DOJ To Eliminate Import Control On Certain USMIL Defense Articles

by Shannon Allen

The Department of Justice (“DOJ”) requests public input on a proposed interim final rule to amend Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) regulations removing certain “defense articles” currently on the “U.S. Munitions Import List (“USMIL”)” that “no longer warrant import control” under the Arms Export Control Act (“AECA”).

In August 2009, the President directed a “broad-based interagency review” of the United States “export control system” to, among other things; identify additional ways to enhance national security, better focus resources on protecting items for export that need to be protected, provide clarity to make it easier for exporters to comply with regulations, and for the United States Government to administer and enforce the regulations.  ATF was asked to identify certain defense articles that no longer warrant control on the USMIL.  The DOJ’s proposed interim final rule amends the regulations at 27 CFR 447.21 by removing defense articles currently on the USMIL that the ATF has determined no longer warrant import control under the AECA.

In “furtherance of world peace” and the “security and foreign policy of the United States,” section 38 of the AECA (22 U.S.C. 2778(a)(1)) authorizes the President to “control the import and . . . export of defense articles and defense services.”  The President, via Executive Order 13637 of March 8, 2013, delegated his “export” authority to the Secretary of State and his import authority to the Attorney General.  The Attorney General “delegated administration” of the “import provisions” of the AECA to the ATF Director. And the Attorney General’s permanent import list, or USMIL, helps to distinguish between the Attorney General’s import list from the Secretary of State’s export list.

This interim final rule includes, but is not limited to the following:

1. The removal from the USMIL Category I—Firearms, paragraph (e), “Riflescopes manufactured to military specifications . . . ;” because they are readily available through diverse domestic commercial sources and they do not present a significant concern for trafficking or diversion into illicit channels.
2. The removal in Category III—Ammunition paragraph (c), “Ammunition belting and linking machines,” and (d), “Ammunition manufacturing machines and ammunition loading machines . . . ;” because these defense articles are costly, difficult to maintain, too heavy for easy transport, and readily available from domestic vendors in the United States.
3. The removal in Category IV—Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines, paragraph (f), “Ablative materials fabricated or semi-fabricated from advanced composites (e.g., silica, graphite, carbon, carbon/carbon, and boron filaments) for the articles in this category that are derived directly from or specifically developed or modified for defense articles;” because such materials are a low threat to domestic security and are readily available in the domestic market.
4. The clarification in Category VI—Vessels of War and Special Naval Equipment, of paragraph (a) to read: “Vessels of War, if they are armed and equipped with offensive or defensive weapons systems, including but not limited to amphibious warfare vessels, landing craft, mine warfare vessels, patrol vessels, auxiliary vessels, service craft, experimental types of naval ships, and any vessels specifically designed or modified for military purposes or other surface vessels equipped with offensive or defensive military systems;” because the new text focuses precisely on defense articles that might threaten domestic security or enable terrorist activities.
5. The revision in Category VI—Vessels of War and Special Naval Equipment, of paragraph (b) to read: “Turrets and gun mounts, special weapons systems, protective systems, and other components, parts, attachments, and accessories specifically designed or modified for such articles on combatant vessels;” because the new language focuses on defense articles that might threaten domestic security or enable terrorist activities.
6. The updating of Category VII—Tanks and Military Vehicles by removing and reserving paragraph (g), “Engines specifically designed or modified for the vehicles in paragraphs (a), (b), (c), and (f) of this category.”

 The DOJ requests all interested persons to comment on this interim final rule, which is effective as of April 28, 2014.  Specifically, the DOJ seeks comments on the clarity of this interim final rule and how it may be made easier to understand.  All comments must reference the agency name and this document docket number (ATF 25I), be legible, include the commenter’s name and mailing address, and be submitted on or before June 25, 2014, by one of the following methods:

• Electronic: Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments;
• Fax: ATTN: ATF 25I  Fax #: (202) 648-9741; OR
• Mail: George M. Fodor, Mailstop 6N-602, Office of Regulatory Affairs, Enforcement Programs and Services, Bureau of Alcohol, Tobacco, Firearms, and Explosives, U.S. Department of Justice, 99 New York Avenue NE., Washington, DC 20226; ATTN: ATF 25I.

Section Membership Mix and Mingle Today!

Federal Judge Upholds Federal Contractor Affirmative Action Regulations

by Lynn White

 

On March 21, 2014, Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia upheld new Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) regulations implementing Section 503 of the Rehabilitation Act that establish a seven percent utilization goal and data collection requirements on the hiring and employment of individuals with disabilities for federal contractors.  The rule went into effect March 24, 2013.  Associated Builders & Contractors, Inc. (ABC) challenged the rule asserting that the seven percent utilization goal and data collection requirements were arbitrary and capricious. 

 

 In upholding the rule, Judge Sullivan stated that OFCCP's interpretation of Section 503 was permissible and not an abuse of the agency's authority.  Judge Sullivan accepted the agency's reasonsing for establishing the seven percent utilization goal and data collection and analysis requirements stating clearly that the rule is not arbitrary and capricious.  Judge Sullivan rejected ABC's argument that the rule violated the Regulatory Flexibility Act.

 

ABC released the following statement in response to the courts decision: "We are disappointed in the decision and we will contemplate our options in further challenging this rule.ABC and its members support nondiscriminatory practices toward individuals with disabilities on federal projects, and we will remain committed to placing these individuals in good jobs and careers in the construction industry; however, OFCCP’s rule imposes wasteful and unnecessary data collection and reporting requirements on government contractors without any supporting evidence from the agency that contractors weren’t previously meeting the requirements. It is particularly onerous for small businesses that historically have provided services but lack the resources to comply with the burdensome and unnecessary requirements."

 

Please stay tuned for more coverage on the matter from Notice and Comment!

 

HUD Proposes Eliminating Certain Post-Payment Interest Charges

by Shannon Allen

The Department of Housing and Urban Development (“HUD”) proposes a new rule to revise the Federal Housing Administration’s (“FHA’s”) regulations that currently allow an FHA approved “mortgagee to charge the mortgagor interest through the end of the month in which the mortgage is being paid.”  The new rule would prevent mortgagees from “charging post-payment interest,” allowing them to charge interest “only through the date the mortgage is paid.” This would require FHA lenders to bear the “entire cost of interest from the pre-payment date to the end of the month.”  HUD anticipates this proposal will result in an “estimated transfer of $13 million from those borrowers who would not pre-pay mid-month under the current rule to those who would.”

HUD’s proposed rule is in response to changes regarding the definition of a “pre-payment penalty” under Regulation Z, “the final rule” of the Consumer Financial Protection Bureau (“CFPB”) called “Ability-to-Repay and Qualified Mortgage Standards under the Truth and Lending Act” (“CFPB’s final rule”).  The CFPB’s final rule defines “prepayment penalty” in “closed-end transactions” as the “charge imposed for paying all or part of the transaction’s principal before the date on which the principal is due.”  This includes “charges resulting from FHA’s currently allowable monthly interest accrual amortization method” (see 12 CFR 1026.32(b)(6)).

The CFPB final rule states that interest charged “consistent with” the monthly interest accrual amortization method “is not a pre-payment penalty” for FHA loans completed before January 21, 2015.  The issue, however, is that for all FHA loans consummated on or after January 21, 2015, a “post-payment interest charge” resulting from the monthly interest accrual amortization method “will be considered a pre-payment penalty.” Hence the necessity for FHA to amend its regulations (see 12 CFR 1026.32(b)(6)(i)).  HUD’s new rule proposes to remove the option provided to FHA-approved mortgagees to “to charge pre-paying mortgagors post-payment interest payments.”

A list of what HUD’s proposed rule would accomplish includes, but is not limited to:

1. Revision of the regulations in 24 CFR 203.558: which currently provide that, if prepayment is offered, the mortgagee may require payment of interest up to the date of the next installment due date; and instead provide that the mortgagee shall accept a prepayment at any time and in any amount and shall not charge a post-payment charge;
2. Requiring that monthly interest on the debt be calculated on the actual unpaid principal balance of the loan as of the date the prepayment is received and not as of the next installment due date;
3. Requiring that post-payment charges using the monthly interest accrual amortization method not be considered prepayment penalties;
4. Continuing not to permit mortgagees to require advance notice of prepayment; and
5. Making two technical conforming changes to the regulations in 24 CFR part 203.

Interested parties are invited to submit comments (referencing Docket ID: HUD-2014-0019-0001 and Title: Federal Housing Administration Handling Prepayments: Eliminating Post-Payment Interest Charges) by May 12, 2014, by one of the following two methods: (NOTE: No Facsimile Comments (faxed) comments will be accepted.)

• by Mail: Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500; OR
• Electronically (strongly encouraged): through the Federal eRulemaking Portal at: www.regulations.gov.

Labor & Employment Committee Teleconference on OFCCP VEVRAA Final Rule

On March 26, 2014, the Section of Administrative Law and Regulatory Practice Committee will host a teleconference on the U.S. Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) new rules amending the implementing regulations of the Vietnam Era Veterans Readjustment Assistance Act of 1974.  The rules are designed to increase veterans' employment by requiring contractors to enhance their recruitment efforts and establish benchmarks for hiring veterans.  Certain provisions in the new rules take effect March 24, 2016.  The teleconference panelists includes: Keir Bickerstaffe, U.S. Department of Labor, Office of the Solicitor, Heather Ansley, VetsFirst, and Emily Bristol, Fortney Scott LLP.  The discussion will be moderated by Marc Antonetti, Partner in the Washington, D.C. office of BakerHostetler.  Download the registration form here.  Hope you can participate!

DHS Seeks Public Input On Retrospective Review of Existing Regulations

by Shannon Allen 

The Department of Homeland Security (“DHS”) seeks public comment on “specific existing significant DHS rules” that DHS should consider modifying, streamlining, expanding, or repealing.  This notice and request for comment is in response to “Executive Order 13563 (“the Order”), “Improving Regulation and Regulatory Review.”  The Order aims to make regulatory programs “more effective or less burdensome in achieving . . . regulatory objectives.”  In addition, the Order requires “each Executive Branch agency” to generate a plan to “periodically review . . . existing regulations” to decide if any regulations should be “modified, streamlined, expanded, or repealed.” 

The mission of DHS is to safeguard a homeland that is “safe, secure, and resilient against terrorism and other hazards.”  The DHS achieves its mission through the Office of the Secretary and 28 components including: U.S. Citizenship and Immigration Services, U.S. Coast Guard,  U.S. Customs and Border Protection, Federal Emergency Management Agency, U.S. Immigration and Customs Enforcement, U.S. Secret Service, and Transportation Security Administration.

DHS’s mission has five main areas of responsibility: prevent terrorism and enhance security; secure and manage our borders; enforce and administer our immigration laws; safeguard and secure cyberspace; and ensure resilience to disasters.

In addition, DHS is responsible for the regulation of: people and goods entering and exiting the United States in order to secure and manage our borders; aviation security, high-risk chemical facilities, and infrastructure protection in order to combat terrorism; administration of immigration and citizenship benefits as well as regulations covering maritime safety and environmental protection; and disaster preparedness, response, and recovery.

DHS’s current solicitation for public input is in accordance with its three-year retrospective review process cycle.  Public input will help DHS confirm that its regulations “contain necessary, properly tailored, and up-to-date requirements that effectively achieve regulatory objectives without imposing unwarranted costs.”  Public input is critical and essential to driving and focusing DHS’s retrospective review.  A nonexhaustive sample list of questions for commenters includes:

1. Are there regulations that simply make no sense or have become unnecessary, ineffective, or ill advised and, if so, what are they? Are there regulations that can simply be repealed without impairing the Department's regulatory programs and, if so, what are they?
2. Are there regulations that have become outdated and, if so, how can they be modernized to better accomplish their regulatory objectives?
3. Are there regulations that are still necessary, but have not operated as well as expected such that a modified, stronger, or slightly different approach is justified?
4. Does the Department currently collect information that it does not need or effectively use to achieve regulatory objectives?
5. Are there regulations that are unnecessarily complicated or could be streamlined to achieve regulatory objectives in more efficient ways? If so, how can they be streamlined and/or made less complicated?
6. Are there regulations that have been overtaken by technological developments? Can new technologies be leveraged to modify, streamline, or do away with existing regulatory requirements?
7. Are there any Departmental regulations that are not tailored to impose the least burden on society, consistent with achieving the regulatory objectives?
8. How can the Department best obtain and consider accurate, objective information and data about the costs, burdens, and benefits of existing regulations? Are there existing sources of data the Department can use to evaluate the post-promulgation effects of regulations over time?
9. Are there regulations that are working well that can be expanded or used as a model to fill gaps in other DHS regulatory programs?
10. Are there any regulations that create difficulty because of duplication, overlap, or inconsistency of requirements?

The most helpful input will identify specific regulations and include actionable data supporting the nomination of specific regulations for retrospective review.  Commenters should provide, in as much detail as possible:

• an explanation why a regulation should be modified, streamlined, expanded, or repealed;
• pecific suggestions of ways the DHS can better achieve its regulatory objectives;
• specific data that document the costs, burdens, and benefits of existing requirements;
• how DHS can best obtain and consider accurate, objective information;
• data about the costs, burdens, and benefits of existing regulations; and
• whether there are existing sources of data that DHS can use to evaluate the post-promulgation effects of its regulations over time.

Interested parties are invited to comment (including the agency name and identified by docket number DHS-2014-0006) by March 28, 2014, by the following method:

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

Meet Elisabeth Ulmer, Student at Villanova University School of Law

by Nina Hart

Meet Elisabeth Ulmer, a student at Villanova University School of Law and Notice and Comment contributor.  Below, she shares her administrative law experience and tips for law students interested in learning more about the field.

1. What led you to pursue a career in law?

My interest in attending law school evolved as the result of several college experiences.  One experience in particular sparked my passion by demonstrating how different facets of law, government, and society interact.  During college, I spent the spring semester of my sophomore year in Hawaii.  I was fortunate to meet Judge Steven Alm, of the First District Court in Honolulu, who launched Hawaii’s Opportunity Probation with Enforcement (HOPE).  This program provides “swift and certain” punishment for each probation violation, rather than allowing probation violations to pile up until probation is revoked and the probationer is sent to prison.  HOPE’s core principle is that enforcing an immediate and consistent consequence, such as a short-term jail stay, results in lower recidivism rates.  Exploring this unique program and its differences from the current probationary process fueled my interest in how, in order to effect change, we must understand the status quo.  Hearing about HOPE’s obstacles in expanding to other states further cemented my realization that law and policy are deeply intertwined.  Learning about HOPE was one of several experiences that prompted me to analyze, ask questions, and realize how much satisfaction a career in law and policy would bring.

2. How did you become interested in practicing administrative law?  What experiences with administrative or regulatory law have you had?

My interest in government and administrative functions took root in my high school AP American Government class, where I gained an understanding of how laws, courts, government, and interest groups intersect.  Taking AP Comparative Government in high school as well widened my horizons to include international forms of government and inspired my pursuit of classes relating to international law and politics when I minored in political science in college.  During the fall of my 3L year at Villanova Law School, I took Administrative Practice, a course in which each student learned about the administrative regulation process and wrote a comment on the FCC’s proposed regulation regarding “Misuse of Internet Protocol (IP) Captioned Telephone Service.”  Taking this course and writing my comment allowed me to network with different public advocacy groups and deepened my understanding of the intricacies of how government agencies operate.  It also strengthened my desire to explore possible careers with government agencies and motivated me to become a contributor to the ABA’s Section of Administrative Law & Regulatory Practice Notice and Comment blog.

3. What do you think are the biggest challenges facing administrative law practitioners?

A major challenge facing administrative law practitioners is financial.  Administrative agencies, for example, do not have the budget, staff, or resources to carry out the immense number of tasks that they handle every day.  They are receiving an increasing number of items for their agendas, but their budgets are decreasing.  At the same time, agencies and the administrative law practitioners that work for them face backlash from the public for perceived inefficiency.

4. For law students considering a career in administrative law, what do you think would help them become familiar with the field?

One of the best ways to become familiar with a field of interest is to speak with practitioners in the field.  Students can meet practitioners at events, such as those held by bar associations, or by tapping into their law school or undergraduate institution alumni networks.  Emailing alumni to ask for informational interviews or a quick chat over a cup of coffee is another excellent way to learn about the work they do and about other resources and contacts in the field.  Furthermore, listening to bar association webcasts, such as the ABA’s Careers in Administrative Law, and reading blogs relating to administrative law can also provide students with a great deal of information not only about the type of work available in this field but also about the issues with which administrative law practitioners deal.

5. Outside of the law, what are your favorite activities or hobbies?

I enjoy reading (historical non-fiction/classics), horseback riding, skiing, and traveling (when possible).

FERC Seeks Input On Southeast Market Pipeline Project Environmental Impact

by Shannon Allen

The Federal Energy Regulatory Commission (“FERC”) issued a scoping notice document inviting public comment on an environmental impact statement (“EIS”) discussing the environmental impacts of the planned Southeast Market Pipelines (“SMP”) Project.  The SMP Project is made up of three “natural gas transmission pipeline projects: Sabal Trail Transmission, LLC's (“Sabal Trail’s”) Sabal Trail Project in Alabama, Georgia, and Florida; Florida Southeast Connection, LLC's (“FSC’s”) Florida Southeast Connection Project (“FSC Project”) in Florida; and Transcontinental Gas Pipe Line Company, LLC's (“Transco’s”) Hillabee Expansion Project in Alabama.” The Sabal Trail, FSC, and Transco propose to build and run over 650 miles of “interstate natural gas transmission pipeline” and associated facilities in Alabama, Georgia, and Florida. The Sabal Trail Project would link with the Hillabee Expansion Project in Alabama, and the FSC Project in Florida. 

FERC staff will address the environmental impacts of all three projects in one EIS.  FERC will then use the EIS to decide “whether the SMP Project is in the public convenience and necessity.”   FERC is required by the National Environmental Policy Act (“NEPA”), to consider environmental impacts that “could result from an action whenever it considers the issuance” of a Certificate of Public Convenience and Necessity under Section 7 of the Natural Gas Act.  In addition, FERC is also required to “discover and address concerns the public may have about proposals.”  This discovery process is called “scoping” and focuses EIS analysis on the “important environmental issues.”  This notice document opens the scoping process used to collect public comment.  FERC staff will use public comments received during the scoping process to “determine what issues will need to be evaluated in the EIS.”

Generally, the EIS would consider a number of factors, like geology and soils; water resources, including surface waters and groundwater; and wetlands to name a few.  Based on a preliminary review, FERC’s staff has identified several issues including: purpose and need for the SMP Project; impacts of clearing forested areas and other vegetation; impacts on water resources including sensitive springs, groundwater, and wetlands; karst terrain; impacts on land use; environmental justice; the use of eminent domain to obtain project easements; impacts on property values, tourism, and recreational resources; cultural resources; compressor station noise; pipeline integrity and public safety; and alternatives and cumulative impacts.

State and local government representatives should notify their constituents about this process and encourage them to comment on their areas of concern. Public and other interested stakeholders can make a difference by specifically commenting about the SMP Project. Comments should focus on:

1. the potential environmental impacts of the project;
2. reasonable alternatives; and
3. measures to avoid or lessen these environmental impacts.

Affected landowners and other interested parties are encouraged to attend the scoping meetings and to verbally comment on issues that should be addressed in the EIS. Verbal comments can be given at the scheduled public scoping meetings to be held in the SMP Project area.  The scoping meetings will also provide interested parties a chance to learn more about the FERC’s review process.  In addition, “representatives from Sabal Trail, FSC, and Transco,” will be present one hour prior to each scoping meeting “to answer questions about their respective SMP Project component.”

Interested parties should submit written comments (referencing the appropriate project docket number: PF14-1-000 for the Sabal Trail Project; PF14-2-000 for the FSC Project; or PF14-6-000 for the Hillabee Expansion Project) by April 20, 2014, by any one of the following methods:

• Electronically:  Use the eComment feature located on the FERC’s Website (www.ferc.gov) under the Documents and Filings heading;
• Electronically: Use the eFiling feature located on the FERC’s Website (www.ferc.gov) under the Documents and Filings heading; or
• Paper: Mail comments to the following address: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.

FERC recommends electronic filing of comments and has expert staff available to assist interested parties at (202) 502-8258 or efiling@ferc.gov.

Save the Date: Homeland Security Law Institute May 29-30, 2014

The ABA Section of Administrative Law and Regulatory Practice will host the 9th Annual Homeland Security Law Institute May 29-30, 2014 at the Walter E. Washington Convention Center in Washington, DC.  Website and registration will be available shortly.  Contact us if you have any questions (202) 662-1582.  Hope to see you there!

ACF Seeks Input on Limiting TANF Benefits Use at Certain Establishments

by Shannon Allen

The Administration of Children and Families (“ACF”) seeks comment on a notice of proposed rulemaking (“NPRM”) to amend the Temporary Assistance for Needy Families (“TANF”) regulations to “require states . . . to maintain policies and practices that prevent TANF funded assistance from being used in any electronic benefit transfer transaction in specified locations.”

TANF is a block grant that gives funding to states to create and administer a program to fulfill the purposes of TANF including:

1. assisting needy families so that children can be cared for in their own homes or homes of relatives;

2. reducing the dependency of needy parents by promoting job preparation, work and marriage;

3. preventing out-of-wedlock pregnancies; and

4. encouraging the formation and maintenance of two-parent families.

In order to receive TANF funding, states are required to spend a minimum amount of non-federal funds, called maintenance-of-effort (“MOE”), to “help eligible families in ways that further a TANF purpose.” Specifically, TANF and MOE funds may be spent on “assistance,” (including cash payments, vouchers, and other forms of benefits) created to meet a family's ongoing basic needs for: food, clothing, shelter, utilities, household goods, personal care items, general incidental expenses, transportation and child care provided to families who are not employed.

This NPRM responds to provisions in the Middle Class Tax Relief and Job Creation Act of 2012 (“Public Law 112-96”) which requires states receiving TANF grants to “maintain policies and practices” as needed “to prevent” benefits provided by the program “from being used … in: any liquor store; any casino, gambling casino, or gaming establishment; or any retail establishment that provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment.”  Prior to the enactment of Public Law 112-96, no federal rules restricted a recipient’s use of TANF benefits.

This proposed rule imposes a new reporting requirement and a new penalty.  Specifically, states will be required to report to the Department of Health and Human Services (“HHS”) by February 22, 2014, (1) their “implementation of policies and practices related to restricting . . . TANF assistance in EBT transactions” at specific establishments and (2) a statement as to how they intend to implement said policies and procedures. The state plan must include an explanation of how the state plans to ensure that:

1. recipients of the assistance have adequate access to their cash assistance, and

2. recipients of assistance have access to using or withdrawing assistance with minimal fees or charges.

HHS will reduce the state’s grant for failure to comply.

Interested parties are invited to submit comments, identified by Docket No: ACF_FRDOC_0001-0045, by May 7, 2014, by any one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov;
• Mail: Office of Family Assistance, Administration for Children and Families, 5th Floor East, 370 L'Enfant Promenade SW., Washington, DC 20024, Attention: Robert Shelbourne; or
• Hand Delivery/Courier: OFA/ACF, 5th Floor East, 901 D Street SW., Washington, DC 20251.