems for Liquids and Slurries is available for purchase directly
from ASME online at https://www.asme.org/products/codes-standards/b314-2012-pipeline-transportation-systems-liquid. Members of the public may
access hard copies of standards incorporated by reference at PHMSA's
Hazardous Materials Information Center (HMIC) at the Department of
Transportation Headquarters in Washington, DC. Members of the public
may make arrangements to visit the HMIC by visiting HMIC's Web site at
http://www.phmsa.dot.gov/hazmat/standards-rulemaking/hmic or by
telephone at<PHONE_NUMBER>. PHMSA staff will work directly with any
person requesting access to these standards.
    PHMSA believes the majority of industry nurse tank manufacturers
and other DOT and UN specification packaging manufacturers has already
purchased and therefore possess and adhere to these standards in order
to be certified under ASME's various certification programs. For
example, products manufactured by ASME BPVC Certificate Holders are
certified and stamped with a Certification Mark in accordance with the
applicable ASME BPVC Section. According to ASME, there are currently
more than 6,800 Certificate Holders in the ASME BPVC Certification
Program. For more information on ASME's Certification Programs, please
see https://www.asme.org/shop/certification-and-accreditation/boiler-and-pressure-vessel-certification.

II. Regulatory Notices and Analyses

A. Regulatory Flexibility Determination and Executive Order 13272
    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), PHMSA
is required to consider whether rulemaking actions would have a
significant economic impact on a substantial number of small entities.
This direct final rule ensures that manufacturers are able to use the
most current editions of technical standards incorporated by reference.
PHMSA concludes this rule does not have a significant negative economic
impact on any small entity. Based on the facts available about the
expected impact of this rulemaking, PHMSA certifies under Section 605
of the Regulatory Flexibility Act (5 U.S.C. 605) that this rulemaking
will not have a significant economic impact on a substantial number of
small entities.
B. Paperwork Reduction Act
    There are no new information collection requirements in this direct
final rule.
C. Unfunded Mandates Assessment
    This direct final rule does not impose unfunded mandates under the
Unfunded Mandates Reform Act of 1995. It does not result in costs of
$155,000,000 or more, adjusted for inflation, to either State, local or
tribal governments, in the aggregate, or to the private sector in any
one year, and is the least burdensome alternative that achieves the
objective of the rule.
D. 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 number contained in the heading
of this document can be used to cross-reference this action with the
Unified Agenda.
E. Environmental Analysis
    The National Environmental Policy Act of 1969 (NEPA), as amended
(42 U.S.C. 4321-4347), requires Federal agencies to consider the
consequences of major federal actions and to prepare a detailed
statement on any action that significantly affects the quality of the
human environment. Since these new standards provide, at minimum, an
equivalent level of protection to the currently referenced standards,
it is unlikely that the adoption of these standards will have any
impact on the environment. We find that there are no significant
environmental impacts associated with this direct final rule. PHMSA
invites comments about environmental impacts that could result from
this direct final rule.

III. Executive Order Determinations

A. Executive Order 13132, Federalism
    PHMSA has analyzed the direct final rule according to Executive
Order 13132 (64 FR 43255). This direct final rule does not have a
substantial direct effect on the States, the relationship between the
national government and the States, or the distribution of power and
responsibilities among the various levels of government. The direct
final rule does not impose substantial direct compliance costs on State
and local governments. Therefore, the consultation and funding
requirements of Executive Order 13132 do not apply.
B. Executive Orders 13563 and 12866 and DOT Policies and Procedures
    This direct final rule is not a significant regulatory action under
section 3(f) of Executive Order 12866 (58 FR 51735) and, therefore, was
not subject to review by the Office of Management and Budget. This
direct final rule is not significant under the Regulatory Policies and
Procedures of the Department of Transportation (44 FR 11034).
    In this direct final rule we are updating references to standards
that are incorporated in the Hazardous Materials Regulations. These
updates will enhance safety while reducing the compliance burden on the
regulated

industry. PHMSA welcomes public comments on potential costs and
benefits of this regulatory action.
C. Executive Order 13175
    This final rule has been analyzed in accordance with the principles
and criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because the direct
final rule does not significantly or uniquely affect the communities of
the Indian tribal governments or impose substantial direct compliance
costs, the funding and consultation requirements of Executive Order
13175 do not apply.

IV. Additional Information

A. Comments Invited
    PHMSA invites interested persons to participate in this rulemaking
by submitting written comments, data, or views. The agency also invites
comments relating to the economic, environmental, energy, or federalism
impacts that might result from adopting the rulemaking action in this
document. The most helpful comments reference a specific portion of the
rulemaking action, explain the reason for any recommended change, and
include supporting data. To ensure the docket does not contain
duplicate comments, commenters should send only one copy of written
comments, or if comments are filed electronically, commenters should
submit only one time.
    PHMSA will file any comments it receives in the docket, as well as
a report summarizing each substantive public contact with PHMSA
personnel concerning this rulemaking. Before acting on this rulemaking
action, PHMSA will consider all comments it receives on or before the
closing date for comments. PHMSA will consider comments filed after the
comment period has closed if it is possible to do so without incurring
expense or delay. The agency may change this rulemaking action in light
of the comments it receives.
B. Availability of Rulemaking Documents
    An electronic copy of rulemaking documents may be obtained online
by--
    1. Searching the Federal eRulemaking Portal (http://www.regulations.gov);
    2. Visiting the PHMSA's Regulations and Policies Web page at http://www.phmsa.dot.gov/hazmat/standards-rulemaking, or;
    3. Accessing the Government Printing Office's Web page at http://www.gpo.gov/fdsys/.
    Copies may also be obtained by sending a request to the U.S.
Department of Transportation, West Building, Ground Floor, Room W12-
140, 1200 New Jersey Avenue SE., Washington, DC 20590. Commenters must
identify the docket or amendment number of this rulemaking.
    All documents PHMSA considered in developing this rulemaking action
may be accessed from the Internet through the Federal eRulemaking
Portal referenced in item (1) above.
C. Where and When To File Comments
    Send comments to PHMSA in either of the following ways:
    (1) By mail to: Docket Management System, U.S. Department of
Transportation, West Building, Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE., Washington, DC 20590-0001.
    (2) Through the Internet at http://www.regulations.gov.
    Make sure your comments reach by the deadline. We will consider
late filed comments to the extent possible. For further guidance on
required information for written comments, see 49 CFR 106.65.
D. Privacy Act Statement
    Anyone is able to search the electronic form of any written
communications and comments received into any of our dockets by the
name of the individual submitting the document (or signing the
document, if submitted on behalf of an association, business, labor
union, etc.). You may review DOT's complete Privacy Act Statement in
the Federal Register published on April 11, 2000 (Volume 65, Number 70;
Pages 19477-78) or you may visit http://www.regulations.gov/search/footer/privacyanduse.jsp.

List of Subjects

49 CFR Part 171

    Exports, Hazardous materials transportation, Hazardous Waste,
Imports, Incorporation by reference, Reporting and recordkeeping
requirements.

49 CFR Part 173

    Hazardous materials transportation, Incorporation by reference,
Packaging and containers, Radioactive materials, Reporting and
recordkeeping requirements, Uranium.

49 CFR Part 178

    Hazardous materials transportation, Incorporation by reference,
Motor vehicle safety, Packaging and containers, Reporting and
recordkeeping requirements.
    In consideration of the foregoing, PHMSA is amending 49 CFR Chapter
I, subchapter C, as follows:

PART 171--GENERAL INFORMATION, REGULATIONS, AND DEFINITIONS

0
1. The authority citation for part 171 continues to read as follows:

    Authority: 49 U.S.C. 5101-5128, 44701; Pub. L. 101-410 section 4
(28 U.S.C. 2461 note); Pub. L. 104-134, section 31001; 49 CFR 1.81
and 1.97.

0
2. In Sec.  171.7, paragraph (g) is revised to read as follows:

Sec.  171.7  Reference material.

* * * * *
    (g) The American Society of Mechanical Engineers (ASME), 150 Clove
Road, Little Falls, NJ 07424-2139, telephone 1-800-843-2763, http://www.asme.org.
    (1) 2015 ASME Boiler and Pressure Vessel Code (ASME Code), 2015
Edition, July 1, 2015 (as follows), into Sec. Sec.  172.102; 173.3;
173.5b; 173.24b; 173.306; 173.315; 173.318; 173.420; 178.255-1;
178.255-2; 178.255-14; 178.255-15; 178.273; 178.274; 178.276; 178.277;
178.320; 178.337-1; 178.337-2; 178.337-3; 178.337-4; 178.337-6;
178.337-16; 178.337-18; 178.338-1; 178.338-2; 178.338-3; 178.338-4;
178.338-5; 178.338-6; 178.338-13; 178.338-16; 178.338-18; 178.338-19;
178.345-1; 178.345-2; 178.345-3; 178.345-4; 178.345-7; 178.345-14;
178.345-15; 178.346-1; 178.347-1; 178.348-1; 179.400-3; 180.407:
    (i) Section II--Materials--Part A--Ferrous Materials
Specifications.
    (ii) Section II--Materials--Part B--Nonferrous Material
Specifications.
    (iii) Section V--Nondestructive Examination.
    (iv) Section VIII--Rules for Construction of Pressure Vessels
Division 1.
    (v) Section IX--Welding, Brazing, and Fusing Qualifications.
    (2) ASME B31.4-2012, Pipeline Transportation Systems for Liquids
and Slurries, November 12, 2012, into Sec.  173.5a.
* * * * *

PART 173--SHIPPERS--GENERAL REQUIREMENTS FOR SHIPMENTS AND
PACKAGINGS

0
3. The authority citation for part 173 continues to read as follows:

    Authority: 49 U.S.C. 5101-5128, 44701; 49 CFR 1.81, 1.96 and
1.97.

0
4. In Sec.  173.315, paragraph (m)(1)(i) is revised to read as follows:

Sec.  173.315  Compressed gases in cargo tanks and portable tanks.

* * * * *
    (m) * * *
    (1) * * *
    (i) Has a minimum design pressure of 250 psig, meets the
requirements of Section VIII of the ASME Code (IBR, see Sec.  171.7 of
this subchapter), and is marked with a valid ASME plate.
* * * * *

PART 178--SPECIFICATIONS FOR PACKAGINGS

0
5. The authority citation for part 178 continues to read as follows:

    Authority: 49 U.S.C. 5101-5128; 49 CFR 1.81 and 1.97.

0
6. In Sec.  178.338-3, paragraph (a) is revised to read as follows:

Sec.  178.338-3  Structural integrity.

    (a) General requirements and acceptance criteria. (1) Except as
permitted in paragraph (d) of this section, the maximum calculated
design stress at any point in the tank may not exceed the lesser of the
maximum allowable stress value prescribed in Section VIII of the ASME
Code (IBR, see Sec.  171.7 of this subchapter), or 25 percent of the
tensile strength of the material used.
    (2) The relevant physical properties of the materials used in each
tank may be established either by a certified test report from the
material manufacturer or by testing in conformance with a recognized
national standard. In either case, the ultimate tensile strength of the
material used in the design may not exceed 120 percent of the minimum
ultimate tensile strength specified in either the ASME Code or the ASTM
standard to which the material is manufactured.
    (3) The maximum design stress at any point in the tank must be
calculated separately for the loading conditions described in
paragraphs (b), (c), and (d) of this section. Alternate test or
analytical methods, or a combination thereof, may be used in lieu of
the procedures described in paragraphs (b), (c), and (d) of this
section, if the methods are accurate and verifiable.
    (4) Corrosion allowance material may not be included to satisfy any
of the design calculation requirements of this section.
* * * * *

    Issued in Washington, DC, on April 25, 2016, under the authority
delegated in 49 CFR part 1.
Marie Therese Dominguez,
Administrator, Pipeline and Hazardous Materials Safety Administration.
[FR Doc. 2016-10027 Filed 4-28-16; 8:45 am]
 BILLING CODE 4910-60-P


[Federal Register Volume 85, Number 114 (Friday, June 12, 2020)]
[Notices]
[Pages 35946-35947]
[FR Doc No: 2020-12729]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

[Docket No. USCG-2020-0190]

Information Collection Request to Office of Management and
Budget; OMB Control Number: 1625-0106

AGENCY: Coast Guard, DHS.

ACTION: Sixty-day notice requesting comments.

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SUMMARY: In compliance with the Paperwork Reduction Act of 1995, the
U.S. Coast Guard intends to submit an Information Collection Request
(ICR) to the Office of Management and Budget (OMB), Office of
Information and

Regulatory Affairs (OIRA), requesting an extension of its approval for
the following collection of information: 1625-0106, Unauthorized Entry
Into Cuban Territorial Waters; without change.
    Our ICR describes the information we seek to collect from the
public. Before submitting this ICR to OIRA, the Coast Guard is inviting
comments as described below.

DATES: Comments must reach the Coast Guard on or before August 11,
2020.

ADDRESSES: You may submit comments identified by Coast Guard docket
number [USCG-2020-0190] to the Coast Guard using the Federal
eRulemaking Portal at https://www.regulations.gov. See the ``Public
participation and request for comments'' portion of the SUPPLEMENTARY
INFORMATION section for further instructions on submitting comments.
    A copy of the ICR is available through the docket on the internet
at https://www.regulations.gov. Additionally, copies are available
from: COMMANDANT (CG-6P), ATTN: PAPERWORK REDUCTION ACT MANAGER, U.S.
COAST GUARD, 2703 MARTIN LUTHER KING JR. AVE. SE, STOP 7710,
WASHINGTON, DC 20593-7710.

FOR FURTHER INFORMATION CONTACT: A.L. Craig, Office of Privacy
Management, telephone<PHONE_NUMBER>, or fax<PHONE_NUMBER>, for questions
on these documents.

SUPPLEMENTARY INFORMATION:

Public Participation and Request for Comments

    This notice relies on the authority of the Paperwork Reduction Act
of 1995; 44 U.S.C. chapter 35, as amended. An ICR is an application to
OIRA seeking the approval, extension, or renewal of a Coast Guard
collection of information (Collection). The ICR contains information
describing the Collection's purpose, the Collection's likely burden on
the affected public, an explanation of the necessity of the Collection,
and other important information describing the Collection. There is one
ICR for each Collection.
    The Coast Guard invites comments on whether this ICR should be
granted based on the Collection being necessary for the proper
performance of Departmental functions. In particular, the Coast Guard
would appreciate comments addressing: (1) The practical utility of the
Collection; (2) the accuracy of the estimated burden of the Collection;
(3) ways to enhance the quality, utility, and clarity of information
subject to the Collection; and (4) ways to minimize the burden of the
Collection on respondents, including the use of automated collection
techniques or other forms of information technology. Consistent with
the requirements of Executive Order 13771, Reducing Regulation and
Controlling Regulatory Costs, and Executive Order 13777, Enforcing the
Regulatory Reform Agenda, the Coast Guard is also requesting comments
on the extent to which this request for information could be modified
to reduce the burden on respondents.
    In response to your comments, we may revise this ICR or decide not
to seek an extension of approval for the Collection. We will consider
all comments and material received during the comment period.
    We encourage you to respond to this request by submitting comments
and related materials. Comments must contain the OMB Control Number of
the ICR and the docket number of this request, [USCG-2020-0190], and
must be received by August 11, 2020.

Submitting Comments

    We encourage you to submit comments through the Federal eRulemaking
Portal at https://www.regulations.gov. If your material cannot be
submitted using https://www.regulations.gov, contact the person in the
FOR FURTHER INFORMATION CONTACT section of this document for alternate
instructions. Documents mentioned in this notice, and all public
comments, are in our online docket at https://www.regulations.gov and
can be viewed by following that website's instructions. Additionally,
if you go to the online docket and sign up for email alerts, you will
be notified when comments are posted.
    We accept anonymous comments. All comments received will be posted
without change to https://www.regulations.gov and will include any
personal information you have provided. For more about privacy and
submissions in response to this document, see DHS's eRulemaking System
of Records notice (85 FR 14226, March 11, 2020).

Information Collection Request

    Title: Unauthorized Entry Into Cuban Territorial Waters.
    OMB Control Number: 1625-0106.
    Summary: The Coast Guard, pursuant to Presidential proclamation and
order of the Secretary of Homeland Security, is requiring U.S. vessels,
and vessels without nationality, less than 100 meters, located within
the internal waters or the 12 nautical mile territorial sea of the
United States, that thereafter enter Cuban territorial waters, to apply
for and receive a Coast Guard permit.
    Need: The information is collected to regulate departure from U.S.
territorial waters of U.S. vessels, and vessels without nationality,
and entry thereafter into Cuban territorial waters. The need to
regulate this vessel traffic supports ongoing efforts to enforce the
Cuban embargo, which is designed to bring about an end to the current
government and a peaceful transition to democracy. Accordingly, only
applicants that demonstrate prior U.S. government approval for exports
to and transactions with Cuba will be issued a Coast Guard permit.
    The permit regulation requires that applicants hold United States
Department of Commerce, Bureau of Industry and Security (BIS) and U.S.
Department of Treasury the Office of Foreign Assets Control (OFAC)
licenses that permit exports to and transactions with Cuba. The USCG
permit process thus allows the agency to collect information from
applicants about their status vis-[agrave]-vis BIS and OFAC licenses
and monitor compliance with BIS and OFAC regulations. These two
agencies administer statutes and regulations that proscribe exports to
(BIS) and transactions with (OFAC) Cuba. Accordingly, in order to
assist BIS and OFAC in the enforcement of these license requirements,
as directed by the President and the Secretary of Homeland Security,
the Coast Guard is requiring certain U.S. vessels, and vessels without
nationality, to demonstrate that they hold these licenses before they
depart for Cuban waters.
    Forms: CG-3300, Application for Permit to Enter Cuban Territorial
Seas.
    Respondents: Owners and operators of vessels.
    Frequency: On occasion.
    Hour Burden Estimate: The estimated burden has been decreased to 5
hours per year due to the reinforced restrictions and current status of
diplomatic relations between the United States and Cuban governments
resulting in fewer individuals are attempting to travel to Cuba via the
maritime realm.

    Authority: The Paperwork Reduction Act of 1995; 44 U.S.C.
chapter 35, as amended.

Kathleen Claffie,
Chief, Office of Privacy Management, U.S. Coast Guard.
[FR Doc. 2020-12729 Filed 6-11-20; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 82, Number 206 (Thursday, October 26, 2017)]
[Notices]
[Pages 49651-49652]
[FR Doc No: 2017-23251]

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DEPARTMENT OF HOMELAND SECURITY

Federal Emergency Management Agency

[Internal Agency Docket No. FEMA-4343-DR; Docket ID FEMA-2017-0001]

Wisconsin; Major Disaster and Related Determinations

AGENCY: Federal Emergency Management Agency, DHS.

ACTION: Notice.

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SUMMARY: This is a notice of the Presidential declaration of a major
disaster for the State of Wisconsin (FEMA-4343-DR), dated October 7,
2017, and related determinations.

DATES: The declaration was issued October 7, 2017.

FOR FURTHER INFORMATION CONTACT: Dean Webster, Office of Response and
Recovery, Federal Emergency Management Agency, 500 C Street SW.,
Washington, DC 20472,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: Notice is hereby given that, in a letter
dated October 7, 2017, the President issued a major disaster
declaration under the authority of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the
``Stafford Act''), as follows:

    I have determined that the damage in certain areas of the State
of Wisconsin resulting from severe storms, straight-line winds,
flooding, landslides, and mudslides during the period of July 19-23,
2017, is of sufficient severity and magnitude to warrant a major
disaster declaration under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act, 42 U.S.C. 5121 et seq. (the ``Stafford
Act''). Therefore, I declare that such a major disaster exists in
the State of Wisconsin.
    In order to provide Federal assistance, you are hereby
authorized to allocate from funds available for these purposes such
amounts as you find necessary for Federal disaster assistance and
administrative expenses.
    You are authorized to provide Public Assistance in the
designated areas and Hazard Mitigation throughout the State.
Consistent with the requirement that Federal assistance be
supplemental, any Federal funds provided under the Stafford Act for
Hazard Mitigation will be limited to 75 percent of the total
eligible costs. Federal funds provided under the Stafford Act for
Public Assistance also will be limited to 75 percent of the total
eligible costs, with the exception of projects that meet the
eligibility criteria for a higher Federal cost-sharing percentage
under the Public Assistance Alternative Procedures Pilot Program for
Debris Removal implemented pursuant to section 428 of the Stafford
Act.
    Further, you are authorized to make changes to this declaration
for the approved

assistance to the extent allowable under the Stafford Act.

    The Federal Emergency Management Agency (FEMA) hereby gives notice
that pursuant to the authority vested in the Administrator, under
Executive Order 12148, as amended, Benigno Bern Ruiz, of FEMA is
appointed to act as the Federal Coordinating Officer for this major
disaster.
    The following areas of the State of Wisconsin have been designated
as adversely affected by this major disaster:

    Buffalo, Crawford, Grant, Iowa, Jackson, La Crosse, Lafayette,
Monroe, Richland, Trempealeau, and Vernon Counties for Public
Assistance.
    All areas within the State of Wisconsin are eligible for
assistance under the Hazard Mitigation Grant Program.

The following Catalog of Federal Domestic Assistance Numbers (CFDA)
are to be used for reporting and drawing funds: 97.030, Community
Disaster Loans; 97.031, Cora Brown Fund; 97.032, Crisis Counseling;
97.033, Disaster Legal Services; 97.034, Disaster Unemployment
Assistance (DUA); 97.046, Fire Management Assistance Grant; 97.048,
Disaster Housing Assistance to Individuals and Households In
Presidentially Declared Disaster Areas; 97.049, Presidentially
Declared Disaster Assistance--Disaster Housing Operations for
Individuals and Households; 97.050, Presidentially Declared Disaster
Assistance to Individuals and Households--Other Needs; 97.036,
Disaster Grants--Public Assistance (Presidentially Declared
Disasters); 97.039, Hazard Mitigation Grant.

Brock Long,
Administrator, Federal Emergency Management Agency.
[FR Doc. 2017-23251 Filed 10-25-17; 8:45 am]
 BILLING CODE 9111-23-P


[Federal Register Volume 78, Number 81 (Friday, April 26, 2013)]
[Rules and Regulations]
[Pages 24677-24679]
[FR Doc No: 2013-09855]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 165

[Docket Number USCG-2013-0208]
RIN 1625-AA00

Safety Zone; XA The Experimental Agency Fireworks, Pier 34, East
River, NY

AGENCY: Coast Guard, DHS.

ACTION: Temporary final rule.

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SUMMARY: The Coast Guard is establishing a temporary safety zone on the
navigable waters of the East River in the vicinity of Pier 34,
Manhattan, NY. This temporary safety zone is necessary to protect
spectators and vessels from the hazards associated with fireworks
displays. This rule is intended to restrict all vessels from a portion
of East River before, during, and immediately after the fireworks
event.

DATES: This rule is effective on May 16, 2013 from 8:00 p.m. until 9:15
p.m.

ADDRESSES: Documents mentioned in this preamble are part of docket
USCG-2013-0208]. To view documents mentioned in this preamble as being
available in the docket, go to http://www.regulations.gov, type the
docket number in the ``SEARCH'' box and click ``SEARCH.'' Click on Open
Docket Folder on the line associated with this rulemaking. You may also
visit the Docket Management Facility in Room W12-140 on the ground
floor of the Department of Transportation West Building, 1200 New
Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m.,
Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email Ensign Kimberly Beisner, Sector New York, Waterways
Management, U.S. Coast Guard; Telephone<PHONE_NUMBER>, Email
<EMAIL_ADDRESS>If you have questions on viewing or
submitting material to the docket, call Barbara Hairston, Program
Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Acronyms

DHS Department of Homeland Security
FR Federal Register
NPRM Notice of Proposed Rulemaking

A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior
notice and opportunity to comment pursuant to authority under section
4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This
provision authorizes an agency to issue a rule without prior notice and
opportunity to comment when the agency for good cause finds that those
procedures are ``impracticable, unnecessary, or contrary to the public
interest.'' Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good
cause exists for not publishing a notice of proposed rulemaking (NPRM)
with respect to this rule because sufficient information about the
event was not received in time to publish a NPRM followed by a final
rule before the effective date, thus making the publication of a NPRM
impractical. The Coast Guard received the information about the event
on February 20, 2013. The event sponsor was unwilling to delay the
event since the event is being held in correlation with a film premiere
event. Any delay encountered in this regulation's effective date by
publishing a NPRM would be contrary to public interest, since immediate
action is needed to provide for the safety of life and property on
navigable waters from the hazards associated with fireworks including
unexpected detonation and burning debris.

    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause
exists for making this rule effective less than 30 days after
publication in the Federal Register for the same reasons specified
above.

B. Basis and Purpose

    The legal basis for this rule is 33 U.S.C. 1231; 46 U.S.C. Chapter
701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6,
160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security
Delegation No. 0170.1.
    This temporary safety zone is necessary to ensure the safety of
spectators and vessels from hazards associated with the fireworks
display.

C. Discussion of the Final Rule

    This rule establishes a temporary safety zone on the navigable
waters of the East River, in the vicinity of Pier 34, Manhattan, NY.
All persons and vessels shall comply with the instructions of the
Captain of the Port (COTP) New York or the designated representative
during the enforcement of the temporary safety zone. Entering into,
transiting through, or anchoring within the temporary safety zone is
prohibited unless authorized by the COTP, or the designated
representative.
    Based on the inherent hazards associated with fireworks, the COTP
New York has determined that fireworks launches in close proximity to
water crafts pose a significant risk to public safety and property. The
combination of increased number of recreational vessels, congested
waterways, darkness punctuated by bright flashes of light, and debris
especially burning debris falling on passing or spectator vessels has
the potential to result in serious injuries or fatalities. This
temporary safety zone will restrict vessels from a portion of the East
River around the location of the fireworks launch platform before,
during, and immediately after the fireworks display.
    The Coast Guard has determined that this regulated area will not
have a significant impact on vessel traffic due to its temporary nature
and limited size and the fact that vessels are allowed to transit the
navigable waters outside of the regulated area.
    Advanced public notifications may also be made to the local
mariners through appropriate means, which may include, but are not
limited to, the Local Notice to Mariners as well as Broadcast Notice to
Mariners.

D. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on 13 of these statutes or executive orders.

1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f)
of Executive Order 12866, Regulatory Planning and Review, as
supplemented by Executive Order 13563, Improving Regulation and
Regulatory Review, and does not require an assessment of potential
costs and benefits under section 6(a)(3) of Executive Order 12866 or
under section 1 of Executive Order 13563. The Office of Management and
Budget has not reviewed it under those Orders.
    The Coast Guard's implementation of this temporary safety zone will
be of short duration and is designed to minimize the impact to vessel
traffic on the navigable waters. This temporary safety zone will only
be enforced for a short period, in the late evening. Due to the
location, vessels will be able to transit around the zone in a safe
manner.

2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as
amended, requires federal agencies to consider the potential impact of
regulations on small entities during rulemaking. The Coast Guard
certifies under 5 U.S.C. 605(b) that this rule will not have a
significant economic impact on a substantial number of small entities.
    (1) This rule will affect the following entities, some of which may
be small entities: The owners and operators of vessels intending to
transit or anchor in a portion of the navigable waters in the vicinity
of the marine event during the effective period.
    (2) This safety zone would not have a significant economic impact
on a substantial number of small entities for the following reasons:
This rule will be in effect a short period; late at night when vessel
traffic is low, vessel traffic could pass safely around the safety
zone, and the Coast Guard will notify mariners before activating the
zone by appropriate means which may include but are not limited to
Local Notice to Mariners and Broadcast Notice to Mariners.

3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small
entities in understanding this rule. If the rule would affect your
small business, organization, or governmental jurisdiction and you have
questions concerning its provisions or options for compliance, please
contact the person listed in the FOR FURTHER INFORMATION CONTACT,
above.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247). The Coast Guard will not retaliate against small
entities that question or complain about this rule or any policy or
action of the Coast Guard.

4. Collection of Information

    This rule will not call for a new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

5. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. We have analyzed this rule under that Order and determined
that this rule does not have implications for federalism.

6. Protest Activities

    The Coast Guard respects the First Amendment rights of protesters.
Protesters are asked to contact the person listed in the FOR FURTHER
INFORMATION CONTACT section to coordinate protest activities so that
your message can be received without jeopardizing the safety or
security of people, places or vessels.

7. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

8. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

9. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

10. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

11. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

12. Energy Effects

    This action is not a ``significant energy action'' under Executive
Order 13211, Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use.

13. Technical Standards

    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

14. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule involves the establishment of a temporary safety
zone. This rule is categorically excluded from further review under
paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An
environmental analysis checklist supporting this determination and a
Categorical Exclusion Determination are available in the docket where
indicated under ADDRESSES. We seek any comments or information that may
lead to the discovery of a significant environmental impact from this
rule.

List of Subjects in 33 CFR Part 165

    Marine safety, Navigation (water), Reporting and recordkeeping
requirements, Security measures, Waterways.

    For the reasons discussed in the preamble, the Coast Guard amends
33 CFR part 165 as follows:

PART 165--REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREA

0
1. The authority citation for part 165 continues to read as follows:

    Authority:  33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703;
50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Pub. L.
107-295, 116 Stat. 2064; Department of Homeland Security Delegation
No. 0170.1.

0
2. Add Sec.  165.T01-0208 to read as follows:

Sec.  165.T01-0208  Safety Zone; XA The Experimental Agency Fireworks,
Pier 34, East River, NY.

    (a) Regulated Area. The following area is a temporary safety zone:
all navigable waters of East River within a 180-yard radius of the
fireworks barge located in approximate position 40[deg]42'28.5'' N,
073[deg]59'9.9'' W, approximately 182 yards south east of Pier 34,
Manhattan, NY.
    (b) Effective Dates and Enforcement Periods. This rule is effective
and will be enforced on May 16, 2013 from 8:00 p.m. until 9:15 p.m.
    (c) Definitions. The following definitions apply to this section:
    (1) Designated Representative. A ``designated representative'' is
any Coast Guard commissioned, warrant or petty officer of the U.S.
Coast Guard who has been designated by the Captain of the Port Sector
New York (COTP), to act on his or her behalf. The designated
representative may be on an official patrol vessel or may be on shore
and will communicate with vessels via VHF-FM radio or loudhailer. In
addition, members of the Coast Guard Auxiliary may be present to inform
vessel operators of this regulation.
    (2) Official Patrol Vessels. Official patrol vessels may consist of
any Coast Guard, Coast Guard Auxiliary, state, or local law enforcement
vessels assigned or approved by the COTP.
    (3) Spectators. All persons and vessels not registered with the
event sponsor as participants or official patrol vessels.
    (d) Regulations.
    (1) The general regulations contained in 33 CFR 165.23, as well as
the following regulations, apply.
    (2) No spectators, except for fireworks barge and accompanying
vessels, will be allowed to enter into, transit through, or anchor in
the safety zone without the permission of the COTP or the designated
representative.
    (3) All spectators given permission to enter or operate in the
regulated area shall comply with the instructions of the COTP or the
designated representative. Upon being hailed by a U.S. Coast Guard
vessel by siren, radio, flashing light, or other means, vessel
spectator shall proceed as directed.
    (4) Spectators desiring to enter or operate within the regulated
area shall contact the COTP or the designated representative via VHF
channel 16 or<PHONE_NUMBER> (Sector New York command center) to obtain
permission to do so.

    Dated: April 10, 2013.
G. Loebl,
Captain, U.S. Coast Guard, Captain of the Port New York.
[FR Doc. 2013-09855 Filed 4-25-13; 8:45 am]
BILLING CODE 9110-04-P


[Federal Register Volume 79, Number 56 (Monday, March 24, 2014)]
[Notices]
[Pages 16066-16071]
[FR Doc No: 2014-06306]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-30984; File No. 812-14016]

HMS Income Fund, Inc., et al.; Notice of Application

March 18, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under sections 57(a)(4) and
57(i) of the Investment Company Act of 1940 (the ``Act'') and rule 17d-
1 under the Act to permit certain joint transactions otherwise
prohibited by section 57(a)(4) of the Act and rule 17d-1 under the Act.

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    Summary of Application: Applicants request an order to permit
business development companies (``BDCs'') to co-invest with one another
in portfolio companies.
    Applicants: HMS Income Fund, Inc. (the ``Company''); HMS Adviser LP
(``HMS Adviser''); \1\ Main Street Capital Corporation (``MSCC'' and,
together with the Company, the ``Investing BDCs''); Main Street Capital
Partners, LLC (``Partners''); Main Street Mezzanine Fund, LP (``SBIC
Fund I''); Main Street Capital II, LP (``SBIC Fund II'' and, together
with SBIC Fund I, the ``SBIC Funds''); MSCII Equity Interests, LLC;
Main Street Equity Interests, Inc.; and MSC Adviser I, LLC (``HMS Sub-
Adviser'').
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    \1\ The term ``Adviser'' means HMS Adviser, HMS Sub-Adviser (as
defined below), Partners (as defined below), any other investment
adviser to an Investing BDC (as defined below), and, with respect to
MSCC (as defined below), an internally managed business development
company, MSCC.
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    Filing Dates: The application was filed on March 22, 2012, and
amended on July 27, 2012, December 28, 2012, June 18, 2013, October 3,
2013, February 24, 2014 and March 17, 2014.
    Hearing or Notification of Hearing: An order granting the requested
relief will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicants with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on April 14, 2014, and should be accompanied by proof of
service on applicants, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
St. NE., Washington, DC 20549-1090. Applicants: the Company and HMS
Adviser, 2800 Post Oak Boulevard, Suite 5000, Houston, Texas 77056;
MSCC, Partners, the SBIC Funds, MSCII Equity Interests, LLC, Main
Street Equity Interests, Inc., and HMS Sub-Adviser, 1300 Post Oak
Boulevard, Suite 800, Houston, Texas 77056.

FOR FURTHER INFORMATION CONTACT: Mark Zaruba, Senior Counsel, at (202)
551-6878 or Dalia Osman Blass, Assistant Chief Counsel, at (202) 551-
6821 (Chief Counsel's Office, Division of Investment Management).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or for an
applicant using the

Company name box, at http://www.sec.gov/search/search.htm or by calling
(202) 551-8090.
    Applicants' Representations:
    1. The Company is a closed-end management investment company that
has elected to be regulated as a BDC under the Act.\2\ The Company's
primary investment objective is to generate current income through debt
and equity investments. The Company has a five-member board of
directors (the ``Company Board''), of which a majority are not
``interested persons'' of the Company as defined in section 2(a)(19) of
the Act (for any board of directors, the ``Independent Directors'').
---------------------------------------------------------------------------

    \2\ Section 2(a)(48) of the Act defines a BDC to be any closed-
end investment company that operates for the purpose of making
investments in securities described in sections 55(a)(1) through
55(a)(3) of the Act and makes available significant managerial
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------

    2. HMS Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940 (the ``Advisers Act'') and serves as
the Company's investment adviser. All investment decisions made by HMS
Adviser require the approval of its investment committee.
    3. MSCC is a closed-end management investment company that has
elected to be regulated as a BDC under the Act. MSCC is a principal
investment firm that provides long-term debt and equity capital to
lower middle market companies and debt capital to middle market
companies. MSCC has a six-member board of directors (the ``MSCC
Board''),\3\ of which five members are Independent Directors. MSCC is
an internally managed BDC. All of MSCC's and its subsidiaries'
personnel (the ``MSCC Employees''), including all investment
professionals, are employed by Partners.\4\ Partners is a wholly-owned
subsidiary of MSCC.
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    \3\ The term ``Investing BDC Board'' means the board of
directors of an Investing BDC (i.e., the Company Board or the MSCC
Board, as applicable).
    \4\ The MSCC Employees perform all of the day to day functions
and activities of MSCC and its subsidiaries, including HMS Sub-
Adviser. As such, the same investment professionals who advise MSCC
and its Wholly-Owned Investment Subsidiaries also sub-advise the
Company through HMS Sub-Adviser. The MSCC Employees are supervised
by the MSCC Board, and when they are acting as investment
professionals for HMS Sub-Adviser, they are supervised by HMS Sub-
Adviser consistent with the policies and procedures adopted by HMS
Sub-Adviser in accordance with the Advisers Act. The MSCC Employees
are subject to the policies and procedures of MSCC and HMS Sub-
Adviser, including, with respect to MSCC, those required by rule
38a-1 and section 57(h) of the Act and, with respect to HMS Sub-
Adviser, those required by rule 206(4)-7 of the Advisers Act.
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    4. Applicants represent that the SBIC Funds were organized as
limited partnerships under the laws of the state of Delaware and are
each licensed by the Small Business Administration (the ``SBA'') to
operate under the Small Business Investment Act of 1958 (the ``SBA
Act'') as small business investment companies. Applicants state that
the SBIC Funds will not be registered under the Act based on the
exclusion from the definition of investment company contained in
section 3(c)(7) of the Act. Main Street Mezzanine Management, LLC and
Main Street Capital II GP, LLC, each of which is a wholly-owned
subsidiary of MSCC, are the general partners of SBIC Fund I and SBIC
Fund II, respectively. Partners is the manager and investment adviser
of both SBIC Fund I and SBIC Fund II. Applicants represent that each of
the SBIC Funds are Wholly-Owned Investment Subsidiaries \5\ of MSCC
because MSCC directly or indirectly owns 100% of the economic and
voting interests in the SBIC Funds.
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    \5\ A ``Wholly-Owned Investment Subsidiary'' is a special
purpose subsidiary formed by an Investing BDC (a) whose sole
business purpose is to hold one or more investments on behalf of the
Investing BDC (or, in the case of certain subsidiaries, maintain a
license under the SBA Act and issue debentures guaranteed by the
SBA); (b) that is wholly-owned by the Investing BDC (with the
Investing BDC at all times, directly or indirectly, holding,
beneficially and of record, 100% of the economic and voting
interests); (c) with respect to which the Investing BDC Board has
the sole authority to make all determinations with respect to the
Wholly-Owned Investment Subsidiary's participation under the
conditions to the application; and (d) that is an entity that would
be an investment company but for section 3(c)(1) or 3(c)(7) of the
Act.
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    5. HMS Sub-Adviser is a wholly-owned subsidiary of MSCC. HMS Sub-
Adviser is registered as an investment adviser under the Advisers Act.
Pursuant to the terms of the investment advisory agreement among the
Company, HMS Adviser, MSCC, and HMS Sub-Adviser, HMS Adviser has
engaged HMS Sub-Adviser as the Company's sub-adviser.\6\ Applicants
represent that no employee or representative of MSCC, Partners, or HMS
Sub-Adviser serves or will serve on the investment committee of HMS
Adviser, and HMS Adviser and its investment committee are in all other
respects completely independent of MSCC, Partners, and HMS Sub-Adviser.
Applicants represent that neither HMS Sub-Adviser, Partners nor MSCC
are otherwise affiliated with the Company or HMS Adviser.
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    \6\ The agreement does not, however, permit HMS Adviser to
delegate its authority to approve investments on behalf of the
Company. Therefore, as discussed below, HMS Adviser will ultimately
approve all investments made by the Company.
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    6. Applicants seek an order (``Order'') to permit the Company, on
one hand, and MSCC, on the other hand, to participate in the same
investment opportunities through a proposed co-investment program where
such participation would otherwise be prohibited under section 57 of
the Act and the rules under the Act (the ``Co-Investment Program'').
For purposes of the application, a ``Co-Investment Transaction'' means
any transaction in which the Company (or a Wholly-Owned Investment
Subsidiary) participated together with MSCC (or a Wholly-Owned
Investment Subsidiary) in reliance on the Order. ``Potential Co-
Investment Transaction'' means any investment opportunity in which the
Company (or a Wholly-Owned Investment Subsidiary) could not participate
together with MSCC (or a Wholly-Owned Investment Subsidiary) without
obtaining and relying on the Order.\7\
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    \7\ All existing entities that currently intend to rely on the
Order have been named as applicants and any existing or future
entities that may rely on the Order in the future will comply with
the terms and conditions of the application.
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    7. Each Investing BDC may, from time to time, form one or more
Wholly-Owned Investment Subsidiaries. A Wholly-Owned Investment
Subsidiary of an Investing BDC would be prohibited from investing in a
Co-Investment Transaction with the other Investing BDC (or its Wholly-
Owned Investment Subsidiaries) because it would be a company controlled
by the Investing BDC for purposes of section 57(a)(4) and rule 17d-1.
Applicants request that a Wholly-Owned Investment Subsidiary be
permitted to participate in Co-Investment Transactions in lieu of an
Investing BDC and that the Wholly-Owned Investment Subsidiary's
participation in any such transaction be treated, for purposes of the
Order, as though the Investing BDC were participating directly.
Applicants represent that this treatment is justified because a Wholly-
Owned Investment Subsidiary would have no purpose other than serving as
a holding vehicle for the Investing BDC's investments and, therefore,
no conflicts of interest could arise between the Investing BDC and the
Wholly-Owned Investment Subsidiary. The Investing BDC Board would make
all relevant determinations under the conditions with regard to a
Wholly-Owned Investment Subsidiary's participation in a Co-Investment
Transaction, and the Investing BDC Board would be informed of, and take
into consideration, any proposed use of a Wholly-Owned Investment
Subsidiary in the Investing BDC's place. If an Investing BDC proposes
to participate in the same Co-Investment Transaction with any of its
Wholly-Owned

Investment Subsidiaries, the Investing BDC Board will also be informed
of, and take into consideration, the relative participation of the
Investing BDC and the Wholly-Owned Investment Subsidiary.
    8. HMS Sub-Adviser and MSCC will generally originate and
independently analyze the appropriateness of investments by the
Investing BDCs.\8\ Applicants expect that almost all investments that
are appropriate investments for one Investing BDC will be appropriate
for the other Investing BDC, with limited exceptions based on Available
Capital,\9\ diversification, investment size, borrow and sponsor
limitations and other relevant factors.\10\ HMS Adviser serves as the
Company's investment adviser and administrator, and HMS Sub-Adviser
serves as the Company's sub-adviser. In these roles, HMS Adviser is
responsible for the overall management of the Company's activities, and
HMS Sub-Adviser is responsible for the day-to-day management of the
Company's investment portfolio, in each case consistent with their
fiduciary duties. Although HMS Sub-Adviser will identify, determine the
appropriateness of and recommend investments for the Company, the Sub-
Advisory Agreement requires that, prior to any investment by the
Company, HMS Sub-Adviser must present to HMS Adviser each investment
that HMS Sub-Adviser determines is appropriate for, and seeks to
recommend to, the Company, and HMS Adviser has the authority to approve
or reject all investments proposed for the Company by HMS Sub-Adviser.
Through this authority to approve or reject any investment proposed by
HMS Sub-Adviser, HMS Adviser will have ultimate authority with respect
to the Company's investments, subject in each case to the oversight of
the Company Board.
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    \8\ While it is currently anticipated that substantially all
origination and evaluation of Potential Co-Investment Transactions
will be conducted by HMS Sub-Adviser, nothing precludes HMS Adviser
from independently identifying and evaluating a Potential Co-
Investment Transaction. In such a case, HMS Adviser will follow the
same process for approval of Co-Investment Transactions that HMS
Sub-Adviser is required to follow under the terms of the
application.
    \9\ ``Available Capital'' refers to the liquid assets not held
for permanent investment, including bona fide uncalled capital
commitments that can be called by the settlement date of the Co-
Investment Transaction, cash, amounts that can currently be drawn
down from lines of credit, and marketable securities held for short-
term purposes.
    \10\ Neither the Company nor MSCC will be obligated to invest,
or co-invest, when investment opportunities are referred to them.
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    9. In selecting investments for the Investing BDCs, the Advisers
will consider only the investment objective, investment policies,
investment position, Available Capital, and other factors relevant to
the respective Investing BDC they advise. For each Potential Co-
Investment Transaction that HMS Sub-Adviser determines is an
appropriate investment for the Company, HMS Sub-Adviser will provide to
HMS Adviser, in advance, information about such transaction, and will
propose an allocation for the Company for such transaction. HMS Adviser
will then evaluate whether the Potential Co-Investment Transaction fits
within the Company's Objectives and Strategies, is appropriate from a
size and risk standpoint based on the Company's Available Capital, is
appropriately structured for co-investment by the Company and has
undergone sufficient due diligence to justify approval by HMS Adviser.
If HMS Adviser independently determines that the Potential Co-
Investment as proposed by HMS Sub-Adviser (including the proposed
allocation between the Company and MSCC) is an appropriate investment
for the Company, HMS Adviser will present the Potential Co-Investment
Transaction to the Eligible Directors of the Company Board for their
approval.
    10. For any Potential Co-Investment Transaction, the applicable
Adviser will present the investment opportunity and the proposed
allocation to the directors eligible to vote under section 57(o) of the
Act (``Eligible Directors'') of each Investing BDC prior to any actual
investment by an Investing BDC. A Co- Investment Transaction will be
consummated only upon approval by a required majority of the Eligible
Directors within the meaning of section 57(o) of the Act (``Required
Majority'') \11\ of each Investing BDC.
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    \11\ Applicants state that no Independent Director will have a
financial interest in any Co-Investment Transaction or any interest
in any related portfolio company, other than through an interest (if
any) in the securities of the Investing BDC.
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    11. With respect to the pro rata dispositions and Follow-On
Investments \12\ provided in conditions 7 and 8, an Investing BDC may
participate in a pro rata disposition or Follow-On Investment without
obtaining prior approval of the Required Majority of the Investing BDC
if, among other things: (i) the proposed participation of each
Investing BDC in such disposition is proportionate to its outstanding
investments in the issuer immediately preceding the disposition or
Follow-On Investment, as the case may be; and (ii) the Investing BDC
Board has approved the Investing BDC's participation in pro rata
dispositions and Follow-On Investments as being in the best interests
of the Investing BDC. If the Investing BDC Board does not so approve,
any such disposition or Follow-On Investment will be submitted to the
Investing BDC's Eligible Directors. The Investing BDC Board may at any
time rescind, suspend or qualify its approval of pro rata dispositions
and Follow-On Investments with the result that all dispositions and/or
Follow-On Investments must be submitted to the Eligible Directors of
the Investing BDC.
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    \12\ With respect to any security obtained in a Co-Investment
Transaction, a ``Follow-On Investment'' is an additional investment
in securities of the issuer of the security, including through the
exercise of warrants, conversion privileges, and other rights to
purchase securities of the issuer.
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    Applicants' Legal Analysis:
    1. Section 57(a)(4) of the Act prohibits certain affiliated persons
of a BDC from participating in joint transactions with the BDC (or a
company controlled by such BDC) in contravention of rules as prescribed
by the Commission. Under section 57(b)(2) of the Act, in general, any
person who is directly or indirectly controlling, controlled by, or
under common control with a BDC, is subject to section 57(a)(4).
Section 57(i) of the Act provides that, until the Commission prescribes
rules under section 57(a)(4), the Commission's rules under section
17(d) of the Act applicable to registered closed-end investment
companies will be deemed to apply to transactions subject to section
57(a)(4). Because the Commission has not adopted any rules under
section 57(a)(4), rule 17d-1 applies.
    2. Rule 17d-1 under the Act prohibits affiliated persons of a
registered investment company from participating in joint transactions
with the company unless the Commission has granted an order permitting
such transactions. In passing upon applications under rule 17d-1, the
Commission considers whether the company's participation in the joint
transaction is consistent with the provisions, policies, and purposes
of the Act and the extent to which such participation is on a basis
different from or less advantageous than that of other participants.
    3. Transactions effected as part of the Co-Investment Program would
be prohibited by Section 57(a)(4) and Rule 17d-1 without a prior order
of the Commission to the extent that each of the Company or MSCC falls
within the category of persons described by Section 57(b), as modified
by Rule 57b-1 thereunder, vis-[agrave]-vis MSCC or the Company,
respectively. Section 57(b) applies to any investment adviser to a
business development company, including a sub-adviser. Therefore, HMS
Sub-Adviser could be deemed to be

related to the Company in a manner described by Section 57(b). MSCC
controls HMS Sub-Adviser and therefore MSCC (or a Wholly-Owned
Investment Subsidiary of MSCC) could be deemed to be related to the
Company in a manner described by Section 57(b) and prohibited by
Section 57(a)(4) and Rule 17d-1 from participating in the Co-Investment
Program with the Company.\13\
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    \13\ As discussed in the application, applicants do not believe
that the Company would be related to MSCC in a manner described by
section 57(b) because applicants assert that HMS Sub-Adviser does
not control the Company. However, if HMS Sub-Adviser were deemed to
control the Company, then the Company would be related to MSCC in a
manner described by section 57(b) and, therefore, prohibited by
section 57(1)(4) and rule 17d-1 from participating in the Co-
Investment Program.
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    4. Applicants state that they expect that increasing the
opportunities available to the Investing BDCs with a co-investment
structure would generate greater deal flow, broaden the market
relationships of the Company and MSCC, and posture them to make the
most attractive risk-adjusted investments and optimize performance of
their portfolios. Applicants represent that the Co-Investment Program
will be implemented only if a Required Majority of each Investing BDC
approves it on the basis that it would be advantageous to the Investing
BDC.
    5. Applicants submit that the Required Majority of an Investing
BDC's approval of each Co-Investment Transaction before investment, and
other protective conditions set forth in the application, will ensure
that each Investing BDC will be treated fairly and reasonably.
Applicants state that an Investing BDC's participation in the Co-
Investment Transactions will be consistent with the provisions,
policies and purposes of the Act and on a basis that is not different
from or less advantageous than that of other. Applicants further state
that the terms and conditions of the application will ensure that all
such transactions are reasonable and fair to each Investing BDC and do
not involve overreaching by any person concerned, including the
Advisers.
    Applicants' Conditions:
    Applicants agree that any Order granting the requested relief will
be subject to the following conditions:
    1. Each time an Adviser, other than HMS Adviser, considers a
Potential Co-Investment Transaction for an Investing BDC that falls
within the other Investing BDC's then-current Objectives and
Strategies,\14\ the Adviser(s) to an Investing BDC will make an
independent determination of the appropriateness of the investment for
the Investing BDC in light of the Investing BDC's then-current
circumstances. If HMS Adviser refers a Potential Co-Investment
Transaction to MSCC, MSCC will make an independent determination of the
appropriateness of the investment itself in light of MSCC's then-
current circumstances.
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    \14\ ``Objectives and Strategies'' means an Investing BDC's
investment objectives and strategies, as described in the Investing
BDC's registration statement on Form N-2, other filings the
Investing BDC has made with the Commission under the Securities Act
of 1933, as amended (the ``1933 Act''), or under the Securities and
Exchange Act of 1934, as amended, and the Investing BDC's reports to
shareholders.
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    2. a. If the Adviser(s) to an Investing BDC deems the Investing
BDC's participation in any Potential Co-Investment Transaction to be
appropriate for the Investing BDC, the Adviser(s) to the Investing BDC
will then determine an appropriate level of investment for the
Investing BDC.
    b. If the aggregate amount recommended by the Adviser(s) to an
Investing BDC to be invested in the Potential Co-Investment
Transaction, together with the amount proposed to be invested by the
other Investing BDC, in the same transaction, exceeds the amount of the
investment opportunity, the amount of the investment opportunity will
be allocated between the Investing BDCs pro rata based on the ratio of
each Investing BDC's Available Capital in the asset class being
allocated to the aggregated Available Capital for the asset class being
allocated of both Investing BDCs, up to the amount proposed to be
invested by each. The Adviser(s) to an Investing BDC will provide the
Eligible Directors of the Investing BDC, with information concerning
each Investing BDC's Available Capital to assist the Eligible Directors
with their review of the Investing BDC's investments for compliance
with these allocation procedures.
    c. After making the determinations required in conditions 1 and
2(a), the Adviser(s) to an Investing BDC will distribute written
information concerning the Potential Co-Investment Transaction,
including the amount proposed to be invested by each Investing BDC, to
the Eligible Directors of the Investing BDC for their consideration.
The Investing BDCs will co-invest with one another only if, prior to
participating in the Potential Co-Investment Transaction, a Required
Majority of each Investing BDC concludes that:
    (i) the terms of the Potential Co-Investment Transaction, including
the consideration to be paid, are reasonable and fair and do not
involve overreaching in respect of the Investing BDC or its
stockholders on the part of any person concerned;
    (ii) the Potential Co-Investment Transaction is consistent with:
    (a) the interests of the Investing BDC's stockholders; and
    (b) the Investing BDC's then-current Objectives and Strategies;
    (iii) the investment by the other Investing BDC would not
disadvantage the Investing BDC, and the participation of the Investing
BDC is not on a basis different from or less advantageous than that of
the other Investing BDC; provided, that if one Investing BDC but not
the other gains the right to nominate a director for election to a
portfolio company's board of directors or the right to have a board
observer or any similar right to participate in the governance or
management of the portfolio company, such event will not be interpreted
to prohibit a Required Majority of the Investing BDC from reaching the
conclusions required by this condition 2(c)(iii), if:
    (a) the Eligible Directors of the Investing BDC will have the right
to ratify the selection of such director or board observer, if any;
    (b) the Adviser(s) to an Investing BDC agrees to, and does, provide
periodic reports to the Board of the Investing BDC with respect to the
actions of the director or the information received by the board
observer or obtained through the exercise of any similar right to
participate in the governance or management of the portfolio company;
and
    (c) any fees or other compensation that the Investing BDC or any
affiliated person thereof, as applicable, receives in connection with
the right of the Investing BDCs to nominate a director or appoint a
board observer or otherwise to participate in the governance or
management of the portfolio company will be shared proportionately
between the Investing BDCs in accordance with the amount of each
party's investment; and
    (iv) the proposed investment by the Investing BDC would not benefit
the other Investing BDC or any affiliated person of either of them
(other than the parties to the Co-Investment Transaction), except (a)
to the extent permitted by condition 13; (b) to the extent permitted by
section 57(k) of the Act; (c) indirectly, as a result of an interest in
the securities issued by one of the parties to the Co-Investment
Transaction; or (d) in the case of fees or other compensation described
in condition 2(c)(iii)(C).

    3. Each Investing BDC has the right to decline to participate in
any Potential Co-Investment Transaction or to invest less than the
amount proposed.
    4. The Adviser(s) to an Investing BDC will present to the Board of
the Investing BDC, on a quarterly basis, a record of all investments
made by the other Investing BDC during the preceding quarter that fell
within the Investing BDC's then-current Objectives and Strategies that
were not made available to the Investing BDC, and an explanation of why
the investment opportunities were not offered to the Investing BDC. All
information presented to the Investing BDC Board under this condition
will be kept for the life of the Investing BDC and at least two years
thereafter, and will be subject to examination by the Commission and
its staff.
    5. Except for Follow-On Investments made in accordance with
condition 8, an Investing BDC will not invest in reliance on the Order
in any issuer in which the other Investing BDC or any affiliated person
of the other Investing BDC is an existing investor.
    6. An Investing BDC will not participate in any Potential Co-
Investment Transaction unless the terms, conditions, price, class of
securities to be purchased, settlement date, and registration rights
will be the same for the Investing BDC as for the other Investing BDC.
The grant to one Investing BDC, but not to the other, of the right to
nominate a director for election to a portfolio company's board of
directors, the right to have an observer on the board of directors or
similar rights to participate in the governance or management of the
portfolio company will not be interpreted so as to violate this
condition 6, if conditions 2(c)(iii)(A), (B) and (C) are met.
    7. a. If an Investing BDC elects to sell, exchange or otherwise
dispose of an interest in a security that was acquired in a Co-
Investment Transaction:
    (i) The Adviser(s) to the Investing BDC will notify the other
Investing BDC of the proposed disposition at the earliest practical
time; and
    (ii) The Adviser(s) to the Investing BDC will formulate a
recommendation as to participation by the Investing BDC in the
disposition.
    b. Each Investing BDC will have the right to participate in such
disposition on a proportionate basis, at the same price and on the same
terms and conditions as those applicable to the other Investing BDC.
    c. An Investing BDC may participate in such disposition without
obtaining prior approval of a Required Majority of the Investing BDC
if: (i) the proposed participation of each Investing BDC in such
disposition is proportionate to its outstanding investments in the
issuer immediately preceding the disposition; (ii) the Investing BDC
Board has approved as being in the best interests of the Investing BDC
the ability to participate in such dispositions on a pro rata basis (as
described in greater detail in the application); and (iii) the
Investing BDC Board is provided on a quarterly basis with a list of all
dispositions made in accordance with this condition. In all other
cases, (i) the Adviser(s) to an Investing BDC will provide the
Advisers' written recommendation as to the Investing BDC's
participation in such disposition to the Eligible Directors of the
Investing BDC and (ii) the Investing BDC will participate in such
disposition solely to the extent that a Required Majority of the
Investing BDC determines that it is in the Investing BDC's best
interests.
    d. Each Investing BDC will bear its own expenses in connection with
any such disposition.
    8. a. If an Investing BDC desires to make a Follow-On Investment in
a portfolio company whose securities were acquired in a Co-Investment
Transaction:
    (i) The Adviser(s) to the Investing BDC will notify the other
Investing BDC of the proposed Follow-On Investment at the earliest
practical time; and
    (ii) The Adviser(s) to the Investing BDC will formulate a
recommendation as to participation by the Investing BDC in the Follow-
On Investment.
    b. An Investing BDC may participate in such Follow-On Investment
without obtaining prior approval of a Required Majority of the
Investing BDC if: (i) the proposed participation of each Investing BDC
in such Follow-On Investment is proportionate to its outstanding
investments in the issuer immediately preceding the Follow-On
Investment; (ii) the Investing BDC Board has approved as being in the
best interests of the Investing BDC the ability to participate in such
Follow-On Investment on a pro rata basis (as described in greater
detail in the application); and (iii) the Investing BDC Board is
provided on a quarterly basis with a list of all Follow-On Investments
made in accordance with this condition. In all other cases, (i) the
Adviser(s) to an Investing BDC will provide the Advisers' written
recommendation as to the Investing BDC's participation in such Follow-
On Investment to the Eligible Directors of the Investing BDC and (ii)
the Investing BDC will participate in such Follow-On Investment solely
to the extent that a Required Majority of the Investing BDC determines
that it is in the Investing BDC's best interests.
    c. If, with respect to any Follow-On Investment: (i) the amount of
the Follow-On Investment is not based on the Investing BDCs'
outstanding investments in the issuer immediately preceding the Follow-
On Investment; and (ii) the aggregate amount recommended by the
Adviser(s) to an Investing BDC to be invested by the Investing BDCs in
the same Follow-On Investment exceeds the amount of the opportunity;
then the amount invested by each such party will be allocated between
them pro rata based on the ratio of each Investing BDC's Available
Capital for investment in the asset class being allocated to the
aggregated Available Capital for investment for the asset class being
allocated of both Investing BDCs, up to the amount proposed to be
invested by each.
    d. The acquisition of Follow-On Investments as permitted by this
condition will be considered a Co-Investment Transaction for all
purposes and subject to the other conditions set forth in the
application.
    9. The Eligible Directors of each Investing BDC will be provided
quarterly for review all information concerning Potential Co-Investment
Transactions and Co-Investment Transactions, including investments made
by the other Investing BDC that the Investing BDC considered but
declined to participate in, so that the Eligible Directors may
determine whether all investments made during the preceding quarter,
including those investments that the Investing BDC considered but
declined to participate in, comply with the conditions of the Order. In
addition, the Eligible Directors of each Investing BDC will consider at
least annually the continued appropriateness for the Investing BDC of
participating in new and existing Co-Investment Transactions. All
information presented to the Investing BDC Board under this condition
will be kept for the life of the Investing BDC and at least two years
thereafter, and will be subject to examination by the Commission and
its staff.
    10. Each Investing BDC will maintain the records required by
section 57(f)(3) of the Act as if each of the investments permitted
under these conditions were approved by the Required Majority of the
Investing BDC under section 57(f).
    11. No Independent Director of an Investing BDC will also be a
director, general partner, managing member or principal, or otherwise
an ``affiliated person'' (as defined in the Act), of the other
Investing BDC.

    12. The expenses, if any, associated with acquiring, holding or
disposing of any securities acquired in a Co-Investment Transaction
(including, without limitation, the expenses of the distribution of any
such securities registered for sale under the 1933 Act) will, to the
extent not payable by the Advisers under an Investing BDC's investment
advisory agreements, be shared by the Investing BDCs with respect to a
Co-Investment Transaction, in proportion to the relative amounts of the
securities to be acquired or disposed of, as the case may be.
    13. Any transaction fee (including break-up or commitment fees but
excluding broker's fees contemplated by section 57(k) of the Act)
received in connection with a Co-Investment Transaction will be
distributed to the Investing BDCs on a pro rata basis based on the
amount they invested or committed, as the case may be, in such Co-
Investment Transaction. If any transaction fee is to be held by an
Adviser pending consummation of the transaction, the fee will be
deposited into an account maintained by the Adviser at a bank or banks
having the qualifications prescribed in section 26(a)(1) of the Act,
and the account will earn a competitive rate of interest that will also
be divided pro rata between the Investing BDCs based on the amount they
invest in the Co-Investment Transaction. No Investing BDC or any
affiliated person of the Investing BDC will receive additional
compensation or remuneration of any kind as a result of or in
connection with a Co-Investment Transaction (other than (a) in the case
of the Investing BDCs, the pro rata transaction fees described above
and fees or other compensation described in condition 2(c)(iii)(C) and
(b) in the case of the Advisers, investment advisory fees paid in
accordance with the Investing BDC's investment advisory agreements).
    14. The Advisers will each maintain written policies and procedures
reasonably designed to ensure compliance with the foregoing conditions.
These policies and procedures will require, among other things, that
HMS Adviser will be notified of all Potential Co-Investment
Transactions that fall within the Company's then-current Objectives and
Strategies and will be given sufficient information to make its
independent determination and recommendations under conditions 1, 2(a),
7 and 8.

    For the Commission, by the Division of Investment Management,
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-06306 Filed 3-21-14; 8:45 am]
BILLING CODE 8011-01-P