Unknown. Final rule

5,922 words·~27 min read·/register/2016/04/22/2016-09302·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2016-04-22.xml --- 81 78 Friday, April 22, 2016 Contents Agricultural Marketing Agricultural Marketing Service PROPOSED RULES Marketing Orders: Raisins Produced from Grapes Grown in California, 23650-23656 2016-09144 Agriculture Agriculture Department See Agricultural Marketing Service See Forest Service Army Army Department NOTICES Privacy Act; Systems of Records, 23682-23683 2016-09414 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 23702-23704 2016-09398 Centers Medicare Centers for Medicare & Medicaid Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 23704-23706 2016-09415 2016-09425 Re-Approval of the American Society of Histocompatibility and Immunogenetics as an Accreditation Organization under the Clinical Laboratory Improvement Amendments of 1988, 23706-23708 2016-09301 Children Children and Families Administration NOTICES Single-Source Program Expansion Supplement Grants:

BCFS Health and Human Services in San Antonio, TX, 23708 2016-09383 Coast Guard Coast Guard RULES Drawbridge Operations: Arthur Kill, Staten Island, NY, 23631 2016-09347 Newark Bay, Jersey City, NJ, 23631 2016-09310 Safety Zones: Xterra Swim, Myrtle Beach, SC Intracoastal Waterway, Myrtle Beach, SC, 23632-23633 2016-09345 Special Local Regulations and Safety Zones: Recurring Marine Events and Fireworks Displays within the Fifth Coast Guard District, 23605-23630 2016-09288 Special Local Regulations:

Regattas and Marine Parades in the COTP Lake Michigan Zone -- Chinatown Chamber of Commerce Dragon Boat Race, Chicago, IL, 23604 2016-09411 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement List; Additions and Deletions, 2016-09385 23680-23682 2016-09386 Defense Department Defense Department See Army Department NOTICES Meetings:

Strategic Environmental Research and Development Program, Scientific Advisory Board, 23683 2016-09408 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: ED School Climate Surveys Benchmark Study 2017 Update, 23692-23693 2016-09348 Applications for New Awards: Magnet Schools Assistance Program, 23683-23692 2016-09437 Meetings: President's Advisory Commission on Asian Americans and Pacific Islanders, 23693-23694 2016-09181 Employment and Training Employment and Training Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Program Reporting and Performance Standards System for Indian and Native American Programs Under the Workforce Innovation and Opportunity Act, 23752-23753 2016-09381 Youthful Offender Grants Management Information System, 23751-23752 2016-09382 Energy Department Energy Department See Federal Energy Regulatory Commission NOTICES Authority to Import and Export Natural Gas, Liquefied Natural Gas: ENSTOR ENERGY SERVICES, LLC, et al., 23694-23695 2016-09387 Charter Renewals:

Appliance Standards and Rulemaking Federal Advisory Committee, 23694 2016-09388 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Tennessee; Knox County VOC Limits Revision for Permits, 23639-23640 2016-09159 Tier 3 Motor Vehicle Emission and Fuel Standards, 23641-23645 2016-08912 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Tennessee; Knox County VOC Limits Revision for Permits, 23666 2016-09160 NOTICES Environmental Impact Statements;

Availability, etc.; Weekly Receipts, 23700-23701 2016-09409 Meetings: Science and Information Subcommittee; Public Teleconference, 23700 2016-09452 Federal Aviation Federal Aviation Administration RULES Airworthiness Directives: The Boeing Company Airplanes, 2016-08539 23581-23591 2016-09000 Establishment of Class E Airspace: Coldwater, KS, 23591-23592 2016-09158 Danville, AR, 23593-23594 2016-08765 Moriarty, NM, 23592-23593 2016-08758 Special Conditions: Bombardier Inc. Model BD-700-2A12 and BD-700-2A13 Airplanes;

Airplane Electronic System Security Protection from Unauthorized External Access, 23578-23579 2016-09336 Dassault Aviation Model Falcon 5X Airplane; Use of Automatic Power Reserve, an Automatic Takeoff Thrust Control System for Go-Around Performance Credit, 23566-23570 2016-09333 Gulfstream Aerospace Corp. Model GVII-G500 Airplanes, Pilot Compartment View Requirements with an Enhanced Flight Vision System, 23570-23572 2016-09334 Gulfstream Aerospace Corp. Model GVII-G500 Airplanes;

Airplane Electronic System Security Protection from Unauthorized External Access, 23579-23581 2016-09335 Gulfstream Aerospace Corp., Gulfstream GVI Airplane; Non-Rechargeable Lithium Battery Installations, 23573-23578 2016-09311 Standard Instrument Approach Procedures, and Takeoff Minimums and Obstacle Departure Procedures; Miscellaneous Amendments, 23594-23604 2016-08751 2016-08753 2016-08754 2016-08756 PROPOSED RULES Airworthiness Directives: Airbus Helicopters Deutschland GmbH Helicopters, 23656-23658 2016-09237 Amendments of Class E Airspace:

Truckee, CA, 23658-23660 2016-09300 Proposed Revocation of Class E Airspace: Lake Providence, LA, 23660-23661 2016-08770 NOTICES Petitions for Exemption; Summaries: Airlines for America, 23799-23800 2016-09327 Delta Air Lines, Inc., 23802-23803 2016-09325 2016-09330 Precisionhawk, 23801 2016-09332 Rotorcraft Leasing Co., 23800-23801 2016-09331 William Nelson, 23800 2016-09329 Property Swap at Augusta State Airport in Augusta, ME, 23801-23802 2016-09428 Federal Communications Federal Communications Commission NOTICES Radio Broadcasting Services:

AM or FM Proposals to Change the Community of License, 23701 2016-09371 Federal Deposit Federal Deposit Insurance Corporation NOTICES Terminations of Receiverships: Independent National Bank Ocala, FL, 23701 2016-09405 Federal Energy Federal Energy Regulatory Commission NOTICES Combined Filings, 2016-09349 23695-23699 2016-09351 2016-09394 Hydroelectric Applications: Great Lakes Hydro America, LLC, 23699 2016-09350 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: 63SU 8ME LLC, 23700 2016-09395 Federal Highway Federal Highway Administration PROPOSED RULES National Performance Management Measures:

Assessing Performance of the National Highway System, Freight Movement on the Interstate System, and Congestion Mitigation and Air Quality Improvement Program, 23806-23913 2016-08014 Federal Reserve Federal Reserve System NOTICES Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 23702 2016-09376 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 23701-23702 2016-09377 Fish Fish and Wildlife Service NOTICES Endangered Species Permit Applications, 23745-23746 2016-09357 Food and Drug Food and Drug Administration PROPOSED RULES Guidance:

Regulation of Human Cells, Tissues, and Cellular and Tissue-Based Products; Extension of Comment Periods, 23664-23666 2016-09366 Regulation of Human Cells, Tissues, and Cellular and Tissue-Based Products; Rescheduling of Public Hearing, 23661-23664 2016-09372 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Export of Medical Devices; Foreign Letters of Approval, 23720-23721 2016-09368 Authorizations of Emergency Use: In Vitro Diagnostic Device for Detection of Ebola Zaire Virus, 23709-23720 2016-09369 In Vitro Diagnostic Device for Detection of Zika Virus, 23723-23733 2016-09370 Meetings:

Scientific Evidence in Development of Human Cells, Tissues, and Cellular and Tissue-Based Products Subject to Premarket Approval, 23708-23709 2016-09373 Regulatory Review Periods: LUZU, 23722-23723 2016-09374 Requests for Information: Risk Assessment of Foodborne Illness Associated With Pathogens From Produce Grown in Fields Amended With Untreated Biological Soil Amendments of Animal Origin, 23733-23734 2016-09367 Forest Forest Service NOTICES Meetings: Del Norte County Resource Advisory Committee, 23675 2016-09363 Fishlake Resource Advisory Committee, 2016-09353 23674-23675 2016-09362 General Services General Services Administration NOTICES Federal Travel Regulations:

Relocation Allowances; Relocation Income Tax Allowance Tables, 23702 2016-09423 Health and Human Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Children and Families Administration See Food and Drug Administration See National Institutes of Health NOTICES Requests for Nominations: Secretary's Advisory Committee on National Health Promotion and Disease Prevention Objectives for 2030; Correction, 23734 2016-09132 Homeland Homeland Security Department See Coast Guard See U.S.

Customs and Border Protection Housing Housing and Urban Development Department NOTICES Federal Property Suitable as Facilities to Assist the Homeless, 23740-23744 2016-09050 Indian Affairs Indian Affairs Bureau NOTICES Indian Gaming: Approval of Amendment to Tribal-State Class III Gaming Compact in the State of South Dakota, 23746 2016-09328 Inter-American Inter-American Foundation NOTICES Meetings; Sunshine Act, 23744-23745 2016-09493 Interior Interior Department See Fish and Wildlife Service See Indian Affairs Bureau See Land Management Bureau See Ocean Energy Management Bureau See Surface Mining Reclamation and Enforcement Office International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews:

Diamond Sawblades and Parts Thereof from the People's Republic of China, 23676-23677 2016-09417 Steel Concrete Reinforcing Bar from the Republic of Turkey, 23675-23676 2016-09416 International Trade Com International Trade Commission NOTICES Investigations; Determinations, Modifications, and Rulings, etc.: 1,1,1,2-Tetrafluoroethane (R-134a) from China, 23750-23751 2016-09337 Certain Three-Dimensional Cinema Systems and Components Thereof, 23749-23750 2016-09339 Polyethylene Retail Carrier Bags from China, Indonesia, Malaysia, Taiwan, Thailand, and Vietnam, 23749 2016-09338 Labor Department Labor Department See Employment and Training Administration See Labor Statistics Bureau Labor Statistics Labor Statistics Bureau NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 23753-23754 2016-09380 Land Land Management Bureau PROPOSED RULES Resource Management Planning, 23666-23667 2016-09439 NOTICES Temporary Road Closures: Public Lands in Owyhee County, ID, 23746-23747 2016-09441 Management Management and Budget Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 23754-23755 2016-09413 NASA National Aeronautics and Space Administration PROPOSED RULES Federal Acquisition Regulation Supplements:

Clarification of Award Fee Evaluations and Payments, 23667-23669 2016-09356 National Council National Council on Disability NOTICES Meetings; Sunshine Act, 23755-23756 2016-09592 National Credit National Credit Union Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Reverse Mortgage Products: Guidance for Managing Compliance and Reputation Risks, 23756 2016-09379 Meetings; Sunshine Act, 23757 2016-09505 National Endowment for the Arts National Endowment for the Arts NOTICES Meetings:

Arts Advisory Panel, 23757 2016-09354 National Foundation National Foundation on the Arts and the Humanities See National Endowment for the Arts National Institute National Institutes of Health NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Framingham Heart Study, 23735-23737 2016-09313 The Agricultural Health Study - A Prospective Cohort Study of Cancer and Other Diseases among Men and Women in Agriculture, 23737-23739 2016-09296 Meetings:

National Cancer Institute, 23739 2016-09315 National Center for Advancing Translational Sciences, 23734-23735 2016-09314 National Institute of General Medical Sciences, 23735 2016-09316 Proposed Exclusive Licenses: Development of Anti-CD70 Chimeric Antigen Receptors for the Treatment of Chronic Myelogenous Leukemia, 23737 2016-09324 National Intelligence National Intelligence, Office of the National Director RULES Mandatory Declassification Review Program, 23604 2016-09253 National Oceanic National Oceanic and Atmospheric Administration RULES Fisheries of the Exclusive Economic Zone off Alaska:

Fixed-Gear Commercial Halibut and Sablefish Fisheries; Bering Sea and Aleutian Islands Crab Rationalization Program; Cost Recovery Authorized Payment Methods, 23645-23649 2016-09308 PROPOSED RULES International Fisheries: Tuna and Tuna-like Species in the Eastern Pacific Ocean; Fishing Restrictions Regarding Mobulid Rays, 23669-23673 2016-09309 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 2016-09343 23678-23679 2016-09344 Meetings: North Pacific Fishery Management Council, 23679-23680 2016-09364 Pacific Fishery Management Council, 23680 2016-09427 South Atlantic Fishery Management Council and Mid-Atlantic Fishery Management Council;

Correction, 23678 2016-09426 Takes and Imports of Marine Mammals: Taking Marine Mammals Incidental to Fisheries Research, 23677-23678 2016-09352 National Science National Science Foundation NOTICES Meetings: Advisory Committee for Computer and Information Science and Engineering, 23758 2016-09365 Proposal Review Panel for Materials Research, 2016-09406 2016-09407 23757-23758 2016-09410 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Guidance for Industry: Closure of Activities Related to Recommendation 2.1, Flooding Hazard Reevaluation, 23758-23760 2016-09421 License Amendment Applications:

Tennessee Valley Authority; Watts Bar Nuclear Plant, Unit 1 Application and Amendment to Facility Operating License; Correction, 23761 2016-09424 Licenses to Export Radioactive Waste, 23761-23762 2016-09418 Licenses to Import Radioactive Waste, 23762 2016-09419 Steam Generator Materials and Design, 23762-23764 2016-09422 Ocean Energy Management Ocean Energy Management Bureau NOTICES Oil and Gas Lease Sales: Outer Continental Shelf, Gulf of Mexico, Oil and Gas Lease Sales for 2017-2022, 23747-23748 2016-09420 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 2016-09305 23764-23765 2016-09306 Postal Service Postal Service RULES International Product Changes, 23634-23638 2016-09213 Securities Securities and Exchange Commission PROPOSED RULES Business and Financial Disclosure Required by Regulation S-K, 23916-24008 2016-09056 NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 2016-09358 23767-23768, 23779-23780, 23792-23793 2016-09359 2016-09360 2016-09361 Self-Regulatory Organizations; Proposed Rule Changes: Bats BYX Exchange, Inc., 23771-23773 2016-09319 Bats BZX Exchange, Inc., 23768-23770 2016-09320 Bats EDGA Exchange, Inc., 23765-23767 2016-09318 Bats EDGX Exchange, Inc., 23793-23796 2016-09317 New York Stock Exchange, LLC, 23786-23792 2016-09323 NYSE Arca, Inc., 23773-23779 2016-09322 NYSE MKT, LLC, 23780-23786 2016-09321 Small Business Small Business Administration RULES Surety Bond Guarantee Program;

Miscellaneous Amendments, 23563-23566 2016-09302 NOTICES Conflict of Interest Exemptions: Aldine Capital Fund II, L.P., 23796 2016-09312 Disaster Declarations: Illinois, 23797-23798 2016-09389 Mississippi; Amendment 3, 23797 2016-09391 Mississippi; Amendment 4, 23797 2016-09390 Oklahoma, 23796-23797 2016-09392 State Department State Department NOTICES Culturally Significant Objects Imported for Exhibition: Karel Appel--A Gesture of Color--Paintings and Sculptures, 1947-2004, 23798 2016-09403 Medieval Permanent Collection Galleries, 23798 2016-09402 Moholy-Nagy -- Future Present, 23798-23799 2016-09401 The Brothers Le Nain--Painters of Seventeenth-Century France, 23799 2016-09404 Service Contract Inventory, 23798 2016-09400 Surface Mining Surface Mining Reclamation and Enforcement Office NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 23748 2016-09393 Transportation Department Transportation Department See Federal Aviation Administration See Federal Highway Administration Customs U.S. Customs and Border Protection NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Regulations Relating to Recordation and Enforcement of Trademarks and Copyrights, 23739-23740 2016-09341 Veteran Affairs Veterans Affairs Department NOTICES Meetings: Clinical Science Research and Development Service Cooperative Studies Scientific Evaluation Committee, 23803 2016-09340 National Academic Affiliations Council, 23803 2016-09378 Separate Parts In This Issue Part II Transportation Department, Federal Highway Administration, 23806-23913 2016-08014 Part III Securities and Exchange Commission, 23916-24008 2016-09056 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 81 78 Friday, April 22, 2016 Rules and Regulations SMALL BUSINESS ADMINISTRATION 13 CFR Part 115 RIN 3245-AG70 Surety Bond Guarantee Program; Miscellaneous Amendments AGENCY: U.S. Small Business Administration. ACTION: Final rule.

SUMMARY: The Small Business Administration

(SBA)is issuing this final rule to change the regulations for SBA's Surety Bond Guarantee Program in four areas. First, as a condition for participating in the Prior Approval and Preferred Surety Bond Programs, this rule clarifies that a Surety must directly employ underwriting and claims staffs sufficient to perform and manage these functions, and that final settlement authority for claims and recovery is vested only in salaried employees of the Surety. Second, this rule provides that all costs incurred by the Surety's salaried claims staff are ineligible for reimbursement by SBA, except the amounts actually paid for reasonable and necessary travel expenses. In addition, the Surety may seek reimbursement for amounts paid for specialized services that are provided by outside consultants in connection with the processing of a claim. Third, the rule modifies the criteria for determining when a Principal that caused a Loss to SBA is ineligible for a bond guaranteed by SBA. Fourth, the rule modifies the criteria for admitting Sureties to the Preferred Surety Bond Program by increasing the Surety's underwriting limitation, as certified by the U.S. Treasury Department on its list of acceptable sureties, from at least $2 million to at least $6.5 million. DATES: This rule is effective May 23, 2016. FOR FURTHER INFORMATION CONTACT: Barbara J. Brannan, Office of Surety Guarantees,

(202)205-6545 or email: *Barbara.brannan@sba.gov.* SUPPLEMENTARY INFORMATION: I. Background Information The U.S. Small Business Administration

(SBA)guarantees bid, payment and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels. SBA's guarantee gives Sureties an incentive to provide bonding for small businesses and, thereby, assists small businesses in obtaining greater access to contracting opportunities. SBA's guarantee is an agreement between a Surety and SBA that SBA will assume a certain percentage of the Surety's loss should a contractor default on the underlying contract. On April 14, 2015, SBA published a notice of proposed rulemaking with a request for comments in the **Federal Register** (80 FR 19886). The rule proposed to change the regulations governing SBA's Surety Bond Guarantee Program (SBG Program) in the following four areas that had prompted questions from participating Sureties:

(1)The rule proposed to clarify that to participate in the Prior Approval and Preferred Surety Bond

(PSB)Programs, a Surety must directly employ underwriting and claims staffs sufficient to perform and manage these functions, and that final settlement authority for claims and recoveries must be vested only in the Surety's salaried claims staff.

(2)The rule proposed to specify that the costs that the Surety incurs for its salaried claims staff are ineligible for reimbursement by SBA and that the Surety may seek reimbursement for amounts actually paid by the Surety for specialized services that are provided by an outside consultant, which is not an Affiliate of the Surety, in connection with the processing of a claim, provided that such services are beyond the capability of the Surety's salaried claims staff.

(3)The rule proposed to modify the conditions under which a Principal, and its Affiliates, would be deemed ineligible for a bond guaranteed by SBA in the circumstance where the Principal has previously defaulted on an SBA guaranteed surety bond. The rule provided that a Principal, or any of its Affiliates, would lose eligibility for further SBA bond guarantees if the Principal, or any of its Affiliates, had defaulted on an SBA guaranteed bond resulting in a Loss (as defined in 13 CFR 115.16) that had not been fully reimbursed to SBA, or if SBA had not been fully reimbursed for any Imminent Breach payments. It also provided that the Principal, or any of its Affiliates, may be reinstated only if SBA had been fully repaid for the Loss or for the Imminent Breach payment, unless SBA's Office of Surety Guarantees

(OSG)found good cause for reinstating the Principal. In addition, the discharge of the indebtedness in bankruptcy would no longer be specifically included as a condition for reinstatement, but the circumstances of such discharge could be considered as part of OSG's good cause analysis for reinstatement. The Proposed Rule also clarified that the same standards regarding the loss of eligibility and the conditions for reinstatement would apply to both the Prior Approval Program and the PSB Program.

(4)The rule proposed to modify the criteria for admitting a Surety to participate in the PSB Program by increasing the Surety's underwriting limitation, as certified by the U.S. Treasury Department on its list of acceptable sureties on Federal bonds, from at least $2 million to at least $6.5 million. The comment period was open until June 15, 2015, and SBA received comments from one trade association and one surety company. One other comment was received from an individual, but this comment did not relate to the Proposed Rule or the SBG Program. One of the commenters indicated its support for the proposed changes that modify the conditions under which a Principal, and its Affiliates, would be deemed ineligible for a bond guaranteed by SBA and that modify the requirements for reinstatement. The commenter also expressed support for SBA's effort to address the failure of some participating Sureties to maintain adequate in-house claims personnel, and to ensure that participating Sureties handle their SBA-guaranteed bond claims in the same manner as their other bond claims. However, both commenters expressed concern that the proposed changes to 13 CFR 115.11 and 115.16(e)(1) would not create clear standards with respect to when SBA would reimburse Sureties for the costs of using outside consultants in connection with bond claims. Under the proposed 13 CFR 115.16(e)(1), a Surety may seek reimbursement for “[a]mounts actually paid by the Surety for specialized services that are provided under contract by an outside consultant, which is not an Affiliate of the Surety, in connection with the processing of a claim, provided that such services are beyond the capability of the Surety's salaried claims staff.” The commenters were concerned that this standard is too limiting, and instead suggested that SBA amend 13 CFR 115.16(e)(2) to allow Sureties to seek reimbursement for the “reasonable” costs of any outside consultants. The commenters indicated that this standard would cover a broader range of consultants, such as construction, accounting or other professionals, that assist Sureties in investigating and settling claims. They argued that the services of these outside consultants may become necessary to avoid delay and to mitigate expenses and that these expenses would be recoverable from the Principal under the General Indemnity Agreement obtained under 13 CFR 115.17(a). SBA has considered the suggestion but has concluded that the reasonable cost standard proposed by the commenters does not adequately reflect the requirement that Sureties employ sufficient in-house staff to handle all customary claims and recovery functions. SBA expects participating Sureties to employ adequate in-house staff to perform these functions and to bear the full cost of performing such functions. The Proposed Rule does recognize that there may be circumstances where an outside consultant with a particular expertise beyond the capabilities of the Surety's salaried claims staff is needed in connection with a claim, and would allow Sureties to seek reimbursement for the costs of such expertise. As described in the preamble to the Proposed Rule, an example of such “specialized services . . . beyond the capability of the Surety's salaried claims staff” would be the services of a structural engineer that are needed to evaluate the Principal's compliance with engineering specifications, and a commenter agreed with this example. SBA believes that its proposed language is sufficiently broad to cover the various situations that may arise. In addition, a commenter suggested that the proposed requirement in 13 CFR 115.11 that the Surety must have a salaried staff “to perform all claims and recovery functions” be revised by removing the term “all” to account for those instances where outside consultants are retained to assist in claim and recovery functions. Instead of removing the term “all”, SBA is revising this section to recognize that the Surety may seek reimbursement for specialized services provided by outside consultants under 13 CFR 115.16(e)(1). Again, SBA expects that these consultants will be needed to provide a specialized service that is beyond the expertise of the Surety's salaried claims staff. Finally, both commenters stated that travel by in-house claims staff is often necessary and expressed concern that the proposed language in 13 CFR 115.16(f)(1) excludes travel costs as a reimburseable expense. SBA agrees that Sureties may seek reimbursement for reasonable and necessary travel expenses by their in-house claims staff, and has amended the language in 13 CFR 115.16(e)(1) and 115.16(f)(1) accordingly. II. Section-by-Section Analysis *Section 115.11.* As proposed, this provision required that an applicant have a salaried staff that is employed directly (not an agent or other individual or entity under contract with the applicant) to oversee its underwriting functions and to perform all claims and recovery functions. For clarity, SBA is revising this section to recognize that, with respect to claims functions, a Surety may contract with an outside consultant for a specialized service the costs of which may be reimbursable under 13 CFR 115.16(e)(1). SBA expects Sureties to employ salaried claims staff capable of handling the routine processing and administration of claims and recovery, and to not seek reimbursement for the costs of these functions under 115.16(e)(1), except, as revised by this final rule, Sureties may seek reimbursement for the reasonable and necessary travel expenses of its salaried claims staff. This section also provides that final settlement authority for claims and recovery actions must be vested only in the applicant's “claims staff” and, for clarity and consistency, SBA is revising this phrase to read “salaried claims staff”. There are no other changes to this section as proposed. *Section 115.13(a).* As proposed, this provision added a new paragraph

(7)to provide that, to be eligible for an SBA guaranteed bond, neither the Principal nor any of its Affiliates may be ineligible for an SBA guaranteed bond under the grounds set forth in 13 CFR 115.14. There are no changes to this provision as proposed. *Section 115.14.* SBA is modifying the criteria regarding the loss of the Principal's eligibility for future assistance and the conditions for reinstatement by providing that a Principal loses eligibility for further SBA bond guarantees if the Principal, or any of its Affiliates, has defaulted on an SBA guaranteed bond that resulted in a Loss (as defined in 13 CFR 115.16) that has not been fully reimbursed to SBA, or if SBA has not been fully reimbursed for any Imminent Breach payments. OSG will have the authority to waive this requirement for good cause. In addition, as proposed, the same criteria on ineligibility and conditions for reinstatement would apply to both the Prior Approval Program and the PSB Program. As the same conditions for reinstatement will apply to both the Prior Approval Program and the PSB Program, the conditions for reinstatement set forth in 13 CFR 115.36(b) and

(c)will be moved in their entirety to 13 CFR 115.14(b) and (c), and the heading of this section will be changed to “Loss of Principal's eligibility for future assistance and reinstatement of Principal.” There are no changes to this provision as proposed. *Section 115.16(e)(1).* As proposed, this provision provided that SBA would reimburse amounts actually paid by a Surety for specialized services provided under contract by outside consultants in connection with the processing of a claim, provided that such services are beyond the capability of the Surety's salaried claims staff. Based on comments, SBA is revising this provision to allow the Surety to seek reimbursement for travel expenses incurred by the Surety's claims staff, and to provide that the cost of the consultant's services and the travel expenses of the Surety's claims staff must be reasonable and necessary, and must specifically concern the investigation, adjustment, negotiation, compromise, settlement of, or resistance to a claim for Loss resulting from the breach of the terms of the bonded Contract. These changes, coupled with the changes made to 115.11, clarify that a Surety cannot outsource routine claims functions and responsibilities or include such costs in its reimbursement requests submitted to SBA under the bond guarantee agreement. With the exception of specialized work that falls outside the scope of the routine processing and administration of claims, the Surety will perform the claims function at no cost to the Agency (other than the reasonable and necessary travel costs of claims staff). *Section 115.16(f)(1).* As proposed, this provision clarified that all costs incurred by the Surety's salaried claims staff, whether or not specifically allocable to an SBA guaranteed bond, are excluded from the definition of Loss. Costs incurred by the Surety's salaried claims staff, like all other overhead of the Surety, are the responsibility of the Surety. Based on the comments, and for consistency with section 115.16(e)(1), an exception for the reasonable and necessary travel expenses of the Surety's salaried claims staff is being added to this provision. *Section 115.18(a)(2).* As proposed, SBA is revising this paragraph to provide that the Surety's failure to continue to comply with the requirements set forth in section 13 CFR 115.11 are sufficient grounds for refusal to issue further guarantees, or in the case of a PSB Surety, termination of preferred status. There are no changes to this provision as proposed. *Section 115.36.* By including the conditions for reinstatement and the standard for underwriting after reinstatement in 13 CFR 115.14(b) and (c), the rule, as proposed, renamed the heading of this section to “§ 115.36 Indemnity settlements”, deleted the paragraph heading “(a) Indemnity settlements.”, removed paragraphs

(b)and (c), and renumbered paragraphs “(1)”, “(2)”, and “(3)”, as “(a)”, “(b)”, and “(c)”, respectively. There are no changes to this provision as proposed. *Section 115.60(a)(1).* As proposed, SBA conformed this provision to the statutory increase in the maximum contract amount for which a bond may be guaranteed by removing “$2,000,000” and inserting “$6,500,000” in its place. There are no changes to this provision as proposed. *Section 115.60(a)(5).* By including in 13 CFR 115.11 the requirement that all Sureties vest final settlement authority for claims and recovery only in their salaried claims staff, this rule removes 13 CFR 115.60(a)(5) and renumbers the existing paragraph 13 CFR 115.60(a)(6) accordingly. There are no changes to this provision as proposed. Compliance with Executive Orders 12866, 13563, 12988, and 13132, the Paperwork Reduction Act (44 U.S.C. Ch. 35) and the Regulatory Flexibility Act (5 U.S.C. 601-612). Executive Order 12866 The Office of Management and Budget

(OMB)has determined that this rule does not constitute a significant regulatory action under Executive Order 12866. This rule is also not a major rule under the Congressional Review Act (5 U.S.C. 800). Executive Order 13563 In accordance with Executive Order 13563, SBA discussed with several surety companies issues regarding the SBG Program regulations. In particular, SBA discussed the underwriting and claims staffing requirements that Sureties must meet in order to participate in SBA's SBG Program. SBA also discussed with these companies the conditions for reimbursement of the costs incurred by their claims staffs. Generally, the Sureties responded favorably to SBA's position that changes were necessary to clarify or amend the regulations on these issues. Executive Order 12988 This action meets applicable standards set forth in Sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden. The action does not have retroactive or preemptive effect. Executive Order 13132 SBA has determined that this rule will not have substantial, direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, for purposes of Executive Order 13132, SBA has determined that this rule has no federalism implications warranting preparation of a federalism assessment. Paperwork Reduction Act, 44 U.S.C. Ch. 35 For the purpose of the Paperwork Reduction Act, 44 U.S.C., Chapter 35, SBA has determined that this rule will not impose any new reporting or recordkeeping requirements. Final Regulatory Flexibility Analysis The Regulatory Flexibility Act

(RFA)5 U.S.C. 601, requires administrative agencies to consider the effect of their actions on small entities, small non-profit enterprises, and small local governments. Pursuant to the RFA, when an agency issues a rulemaking, the agency must prepare a regulatory flexibility analysis which describes the impact of the rule on small entities. However, section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities. There are 23 Sureties that participate in the SBA program, and no part of this rule would impose any significant additional cost or burden on them. Consequently, this rule does not meet the significant economic impact on a substantial number of small businesses criterion anticipated by the Regulatory Flexibility Act. List of Subjects in 13 CFR Part 115 Claims, Reporting and recordkeeping requirements, Small businesses, Surety bonds. For the reasons stated in the preamble, SBA amends 13 CFR part 115 as follows: PART 115—SURETY BOND GUARANTEE 1. The authority citation for part 115 continues to read as follows: Authority: 5 U.S.C. app 3; 15 U.S.C. 687b, 687c, 694a, 694b note; and Pub. L. 110-246, Sec. 12079, 122 Stat. 1651. 2. Amend § 115.11 by adding three sentences at the end to read as follows: § 115.11 Applying to participate in the Surety Bond Guarantee Program. * * * At a minimum, each applicant must have salaried staff that is employed directly (not an agent or other individual or entity under contract with the applicant) to oversee its underwriting function and perform all claims and recovery functions other than specialized services the costs of which may be reimbursable under 13 CFR 115.16(e)(1). Final settlement authority for claims and recovery must be vested only in the applicant's salaried claims staff. The applicant must continue to comply with SBA's standards and procedures for underwriting, administration, claims, recovery, and staffing requirements while participating in SBA's Surety Bond Guarantee Programs. 3. Amend § 115.13 by adding paragraph (a)(7) to read as follows: § 115.13 Eligibility of Principal.

(a)* * *

(7)*No loss of eligibility.* Neither the Principal nor any of its Affiliates is ineligible for an SBA-guaranteed bond under § 115.14. 4. Amend § 115.14 as follows: a. Revise the section heading, and paragraphs (a)(4) and (b); b. Add paragraph (c). § 115.14 Loss of Principal's eligibility for future assistance and reinstatement of Principal.

(a)* * *

(4)The Principal, or any of its Affiliates, has defaulted on an SBA- guaranteed bond resulting in a Loss that has not been fully reimbursed to SBA, or SBA has not been fully reimbursed for any Imminent Breach payments.

(b)*Reinstatement of Principal's eligibility.* At any time after a Principal becomes ineligible for further bond guarantees under paragraph

(a)of this section:

(1)A Prior Approval Surety may recommend that such Principal's eligibility be reinstated, and OSG may agree to reinstate the Principal if:

(i)The Surety has settled its claim with the Principal, or any of its Affiliates, for an amount that results in no Loss to SBA or in no amount owed for Imminent Breach payments, or OSG finds good cause for reinstating the Principal notwithstanding the Loss to SBA or amount owed for Imminent Breach payments; or

(ii)OSG and the Surety determine that further bond guarantees are appropriate after the Principal was deemed ineligible for further SBA bond guarantees under paragraph (a)(1), (2), (3),

(5)or

(6)of this section.

(2)A PSB Surety may:

(i)Recommend that such Principal's eligibility be reinstated, and OSG may agree to reinstate the Principal, if the Surety has settled its claim with the Principal, or any of its Affiliates, for an amount that results in no Loss to SBA or in no amount owed for Imminent Breach payments, or OSG finds good cause for reinstating the Principal notwithstanding the Loss to SBA or amount owed for Imminent Breach payments; or

(ii)Reinstate a Principal's eligibility upon the Surety's determination that further bond guarantees are appropriate after the Principal was deemed ineligible for further SBA bond guarantees under paragraph (a)(1), (2), (3),

(5)or

(6)of this section.

(c)*Underwriting after reinstatement.* A guarantee application submitted after reinstatement of the Principal's eligibility is subject to a very stringent underwriting review. 5. Amend § 115.16 by revising paragraphs (e)(1) and (f)(1) to read as follows: § 115.16 Determination of Surety's Loss.

(e)* * *

(1)Amounts actually paid by the Surety for specialized services that are provided under contract by an outside consultant, which is not an Affiliate of the Surety, provided that such services are beyond the capability of the Surety's salaried claims staff, and amounts actually paid by the Surety for travel expenses of the Surety's claims staff. The cost of the consultant's services and the travel expenses of the Surety's claims staff must be reasonable and necessary and must specifically concern the investigation, adjustment, negotiation, compromise, settlement of, or resistance to a claim for Loss resulting from the breach of the terms of the bonded Contract. The cost allocation method must be reasonable and must comply with generally accepted accounting principles; and

(f)* * *

(1)Any unallocated expenses, all direct and indirect costs incurred by the Surety's salaried claims staff (except for reasonable and necessary travel expenses of such staff), or any clear mark-up on expenses or any overhead of the Surety, its attorney, or any other consultant hired by the Surety or the attorney; 6. Amend § 115.18 by revising paragraph (a)(2) to read as follows: § 115.18 Refusal to issue further guarantees; suspension and termination of PSB status.

(a)* * *

(2)*Regulatory violations, fraud.* Acts of wrongdoing such as fraud, material misrepresentation, breach of the Prior Approval or PSB Agreement, the Surety's failure to continue to comply with the requirements set forth in § 115.11, or regulatory violations (as defined in § 115.19(d) and (h)) also constitute sufficient grounds for refusal to issue further guarantees, or in the case of a PSB Surety, termination of preferred status. 7. Amend § 115.36 as follows: a. Revise the section heading; b. Remove the paragraph designation and heading “(a) Indemnity settlements.”; c. Remove paragraphs

(b)and (c); and d. Redesignate paragraphs (1), (2), and (3), as (a), (b), and (c). § 115.36 Indemnity settlements. § 115.60 [Amended] 8. Amend § 115.60 as follows: a. Amend paragraph (a)(1) by removing “$2,000,000” and adding “$6,500,000” in its place; and b. Remove paragraph (a)(5) and redesignate paragraph (a)(6) as new paragraph (a)(5). Maria Contreras-Sweet, Administrator. [FR Doc. 2016-09302 Filed 4-21-16; 8:45 am]

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